Former U-M Students Help Honduran Farming Community Make Coffee More ’Local’

Tuesday, June 7, 2011

After several service trips to the mountainous villages of La Union, Honduras, former University of Michigan student Andrew Boyd was inspired. He wanted to do more, but wasn’t sure how he could make an impact. His passion led to a microfinance organization that focused on something the people of La Union already knew – coffee. And now thanks to his efforts, the Honduran farming community gets a rebirth, and Ann Arbor is drinking some of the most “local” coffee possible.

With the help of U-M Ph.D. candidate and research mastermind Derek Stafford, Boyd and fellow students Patrick and Alex Hughes, Dan Schwartz and Mike DeWit were able to implement a research project that turned into a life-changing organization.

The region of La Union had the ability to grow phenomenal coffee. Unfortunately, due to lack of training, supplies and the cycle of poverty, farmers there were unable to produce enough crops or sell their product at a fair price. Money coming in was simply spent, and profits that should have benefited the community, were going with their crops – elsewhere in the world.

Using information from their research and money from an outside grant, the team was able to develop a non-traditional microloan program, tailored to La Union’s coffee growers (including sustenance crops like corn and beans).

“Most microloans are based on cash,” said Patrick Hughes. “But in Honduras, the people have a saying ’dinero ganado, dinero gastado,’ – money earned, is money spent.” Cash-based loans, simply wouldn’t work.

The team found a better way to give back to the community – tools, fertilizer and education were the key, and after years of preparation, a 501c3 was established, and Union Microfinanza (UMF) became a reality.

How it works

Union Microfinanza grants farmers microloans in the form of supplies. The organization is able to buy items (mostly fertilizer) in bulk, and carry the savings down to the farmers. The farmers are then able to repay their loans slowly during growing season, completing them after harvest. The money repaid is then reinvested into the program and put right back into the community.

Twenty-four out of 32 aldeas (villages) in La Union participated in the first loan cycle in 2010. A Honduran board of directors was established in each area to determine who would receive loans and oversee repayment. Some 125 farmers received more than $12,000 worth of tools and fertilizer during the first year of microloans alone.

Source: (link opens in a new window)