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Thursday, 04 August 2005 |
by David Griswold, Founder and President, Sustainable Harvest
Reprinted with permission of Fresh Cup Magazine
"The people used to be very poor and they are still very poor,
but something, something essential, has been changed. Now, for
the first time, they are doing something, and for the first time
they believe in what they are doing." — From an essay on
Nicaragua in the book, We Say No by journalist, Eduardo Galeano
When the American specialty market expanded in the 1980s
and '90s, U.S.-imposed trade embargos against Nicaragua's
Sandinista government kept Nicaraguan coffees off of
America's store shelves. As a result, Nicaragua never made it onto the
radars of most American coffee consumers. But while the country
has suffered from anonymity among consumers, industry buyers have
long known of Nicaragua's superb coffees, including heirloom
bourbon and typica varietals, most of which grow under dense
shade in extremely fertile volcanic soil at altitudes between
3500 and 5000 feet.
Unfortunately, even among loyal buyers, Nicaragua's
reputation has periodically fallen prey to inconsistencies in
coffee exports, a problem wrought by unstable political systems,
civil war and natural disasters. In the late '90s, for
instance, the country was ravaged by Hurricane Mitch, one of the
worst natural disasters in Central American history. The powerful
storm destroyed much of the infrastructure of the rural
countryside and displaced tens of thousands of coffee farmers and
plantation workers. Five years later, Nicaragua is still
recovering. But today, the country is making a comeback in the
specialty coffee sector, and many roasters are paying more
attention to Nicaragua as a single-growth origin. These buyers
are moving it from the blend obscurity it has often known to a
single-origin coffee that stands alone on the basis of quality.
In fact, so many buyers from the U.S., Europe and Japan are now
visiting Nicaragua that it can arguably be called one of the most
popular coffee origins this year.
Last February, I traveled to Nicaragua on a coffee sourcing
trip. I had visited the country's coffee regions periodically
over the past nine years, but this time I could tell things on
the coffee farms were more desperate than ever before. The
economic impact of low world coffee prices has devastated all
sectors of Nicaragua's economy. But despite these immense
obstacles, there are still signs of optimism and innovation, and
the Nicaraguan people continue to surmount their challenges by
implementing new coffee business models. Perhaps as a result of
facing so many different crises over the years, Nicaragua will be
able to turn the current coffee crisis into more of an
opportunity than a hurdle.
The Coffee Crisis
For Nicaragua, the impact of the current coffee crisis has been
enormous. Coffee provides jobs for more than 200,000 Nicaraguans, and
it is the country's most valuable agricultural crop, comprising
about 20 percent of the total export income. While low prices
impair all countries producing washed arabica coffees, it seems
the pain is magnified in Nicaragua. More economically diverse
producing countries, like Costa Rica, ease the economic blow of
low coffee prices with eco-tourism and jobs from corporate factories
like Intel.
Unfortunately, Nicaragua has few economic alternatives to coffee.
"This year the drop in coffee 'C' Market prices will mean the
rural areas will get about $100 million less than they would in
typical years," says Roberto Bendanya, vice minister of
agriculture for the Nicaraguan government. "It has a direct
impact on the income of more than 30,000 coffee farmers,
especially in the rural regions where it is grown." (For more on
Bendanya's view of the crisis, see Nicaraguan Solutions to
the Coffee Crisis: An Interiew with Roberto Bendaya).
Such economic and social dislocation affects hundreds of
thousands of people, and levels of unemployment, migration and
health problems in Nicaragua are staggering. A recent study
conducted by students at the University of California-Santa Cruz
found that the child malnutrition rates in the country's coffee
regions are at 21 percent, compared to a national rate of nine
percent. "When we say a coffee farmer is at risk, we're not just
talking about the risk of losing their home," says Mike Maxey,
Nicaragua's director for the United States Agency for
International Development (USAID). "We are talking about people
who are starving. Seventy percent of the rural population is
living on less than two dollars a day."
"The impact of low prices is dramatic," adds Chris Bacon, a
University of California-Santa Cruz graduate student who
studies the social and economic conditions of Nicaragua's coffee
sector. "Coffee income allows people to buy food, shoes and
school notebooks. The bulk of the crisis has fallen on seasonal
and permanent workers on private coffee plantations. In the
Matagalpa region alone, 20 of 25 large coffee farms have shut
down."
According to government statistics, unemployment levels are
now reaching 80 percent for many of Nicaragua's 150,000 coffee
farm workers. Without land or money, they are forced to migrate
from coffee-growing areas to urban centers, where they usually
end up in shantytowns that are mushrooming on the borders of
cities like Managua and Matagalpa. Many others venture farther
north to the United States.
Over the next several years, the U.S. government and other
development and aid agencies plan to fund more coffee-development
programs in Nicaragua. According to Maxey and Bendanya, long-term
answers to the country's problems will build on enterprise
solutions and on many of the current successes Nicaragua has seen
in the specialty sector, such as coffee cupping labs,
Internet-based coffee auctions, cooperatively run wet mills and
organizations that focus on quality, and the increasing capacity
of local people to operate farmer development programs.
Crisis or Opportunity?
" Crisis can tear people apart or it can bring them together,"
says Bacon, noting that the current crisis is forcing farmers to
reevaluate how they cultivate coffee. For instance, "Many
Nicaraguan farmers are finding that by being part of a
cooperative and producing certified-organic and fair-trade
coffees, they can survive this crisis," he says.
In 2002, Bacon and other researchers surveyed 240
small-scale farmers in the Matagalpa and Jinotega regions and
found that farmers linked to fair-trade and organic markets
garnered prices two to three times higher than the national
average. "We also found that these farmers felt four times more
confident that they wouldn't lose their land to bank
foreclosure," says Bacon.
He says the crisis has been most devastating to large
coffee farms, and the strained market is causing the small-scale
farm model to be re-examined as a more sustainable solution.
"If you look at the figures nationally, large coffee farms are
carrying the biggest debt with banks," Bacon says. "They have a
high-input, high-output model that isn't working--high prices for
inputs and high prices for labor."
Thus, Bacon says small growers who farm organically and use
their own labor are more likely to survive. "They grow about
half the food they need right on their own farm. Small farmer
co-ops feel that their business model is being recognized, not
just by their government, but more importantly, by buyers.
Small-scale Nicaraguan farmers are seeing a difference, not just
in higher prices, but in the power of being part of a group. They
feel that they are part of a change that is bigger than
themselves. It's very powerful."
Centralized Wet Mills
Large or small, most Nicaraguan farmers are realizing that
those who focus on quality and innovations are the ones who will
overcome this crisis. Even larger, private farmers are learning
to work collaboratively in an effort to create their own success
stories. In Jinotega, for instance, I visited medium- and
large-sized coffee farms that are working as a consortium in a
centralized wet mill project called Pueblo Nuevo. Pueblo Nuevo is
supported by USAID and the Nicaraguan Ministry of Agriculture and
run by Technoserve, a nonprofit U.S. development consulting
agency.
"In terms of cost, there's not much chance of Nicaragua competing
with some of the bigger players, such as Brazil," says Tom
Kilroy, a former McKinsey consultant who will spend this
year in coffee regions helping Technoserve. "Pueblo Nuevo
is a centralized wet mill trying to improve quality. Before,
these farmers were each processing on their own coffee. They were
using dirty water, and the coffee was not coming out at a high
quality level."
By working to improve quality, Pueblo Nuevo farmers hope to
move up to better market prices. But it was important for them
to find the support of a coffee buyer early in the process. In
this case it was Pete Rogers, a coffee buyer for JBR/San
Francisco Bay Coffee of San Leandro, California. "When I first
visited three years ago, their wet mills were pretty horrific,"
Rogers recalls. "They asked me how they could sell to the
gourmet market, so I got involved in this wet mill project."
For Rogers, the key is for roasters to stand by farmers as
they face these new challenges. "Roasters have to support
projects like these that help improve quality," he says.
"If we support them by buying their coffees at a good fixed
price, they will support us with higher-quality coffee."
Cup of Excellence Auctions
Nicaragua has recently succeeded in revealing itself to a
wider audience by finding alternative markets, like the Cup of
Excellence coffee competition and auction. "There is a growing
awareness that Nicaragua has some great, unique tastes," says
Susie Spindler, who spearheaded the highly popular Cup of
Excellence program. "Because the majority of the coffees are
fair-trade and organic, roasters tended not to identify the
particular farm or co-op, so the top-quality coffees never had a
chance to stand out."
The Cup of Excellence program occurs annually in numerous
coffee-producing countries. The goal is to discover and help
market the finest coffees of a particular origin. By sorting
through hundreds of entries from hopeful farms, a jury of
international cuppers selects the top coffees to be sold in an
Internet-based auction. The coffees are auctioned off in small
lots of 10 to 100 bags to bidders around the world. Prices
fetched are well above the world market price, and in many cases,
the auction introduces "undiscovered" farms to a wide range of
buyers. "The Cup of Excellence has given Nicaraguan producers the
ability to see if improvements in quality, though such efforts as
cupping labs, are making a difference," says Spindler. "It also
empowers producers to know what they have in terms of quality.
Why market real diamonds for the price of fake ones? They need to
know which ones are real."
Rural Cupping Labs
Perhaps the most significant innovation in terms of
teaching farmers about the taste of their own coffee has been the
advent of rural coffee cupping labs. These newly constructed labs
were created several years back by Thanksgiving Coffee's Paul
Katzeff. Working with the Cooperative League of the United States
(CLUSA), Katzeff received USAID funding to build nine cupping
labs for Nicaraguan grower cooperatives in rural regions. (For
more information on the cupping labs, see "The Green Café"
in the April 2002 issue of Fresh Cup Magazine.)
These cupping labs allow small-scale farmer cooperatives to
taste and evaluate the best of their harvest in a specialty
coffee setting. In Jinotega, I visited a cupping lab set up by
the SOPEXCA cooperative. The SOPEXCA farmers claim that it is the
first cupping lab in Jinotega, a city many call "the coffee
capital of Nicaragua."
The room is beautifully appointed and spacious, with plenty
of room for eight people to cup side by side. The lab is
equipped multi-barreled Brazilian-built sample roasters and
American-made coffee grinders. On the walls are dozens of new
crop green samples in carefully marked containers stretching from
one end of the wall to the other. Warm wood paneling, white tiled
floors and plenty of light provide a perfect environment for
buyers and sellers to talk coffee.
As the co-op staff prepares to cup coffee from a dozen
farms, I think about the uniqueness of this experience. After
all, I can't think of many places in the world where small-scale
farmers and their customers have the chance to cup coffees side
by side. "Having the cupping lab at our own co-op is a tremendous
advantage," says Victor Manuel Gonzales, vice president of
SOPEXCA. "Before the cupping labs, we didn't have an instrument
to [gauge] the quality of the cup—to know if the farmer's hard
work was making a difference. Now the farmers can taste their own
coffee."
Creating Local Capacity
Another possible solution to the coffee crisis is providing
more coffee processing training to growers, says Jose Adan Lopez
Zelaya, president of Union de Cooperativas Agricolas de Mancotal,
an organic coffee co-op located in the Mancotal region of the
Jinotega mountains. "Training is one of the most important
needs of a producer in Nicaragua," Lopez says. "Small
producers need people to teach them how to produce high-quality
coffee. But with prices so low, it's hard for a cooperative to
afford the staff needed to provide that training."
Building local capacity is vital to the long-term success
of coffee projects, but it is an issue that is often
disregarded when development projects are planned. Many
development organizations and other multilateral agencies have
little to no coffee knowledge. Because of this, they tend to
spend large budgets on salaries for outside advisers and on
infrastructure that is often inappropriate for local conditions.
In contrast, the more successful ventures, such as the cupping
lab program, train local co-op staff and farmers to manage the
projects. "We have to create locally based training programs that
build the capacity of our co-op members," says Fatima Ismael,
general manager of SOPEXCA. "We have to break our dependency on
technicians and professional consultants who come from the
outside. They do their project, but when the money runs out, they
go. If we are not trained, they take that knowledge with them."
Ismael focuses her co-op's efforts on building local
capacity in cupping, business strategy and better administration.
For example, cooperative staff cuppers run the cupping labs and
share the quality results with member farmers. They avoid paying
for outside laboratories to provide them with cupping results.
And as the only cupping facility in Jinotega, SOPEXCA generates
additional income by cupping coffees for other groups and private
farms.
One of the most inspiring stories of training local workers
involves Marbely Garcia Lopez, SOPEXCA's quality control manager.
Only 23 years old, Lopez's skill as a cupper has made her one of
Nicaragua's specialty coffee success stories. Lopez grew up picking
coffee with her parents on a large plantation. She eventually
moved to the mountain town of Esteli in search of work, and she
became involved in a Nicaraguan co-op program that offered
training classes on such topics as environmental education and
English. When the USAID cupping lab project developed, Lopez
decided to learn how to cup coffee, and after two years of honing
her skills, SOPEXCA offered her the position of head cupper. She
was the first person to be hired to run the new cupping labs.
Lopez has even been recruited as a judge by the Cup of
Excellence. Good training and innate cupping skills have taken
her far beyond her home in the mountains near Jinotega.
Cupping With Customers
From a business perspective, employing a skilled cupper can be a
noticeable advantage to a co-op because it creates a situation in
which producers and buyers can communicate in the language of
flavor and taste. Such was the case for Peet's Coffee & Tea
buyer, Doug Welsh, who traveled to Nicaragua recently to sample
new-crop coffees at SOPEXCA's cupping lab. Peet's purchases a
coffee called "Hermanas," which is exclusively grown and
processed by the 140 female farmers of the 400-member SOPEXCA
co-op. Welsh cupped alongside the two staff cuppers from the
nearby PRODECOOP of Esteli, which had also brought in samples for
purchase considerations.
After the water was poured over the coffee grounds, the
cuppers silently made their way around the table, slurping and
spitting. "We had 10 coffees on the table, and there was one
coffee that jumped out," says Welsh. "It had more acidity, an
elegant texture and a sweet floral aroma. As a cupper, you can
get sort of addicted to that kind of cupping experience—that
moment when you find a spectacular coffee. And sometimes you see
someone else at the table who feels the same way. I looked at
Marbely and we both smiled, because we knew this was the one
coffee—at least for that table—that stood head and shoulders
above the rest. After the cupping, we turned the cards over (to
find the farm names), and the coffee we both liked was the one
we'd bought the previous year and would buy again this year. I
just felt happy and proud for them because things don't always
work out that way."
Such an experience highlights the hope emanating from Nicaragua's
coffee sector, and it proves that the country's coffee farmers
are indeed finding innovative ways to overcome the challenges
facing their country. Perhaps specialty coffee can lead the way.
About the Author - David Griswold is the president and founder of
Sustainable Harvest Coffee Company, a Portland, Ore.-based green
coffee importer who finds exemplary farms of organic, shade-grown
and fair-trade coffees for specialty roasters through its
relationship coffee program. For more information, visit www.SustainableHarvest.com. |
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