Coca Invades Colombia's Coffee Fields Falling Prices Push Farmers to Plant Illegal Crops, Threatening U.S. Drug War

By Scott Wilson Washington Post Foreign Service Tuesday, October 30, 2001; Page A17

PUERTO VENUS, Colombia -- Coffee shrubs the color of army fatigues cover the hills above this village, which is set in a deep valley cut by the River Samana. But near the peaks, the bright green stripes of another crop can be seen between the coffee, spelling trouble for Colombia's most renowned industry and the United States' drug war.

No one here will claim the brilliant fields of coca, the key ingredient in cocaine. But farmers acknowledge that some among them have yanked up coffee plants in the past year and replaced them with crops that have a more profitable and reliable, if illegal, market. Along mountain roads, pickup trucks with beds filled with coca seedlings now pass buses stuffed with burlap sacks of coffee.

"Coffee has been fundamental to our economy," said a storeowner in this village of 1,000, about 90 miles northwest of the capital, Bogota. "We all rely on it. But right now a coffee farmer can't even pay for the basics. Coca is new to us here, so we don't know what it will bring. So far it has been only a grain of salt for our economy."

What is squeezing the coffee farmers are the caprices of economic globalization. Years of good growing weather worldwide and a rising number of countries planting the beans have increased supplies and sent world prices tumbling. As income flowing back to villages like this falls, farmers find themselves pushed away from Colombia's most renowned crop toward its most notorious.

The coffee crisis, as it is called here, has helped create a countrywide recession. Unemployment is near 20 percent, and higher in the countryside where war and scant public resources make poverty nearly inescapable. That, in turn, has given the country's various armed groups -- Marxist rebels on one side, a counter-guerrilla paramilitary force on the other -- a larger pool of idle young men and women from which to fill their ranks. Recruiting has never been easier.

It is all bad news for the United States' $1.3 billion contribution to the anti-drug program known as Plan Colombia.

Part of that mostly military package pays coca farmers to uproot their crops in favor of legal ones, an "alternative development" strategy unfolding slowly far to the south where drug crops are most bountiful. But here in rugged southeastern Antioquia and across its river border in Caldas province, the switch is working in reverse.

It would be a reach to say that Juan Valdez, the iconic Colombian coffee farmer of television advertising, has turned to drugs. Although hard numbers are impossible to come by, evidence and informed estimates suggest that only about 1,000 of the country's 560,000 coffee farms have scrapped coffee plants in favor of coca or opium poppies. But just about all coffee farmers wonder how they are going to survive at the current prices.

Archangel Cifuentes, picking beans in the town of Chinchina one recent morning, said his weekly salary had fallen from $50 to half that within a year. "Even with a good crop, the prices are so low we make nothing," he said, his hands darting from the bright red beans to the yellow bucket around his waist. "You Americans have to drink a lot more."

The switch is occurring mostly on the remote edges of the country's coffee heartland, where there is little state presence. Most of those who have changed over maintain tiny illegal plots alongside larger coffee fields in hopes that prices will rise again.

But international counter-narcotics officials here warn that things are likely to get worse. Klaus Nyholm, head of the U.N. Drug Control program in Colombia, said opium poppies are appearing on what was once traditional coffee land in the mountains of southwestern Tolima and southern Huila provinces.

In the old days, Nyholm said, "Colombian hearts would beat faster at the sight of a coffee bush. Now we are going to have to start looking at alternatives within the coffee zone itself. But people are going to have to accept that legal alternatives to coffee may never yield as much money as coca, although they will not have the violence that goes with the drug trade. There is no magic solution."

Coffee beans arrived here with proselytizing Jesuit priests almost three centuries ago. Like oil in the Middle East, coffee was the fuel for much of Colombia's economic and political development.

Roads and railroads were built to move coffee from the cool slopes of Antioquia and its southern neighbors to the Pacific coast, where ports were built to ship it out. Coffee proceeds financed the development of such other exports as bananas, cotton and sugar, not to mention rural schools and health clinics. Colombia's coffee belt became one of the richest and most stable regions of the country.

Production was dominated by small farms, in contrast to other Latin American and Caribbean countries where large plantations controlled the growing of such commodities as sugar and pineapples. Today, 96 percent of the country's coffee farmers tend plots smaller than seven acres. These farmers were the model for Juan Valdez.

The broad participation in the nation's chief industry helped foster democratic participation in politics, as well. It was the driving force behind Colombia's decentralized system of government, one that was once widely admired but recently has shown weakness in dealing with a civil conflict that thrives on proceeds from drug crops.

The bonanza years of the 1960s and 1970s, when shrewdly marketed Colombian coffee traded on commodities markets near $3 a pound, have ended in a supply glut. Colombian coffee now sells for about 62 cents a pound on the New York commodities exchange, generating just 10 percent of the country's legal export income. It once accounted for more than half.

A big reason for the glut is Vietnam. With the soil and altitude in which coffee shrubs thrive, it was a major exporter before the Vietnam War and reentered the world market in about 1980. Today, it is exporting more coffee than Colombia, and though its beans are generally of a lower quality than Colombia's, they are helping drag down prices. A pound of Vietnamese coffee sells for about 16 cents.

"Vietnam is dumping," said Jorge Cardenas, head of the National Federation of Colombian Coffee Growers, using a term that meansselling on world markets at prices that are illegally low under trade law. He said Colombia's labor regulations make it impossible to produce coffee for less than 50 cents a pound. "We cannot compete," he said.

To export Colombian coffee, a farmer or company must receive federation approval. Only 30 companies have that stamp, and together they control 70 percent of all coffee exports. The remaining 30 percent is controlled by the federation, which keeps a portion of its revenues for social development and has channeled about $1 billion over the past decadeinto building schools, clinics and roads in coffee-growing regions.

Cardenas said the rules ensure that Colombian coffee sells for more than other types overseas, even during a crisis, but that allowing any farmer to sell abroad would "confuse the markets and lessen quality."

Maria Teresa Londono, who owns a small factory that husks and sorts coffee beans in Chinchina, blames the federation for the current crisis. "They are killing us with paperwork," said Londono, whose father was the first coffee buyer in Chinchina. "If the rules are not changed to allow us to sell directly to the buyer, I don't know what is going to happen to this industry."

The federation and international development groups are trying to encourage Colombian farmers to go "up market" and grow gourmet beans that will fetch higher prices. But here on the distant margins of coffee country, many farmers are simply getting out of the business.

Moving northeast from Manizales, the capital of Caldas province and one of the world's most fertile coffee regions, abandoned coffee farms abound. Pasture covers hillsides that for decades had been coffee land, and prime coffee farms are rented out for parties and weekend getaways to help the owners make ends meet.

Rural banks, long the chief source of loans in farming areas, have stopped lending to an industry in which it costs $15 to produce a 27.5-pound bag of coffee that sells abroad for $12.

The Revolutionary Armed Forces of Colombia (FARC), the country's main rebel group, controls much of this region, although farmers say the guerrillas are not profiting from the new crops as they do in other areas. But local officials fear that the social unrest that has traditionally accompanied falling standards of living will sharply increase in the months ahead, fueling guerrilla recruitment in the region.

In the town of Pensilvania, in eastern Caldas, Mayor Jose Oscar Gonzales said coffee has been uprooted in favor of coca in the nearby towns of El Verdal, Playa Rica, Pueblo Nuevo and La Ceba. In all, he said, about 440 acres of coca have replaced coffee. The plots are tiny -- 1,000 to 2,000 plants each, enough to cover only a fraction of an acre.

But Gonzales predicted that the 100 or so farmers who have made the change to coca, which can be harvested three times a year to coffee's one, are just the vanguard. "This isn't pressure from the guerrillas," he said. "This is poverty. Look, coca brings in 10 times the amount as coffee right now. This is the heart of the crisis."

© 2001 The Washington Post Company

********************************************************************* submitted November 1, 2001

Tool in the War Against Drugs: Fair Trade Coffee

Your recent article on Colombia (Oct 30) well describes how falling prices in the coffee market create economic incentives for farmers to switch to coca, an effort that spells trouble for the war against drugs.

It especially brings to light the need for the United States¹ $1.3 billion assistance package, Plan Colombia, to focus on economic alternatives over military entrenchment.  Without other ways to make a living, coca is just too attractive an option for rural farmers who need to make a living to feed their families.  One more attractive alternative that could help stave off the crisis and keep coffee farmers out of poverty is Fair Trade.

Fair Trade is an international monitoring and certification system that guarantees small farmers, like those in the Caldas region, a minimum of $1.26 per pound instead of the world market price (currently 43 cents).  For example, the coffee cooperative CRIDEC, the Regional Indigenous Council of Caldas, serves nearly 80,000 people on four reservations and provides technical support for farming, education, and promotion of indigenous culture. Rather than uproot plants in favor of coca or poppies, its members know it can count on CRIDEC to gain a fair price for their coffee through the Fair Trade system, as long as they continue to produce the high-quality coffee Colombia is known for.

Since September 11, Americans have been learning that our national security is imperiled by global inequality.  The failed War on Drugs is another example of why the increased wealth gap brought on by globalization has increased domestic insecurity, and how the route to true global security is through global justice.

Over 100 coffee roasters in the US are now offering coffee with the Fair Trade Certified label in over 7000 retail locations.  Americans concerned about the impact of drugs in the US can help Colombians gain security for their families - and ours - by purchasing Fair Trade coffee from Colombia.

Deborah James is the Fair Trade Director of Global Exchange, a San

Francisco-based human rights organization.

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Financial Times

Colombian coffee growers start sowing poppies

By James Wilson - Oct 25 2001

Coffee income - boosted by advertisements featuring the mustachioed Juan Valdez - brought a measure of social cohesion to regions wracked by four decades of civil conflict in Colombia.

But the latest price drop has led to an upsurge in kidnappings, violence and farming of drug crops.

UN drug and coffee officials note that some farmers are trying to supplement declining incomes by sowing opium poppies, used to produce heroin. "I have seen farms where there are poppies and coffee," says Fernando Osorio, executive director of the national federation of coffee-growers' committee in Tolima, a central province that grows 12 per cent of Colombia's coffee.

Klaus Nyholm, the UN Drug Control Programme representative for Colombia and Ecuador, says officials promoting alternative development are also finding more coffee-growers in Tolima producing poppies.

"People are not cutting down their coffee, at least not yet - though this may happen in a year or two when people feel that coffee prices are going to stay low," says Mr Nyholm. "But they don't tend the coffee as well as previously."

Mr Osorio says poppies are four times as profitable as coffee per hectare. "The coffee grower does not want to get into illegal businesses, with a lot of risk," says Mr Osorio. "But he accepts that risk because there is nothing else to do."

The trend could confound international efforts to control heroin trafficking. Colombia remains a small player, producing 2-3 per cent of the world's total, but it already supplies most of the heroin on the US east coast.

It is unclear how the US-led war in Afghanistan will affect that country's heroin output, but Colombian officials already fear a rise at home.

"We were already worried about a rise before September 11," says Mr Nyholm.

Colombia has small farms with high production costs: 90 per cent of coffee farms are of 5 hectares or less. Vietnam has lower costs and has overtaken Colombia as the world's second-largest coffee exporter over the last decade. In Brazil, the world leader, farmers have also increased productivity.

Coffee production in the year ending in September was at an all-time high of more than 115m bags, according to the Association of Coffee Producing Countries. The increase in global output outstripped the slow rise in demand, driving down market prices. Many farmers are not even covering their production costs despite the buoyant prices in cafes and gourmet shops.

Efforts to persuade countries to restrict output, led by Colombia, have failed. "Casualties are inevitable," says Karen St-Jean Kafour, the ACPC's senior economist. Already many Colombian growers are cutting back amid the crisis. Bernardo Londõo, manager of Agroinsumos del Café, which supplies three-quarters of the fertiliser sold to Colombia's coffee co-operatives, says sales this year are down 40 per cent. That indicates declining investment by growers, which will cut output and quality, says Pedro Luis Ramírez, coffee director at a 3,000-member co-operative in the important coffee-growing province of Central Huila. "People can afford to fertilise or eat," he says.

John Naranjo, commercial manager of the national coffee-growers' federation (Fedecafe) says unemployment in Colombia's traditional coffee zones is among the country's highest, contributing to unrest. Jorge Lozano, president of the coffee exporters' association, says: "Our industry has been perhaps one of the last to be affected directly by the insecurity that plagues the country. But for months now extortion and robbery have been another negative factor."

The government last month promised the industry aid worth 350bn pesos ($150m) over the next two years. But President Andrés Pastrana joined the chorus of critics demanding that growers and their federation abandon marginal production areas and modernise.

Some reformers point out that growth in the world coffee market has overwhelmingly benefited companies at the consumer end of the chain, not producer countries. Santiago Montenegro, an economist and president of the National Association of Financial Institutions, says Colombian coffee has a good reputation and the country should do more to win consumers to its own processed brands.

There are also efforts to promote higher-value organic and speciality coffees.

Mr Osorio says fighting in Colombia's civil conflict has already caused farmers to abandon some coffee land. Mr Pastrana himself has recognised that former coffee-pickers have had to turn to drug crops.

With world demand expected to slow, and low returns leading to less investment and lower quality coffee, further deterring consumption, finding a model that can revive the fortunes of Colombia's most emblematic product will not be easy.