Co-op perks up Guatemala coffee farmers
Mike Williams - Cox Washington Bureau
Sunday, May 5, 2002

Pueblo Nuevo, Guatemala --- Hilda Niz opens the wire mesh door, reaches into the small wooden hutch and pulls out a fat black rabbit.

"We sell them for 25 quetzales [about $3.25] for people to eat," she says, proudly displaying one of the dozen residents of the hutch. "This is a business we started with the profits we made from our coffee."

That Niz and her common-law husband, Conrado Lopez, started a business in this remote village deep in the Guatemalan highlands is a bit of a rarity. But the fact that they did so with profits earned from their coffee crop is nearly a miracle.

A worldwide glut of coffee has sent prices tumbling to a 100-year low, triggering a crisis in dozens of coffee-producing countries. In Guatemala, where the crop has long been an economic mainstay and a way for poor families to earn decent money, thousands of small landowners have abandoned their plots while thousands more landless coffee workers have left their homes in search of other jobs.

But a few dozen farmers in Pueblo Nuevo --- and a few thousand others across Guatemala --- have so far escaped the brunt of the coffee crisis by selling their crop to buyers committed to paying a high enough price so that the farmers are guaranteed a living wage.

The system --- called "Fair Trade" --- began about 20 years ago, started by a group based in Europe. The goal is to cut out several layers of middlemen in a market that traditionally has seen small farmers paid extremely low prices for a crop that is marked up over and over by several layers of middlemen.

"It's a classic case of the farmers being left at the whim of a system over which they have no control," said Bill Harris, founder of Cooperative Coffees, an Americus, Ga., firm that imports coffee grown in Pueblo Nuevo and sells it to 14 small roasting companies around the United States and Canada.

Customers on Web

His customers include his own coffee-roasting and retailing firm, Cafe Campesino, which sells over the Internet, as well as Los Armadillos, an Austin, Texas, outfit.

"In some cases, the coffee passes through 10 hands between the farmer and the consumer," Harris said. "We're trying to cut out some of those people and ensure that the farmers earn more."

With the current coffee crisis, the difference is dramatic. While typical small farmers in Guatemala this year received about $50 per 100-pound bag for their beans, the Fair Trade farmers earned around double that amount.

While the cost of production varies widely due to terrain, weather, the farmer's ability and other factors, many Guatemalan growers who got the regular market price say that by the time they paid for fertilizers, maintenance of their coffee trees, harvesting and processing, they lost money.

The Fair Trade farmers are lucky, but they also work hard to gain the label that enables them to earn a higher price. Their farms must be certified by monitors who visit to see that they meet the Fair Trade criteria, which include limits on the size of the farm and the amount of hired labor that can be used.

Because much of the coffee sold in the United States goes to health-food stores, most of the farmers must also guarantee that their crop is raised organically, without chemicals and with sound land-use practices.

Those requirements scare off many poor farmers, even when they learn their neighbors are earning double the regular market price.

"Out of an estimated 85,000 small producers in Guatemala, I'd guess that only about 5,000 to 7,000 are involved with Fair Trade," said Jeroen Bollen, who runs the Manos Campesinas (Farmer's Hands) cooperative, which helps coffee farmers throughout northern Guatemala. "We have grown, but it's still only a tiny percentage of all the coffee produced in Guatemala."

Association started

In Pueblo Nuevo, the farmers started their own association in the early 1990s after they decided that pooling their crop might help them earn a better price. Four years ago, the group was certified to sell Fair Trade coffee. The farmers' production and incomes have risen steadily.

"Before this, we had to take our coffee down the mountain and sell it for whatever price they would give," said Conrado Lopez, referring to the bone-jarring 90-minute ride to Malacatan, the nearest town. "The buyers knew we could never afford to haul coffee back home, so we were at their mercy. Now we get a better price, but we're also getting technical education on how to farm better. I've doubled the production from what my father used to grow on his land."

With its profits, the group in Pueblo Nuevo has built a small warehouse in Malacatan to store its crop and has plans for other improvements, perhaps improving the rough road to the village.

But most of all, selling their coffee for Fair Trade prices has changed many of the farmers' attitudes, giving them a newfound sense of independence in a system that has long seen poor small farmers selling a valuable crop for only a fraction of what others make from it.

"Before, we didn't know anything but how to grow the coffee," said Juan de Dios Perez, another of the Pueblo Nuevo farmers. "Now we understand a little about the process and have a general idea of how the international market works. Our members are living in better houses and sending their children to school. It's been a very good change for us."

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