Devouring profit - International Coffee Organization

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For farmers in this area, low coffee prices and lack of credit are the main problems,
followed by the cost of the inputs needed to produce coffee. New pests, such as CBB
and the role of intermediaries are also important. They gave higher importance to pest
problems, especially CBB; perhaps climatic conditions in this region are more favourable
to pests because of the more humid climate. Intermediaries there can demand
an interest rate of about 40% per year from farmers, which is significantly higher than
the interest rate offered by the local banks.
Commercialisation problems: an imperfect market, which is the case of the Honduran
internal coffee market, can lead to seasonal and normally low coffee prices because
of the harvesting peaks. The result is a highly vulnerable production system
because of fluctuating availability of labour and assets. For instance, labour costs tend
to be higher during the harvest period because it is scarce and in many cases farmers
have to bus workers to and from distant villages. Another important factor is that the
internal market buys coffee by weight and discounts the price reduction according to
level of CBB damage. There is no national standard for these penalties, for instance
one trader reduces the price by 1% for each 3% of perforated dry cherry coffee from
a 500g sample, which should correspond to 1.5% in parchment coffee. At the Coex
Company, coffee exporters take a sample of 100 g of cherry coffee. If CBB damage is
over 2%, the company will refuse the coffee, which seems a very severe penalty.
2.4 Guatemala
The case of the Chocola community: Chocola is a peasant coffee community, with an
area of about 2,450 ha. This enterprise was founded by the Guatemalan government
in 1972, giving the land to 772 farmers as a result of a programme of land reform.
Although Chocola has its own post-harvest infrastructure, this has been rented to
Coex, a coffee trading firm. For this reason most of the coffee producers sell their
coffee to this firm which buys the coffee by weight, ignoring any potential differentiation
by quality. So farmers here are not encouraged to achieve better coffee quality
because the market does not reward it. We had a meeting with 12 coffee growers
from Chocola who we involved in a RRA; Table 9 shows the results.
From this analysis, it seems that lack of commitment to maintain a sound coffee crop
is the main problem. Farmers were almost unanimous that people from their commu-
Table 9. Main coffee production problems in Chocola.
Problem Score
Lack of community interest 5
Lack of community organisation 4
Low coffee prices 3
Lack of money 2
Coffee berry borer 1
Coffee leaf rust 0