The project to build a coffee mill in Kintamani, Bali has completed. There were successes and failures but by-and-large I regard the project as a success.
First the successes:
Bootstrapped a small business
The mill itself is privately owned and operated. Part of our assistance (“ours” being my wife’s and mine) was a short term, interest-free loan for the construction costs of the mill; a micro-intervention of sorts. Together with a loan from the Indonesian government, the family was able to build the mill and thus start a small business.
Doubled the quantity processed
By having the mill, the quantity of coffee the family can process each day has at least doubled (I suspect it more-than-doubled). There are three areas where capacity was specifically increased:
- Drying capacity: by adding an additional drying patio (the family already had one patio) they can now dry more coffee.
- Fermentation capacity: smaller quantities of seeds are fermented in large, plastic trashcans. At the mill, they have constructed a cement fermentation tank with a 1 tonne capacity.
- Mechanical washing machine: previously, after fermentation the seeds were mechanically washed by hand in wheelbarrows and took three or four people to complete. With the washing machine, it can now be done by one, freeing up two or three people to do other tasks. (you can see the machine in action at my Youtube channel.
Increased cashflow in the community
The mill buys harvested, unprocessed coffee cherries from anyone who can get the cherries to the mill and they pay cash on-the-spot. Paying cash immediately is a great incentive and brings in cherries quickly. One of the more interesting things I observed is the micro-chains created in the supply chain. For example, collectors, men with trucks, would drive around and buy cherries from pickers who couldn’t otherwise get to the mill and the collectors would then re-sell the cherries to the mill.
Being able to sell harvested cherries to the mill makes it easier for sellers (farmers, pickers, collectors, etc) to make money. In this context, the mill is a customer. More customers means an increase in demand (a shift of the demand curve) and increased demand means an increase in price, which is good for those selling raw, unprocessed cherries.
Having the mill also increased other purchases. For example, the mill feeds all the workers so each day the mill would purchase food stuffs from locals. There are also incidentals to be purchased, such as wood for building and maintaining coffee drying racks, tarps for covering drying coffee at night, etc.
Created employment for several workers
The mill hired one full-time, seasonal worker to help during harvest and also there were ad-hoc employment situations in which ladies (and often their kids) would show up for a day to help sort or to harvest cherries from the owner’s personal plots. Given that the capacity processed each day doubled means the need for day labor increased.
And now for the failures.
There was a disconnect in exactly what level of quality we were targeting and also a disconnect in the purpose of me physically being there during harvest.
Differences in desired quality
It was clearly stated early in the business relationship that they desired a “cleaner, sweeter cup.” Both of those attributes are primarily determined by pre- and post-harvesting procedures. The pre-harvest procedures they do pretty well already — they have good plant breeds, they practice good farming practices, etc. The post-harvesting procedures though are lacking in that they are skipping steps in the processing routine to save time and money (mostly labor costs).
Unfortunately, it was obvious within a week of my first visit that they weren’t interested in any changes to their processing that increased the amount of labor involved. In fact, they only expressed interest in those changes that decreased labor, such as the fabricated washing machine and an improved fermentation method. Other changes they actively resisted.
To me this point is critical because they have all of the ingredients to produce a very nice coffee at nearly all product tiers. It bears repeating; they have decent coffee plant varieties, good elevation, mostly-organic farming practices, etc. The latent, inherent quality is there but unless they process it more precisely, they lose quality potential.
That being said, they are happy with the price they get for their coffee. They mainly want buyer stability — basically one buyer for all of their coffee, year-after-year and this fact was only brought to my attention late in the relationship. For the price they already get for their coffee, they don’t feel it’s worth the extra work to increase the quality, especially if there isn’t an immediate and measurable increase in premiums for that quality.
See also: Coffee’s Inherent Quality
While I would have loved to be able to help them achieve a higher level of quality I’m very happy to have been instrumental in helping them start a successful small business that will increase cash-flow for many in the area.
This article is associated with a project: Ulian Project: New Wet Mill