Economy & Trade, Food and Agriculture, Latin America & the Caribbean

Food and Agriculture

Guatemalan Coffee Growers Get Creative

GUATEMALA CITY, May 14 2012 (IPS) - Overwhelmed by climate change, worried about speculation in international prices and still hurting from the effects of the crisis in 2000, coffee growers in Guatemala are trying in various ways to recover the production levels they achieved 12 years ago.

The situation has forced farmers to diversify their crops, join certification programmes, aim at gourmet coffee production and compete more creatively in markets abroad, the destination of 95 percent of national output.

“Coffee will continue to be one of the economic mainstays of the country and of major importance for small farmers, but the focus needs to change,” Jairo Fuentes, a farmer belonging to the Adelante Chanmagua cooperative in the eastern province of Chiquimula, told IPS.

“The point is no longer to produce conventional coffee, but rather beans of the highest quality, and we have to seek certification because the time will come when we will not be able to sell our produce without it,” he said.

Global overproduction of coffee in early 2000 brought about a crisis in the sector, with prices plunging to below 50 dollars the quintal (one quintal is 100 pounds), the lowest level in 50 years, according to the Economic Commission for Latin America and the Caribbean (ECLAC).

Guatemalan coffee production fell from 6.3 million quintals in 1999-2000 to 4.3 million in 2001-2002, according to information from the National Coffee Association (ANACAFE).

Coffee growers have also had to overcome international price volatility, speculation, and excessive rainfall and drought attributed by experts to climate change.

In the face of these difficulties, producers have turned to certification systems like those of Starbucks, the International Fairtrade Certification Body (FLO-CERT), and Utz Kappé, in an attempt to boost competitiveness.

“(Certification) guarantees four areas: fair treatment for workers, non-use of banned chemicals, accurate reporting of coffee origin, and good quality. This gives an added value of between 10 and 20 dollars a quintal,” said Fuentes.

The Adelante Chanmagua cooperative, with 600 hectares of coffee plantations, has diversified its production to make it through hard times.

“So as not to depend only on coffee, we have an agroforestry programme intercalating coffee trees with fruit trees, which is working very well. We are also growing plantains to try to control our costs and, at the same time, provide shade for the coffee trees,” he said.

Fuentes said these measures are a response to the different challenges to coffee production today, such as climate change, speculation, international overproduction and the after-effects of the crisis of 2000.

“A lot of people at that time gave up investing in their farms, sold them and headed north (to the United States). Now we have been having trouble with the rains, and with the economic crisis in Europe, which is one of the biggest markets for Guatemalan coffee,” he said.

Coffee is Guatemala’s main permanent crop, accounting for 40.5 percent of the over 660,000 hectares devoted to perennial crops, followed by sugarcane, representing 28.4 percent of that area, according to the Fourth National Agricultural Census of 2003.

Coffee thus remains an important foreign exchange earner for this Central American country. In the 2010-2011 harvest, 4.7 million quintals brought in record earnings of 1.1 billion dollars, according to ANACAFE.

The main buyers are the United States, the European Union, Canada and Japan.

But keeping going has been far from easy. The Chicoj cooperative, in the northwestern province of Alta Verapaz, had to tighten its control of production costs, launched sales of leaf compost and foliar fertilisers, and added tourist services to its activities.

“We offer a coffee tour, and we are now building an orchid nursery that is adding value to our cooperative,” which has 124 hectares under coffee, said Raúl Caal, a Qeq’chí Indian belonging to the Chicoj cooperative.

The cooperative also has forestry plantations and sells timber, “but coffee continues to be our main crop,” Caal, who says price swings are a huge threat, told IPS.

“This season we only broke even with our costs, because the coffee price fell by 25 percent compared to last year,” he complained.

Climate change, too, is wreaking havoc. Gerardo de León, a manager for the Federation of Agricultural Cooperatives of Coffee Growers of Guatemala (FEDECOCAGUA), told IPS they had to lower their output projections for this year, previously estimated at 4.7 million quintals.

“In the course of the year we reduced our forecast to 4.6 million quintals, due to fungal infections, particularly coffee rust, arising from the rains associated with climate change,” he said.

De León, who is also a board member at ANACAFE, said they are promoting the fight against rust disease, the renewal of coffee plantations, and seed improvement.

Carlos González Arévalo, of the Association for Social Research and Studies (ASIES), an NGO, told IPS that coffee production is also affected by speculation, which “reduces or increases prices on the international market.”

In his view, “the ups and downs of supply and demand” of coffee on the international scene have led small-scale Guatemalan producers to organise in cooperatives to be able to compete and to improve the quality of their production.

“This is positive, because one has to be farsighted and produce high quality coffee, because there are many factors in play in this business,” he concluded. (END)