Promoting better working conditions in the Colombian coffee sector by addressing risks related to piece rate pay - Concept Note
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Concept Note:
Promoting better working conditions in the
Colombian coffee sector by addressing risks
related to piece rate pay
May 1, 2021Introduction
Labor, particularly for coffee harvesting, is the largest single expense for coffee producers, making up
approximately 40 percent of total expenses for a typical coffee farm, and in some cases as much as 60
percent. For farmers, the use of piece rate payment schemes, in which workers are paid according to
their production, is a way to mitigate economic risk, tying workers’ wages to coffee production.
Piece rate pay is widespread in the Latin American coffee sector, and unfortunately, this payment
system contributes to several labor risks when the necessary controls are not in place, especially when
combined with production quotas. These labor risks include deception, wage and hour violations,
discrimination against women, and child labor, among other issues. It is therefore essential to develop
and test alternative payment schemes to mitigate labor risks and to promote social sustainability and
better working conditions in coffee supply chains.
Therefore, Verité has chosen to focus its COFFEE pilot project in Colombia on alternatives to piece rate
payment systems that provide better working conditions to vulnerable workers such as women and
Venezuelan immigrants, while helping farmers to mitigate their own financial risk. Verité research has
found that a lack of prior experience and skills in the coffee sector is a major driver for labor-risks during
coffee harvest, particularly when highly mobile migrant labor are employed. Reduced skills are linked
with efficiency levels as low as -50% for average (but experienced) harvesters, which generate
extremely low daily wages that negatively impacts their livelihoods and also erodes workers dignity.
Women are also placed at a disadvantage both because they are expected to carry out a number of
unremunerated tasks such as cooking, cleaning, child rearing, and childcare, and because male heads
of household are often the ones who receive the payment for their production.
Portable mechanical harvesters (derribadoras de café) represent an opportunity to improve these
workers’ productivity and wages, particularly on steep mountain ranges common in many Colombian
coffee-producing areas. Some studies indicate that hand harvesting yields an average of 82 kilograms
(181 pounds) of coffee per day per worker. Workers using portable mechanical harvesters in Minas
Gerais, Brazil have shown an 80 percent increase in yields, on average, increasing their incomes and
reducing farms’ harvesting-related costs by 14 percent, thus resulting in both increased wages and
profitability. This is a rare win-win scenario for farmers and workers alike, especially considering that in
most countries in Latin America, excluding El Salvador, labor-related harvesting costs have steadily
increased as a result of labor shortages and inflation in recent years.1
In Colombia, Verité seeks to implement an innovative project that will pilot an alternative model for the
payment of coffee harvesters, using an innovative compensation structure for farm-labor that will create
adequate incentives for the adoption of best practices, and promoting the skill development of workers
to ensure that they earn a decent wage. The model is focused on vulnerable groups, providing a model
for improving coffee quality via the development of a training module on best harvesting practices using
conventional labor and portable mechanical harvesters.
The project will implement a strong evaluation assessment plan, backed by leading research
institutions. This will guarantee an independent and thorough assessment of the social and economic
impacts of the pilots, required for documenting lessons learned and costs and benefits, and providing
clear guidance on how to replicate, scale, and make this alternative model sustainable.
1
A study on Cost of Production in Latin America, Caravela Coffee, 2019. Accessed online:
https://caravela.coffee/project/a-study-on-costs-of-production-in-latin-america-white-paper/Furthermore, overlapped with the economic impact benchmarking and impact assessment, a Living Wage and Living Income study would be developed, as a key decision-making tool for informing the stakeholder group on emerging social-sustainability strategies and also for refining our Socially Sustainable Sourcing Toolkit (S3T). Key root causes for labor violations in coffee farms are intricately linked to the inability of farmworkers to fulfil their basic needs, which makes them prone to labor and poverty traps, that reinforce their vulnerability and expose the coffee industry to never-ending risk on labor supply, coffee beans availability, and tarnished brand reputation of coffee businesses’.
GOAL
Improve working conditions for vulnerable coffee harvesters by implementing innovative payment
models and improving worker productivity in Colombia.
Objectives
1. Improve understanding of needs for best harvesting practices in the Colombian coffee
sector.
2. Improve the incomes of vulnerable farmworkers by increasing their productivity.
3. Design an alternative payment program for coffee harvesting on selected coffee farms.
4. Implement an alternative payment model on select coffee farms for manual and mechanically
assisted harvesting.
5. Increase understanding of labor standards and capacity to detect and reduce labor risks.
6. Increase knowledge and evidence on root causes of labor issues in the coffee sector.
The basic intervention structure is summarized below, and the proposed approach is described in
greater detail in the next section.
Proposed Approach
The proposed approach has three key elements that together provide a structure that not only mitigates
labor risks linked with piece-rate payment mechanisms, but also create tangible value for farmworkers,
coffee farmers, and coffee companies alike:
1. Improving harvesting practices by developing and implementing a training curriculum for manual &
mechanically-assisted coffee harvesting.
2. Implementing an alternative payment model through the provision of premiums directly to workers
(using FOB prices as a benchmark).
3. Training participating producers on international labor standards, Colombian labor and immigration
law, and detecting, preventing, and addressing labor risks.
4. Entrepreneurship development and farmworker specialization by supporting organizational
development to catalyze options for specialized services provision to coffee farms and farmers (e.g.
R&R, postharvest, etc.).
USDOL funds will be used to support farmworkers entrepreneurship, develop benchmarks for coffee
harvesting and implementing the training and capacity building modules for farmworkers, agronomists
and field technicians, and coffee producers. Interested coffee companies will support the living wage &
living income research, farm-level investments, specifically the mechanical harvesters, the time-motion
study for coffee harvesting, the cupping activities to evaluate the impacts of best harvesting practices
on bean quality, the premiums that will be directly transferred to the harvesters, along with trainings on
labor standards and risks for their suppliers.
The benchmarking and capacity building portion of the project will include:1. A time-motion study2 to inform the adoption of best practices in manual and mechanically assisted
coffee harvesting. The study will include an assessment of health & safety risks and impacts.
2. Training module on best harvesting practices for:
a. Farmworkers (women and Venezuelan migrants)
b. Agronomists and field technicians
c. Coffee producers
The alternative coffee harvesting payment model will include:
1. Co-design of alternative fixed payment schemes & direct-transfer of premiums to workers, including
a root cause analysis, using Verité’s Root cause analysis of labor violations in the coffee sector
tool.
2. Training on implementation of the alternative coffee harvesting payment model for:
a. Farmworkers (women and Venezuelan migrants)
b. Agronomist and field technicians
c. Certifiers and monitors
d. Coffee producers
3. Farmworkers entrepreneurship:
a. Vocational training and gender equity awareness
b. Business idea inception and trust building
c. Business model generation and validation
d. Business investment support and start-up
The project will also include eight training modules for farmworkers, agronomists and field technicians,
and coffee producers participating in the project:
1. Online training module on local and international labor standards and legislation
(including on forced and child labor and recruitment).
2. Blended learning3 on forced labor and child labor, including links to piece rate pay.
3. Blended learning on wages and working hours, including links with piece rate pay.
4. Blended learning on occupational health and safety risks, including those linked to manual
and mechanical-assisted harvesting.
The blended learning sessions will incorporate learning on gender issues, as a cross-cutting topic.
Deliverables
Verité will develop a set of materials and methodologies for different audiences in the coffee sector on
piece rate payment alternatives in coffee harvesting. Key deliverables to be generated include:
1. Reports and Analysis:
a. Benchmarks for manual and mechanically assisted coffee harvesting
b. Best practice guidelines for manual and mechanically assisted coffee harvesting
2
A time motion study is a research methodology that is used to analyze workers’ movements to identify which
movements contribute to higher or lower levels of productivity and effort, improving the overall efficiency and health
and safety of these workers.
3
The blended learnings will include both online training modules and instructor-led trainings (ILTs) with a
duration of 1.5 hours each, which will have a maximum capacity of 20 participants each to ensure an
adequate level of participant interaction.c. Impact assessment of the alternative piece rate payment model on farmworkers, farm
profitability, and coffee quality
d. Living wage & living income report for the Colombian coffee sector
2. Trainings:
a. Training on best practices in manual and mechanically assisted coffee harvesting
b. Training on alternative payment models for coffee harvesting
c. Training modules on labor risks
Verité will provide company co-funders with quarterly reports with key information on project activities,
complementing the deliverables described above.
Estimated Timeline
DELIVERABLE Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
2021 2021 2021 2021 2021 2021 2021 2021 2021 2022 2022 2022 2022 2022 2022 2022 2022 2022 2022 2022 2022 2022 2022 2022
Project planning and stakeholder outreach
Development of time-motion and benchmarks
analysis
Design of training module on coffee harvesting
best practices (T1)
Design of training on HOR for coffee harvesting
(T2)
Co-design of alternative coffee harvesting
payment model
Design of training on implementation of
alternative harvesting payment model (T3)
Living Wage and Living Income Study
T1 implementation
T2 implementation
T3 implementation
Piloting and field work
Quarterly reporting
Pilot Project impact assessment
About Verité
Verité, headquartered in Amherst, MA, is a global, independent, non‐profit organization which provides
consulting, training, research, and assessment services with a vision to ensure that people worldwide work
under safe, fair, and legal conditions. Since 1996, Verité has partnered with hundreds of multinational brands,
suppliers, and international institutions across multiple industry sectors to improve working conditions and
overall social and environmental performance within global supply chains.
Our work to align business and social impact has earned us recognition in the social entrepreneurship space,
including an award as the Social Entrepreneur of the Year in the United States for 2011 by the World Economic
Forum‐affiliated Schwab Foundation. Verité’s programs have been conducted in more than 60 countries across
Asia, Europe, and North and South America and across multiple sectors, including electronics, apparel,
footwear, agriculture, food, hard goods, and toys.
As an NGO, Verité is recognized for its independence and unique credibility, as well as the practical usefulness
of its information to businesses. Information is sourced from workers, NGOs, and trade unions, and then
interpreted to help businesses reduce social risk in their supply chains. We focus on human rights and labor
rights in the production of consumer goods and sourcing of raw materials. Operating through an extensive
network of regional offices and partner organizations, Verité has more than one hundred staff and consultantslocated in China, the Philippines, India, Bangladesh, and throughout Europe, Africa, and Latin America, enabling us to expand our scale quickly and efficiently. Verité has carried out research and projects on labor conditions in the coffee sector in Colombia, Mexico, Guatemala, Brazil, and Uganda. Verité has implemented research on labor law and implementation in Colombia for over 15 years, as well as a number of other research projects, assessments, and trainings in Mexico, including a previous round of trainings focused on labor issues in the Colombian coffee sector. Verité is currently carrying out the Cooperation On Fair, Free, Equitable Employment (COFFEE Project), focused on the development of tools to address child labor, forced labor, and unacceptable conditions of work in the coffee sector, with pilot projects in Colombia, Mexico, and Brazil.
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