Development & Aid, Economy & Trade, Food and Agriculture, Headlines, Latin America & the Caribbean

Bitter Taste in Mexican Coffee Farmers’ Mouths

Emilio Godoy

MEXICO CITY, Apr 26 2010 (IPS) - A Turkish proverb says “coffee should be black as Hell, strong as death, and sweet as love.” But growers of the more expensive arabica coffee beans in Mexico are more concerned with a government plan to promote the cheaper robusta beans than with poetic maxims.

The ministry of agriculture, livestock and fishing launched the “humid tropics” programme to boost production of the lower quality but hardier robusta coffee in nine of Mexico’s 32 states.

Currently, 95 percent of coffee produced in this country is the more prized but harder to grow arabica.

“It will affect us, because it’s going to generate a new coffee price crisis and will flood the market with a cheaper product,” Cirilo Ruiz, a member of the regional coffee council of Coatepec, a town in the state of Veracruz, 400 km southeast of the capital, told IPS.

The agriculture ministry will initially make three million dollars available with the aim of expanding the cultivation of robusta coffee in the nine states in question, to increase annual output from the current 150,000 sacks to 500,000 sacks by 2012.

The direct beneficiaries will be big roasters like Switzerland’s Nestle or the Mexican company Sabormex, because instant coffee is made with robusta beans.

Eighty percent of instant coffee – which represents 57 percent of domestic consumption of coffee in this country – is sold by Nestle.

Arabica, which is more highly regarded for its taste and aroma and fetches a higher price on the international market, must be grown 800 metres above sea level, while the hardier robusta can grow at lower altitudes and has more caffeine.

Mexico is the third largest coffee producer in Latin America, after two world leaders: Brazil and Colombia, the first and third largest coffee producers in the world. (Vietnam is the second.)

In Mexico, some 490,000 farmers grow coffee on more than 600,000 hectares, producing around 4.2 million 60-kg sacks of coffee a year. More than three million people directly depend on coffee farming for a living in this country of 107 million people.

Robusta coffee is grown by about 19,000 families on 34,000 hectares of land in the southern states of Chiapas, Oaxaca and Puebla, and in Veracruz, one of the country’s main coffee-producing areas, where 90,000 farmers grow arabica beans on 136,000 hectares.

Coffee prices have rallied on the international market in the last few months, which has benefited farmers, but not nearly as much as it has benefited the big roasters.

One sack of washed arabica beans now brings in around 165 dollars, while a sack of robusta beans fetches 70 dollars.

However, the price of robusta coffee declined 15 percent between February 2009 and February 2010, while the price of other varieties rose, according to the London-based International Coffee Organisation (ICO), which brings together governments of coffee producing and consuming nations for the development of shared global strategies.

“What I have seen is that demand has remained quite stable while supply is volatile, but is not on the rise,” Juan Albín, a coffee farmer in the mountains of the state of Puebla and the director of the Mexican Coffee Promotion Council, remarked to IPS.

Arabica coffee producers want to avoid a repetition of the 2000-2001 crisis, when countries like Vietnam and Indonesia, bolstered by credit from the World Bank, flooded the international market with robusta coffee, driving down prices.

Within the North American Free Trade Agreement (NAFTA), which has linked Canada, Mexico and the United States since 1994, instant coffee has been exempt from import duties since 2004, which has favoured Mexico’s exports to both of its partners.

“The companies are just looking for a bargain, because they’re going to drive down costs and sell more instant coffee,” Ruíz said.

A 2006 study carried out by the United Nations Food and Agriculture Organisation (FAO) for the Mexican agriculture ministry recommended that production of robusta beans not be increased beyond the current level – five percent of total coffee output.

The report noted that the cost of producing robusta beans in Mexico is higher than the national average, and recommended that this country’s coffee farmers focus on specialty niches like certified organic fair trade coffee.

This year, the agriculture ministry will provide 42 million dollars in subsidies to coffee producers, including more than nine million dollars to farmers in Veracruz.

The National Coalition of Coffee Growers Organisations (CNOC), a network of regional groups that represents tens of thousands of small farmers, complained in a document addressed to the agriculture ministry that roasters want production of the cheaper robusta beans to increase in order to gain a larger profit margin through sales of instant coffee.

Mexico’s coffee producer organisations are also working to design a strategy that would enable them to make headway in the highly profitable U.S. and European gourmet coffee markets.

Mexico was a pioneer in the production and marketing of organic coffee, and is one of the biggest suppliers of the product in the fair trade system, which reduces the number of intermediaries and brings farmers higher prices.

“Our project consists of boosting coffee cooperatives,” said Albín. “We want yields to grow from today’s nine quintals per hectare to 30 quintals.”

According to ICO figures, annual per capita coffee consumption in Mexico is 1.2 kg, below the level in Brazil (5.8 kg) and Colombia (1.8 kg), and far below the countries with the highest per capita consumption levels, like Finland (12 kg) and Norway (9.9 kg). But things have begun to change in this country, where coffee shops are the new rage.

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