In the past, coffee cooperatives in El Salvador have relied on short-term working capital loans of one year or less, despite the relatively high interest rates on these loans. Their failure to make timely repayments then kept some cooperatives from obtaining financing the following year. As a result, the participating cooperatives were able to acquire additional equipment and could also provide more technical assistance to farmers and better training for their staff. Collaboration among cooperatives helps maximize productivity. As a result of this project, participating cooperatives have established strategic alliances for the financing, processing, and marketing of their coffee.
Small cooperatives benefit by tapping into the processing facilities of larger cooperatives.
The local cooperative members also share their business experiences, helping member farmers to become more knowledgeable about the potential value of their coffee and the best ways to market it. Coffee processing leads to income diversification. In recent years, participating cooperatives have diversified their income sources by expanding their product lines. The cooperatives now sell agricultural inputs such as the organic fertilizer byproduct, coffee seedlings, as well as the final roasted coffee product. Transforming the Economy of Small Coffee Producers.