Friday, May 15, 2009

On Rising Coffee Prices

Recently, I’ve seen news that international coffee prices have risen (Shortages stir coffee and sugar prices, Financial Times). This has created worry in some sectors of the industry, especially among the buyers who sell their coffee directly to consumers. At the same time, some believe this means farmers will receive a more equitable price for their coffee. This is not certain, especially since the majority of organized farmers I know sold their coffee months earlier.

The process of running a cooperative requires many managers to accept pre-financing (oftentimes with interest payments) to fund the upcoming year’s crop. This pre-financing often obliges them to sell their coffee at a fixed price. Given that, a decrease or increase in coffee prices in the future doesn’t affect many farmers.

Oftentimes, the intermediaries and coffee buyers know how the market is performing and can make decisions with information many farmers aren’t privy to. In my experience, farmers often lose out or are pushed to the margins by this phenomenon.

And factor in that real, high quality coffee is becoming scarcer due to a number of reasons, including:

• a shift in the optimum zones for coffee cultivation due to climate change,
  
• increased costs for fertilizer and fuel,
  
• costs associated with certification processes,
  
• an increase in competition between producers,
  
• an increase in the number of countries that produce coffee.

In my experience, an average family should produce at least 40 sacks of coffee for export (under the organic coffee system) to make a dignified – albeit modest – living, but the average family only produces about 8-10 sacks of coffee.

Coffee Kids’ partners work with families to create alternatives to coffee farming that provide year-round income. These alternatives promote, access to education, health awareness and food security and most importantly, coffee-farming families can continue farming coffee without being dependent on it.

---

Monday, May 11, 2009

Voice from the Field: Fatima Ismael Espinoza

José Luis Zárate of Coffee Kids recently spoke with Fatima Ismael Espinoza, the general manager of the Coffee Kids’ partner Society of Small Producers for Coffee Export (SOPPEXCCA) to get a sense of how coffee farmers deal with unstable coffee prices and provide for their families.

Located in Jinotega, Nicaragua, SOPPEXCCA is a 650-member cooperative known throughout the coffee industry for their innovative practices and approaches to sustainability. Like many coffee-farming communities, they confront unstable prices for their product and variable yields.

JL: How much land does the average farmer in your cooperative have in coffee?

FE: Small producers in our cooperative on average cultivate about 1.8-2 hectares of coffee. This is insufficient for many and propagates poverty, which will continue for the foreseeable future.

JL: Is poverty an issue of access to sufficient land or low productivity?

FE: It is primarily a result of small properties, but there are two factors that go together. Limited land combined with inefficient use of that land and the lack of technical resources make it very difficult for families to survive.

JL: And when you talk about that lack of technical resources, what do you refer to?

FE: I mean technical support in the sector of organic coffee production. For example, to produce organic coffee, our producers expect a 50% reduction in production. The effect should be the opposite, organic production should be higher than with agro-chemicals because agro-chemicals deteriorate the environment.

In all the years that we have worked with organic production, we have noticed the damage to the environment that was caused by agro-chemicals. The problem that we face now is called soil infertility. My hypothesis is that this issue of infertility is the result of all the years that the land suffered from agro-chemicals, particularly in the 60s and 70s during the coffee boom. Also big estates used large amounts of agro-chemicals to make the land productive and generated such soil infertility.

JL: Maybe it’s not that the soil is poor but that it is toxic…

FE: Moreover, the hurricanes now wash away the nutrients from the soil eroding the richest layers of the land. I remember days after Hurricane Mitch I saw those soils totally bleached, white and hard. This means that a process of soil rehabilitation is needed.

We have had to analyze the soils, which is expensive. The price is unreachable to producers, so they cannot understand the condition of their soils. It is not worth it for them. This is why we have done various soils samplings with the cooperatives.

Thanks to this we have realized that although some of the soils are not as poor as we thought, there are some elements in it that show deficiencies. Then, as an alternative we have been attempting at working with the young people to process organic fertilizers that, apart from providing youngsters with a source of employment, help reduce the problem for the producers of organic coffee.

Conventional producers will have to move to organic gradually because the cost of chemical fertilizers is higher and higher. This increase in the price of chemicals is going to benefit us because there will be more and more organic producers.

JL: How many sacks of export-ready green coffee do the farmers produce per hectare?

FE: Our farmers produce about six sacks of green coffee (100 pounds per sack) per hectare.

JL: In your opinion, how much coffee does a family need to produce to cover living expenses?

FE: An average family should produce approximately 30 sacks of green coffee for export. But in order to survive, this production must be accompanied by the production of basic grains, fruits and some vegetables, along with other cash crops.

The aim is to diversify the products that fit into the agro-ecological system of coffee. This will prevent over dependence on coffee because if the price falls, families are helpless. If the harvest is bad, families are helpless. In our case, we have been encouraging cultivation of cocoa alongside coffee. The cocoa has a good price and it’s a more efficient use of the soil.

JL: In your experience, how much money is necessary to cover a family’s needs?

FE: For a normal family, without wasting anything, a family could spend about $30 a day. And the average income in Nicaragua is $2 per day.

JL: What happens during the ‘silent months’ when there is no coffee production?

FE: Coffee has very little silence. Most of the energy is put in November through February, which is harvest time. But after that there is the pruning, fertilization and coffee maintenance.

JL: It seems obvious that families do not earn enough to cover their expenses. What are they doing to cover that missing part?

FE: Well, this means they’re eating badly. It’s an issue of malnutrition. And what are we doing about this? We are trying to find alternatives for the people so they can diversify their diets starting with backyard production of fruits and vegetables.

JL: What kind of projects are you promoting?

FE: There are some who have already diversified their production. Some produce coffee and cocoa, others have coffee and sheep and some others are managing coffee and cattle. There is a group of poor women that have little land and we’ve provided them with training to produce jam for local sale and consumption.

Learn more about SOPPEXCCA’s efforts here or check out our Flickr page to see photos from Coffee Kids’ latest visit!

---

Friday, May 08, 2009

Civil War Apologies in Guatemala

Just saw this article in the Washington Post, Payments and Apologies for Victims of Guatemala’s Civil War. After living in Guatemala for two years and coming to understand the effect the civil war had on thousands of people there, it’s exciting to see the government taking some responsibility. Many of our Guatemalan partners work in indigenous communities that were heavily affected by the war, which lasted for nearly 30 years from the late 60s until 1996.

---