Difference between coffee estates and coffee cooperatives

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[PROTECT THE ORIGIN] Coffee estates and coffee cooperatives are the two most popular coffee growing models today. They have many variations that provide more diversity in how the coffee industry operates. Let’s learn about the difference between Coffee estates and coffee cooperatives with 43 Factory Coffee Roaster.

What are coffee cooperatives?

Coffee cooperatives are also known as coffee cooperatives. This is a model with at least 5 manufacturers working together, exchanging experiences, and supporting each other in the production process. In this model, member producers will often contribute a fee to reinvest in the coffee community. They also share with each other some resources such as fertilizers, machinery and equipment, seeds, loans, investment to develop.

In addition, some Coffee cooperatives will have their own support team. These operators will help member farms by providing materials and seedlings at low prices. They also support businesses, lend investment capital with preferential interest rates to households with weak resources. Not only that, a coffee cooperative large enough will have full staff of management, research, education, marketing,… These employees will be responsible for support, guidance, training. coffee farmers and business, marketing. Besides, Coffee cooperatives is also an intermediary to help farmers contact global suppliers to sell coffee. After selling and making a profit, they will collect some money to maintain operations and transfer money to each household. This helps the farmer to improve his coffee production and get his share of the salary right.

What are coffee estates?

Coffee estates are private farms with a larger scale than member farms in Coffee cooperatives. Coffee estates typically only produce, process and sell their own coffees. Producers of private farms will have more freedom. They own the farm, control themselves or hire employees to produce and do business according to their own orientation. At the same time, the farm operators will have to solve the problems of materials, finance, planting methods with their own resources and network because they are not supported as in the cooperation model. commune.

Difference between coffee estates and coffee cooperatives

Through the above definitions, we can clearly see the difference between two models of coffee estates and coffee cooperatives such as:

The future of coffee estates and coffee cooperatives

First of all, Coffee cooperatives, this model has been popular for decades. However, in recent years, farmers in cooperatives are facing many difficulties. The biggest difficulty is the problem of limited resources. Resources in Coffee cooperatives are limited while more and more member farms depend on it. This has resulted in many members losing the opportunity to receive financial support, training opportunities, business and deciding to leave the organization. Next, farmers also face difficulties in autonomy and decision-making in coffee processing and trading. They are not allowed to set prices for their own products or process their coffee by other methods. This is also one of the reasons why they want to leave Coffee cooperatives. Because farm owners feel they have less ownership over their own coffee. Therefore, if not well managed, this model will have negative changes in the future. To change this situation, Coffee cooperatives may set up a policy to restrict the admission of members if the output or quality is not guaranteed. This policy both ensures quality maintenance and solves the problem of lack of supply resources for farms. Regarding the decision-making power of the farm owner, the manager of Coffee cooperatives should clarify the mandatory standards and benefits so that the members understand and comply more voluntarily.

Next is about the coffee estates model. For the most part, coffee estates have more autonomy than Coffee cooperatives. Farm owners have full control, research, improvement and application of new methods in coffee production and processing. They can also choose different prices for farm produce. The important thing is that they can also get more profit when they achieve certain successes in the production and supply process. However, this model has great competitiveness and entry conditions are quite difficult. The farmer needs a license and the farm has to meet certain requirements such as minimum number of coffee trees, planting area and total production volume. Besides, setting up a coffee business is also expensive and time consuming. Farmers will need a sizable resource. Furthermore, estate farmers need to manage their own production and labor costs, as well as the processing and marketing of their coffee. Therefore, if there is not enough finance, the owners of coffee estates are easy to fail.

Each model has its own advantages and disadvantages. For coffee estates, farmers can operate on a larger area of land, improve their products on their own, and can bring in more profits. Coffee cooperatives have proper management, farmers will be supported in many ways and have a good reputation for quality control. If you are looking for fresh coffee beans from famous farms or cooperatives, go to 43 Factory Coffee Roaster. Because the factory always selects the best global suppliers to ensure the best products can reach you.

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