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Hurricane Sandy and Climate Resiliency


Cocoa Drying in Peru

November 2012 Newsletter    

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Message from the CEO

Willy Foote

Seeing the images of Hurricane Sandy’s destruction and hearing reports about millions struggling to rebuild their lives amid the wreckage takes me back to a year ago when I was stranded in
El Salvador during a 10-day storm that brought torrential rains and catastrophic flooding to Central America.

I was participating in Let's Talk Coffee, an annual event held in producer countries with hundreds of our clients and value chain partners. Organized by Sustainable Harvest, the gathering is an opportunity to build deep relationships and co-create supply chain wide sustainability solutions. Discussions focus on themes like clean technologies for agricultural businesses, linking roastmaster sensory and tasting skills with farmer agronomic practices, and food security.

Last year's discussion included, ironically, strategies for building resiliency to climate change, amid an unusually severe storm with deafening downpours. After the conference, a group of us ventured to the airport by bus. As the rains crashed down, we could see the river swelling alongside the road. Suddenly our driver slammed on the brakes. The bridge we were about to cross had just washed away. Our bus turned around, only for the road to flood out behind us. The ordeal lasted hours. As we inched along, lightning illuminated the faces of evacuated families filling the roadside as storm-fed waterfalls cut ditches of destruction through tiny farms. Thankfully, we made it back to the hotel safe and sound, but the people we passed – and countless communities throughout the region – may not have been as lucky.

The 10-day storm that brought catastrophic flooding to Central America last year didn’t get the notoriety of Sandy, but it sits in sad harmony with it. Climate change is a reality. I see it in our work every day as our clients strive to grow their businesses and meet buyer demands in the face of increasingly erratic weather.

What consoles me is that we can do something about it. Specifically, we can propel agricultural businesses that empower small-scale producers to adopt climate-smart practices and become stewards of the ecosystems that underlie rural prosperity. By linking farmers to green markets that incentivize sustainable agricultural practices, such as soil and nutrient conservation or reforestation, we can help farmers adopt these smart practices, while demonstrating replicable models that can be applied to reach more of the world’s 500 million small-scale farmers.

Companies large and small are evolving the ways they source agricultural products, expanding the green market. Unilever, the global consumer goods giant, has committed to sourcing 100 percent of its agricultural raw materials sustainably by 2020. Cadbury’s Cocoa Partnership aims to promote sustainable livelihoods for one million cocoa farmers and increase cocoa crop yields 100 percent by 2018. The Hershey’s Company, Mars and Nespresso are making similar commitments.

Examples like these give me hope that together, we can avoid the worst impacts of climate change while building resiliency to what we cannot prevent.

Thank you for helping Root Capital make important investments to forge value chains that are resilient in the face of a changing climate, while growing rural prosperity for small-scale farmers.


Willy Foote Signature

William Foote, Founder and CEO

P.S. The American Red Cross is working hard to provide shelter, meals, water and supplies to the victims of Hurricane Sandy. Click here to donate.

Video: Protecting Rwandan Coffee Farms from Climate Change

resilience-fund-video.orgIn the aftermath of the 1994 genocide, devastated communities in Rwanda's coffee-growing regions struggled to rebuild. In 2005, the Dukunde Kawa coffee cooperative, also known as Musasa, became Root Capital's first client in Africa. Since its founding, the enterprise has grown from 300 to more than 1,800 members. Our friends at the Thanksgiving Coffee Company have been loyal buying partners to Musasa since those early days. After witnessing the impacts of prolonged drought on the region, Musasa and Thanksgiving forged a partnership to help build farmer resiliency to climate change. Check out this video to see the fruits of their innovative collaboration.


Root Capital and Clean and Appropriate Technologies

Interview with Elicia Carmichael, Lending and Innovation Officer – Latin America

Elicia CarmichaelElicia spoke with Michael Sheridan, Catholic Relief Services Coffeelands blogger, about Root Capital’s efforts to increase our client’s adoption of clean and appropriate technologies, like water-efficient coffee mills. Below is an excerpt of the interview. For the full conversation, go to the Coffeelands blog.

When and why did Root Capital begin financing clean and appropriate technology investments?

The agricultural smallholders we work with are dependent on the land for their livelihoods, which are inextricably linked to the health of the local environment. Many of them are already noting the effects of climate change through alterations in their harvest cycles and in the health of their crops. We wanted to more systematically ensure that our clients had the information, support, and access to capital they needed to adapt to these changes.
Since 2002, we have extended 28 loans totaling over $2 million for clean and appropriate technology investments to rural small and growing businesses in Latin America and Africa. We seek to help clients understand their options and lower their barriers to investing in clean technologies by offering our clients access to information and to the contacts in our global network, by preparing our loan officers to help clients identify investment opportunities, and by designing novel loan structures with customized grace periods, repayment schedules, and unconventional loan guarantees.
What technologies are you promoting, and why did you decide to prioritize these particular technologies?

We have identified a handful of technologies that we believe are most relevant for our agricultural client base; solar panels, solar dryers, irrigation systems, biodigestors, water-efficient coffee mills, and small-scale hydro and wind turbines are all at the top of our list.  Each of these technologies contributes either to the enterprise’s bottom line or to its producers’ quality of life in the home, and also conserves natural resources or lowers carbon emissions. These technologies are all also relatively affordable at a small scale and can often pay for themselves with productive benefits within a few years.  
What kinds of organizations are you partnering with to advance this exciting agenda?

“Pathological collaboration” perfectly describes Root Capital’s approach to engaging other stakeholders, and there is no better term for what we must do to advance clean technology adoption in the coffee industry. In this regard, we are enthusiastically aiming to join forces with the non-governmental organizations (NGOs), buyers, government initiatives, clean tech entrepreneurs, and academic institutions that can lend expertise, offer subsidies, provide loan guarantees, implement technical assistance, manage demonstration projects, and connect small and growing businesses (SGBs) to markets. 


What We're Reading


New and Noteworthy

  • Vice President of Investor Relations Catherine Gill spoke on a panel on Gender Lens Investing at SOCAP 2012, an annual gathering of investors, entrepreneurs and institutions working to build the impact investing industry. Vice President of Strategy, Knowledge & Innovation Brian Milder also spoke about Root Capital’s work towards promoting food security in Africa.  
  • USAID Administrator Rajiv Shah highlighted Root Capital on a plenary panel addressing food security progress at the annual World Food Prize in Des Moines, Iowa. 


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