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Coffee Industry Fails Farmers

Amidst the leaf rust Roya crisis, co-operatives and organic farming shine a light

by Monika Firl

The "last lonely bean." The impacts of Roya have been drastic on Central American coffee producers. Photo by Chelsea Bay Dennis
The "last lonely bean." The impacts of Roya have been drastic on Central American coffee producers. Photo by Chelsea Bay Dennis

MONTREAL—I begin each day with my usual routine: enjoying a morning cup of organic fair trade coffee and wondering how millions of small-scale coffee farmers across Latin America are getting through the current leaf rust crisis—or "Roya" as it’s called in Spanish.

I’ve worked in different niches of the coffee industry since 1994 in both production and marketing projects with small-scale farmers, while living in Central America and Mexico, and now in direct import, communications and production improvement projects from Montreal. In two decades, I’ve never seen anything quite as devastating as the current production crisis—which according to the International Coffee Organization (ICO) is expected to cause an estimated loss of 2.5 million 69-kilogram sacks of production, or $550 million of financial loss in farmer income.

The initial industry reaction was a call to summit meetings. A first emergency gathering sponsored by some of the world’s largest coffee companies and research organizations, was held in Guatemala in April 2013; the second was in El Salvador in November 2013. But while experts theorize about whether or not climate change is the culprit and share their findings on plant-DNA research, small-scale coffee farmers wait impatiently for viable relief plans.

“Our government has declared a state of emergency, but to date we have seen no concrete supports to producers on the land,” said Rodolfo Peñalba, General Manager of the small-farmer organization Café Organico Marcala (COMSA) in Marcala, Honduras.

“The Nicaraguan government has passed a new law that will tax an additional $3 to $5 (depending on the fluctuating market price) on every sack of coffee exported in order to create a Roya Credit Fund for field renovation and other recovery activities,” said PROCOCER Coffee Farmer Cooperative Manager Roberto Villegas. “But since the government put the management of those funds in the hands of the National Bank, for us this only represents an additional expense. With the Roya crisis, the National Bank considers campesinos (small-scale farmers) too risky and have stopped lending to us. We will never have access to those credits.”

The most consistent message communicated to farmers from industry and technical-support offices has been to spray more fungicides and hope for the best. But nowhere do we hear about the deep-rooted causes of the poverty in the soil and the precarious situation of farmers.

Miguel Medina, Vice Chairman of the Guatemalan national coffee association Anacafé and one of the Guatemala summit organizers bluntly set the stage. “I don’t know how organic coffee can have a future. There is nothing that works to control rust in the field and I am not seeing anyone in the market offering more to create additional incentives for organic farmers,” he said during the working sessions.

But while Mr. Medina and so many industry leaders dismiss the potential for organic solutions, members of the small-scale farmer organization COMSA in Honduras watched the slow decay of their neighbours’ conventional (chemically treated) trees—while they were busy harvesting a bumper crop of premium-quality organic coffee from their fields.

Unfortunately, the experiences of farmers like these COMSA members are not being showcased at high-level summits.

Instead of acknowledging and strengthening successful organic practices proven on the land, coffee farmers are being pushed to quick-fix solutions. Some 45% of all green coffee imports are purchased by the five largest roaster parent companies—Philip Morris (Kraft, Maxwell House, etc.), Nestlé, Sara Lee, Procter & Gamble and Tchibo. The large coffee buyers are primarily concerned with getting the volume they need and with satisfying shareholders' expectations of profit. Organic solutions take time, labour investment and financial resources that most small-scale farmers simply don’t have.

With the international price of coffee set by a wildly fluctuating commodity market, driven as much by supply and demand as by completely unrelated investment portfolios buying and selling coffee futures contracts, small-scale farmers are price takers and have endured a long history of the low prices offered by the New York “C” market.

Perhaps it is simply because of the sheer magnitude of the coffee business that the idea of changing production and pricing models at this point is just too much to digest. And with new coffee producing countries, like Vietnam or up-and-coming China, many traders will simply seek out replacement coffee sources from countries not yet affected by the epidemic—leaving Latin American coffee farmers devastated by Roya to fend for themselves.

I had the opportunity early in 2014 to organize a roaster-producer gathering at the COMSA headquarters in Honduras. This event, sponsored by Cooperative Coffees—an organic green coffee importing cooperative owned by 23 independent and locally based artisanal coffee roasters across Canada and the USA—was intended to demonstrate that organic solutions, in keeping with the economic and cultural realities of small-scale farmers, are the most viable long-term path for a sustainable livelihood. Together with Latin American coffee-farmer representatives, coffee roasters, importers and allied organizations, we united around the crisis to talk about production, quality, price and Roya recovery.

For the roasters present, who base their businesses on values dedicated to fair, direct and sustainable partnerships with small-scale farmer organizations, simply substituting coffees from other regions was not an option.

"As a Canadian boutique roaster sourcing 100 per cent organic and mostly Latin American coffees, I was amazed and encouraged to see how these small-scale organic farmers were able to tackle the Roya problem using a creative combination of sustainable, organic solutions," said Al Teflissi, owner of Coutts Coffee in Perth, Ontario and roaster member of Cooperative Coffees participating in the Honduran event.

"My livelihood is linked to theirs—our customers are asking for organic coffee from small-scale producer co-ops, so we’ve made it a priority to support these farmers through a special project that will bring information, organic training and additional financial support to cooperatives like COMSA."

This “Roya Summit” was cooperatively organized and led by expert farmer practitioners and intended to help them see, touch, learn and exchange information with each other about the innovative and highly successful organic solutions that many small-scale farmers are implementing to resist and recover from Roya.

Roya, a naturally occurring fungus in coffee fields, can be held in check when the fields are kept in ecological balance. But during the 2012–2013 growing season, with peaks of abnormally high temperatures and prolonged periods of excessive humidity combined with vulnerable soils and trees due to the lack of investment and healthy agricultural practices, the orange fungus spread like wildfire. Once the fungus hit its tipping point, it spread across Central America, affecting between 15 and 85 per cent of yields, depending on local conditions. Roya attacks the leaves, the primary source of photosynthesis of the coffee plant, which not only affects ripening of the current-season cherries, but can also cause the flowers of the following season to drop, and depending on the intensity of the infestation can kill a branch or the entire tree—thus affecting the current harvest and harvest yields for many years to come.

COMSA Organic Promoter Victor Contreras explained, “We frequently talk about nutrients, but we often forget about the life-giving energies found in minerals and micro-organisms. Here at COMSA, we are learning to create a model of agriculture in harmony with the laws of nature to feed and nurture the life energy in the soil.”

Ironically today in 2014, the “International Year of Family Farming” (IYFF), the perfect storm of environmental, economic and humanitarian disasters is lining up to push struggling small-scale farmers off the land. And with the exception of a very small niche of fair trade or direct commercial relationships between farmers and consumers, no one seems to notice. Is this just another David and Goliath story? Just another unfortunate chapter in the long and twisted story of coffee? Perhaps. But, it’s one in which Canadians take part—inadvertently or not, on a daily basis.

According to the Coffee Association of Canada's newly released 2013 Coffee Drinking Study, coffee is second only to tap water as the most consumed beverage in Canada. Nearly two-thirds of adult Canadians will have consumed coffee in the past day, and coffee drinkers consume on average 3.2 cups of coffee per day, for total annual retail sales of some CAD$1.6 billion.

The goal of the Food and Agriculture Organization of the United Nations for the 2014 IYFF is to “reposition family farming at the centre of agricultural, environmental and social policies in national agendas by identifying gaps and opportunities to promote a shift towards a more equal and balanced promote broad discussion and cooperation at the national, regional and global levels to increase awareness and understanding of the challenges faced by smallholders and help identify efficient ways to support family farmers.”

Sadly, small-scale farmers are experiencing just the opposite.

Prior to her work in Fair Trade coffee, Monika has worked as a freelance writer and has supported a variety of locally based development projects, while living in Central America and Mexico from 1991 to 2000. Monika holds a Master's Degree in Journalism as well as a BA in International Relations and German.

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