Central America Coffee Farmers Survive by Going Green

from: <www.grist.org> Grist Magazine 10/19/04

WE TAKE OUR COFFEE GREEN
Central American coffee industry rebounds by going green

A global surplus of coffee five years ago sent the Central American
coffee industry into a tailspin, but it is gradually recovering by
focusing on high-quality beans -- which in many cases means
organically grown. In that rarest of things, a genuine win-win
situation, the industry is being helped by an odd coalition including
large U.S. coffee corporations, international conservation groups,
U.S. aid agencies, and Central American governments. The U.S.
government sees aid as a way of encouraging financial stability in
nearby nations; conservation groups see it as a way of encouraging
biodiversity and reducing erosion, both enabled by organic coffee
farms; U.S. coffee corporations see it as a way of ensuring a steady
supply of high-quality coffee, which is in high demand these days;
and Central American governments see it as a way of reducing
unemployment and social unrest. The assistance available to farmers
willing to go organic also enables them to pay higher salaries and
offer more health benefits.

straight to the source: The Washington Post, Mary Jordan, 17 Oct 2004
<http://grist.org/cgi-bin/forward.pl?forward_id=3357>

washingtonpost.com
The Cappuccino Effect
Quality Beans Revive Guatemala's Coffee Industry

By Mary Jordan
Washington Post Foreign Service
Sunday, October 17, 2004; Page A01

AMATITLAN, Guatemala -- When a global glut drove the price of coffee beans
to a historic low five years ago, Julio Flores almost shuttered the hillside
coffee farm that had been in his family for four generations. But today
Flores's farm is prospering as soaring demand for premium coffee brings new
wealth to the old fields of Central America.

"We fought and fought and focused on higher quality, and we have left the
crisis behind us," said Flores, 49, wearing jeans and a straw hat as he
walked around his leafy, seven-foot-tall coffee plants with beans ripening
for a December harvest.

Flores said what saved his farm was a clearer understanding that First
World consumers want only the best beans in their cappuccinos and lattes and
that they are willing to pay for it.

So he stopped using chemical fertilizers and pesticides, planted avocados
below the 4,500-foot elevation that is generally required for the best beans
and tended more carefully to his mile-high coffee plants.

Now, instead of selling 100 pounds of beans for $42 as he did in 2000, he is
raking in $115 for the same amount of higher quality beans. Better still, he
said, if he is certified as an organic grower next year as he expects, he
aims to earn $150 to $200.

"A revolution has taken place in five years," said William Hempstead, a
director of the Guatemalan National Coffee Association, which has been
helping farmers increase quality to further distance themselves from such
mass producers of commercial grade coffee as Vietnam.

Industry analysts said the shake-out in the coffee industry has caused pain
across the region, resulting in the loss of at least half a million jobs.
The industry now employs about 1.2 million people in Central America, down
from about 1.7 million five years ago, according to official labor
statistics. Guatemala lost 250,000 of its 650,000 coffee-industry jobs.

Unemployed coffee workers have moved to already overburdened cities, and
others have gone illegally to the United States looking for work. Families
who have depended on coffee for generations have been displaced, and
countless coffee farms have been abandoned.

But Hempstead and others said that rather than dying, the industry is now
bouncing back with a greater emphasis on top-quality coffee. While that has
not restored the industry to its former glory, it has brought rare good
economic news to this impoverished region.

Analysts said the shift to high-end coffee had been supported by the United
States government, which sees it as an opportunity to improve economic
stability in its back yard. Conservation groups also are working with
farmers to help them earn more money so that coffee farms survive, because
they help the environment by preventing erosion and harboring wildlife.

Large U.S. coffee corporations, Central American governments, U.S. aid
agencies and international conservation groups are working together to help
the industry, said Charles Oberbeck, who is in charge of the region's coffee
programs for the U.S. Agency for International Development.

"The unlikely bedfellows," he said, may all be working for differing
reasons, but the effect is clear: Guatemala's coffee export earnings rose
from $233 million two years ago to over $300 million this year. A similar
rebound is occurring in neighboring Costa Rica, El Salvador, Nicaragua and
Honduras, which all depend on coffee production.

"The crisis taught us that quality sells," said Henry Hueck, a Nicaraguan
coffee farmer who sells his coffee to Bewley's Ltd., based in Ireland. "It
used to be a given that people bought your coffee. Now all people are
talking about is quality coffee."

Oberbeck said U.S. coffee companies are paying above-market prices to
secure the world's best coffee because "they don't want to kill the goose
that laid the golden egg."

While there is a huge supply of commercial-grade coffee -- often grown in
the sun in lowlands in Africa and Asia and Brazil -- Oberbeck said there is
a less abundant supply of what is considered the best coffee. He said the
growing demand for top-quality coffee has turned out to be "lucky salvation
for the industry" in Central America. Guatemala in particular is reaping the
benefits as it emerges "as the world leader in quality coffee," he said.

According to industry figures, Guatemala ranks second to Colombia in the
overall amount of quality coffee it produces, but ranks first in the
percentage of its crop classified as the highest quality -- and that
percentage has been rising steadily.

Guatemala's elevation, volcanic soil and rainfall produce beans with
distinct flavors -- from chocolaty to fruity -- setting it apart from
coffees used in canned or instant coffee, industry experts said. Some
Guatemalan coffee is grown at elevations as high as 11,000 feet, with
farmers tending to it on mountains so steep they have to tie a rope around
their waists to make sure they don't fall. "It's so steep you can literally
fall out of your farm," Oberbeck said.

Coffee experts compare their industry to the wine industry, with consumers
wanting a gourmet arabica more than a routine robusta, just as people want a
fine cabernet sauvignon over a red table wine.

There has also been a noticeable upsurge in Japanese buyers, including the
giant beverage company Suntory, which has descended on Guatemala looking for
velvety bodies, lively aromas and just the right aftertaste. Japan, once a
tea-drinking nation, is now the third-largest importer of coffee, after the
United States and Germany, according to the International Coffee
Organization.

The competition among buyers from wealthy countries is also helping coffee
producers in Costa Rica, El Salvador, Nicaragua, Honduras and the southern
Mexican state of Chiapas.

New Internet auctions begun this year exclusively for the region's gourmet
coffee attracted bidders from New York to Tokyo and are helping raise prices
and recognition in Central America.

The U.S. government has allocated nearly $20 million for regional coffee
programs to be spent through USAID from 2002 to 2006. The agency is helping
farmers with technical and marketing advice. U.S. officials said supporting
the coffee industry makes sense because coffee remains a vital export and
employs hundreds of thousands of the region's poorest.

When things go wrong in those fields, "we really feel the effect in our
back yard," said Martin Raine, a U.S. economist at the World Bank who
focuses on Central America. Environmental and conservation groups have
become involved in the shade-grown coffee movement, praising small farms
such as Flores's for the steps they have taken to protect the environment.

"We call them coffee forests because so many of them are so gorgeous," said
Sabrina Vigilante, a marketing manager for Rainforest Alliance, a New
York-based organization.

On the steep road to Flores's farm, named The Forest, he points out one
abandoned coffee farm and another paved over for a new housing development.
But at his place, mockingbirds, doves and parakeets fly under a canopy of
cypresses and cedars. He said he has planted 4,000 trees on his 400 acres,
all part of a strategy to become certified as organic and environmentally
friendly.

Flores also said he now likes drinking specialty coffees, such as
cappuccino, a drink that many of his beans are used for in the United
States. He has even asked his aunt in Bethesda, Graciela Carcamo Stukey, to
bring him an espresso machine on her next visit.

Coffee workers earn about $4 day -- the price of some brews at U.S. coffee
shops. Farmers and workers interviewed said that working conditions have
improved in many cases as foreign buyers, who want to be seen as socially
responsible, express concern.

Flores said he is planning a new health clinic on his farm, adding that
producing better beans means more profit for him and higher pay for his
workers.

"I benefit and so do my workers," he said. Flores even said he is hiring,
rare good news in an industry that has been shedding workers.

Rosendo Tubac, 32, said he was jobless for two rough years when the coffee
farm where he worked went out of business. He said he and his wife scrambled
to sell sandwiches in the street to feed their four small children.

Now, working at The Forest, Tubac said, "times are better."

© 2004 The Washington Post Company