Making Progress in Nicaragua: Interview with the Global Manager of Aldea Global

Aldea Global is an association of smallholder farmers with over 13,000 members, including  6,200 coffee farmers, based in Nicaragua that exports fair trade and organic coffee to Asia, Europe and the US. The association’s forward-leaning manager and management team have embraced a clear vision committed to sustainable agriculture, gender equality, and technological innovation to make progress for rural families.

Aldea Global General Manager WarrenArmstrong

Whether it’s investments in climate adaptation, gender equity written into their bylaws or an AI-driven credit model to help them meet the growing demand for microcredit, Aldea Global looks to create a more equitable, sustainable future for their members.

In 2021, the organization secured an 8-year loan from IDH Farmfit Fund and Oikocredit to improve their ability to process coffee. We interviewed Warren Armstrong, Aldea Global’s General Manager, to learn more about the association and their efforts.

What are Aldea Global’s mission and values?

As a smallholder farmer association, we strive to be a vital link to better livelihoods for our members. The protection of the environment, focus on gender equity, as well as use of information and communication technologies, are key elements to this mission.

The local environment remains critical to us since our smallholder farmers live in these mountains. Gender focus is a key part in everything we do – in our loans, in our goals, in our representation. Since 2009, our bylaws state that at least 40% of the delegates in our general assembly and of our different boards—must be women. In 2020, two smallholder women farmers were elected as president and vice-president of our Board of Directors.

We increasingly focus on bringing new digital solutions to farmers using information and communication technologies, such as smartphones, to facilitate services. Last year, we provided loans to almost 11,000 smallholder farmer members—70% had cell phones. It is our assumption that even if a farmer doesn’t own a smart phone, someone in the family owns one. We want to bring the 21st century into small farmer households, so you need smartphones.

“NO PEN” is our motto—all digital!

How does Aldea Global operate differently than other agri-businesses in Nicaragua?

Gender focus and digitization. The use of information and communication technologies as well as an effective institutional gender strategy remain key differentiators.

If a rural woman doesn’t maintain a digital presence, she doesn’t exist – this is what we aim to change. Digitization and gender strategy are interconnected. You cannot have one without the other in the 21st century.

If a rural woman doesn’t maintain a digital presence, she doesn’t exist – this is what we aim to change. Digitization and gender strategy are interconnected.

Since 2018, we focused strongly on technology to become the Association’s growth engine as well as to generate new revenue streams. For example: we entered the agricultural input business in 2019. Our members long wanted to include the provision of inputs in our service package, but as an organization we wanted a competitive advantage. This was technology. We studied the Amazon model and how to link input suppliers’ systems to our system and create efficiencies providing inputs at a lower cost to members. Now in the App Store for smart phones, our members can access two apps: Aldea Movil for our services and Aldea Tech for coffee growing technical assistance.

Our next strategic plan 2023-2027 will focus on analytics. We want to become more efficient and speed up the credit approval process with the least amount of paper. Average loan approval time used to be 7 days, currently 5 days, now our goal is to decrease to 2 days. Using analytics, we can create new financial products, i.e. loans to improve a farmer’s house or lower interest rates based on a better risk analysis.

What are the reactions of your farmer members towards the construction of Aldea Global’s cutting edge specialty coffee mill?

In Nicaragua, investing in a cutting-edge mill is a novelty. In 2016, our general assembly initiated the approval process for this cutting-edge mill construction. Members were fully on board at all levels. Happy finally to own not only their first mill after 20 years paying for this service, but the best mill in the nation—possibly in Central America—to improve milling yields as well as cup quality.

We planned the construction in stages based on historical growth, so the mill always operates at full capacity. In addition, Aldea Global’s farmers traditionally deliver 30% more coffee than they committed before harvest.

We explained to our members that they must bring in coffee cherries instead of wet parchment  for the machinery to improve their quality consistently. By fully controlling the process from the moment the fruit is picked, to mechanically drying for different cup profiles, then stored in climate-controlled silos within 48 hours allow the Association to achieve a better-quality bean. This mill will operate on state-of-the-art fully automated systems.

Bringing in coffee cherries is something new for our members instead of wet coffee parchment. Therefore, we expect to receive 10% of coffee as cherries in the beginning, but our goal to bring this up to at least 80%. Other countries that changed their processing from sun dried patios took about 4-5 years to transition to all cherries. Changing farmers’ behavior takes time.

Aldea Global Coffee Mill and Warehouse Nicaragua

What is the status of the Aldea Coffee mill construction in Asturias, Jinotega?

There are two buildings that are part of the plant at this stage. 20 mechanical dryers operate in the “smaller” one. We planned this mill thinking about the future, 20-50 years from now, so all dryers are computer-operated, very efficient, permitting drying profiles for different qualities. The larger building (left on the picture) contains all the milling equipment, a storage area, as well as five ports for shipping containers directly to Nicaragua’s port. This mill will operate with fully digitally control systems via remote internet access.

The plant is definitely an eye catcher and something buyers are going to want to be a part of and something they can promote to their roasters.

Since February 2021, we started operations to test the dryers in the tail month of the past harvest. In October 2021 when the new coffee harvest started, we ran at full capacity. We rented additional warehouses, as we did not have enough storage space for the dried coffee in Asturias. In March 2022 we started installing the climate-controlled silos. In addition, we solved some infrastructural issues: installation three-phase electric power, drilling a water well, high speed internet connectivity, as well as access road improvements.

Given that March and April are heavy exporting months, we will move our top-of-the-line coffee dehullers and electronic sorting equipment from our rented mill into our new mill in Asturias, by May 2022. Our first experience demonstrated this top-of-the-line milling equipment’s efficiency in selecting quality beans. Thus, we called back to some of our buyers because we could not meet our commitment on low quality coffee contracts—rather offer them higher quality beans instead—meaning more money to our members!

The plant is definitely an eye catcher and something buyers are going to want to be a part of and something they can promote to their roasters. I keep telling people, those trucks in the middle of the picture aren’t toy trucks!

What is your outlook for 2022? What will change for Aldea Global and its members once you complete the construction?

In 2022, we will work out some final design questions at the Aldea Coffee industrial plant: processing coffee wastewater on natural grasses; mechanizing coffee pulp processing to produce organic fertilizer, solar panels, etc. For our members delivering cherries, we expect better yields from cherry to green bean exportable coffee, as well as consistent high quality.

Sometimes, sun drying coffee takes up to 14 days due to climate change, which impacts negatively on coffee quality and yields. Also, our machinery is significantly more efficient than what smallholder farmers use on their farms where very little technologically has changed over the past 100 years.

Read the release on IDH Farmfit Fund’s and OikoCredit’s investment in Aldea Global here.