||Pictured above: Coffee,
with white flowers, and macadamia trees on Oriflama farm in
the highlands of Guatemala.
Posted May 13, 2003:
Good coffee, like wine, has cachet – it’s delicious,
it adds richness to your daily routine, it expands your vision.
Even more than wine however, coffee has embedded in it a rich matrix
of social, economic, and environmental dynamics that span the globe.
Coffee is the second most valuable globally traded commodity; only
the petroleum trade does more business. Furthermore, in a stark
distinction from the notoriously concentrated petroleum industry,
coffee is produced by more than 20
million farmers worldwide.
In 2001 the price of coffee fell from over $1/lb. on the world market
to less than $0.50 because of the increase in supply brought on
mainly by Vietnam becoming a major coffee producer and by increases
in production in Brazil. The price drop has been an unmitigated
disaster for Central American economies, causing some 600,000 people
to become refugees and 1.2 million to need direct food aid.
||"Worldwide it is widely
said that the average coffee farmer receives about 1% of the
price of a cup of coffee bought in a café. By simply
increasing the percentage that goes to the farmer to 2%, a few
pennies are added to the cost of a cup of coffee, but a doubling
of the farmers income can be achieved, making coffee production
The signs of the coffee crisis can be seen everywhere in the Guatemalan
highlands, where some of the finest coffee in the world is grown.
Huge swaths of land that formerly held coffee with beautiful stands
of shade trees lie smoldering or blackened, being readied for planting
of some other crop. The use of large trees for shading coffee is
a Guatemalan coffee-growing custom and is said to have been developed
here. Coffee grown under the proper level of shade takes longer
to develop, which favors the development of rich and complex flavors.
Shade-grown coffee is one of the most environmentally benign crops
in the world and is perhaps the ideal agroforestry crop. Over 100
species of shade trees have been counted on a single Guatemalan
The vast majority of alternative crops being planted in the place
of coffee are not nearly as environmentally friendly – most
are monocultures, many need much higher levels of pesticides and
fertilizers and many are annual crops that leave the soil exposed
Less visible than the loss of coffee crop land is the human suffering
and struggle due to the loss of jobs on and income from coffee farms.
The indigenous people of the highlands of Guatemala are not a demonstrative
people. They suffer their setbacks quietly. However, it doesn’t
take a long conversation to find out how difficult the past two
years have been for people here whose livelihood depends on coffee.
While, historically, the coffee industry in Guatemala has been intimately
linked with the exploitation of the Mayan people, as described in
books such as the widely read I, Rigoberta Menchu, the
loss of those jobs has made the situation worse. Swarms of people
from the countryside ply the streets of tourist towns trying to
sell homemade weavings and crafts.
Premium grade coffee, low
grade prices: The Guatemalan
struggle to be recognized in the gourmet market
Central America, and particularly Guatemala, produces some of the
finest, if not the finest coffees in the world. Terms like “kaleidoscopic,
exceptionally sweet, elegant and powerful” have been used
by coffee professionals when describing Guatemalan highland coffees.
The problem is that much of the Guatemalan coffee is sold on the
standard world coffee market, known as the “C market,”
whose average coffee quality is far lower than Guatemalan highland
coffee. The C market price is currently less than the cost of production.
Reaching the “specialty” or “gourmet” coffee
market is a major goal of Central American coffee producers.
The task of selling to the gourmet coffee market can be daunting,
however, as there are at least two dozen major steps in the chain
of production and processing that must be carried out flawlessly
in order to sell to the specialty coffee market. If any one of those
steps is botched, the coffee will surely be rejected by coffee brokers,
whose practice of tasting, known as “cupping,” the roasted,
ground and brewed product is a standard regimen in the marketing
Everything from varietal selection, soil fertility, pest and disease
management, harvesting, time from harvest to processing, plus a
dozen major steps in processing from initial fermentation to final
drying, storage, and transport have to be spot-on in order to make
the gourmet coffee grade and get the top prices - $1 - $1.50 per
pound for “green” (unroasted) coffee. (Green coffee
is the form of coffee traded on the world market.)
I visited three traditional plantation style coffee farms as well
as a number of small scale coffee producers and cooperative managers.
The coffee plantation owners are relatively wealthy by Guatemalan
standards. However, with the fall in coffee prices, even these families
are struggling hard to make ends meet. Much of the pioneering work
on the development of methods for coffee sustainability and quality
is being done on these farms.
Oriflama Farm, in the mountains
just south of Mexico:
Environmentally friendly, agriculturally innovative, socially bold
of Oriflama breaking social molds: Standing in
the tan sweatshirt, Walter runs a workshop for his workers
to apply for leadership positions on the farm. He encourages
the women to attend, and says he actually prefers women
as supervisors because they don't bring with them the
old Latin American tradition of poor treatment of workers,
as many men do.
Walter Adams, whose great-grandfather Don Bernardo Hannstein was
one of some 5,000 German coffee pioneers in Guatemala in the 1800s,
showed me his family’s 185 hectare coffee and macadamia nut
farm, Oriflama, in the mountains just south of the Mexican border.
After leaving the main road, we drove for two hours on a four-wheel
track to reach Oriflama.
Oriflama is certified for sustainability by the Rainforest Alliance,
a process that involves inspection of a spectrum of farm elements:
fertilization, pest management, waterway protection, recycling,
worker pay and housing, biodiversity, and transparency of the marketing
chain, to name a few.
This certification is not an organic certification – it is
broader in its scope than organic, although a farm can be certified
under both frameworks. Under the Rainforest Alliance certification
program, certain types of pesticides and low to moderate levels
of synthetic fertilizers can be used, a major distinction from organic
certification. On the other hand, criteria such as the recycling
of waste from processing facilities and on-farm households, worker
wage and housing criteria, coffee marketing channels and their transparency,
and standards for protection of riparian and natural zones are all
issues addressed by the Alliance that generally stand outside the
scope of organic certification.
Owner: Walter Adams
Size: 185 hectares
Certification: Rainforest Alliance
wet processing system; low-cost pest trap for the coffee
berry borer; the hiring of women as supervisors on the
Sells to: Starbucks, others
Starbucks pays 10% more for coffee that is certified as sustainable
by Rainforest Alliance and several other certifiers. They pay approximately
$1.20 per pound, about twice the C-market price and close to the
current Fair Trade price of $1.26 per pound. Oriflama sells a substantial
percentage of its coffee to Starbucks.
Water pollution from the wet-processing system that most Central
American coffee producers use is coffee’s biggest environmental
impact. The waste water is acidic and high in natural effluents
from the fermentation of the mucilage that envelopes the coffee
berry. Oriflama has developed a method of wet processing the freshly
harvested coffee beans that reduces the amount of water used by
95%, virtually eliminating the discharge of waste water into surrounding
streams. They recycle all of their coffee processing pulp back to
the coffee plantation as fertilizer.
||"Adams and his crew at Oriflama have
developed a low-cost attractant trap for controlling the coffee
berry borer, coffee’s worst insect pest. The traps are
made from discarded plastic liter-sized soda pop bottles and
two inexpensive alcohols as attractants."
Over 100 species of trees have been counted as part of the shade
regime on Oriflama. About a third of the coffee is interplanted
with macadamia trees, the nuts of which are also processed on the
farm. Where macadamia is not interplanted with the coffee, the predominant
shade tree species is Inga spp., known as chalun. Chalun, is a legume,
yields excellent firewood, and is the most commonly used coffee
shade tree in Central America.
Adams and his crew at Oriflama have also developed a low-cost attractant
trap for controlling the coffee berry borer (Hypothenemus hampei),
coffee’s worst insect pest. The traps are made from discarded
plastic liter-sized soda pop bottles and two inexpensive alcohols
as attractants. In the absence of adequate research infrastructure
for organic and sustainable methods in Guatemala, the better-off
plantations such as Oriflama play an important role in developing
this type of technology, which can then be replicated by small-holders.
Another of Walter’s innovative practices is to hold workshops
for any of his workers who wish to train to become supervisors,
known as caporales. He encourages the women to attend,
and says he actually prefers women as supervisors on the farm, as
they do not bring with them the old Latin American tradition of
exploitation and poor treatment of workers, as many of the men do.
Women tend to focus on the tasks at hand rather than power issues,
as the men tend to.
Of three highly successful women caporales on the farm
in the past, only one remains, as the two others’ husbands
could not accept the women having an income greater than theirs
and forced them to quit! The remaining woman caporal put her foot
down and told her husband he could leave if he wanted, but she wouldn’t
give up her post. He hasn’t left.
Finca Santo Thomas Perdido,
on the lower slopes of the Toliman volcano:
Fighting erosion, preserving older varieities, supporting local
Owner: Carlos Torrebiarte
Size: 280 hectares
Certification: Mayacert, a Guatemalan
organization with standards similar to the Rain Forest
Innovations: using honey bees to increase
productivity; promoting responsible use of firewood
from coffee shade trees, along with fuel-efficient,
home constructed adobe stoves; preserving older tipica
varieties of coffee, which Carlos says are very flavorful
Several hours drive to the south of Oriflama, where the Guatemalan
highlands begin to descend from Lake Atitlan to the Pacific Ocean,
Carlos Torrebiarte owns and runs a 280 hectare coffee farm, Finca
Santo Thomas Perdido. Santo Thomas is certified for sustainability
by Mayacert, a Guatemalan-based organization that uses the same
framework used by the Rainforest Alliance for certification. As
with Oriflama, St. Thomas has reduced water discharge from processing
to negligible amounts, the biggest step in sustainablizing coffee
Carlos is also a leader in developing honey production in coffee,
and keeps one hive per acre of coffee throughout the farm, harvesting
125 lbs. of honey per year per hive. The honey is from flowers of
both coffee and chalun. Carlos maintains that pollination of coffee
by bees raises his coffee yields by 25% -- a recent discovery. Coffee
is mostly self-pollinated and has not been considered to be a crop
that needs insect pollination. Carlos believes that the coffee crop
has great potential to be a major honey producer in Central America.
Carlos is also enthusiastic about the substantial amounts of firewood
supplied by coffee shade trees. Eighty percent of energy use in
Guatemala is still firewood, and shade-gown coffee can provide much
of that, taking some pressure off of the remaining beleaguered forests.
Carlos works in the community to promote the Lorena stove, a simple,
home-constructed, adobe stove that reduces fuel use by half. He
is also involved with his coffee-grower neighbor, Andy Burge, in
preserving the remaining forests in the area.
||"Carlos maintains that pollination
of coffee by bees raises his coffee yields by 25% -- a recent
discovery. Coffee is mostly self-pollinated and has not been
considered to be a crop that needs insect pollination. Carlos
believes that the coffee crop has great potential to be a major
honey producer in Central America."
Andy, whose farm I visited with Carlos, is one of the leaders of
local conservation groups and is involved with The Nature Conservancy.
Andy is attempting to obtain the Smithsonian “Bird Friendly”
coffee certification, but says that it’s very stringent and
not easy. As we sit and talk on the porch of his old plantation-style
home, he identifies at least a half-dozen calls of birds considered
to be rare and threatened. Andy says that since he and other neighbors
have improved the shade tree abundance and diversity in their coffee
plantations, plus banned the use of slingshots on their land by
locals (traditionally used to hunt birds), many birds have reappeared
that did not exist here a decade ago.
Destruction of forest on the volcano slopes above the Santo Thomas
Perdido farm by people needing new crop land has caused wells to
dry up, and two major mudslides to occur. The second mudslide wiped
out a village, killing over 30 people in 2002. Carlos has housed
the remaining villagers on his land. He has planted a South American
bamboo Guadua angustifolia known as the world’s strongest
and longest lasting bamboo, to help stabilize the slopes. Pressure
to exploit the few forested areas left, mostly on steep slopes,
has increased and will continue to grow. The population growth rate
is high amongst the poor, mostly Mayan, highland population - the
population doubling time is approximately 20 years. Families typically
consist of at least 6 children. The gardener of the house I am renting
has 12 children. The outdated, corrupt, and vastly unfair land tenure
system of Guatemala makes the situation worse for the poor and landless.
Another of Carlos’ projects is the planting and preservation
of tipica varieties of coffee. These varieties were brought to Guatemala
by the Spanish hundreds of years ago and were selected to thrive
under local conditions. The tipicas predate the venerable Bourbon
variety, considered to be the oldest of the more modern coffee varieties.
Carlos maintains that, while the tipica plants tend to be large
and scraggly, the taste of tipica coffees is unparalleled.
Andy’s coffee farm is in transition to organic. He is the
third coffee grower I have talked to who maintains that going organic
means enduring a yield reduction of 50%-70%, due to soil fertility
constraints. I am skeptical that this magnitude of yield reduction
should be the rule, for several reasons. First, a study done in
Costa Rica showed an average organic underyield of 17% in paired
conventional/organic coffee farms, despite the fact that state-of-the-art
organic methods have yet to be developed for coffee. Second, all
of the evidence from other crops around the world shows that organic
crops yield on the average 90% of conventional, after transition
and the development of state-of-the-art organic methods. This point
of view is bolstered by Carlos and Andy’s mention of a consultant
who maintains that organically managed coffee can attain equal yields
as conventional, all other things being equal. So the jury is still
out on this issue. Research needs to be done, particularly on green
manure crops for building soil fertility.
Smaller coffee growers
near the shores of Lake Atitlan:
Struggling to survive the low world prices on less than an acre
of low world prices: Small coffee grower Antonio
Quic shows a neighbor's land, where coffee has been taken
out because of the fall in prices and loss of income.
I visited Francisco Sajquiy’s small (less than an acre) coffee
farm in San Pedro la Laguna, near the shores of Lake Atitlan. He
is now harvesting the last of the coffee beans, and selling the
“cherries” to buyers nearby for $7 per hundred pound
sack, or seven cents a pound. The buyer, who has a pickup, then
sells the cherries to a nearby processing plant for a small profit.
A one hundred pound sack of freshly picked coffee cherries, after
going through the processing plant, makes 20 pounds of green coffee.
Therefore, Francisco was paid about 35 cents per pound for what
would end up as green.
The C-market price right now for green coffee is 63 cents per pound.
Whoever ends up selling the green coffee from the processing plant
may, depending on the quality, be able to sell it above the C-Market
price because it is “strictly hard bean” (which means
high quality Guatemalan) coffee. Let’s say they get 85 cents
per pound. Several commercial steps later, the end of the marketing
chain, Guatemalan premium highland coffee, roasted, is going for
about $6 per pound on the Internet (the roasting process reduces
the weight by about 20%). The higher one goes up on the marketing
chain, the higher the value-added markup becomes.
The average size of the smallholder coffee crop around Lake Atitlan
is about a half acre, and the average smallholder fresh bean coffee
yield is 4800 pounds per acre. Thus at the current rate of $7 per
100 pound sack, the half acre of coffee pays $168. The average cost
of production is considered to be $430 per acre, or $215 per half
acre. Therefore it is not hard to see why farmers are ripping out
their coffee to put in other crops.
Worldwide it is widely said that the average coffee farmer receives
about 1% of the price of a cup of coffee bought in a café.
At 1/3 oz. of coffee per cup (strong!), and $1.50 per cup (cheap!),
a pound of coffee earns $72 in this bargain of a café. Francisco
earned about $0.43 per pound of roasted coffee ($0.35 per pound
for green). This comes out as exactly 1%, but my estimate is generous,
and it is probably less than 1%.
||"the consensus among North American
coffee buyers is that the quality of Fair Trade coffees tends
to be inconsistent at best and inferior at worst, compared to
the traditional plantation coffee sold through private channels.
Given the sophisticated management needs for production of top
quality coffee, this is not surprising, and the challenge is
for the cooperatives to develop the management skills to consistently
produce high quality coffee. "
By simply increasing the percentage that goes to the farmer to
2%, a few pennies are added to the cost of a cup of coffee, but
a doubling of the farmers income can be achieved, making coffee
production profitable. One of the rays of hope in this area of improving
producer-consumer equity is the work of organizations which promote
what is known as Fair Trade coffee, whose goal is to increase the
farmers’ share of profits. Fair Trade coffee currently pays
a minimum of $1.26 per pound of green coffee to producers, nearly
four times that which Francisco is receiving. Fair Trade coffee,
such as that sold by Equal Exchange, is generally bought from coffee
associations or cooperatives of smallholders who are certified by
Fair Trade certification organizations such as Transfair.
I talked to Rainiero Lec, a Mayan Guatemalan who works for a American
NGO with a consortium of smallholder coffee associations, representing
several thousand farmers. Currently they are working at obtaining
organic certification for several of the associations via Maya Cert.
Because of the cost of certification, smallholders’ only avenue
for organic certification is via forming an association, in which
300 holdings are certified at once. Currently organic Guatemalan
highland coffee sells for $1.41 per pound of green, a higher price
than the $1.26 Fair Trade rate. For coffee to be sold as certified
organic, the coffee processing plant must be certified organic as
well. Currently Rainiero’s associations pay processers for
this service. They are in the process of building four organic coffee
Rainiero’s consortium is also working to obtain Fair Trade
certification for the small-holder associations, via Transfair.
The main certification criteria is assurance of payment of the Fair
Trade price to producers. Since farmers often need the money in
hand immediately after harvest, credit and partial up-front payments
are part of the Fair Trade certification program.
Much progress needs to be made to improve Fair Trade coffee commerce,
both at the producer end as well as the consumer demand end, in
order to bring about a consistent implementation of improved producer-consumer
equity. One challenge is that the consensus amongst North American
coffee buyers is that the quality of Fair Trade coffees tends to
be inconsistent at best and inferior at worst, compared to the traditional
plantation coffee sold through private channels. Given the sophisticated
management needs for production of top quality coffee, this is not
surprising, and the challenge is for the cooperatives to develop
the management skills to consistently produce high quality coffee.
Mike Roberts, owner (as well as barista) of Crossroads Café
in Panajachel, Guatemala, where one can buy possibly the best cup
of coffee in Guatemala, has worked in the specialty coffee industry
for nearly 20 years. Mike buys, blends, roasts, and sells coffee
on the specialty coffee market, and often buys organic and cooperative
produced coffee, but always tests each lot. “When you have
300 farmers bringing their coffee to one cooperative processing
plant, if the management isn’t right on top of things, just
one or two bad batches from one or two farmers can ruin the whole
lot for selling to the gourmet coffee market.”
Dan Fireside, a Cornell University graduate student doing his Master’s
degree thesis on Guatemalan cooperative coffee maintains that there
is a bias against cooperative and Fair Trade coffee in the North
American coffee buyer community, and that more could be done to
increase demand for coffee from these sources. According to Dan,
there are now associations of cooperatives in Guatemala with an
umbrella organization in Guatemala City, the Federation of Coffee
Growing Cooperatives of Guatemala (FEDECOCAGUA) that does quality
selection, cupping, and marketing on a level as sophisticated as
any of the established private sector businesses.
Ultimately, the quality debate will have to be settled with blind
cuppings of Fair Trade coffees and privately produced and traded
coffees from the same region. So next time you go to your favorite
café for coffee, ask them if they sell Fair Trade or organic
coffee, and give it a try – you may be pleased.