The evolving relationship between Alterfin and Canaan is a perfect example of what Alterfin has been trying to achieve for the past 25 years: making the difference for organisations involved with small farmers by providing them with adequate funding for their development when local sources of financing are beyond their reach. Then Alterfin coaches them throughout the process, playing the role of a catalyst so that in time they will no longer need our support.
Canaan, a fair trade olive oil processing and export company located in Palestine, was founded in 2004 by anthropologist Dr Nasser Abufarha.
Alterfin’s relationship with Canaan began in 2010. At the time, an initial credit of 175,000 USD was made available in a record 23 days, enabling the organisation to buy the olive harvest (along with a small amount of artisanal oil) from more than 1,000 small farmers in the region. Aware of the organisation’s potential as well as certain weaknesses it had, Alterfin’s credit manager in charge of the project, Hugo Couderé, also took the time to develop a set of financial management tools with the Canaan staff that enabled them to strengthen the organisation’s managerial capacities.
Sufficient funding at the right time
Alterfin’s credit line is paid out based on sales contracts with international exporters. Thus Alterfin funding makes it possible to pay farmers directly, at the point when they bring in their olives. The exporters, in turn, commit to paying Alterfin upon receipt of the olive oil. This financing method reduces the risk of the credit without demanding collateral security that Canaan cannot provide.
Alterfin’s financial support came just when Canaan needed it most because the local banks, which had little experience of the concept of financing without security, were not prepared to provide the necessary funding.
In nine years of working together, thanks to the progressive increase in the credit lines granted by Alterfin, Canaan has expanded its operations. Sales of olive oil have increased from 300,000 litres in 2010 to 700,000 litres in 2019.
Over the years, Canaan has managed to build up a solid reputation among the farmers in the region. The latter are attracted by this organisation that pays promptly at prices above the going rate and provides many services (in particular, training in sustainable practices). Canaan also stands out for its high-quality standards. In 2019, 1,300 farmers sold their harvests to Canaan.
Role as a catalyst
Thanks to Alterfin’s support, Canaan has been able to demonstrate the financial viability of its activity. Reassured by years of success, local banks are also beginning to provide financing based on sales contracts, which is particularly innovative. This is how Canaan received sufficient local funding on favourable terms to go it alone in 2019.
Canaan mainly exports fair trade olive oil, but it also processes and sells other products such as almonds, freekeh (Palestinian green wheat) and maftoul (Palestinian couscous). These products are bought from 50 groups of producers, accounting for a total of 1,300 farmers.
The sale of these different products with fair trade and organic labels allows rural communities that find themselves marginalised in this conflict zone to maintain their means of subsistence and their culture. The farmers receive training in sustainable practices and support in transitioning to certified organic production. This guarantees high-quality standards as well as implementing programmes to promote social and economic autonomy.
96% of the products Canaan sells are organic. The products also have fair trade certification, generating more than 2 million USD in premiums between 2010 and 2019. These premiums were mainly paid out to the farmers on top of their sale prices, allowing them to increase their families’ disposable incomes.
Beyond the purely commercial aspect, Canaan advocates intercultural, interreligious and multi-ethnic links. Although it is based in a territory in conflict, the organisation creates connections around the world without concerning itself with the religious, cultural or ethnic affiliations of its partners.
Meet Um Hikmat
The processed products (dried tomatoes, maftoul etc.) are bought from several women’s cooperatives.
Um Hikmat Khaled is a member of a women’s cooperative that sells maftoul to Canaan. The aim of her cooperative is to improve the women’s economic situation.
"Um Hikmat Khaled is a member of a women’s cooperative that sells maftoul to Canaan. The aim of her cooperative is to improve the women’s economic situation."
A respected figure in her community, she is a divorced woman who runs her small farming business alone.
“Many fathers with a family to support are out of work. As women, we can find alternative ways of meeting our families’ needs...” “It is important to show girls that they are not the victims of their circumstances. With a lot of hard work and determination, they can have more control of their lives.”
“Since we started selling maftoul to Canaan, we have been spending a lot of time together. Maftoul is the perfect excuse to meet up, cook and work together. That gives us a sense of achievement. We love life and want to enjoy it to the full.”
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