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This is an archived USAID document retained on this web site as a matter of public record.
IN FOCUS: COFFEE
In this section:
Producers Wake Up and Smell the Coffee
Coffee: A Market History—Where It’s
Grown and How It’s Processed
Bolivian Coca Farmers Switch to Fine Coffee Growing
Stages of Arabica Coffee Production
Producers Wake Up and Smell the Coffee
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Experts taste coffee varieties submitted to a cupping
competition by coffee farmers throughout Ethiopia. The
coffee varieties that win such competitions fetch high
prices at online auctions, or are sold as specialty
coffees in Europe and the United States.
Gerry LaRue |
Coffee is an easily grown crop with a steadily increasing
global demand, and farmers in nearly 30 countries throughout
Latin America, Africa, and Asia are working with U.S. assistance
to meet the world demand.
USAID helps farmers obtain equipment, credit, and new processing
techniques that help them increase their output and meet international
quality standards for higher-priced coffee. USAID also works
with the Specialty Coffee Association of America (SCAA) and
others that run “cupping competitions” by coffee
experts who taste selected types of coffee.
The winners of cupping competitions often sell their highly
graded coffee online at premium prices. These competitions
and internet auctions have proved to be excellent coffee promotion,
according to Agency agricultural specialists, because they
raise demand and prices for these coffees.
Demand for coffee is steadily rising at a rate of 1.5 percent
per year. Most is grown in developing countries.
In 2002, the international market for coffee tanked because
so much of the product flooded the market, and producers turned
to specialty coffees whose price was less affected by the
coffee market crash.
USAID supports the creation of coffee cooperatives, which
pool farmers’ assets, giving them easier access to technical
help, marketing advice, and machinery that they could not
afford on their own. The Agency also works with organizations
such as Coffee Corps, which provides volunteer support and
help in the areas of production and marketing.
Through a partnership with coffee giant Starbucks, specialty
coffee growers from developing countries can earn bonuses
for quality coffee and every new coffee type that Starbucks
buys.
Coffees from Kenya, Bolivia, and Rwanda are selling well
at coffee shops throughout the United States.
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Processing coffee cherries in Tanzania. USAID has provided
millions of dollars in aid to coffee growers around
the world.
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In Africa, the Agency’s regional program works with
the East Africa Fine Coffee Association (EAFCA) to enhance
the quality, competitiveness, and profitability of the local
coffees in global markets. EAFCA has 70 members from 11 countries,
including local producers and exporters, government coffee
boards, foreign importers, and the International Coffee Organization.
In 2002, EAFCA conducted the first regional cupping competition
involving 26 fine coffees from four countries. It launched
the first internet auction of East African fine coffees and
developed a website providing regional market information.
USAID is now helping EAFCA establish a regional appellation
system for East African coffee.
USAID in 2002 also invested $2.8 million to help coffee
producers in Uganda, Tanzania, Rwanda, and Ethiopia.
“Ethiopia is the only culture in Africa that really
drinks and savors coffee,“ said Jim Dempsey with ACDI/VOCA
(Agricultural Cooperative Development International/Volunteers
in Overseas Cooperative Assistance), which is carrying out
a project that supports coffee cooperatives and has helped
create four unions with 151 coffee grower cooperatives and
close to 180,000 coffee growers. “I think that helps
them grow and process coffee well, because they can taste
quality.”
USAID funds coffee projects in Asia as well. In East Timor,
the Agency has spent millions of dollars on a program supporting
high-quality organic specialty coffee for export.
Since 1994, USAID, through the U.S. National Cooperative
Business Association (NCBA), has offered technical assistance
and other aid to small-scale producers to improve postharvest
handling and processing. NCBA has helped form cooperatives
with some 17,000 registered farmer members.
Latin America is home to the largest coffee programs. In
2002, USAID signed a Quality Coffee Agreement with Costa Rica,
El Salvador, Guatemala, Honduras, Nicaragua, the Dominican
Republic, and Panama. The Agency provided $8 million to assist
small and medium coffee producers to improve coffee quality,
form new business linkages, and secure longer-term contracts
with the specialty coffee industry. Where farmers could not
compete, USAID helped them branch out into growing other,
more suitable crops. In 2003, the project spent another $30
million on improving the regional trade and investment environment.
In Colombia, which has long been a producer of high quality
coffee, the Agency in 2003 began a $7 million, five-year effort
on specialty coffee activities in opium poppy and coca cultivation
areas.
Coffee: A Market History—Where It’s Grown and
How It’s Processed
Two decades ago, the world’s most popular coffee was
highly caffeinated Robusta coffee, blended with other varieties
to improve taste.
But, over time, two factors have changed the market significantly:
coffee drinkers’ palates have developed, and coffee industry
newcomers want to grow products that differentiate them from
the competition.
The result is a rise in demand for high-quality and often
single-origin Arabica coffee.
Robusta and Arabica look alike. But Robusta grows in low
altitudes. It contains more caffeine and less taste. Arabica
grows on hills and mountains. It is tastier, but less caffeinated.
Robusta sells cheaply, and is often blended. An espresso
shot at any given coffee shop in the United States, for instance,
is most likely all Robusta. An espresso in Italy might be
half Robusta and half Arabica, which cuts the caffeine but
improves the taste.
Some 70 percent of all Robusta is sold at supermarkets in
low-grade, blended products. Arabica, by contrast, is made
into specialty coffees sold at major department stores, upscale
coffee houses, and organic markets.
Worldwide demand for coffee is growing at a rate of 1.5
percent every year.
In the late 1990s, the average world market price for a
pound of coffee was $2. But quick expansion of supply—mostly
from Brazil and Vietnam, which together produce half of the
world’s coffee production—led to a market collapse
in 2000. Coffee prices dropped and stayed in the range of
50 cents to $1 per pound until late 2004.
For consumers, this meant cheaper coffee. But for growers—especially
those in developing countries—the effect was disastrous.
In Ethiopia, for instance, farmers cut down their coffee
trees and planted chat, a local plant that, when chewed, acts
as a mild narcotic drug. Entire communities in Latin America
were economically hard hit, and many moved away from coffee
production because of negative returns.
The market has now recovered, with prices in the range of
$1.25 to $1.50. And in recent years USAID has urged coffee
growers to grow higher-quality Arabica coffee, for which the
market and price continue to be strong (see article above).
A coffee plant grows in about two years and is easy to care
for. The coffee bean grows inside a red cherry.
The easiest processing method, which usually fetches the
lowest prices, is sun-drying. Cherries are left on the tree
until the red pulp dries, shrinks, and is absorbed into the
bean. Trees are shaken and beans collected from the ground,
which diminishes the taste and lets the beans get dirty.
The beans are laid out on the ground or over a mesh net,
and left to dry in the sun for about nine to 12 days.
The processing method most often used for Arabica, which
leads to tastier coffee, is wet processing. Cherries are picked
while red, sorted, and run through a pulping machine, which
removes skin and pulp that cover the bean but leaves a paper-like
“parchment” over the beans. The washed coffee is
most often placed in a tank with water and left to ferment
for 24–31 hours. It is then placed in the sun until appropriately
dry.
Different processing gives the beans different qualities,
aside from taste. Arabica, for instance, stores well because
the bean remains wrapped within a parchment that covers the
bean.
Bolivian Coca Farmers Switch to Fine Coffee Growing
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Green and red coffee cherries are often seen on the
same tree. The red ones are ready to be harvested.
Eve Astrid Andersson |
LA PAZ, Bolivia—Just before last Christmas, Yolanda
Condori sold 10 bags of coffee weighing 154 pounds each for
$7.30 per pound. This meant starting the year rich, considering
that two years earlier she was selling her coffee at 25 cents
per pound.
Condori is one of thousands of Bolivian coffee growers participating
in an eight-year USAID project that began in 2002 and aims
to change the image of Bolivian coffee abroad. The country
has a reputation for substandard coffee, sometimes called
“surprise” coffee. Most of Bolivia’s coffee
exports are bought by the U.S. prison system.
The alternative development program—which tries to
encourage farmers growing coca plants to make cocaine to switch
to growing coffee—aims to reach and increase earnings
for some 30,000 coffee-growing families.
Most of Bolivia’s coffee plants are of the highly prized
“heirloom” Arabica varieties. The coffee is grown
in high mountain valleys under favorable agroecological conditions.
Yet Bolivia was turning out lousy coffee.
The mission brainstormed and decided that coffee was never
meant to scale mountains. Bolivia is the only area in the
world where coffee leaves the farm at 3,960 feet and has to
climb into the mountains to reach its market. Coffee must
traverse the Andes through a 15,000-foot high, glacier-guarded
mountain pass. During the 1-hour drive, the coffee endures
plummeting air pressure, relative humidity, and air temperature,
factors that degrade the bean’s quality.
The program’s first approach was to shift farmers to
selling ripe cherry coffee directly to trained coffee processors.
This allows for good quality control systems for processing.
It also allows growers to harvest more coffee because they
are freed from their rustic form of harvest processing. Farmers
get cash on delivery, instead of waiting months to be paid
for their semi-processed coffee. Because their coffee beans
are of better quality, they also earn significantly more.
The second pillar of the program calls for the completion
of all coffee processing and drying in the Yungas before the
beans are transported across the Andes Mountains. The program
supplies dryers to the Yungas farmers, and now they process
the coffee where its humidity content is lower and more stable.
This preserves the natural high quality and eliminates the
need to send the beans to an altitude of more than 13,000
feet for processing.
USAID also helped the farmers develop and carry out a marketing
plan. For the harvests of 2003 and 2004, the Agency held national
cupping competitions, called “Cupping the Mountain’s
Peak.” International coffee buyers were invited to judge
coffee samples.
This year, Bolivia participated in the prestigious Cup of
Excellence® program. The objectives of this cupping competition
are to identify the very best coffees in the world, sell them
at the very highest prices in the world via an internet auction,
and ensure that most of the sale price goes back to the farmers
who grew the coffee.
Condori submitted one of the 13 coffee samples that, after
exhaustive testing, were judged to meet the high quality standards
for the Cup of Excellence® auction. Bolivian coffee at
the competition sold as high as $11.25 per pound—more
than 10 times the world market price.
“The increase in prices paid to growers for selling
high-quality cherry coffee has begun to transform the lives
of thousands of families through significantly increased income,”
said project Chief of Party Bruce Brower. “In the first
year of the program, coca farmers and other opponents were
sabotaging processing plants and threatening to harm participants.
The recent fantastic marketing results have created a huge
farmer demand, leading almost 10,000 farmers to participate
in the next growing cycle.”
“Participation in the program helps cement Bolivia
in the minds of coffee buyers as a quality source for coffee,”
Brower added.
Stages of Arabica Coffee Production
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Arabica cherries are picked while red and sorted.
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The coffee cherries are then run through a pulping
machine, which removes skin and pulp that cover the
bean but leaves a paper-like “parchment” over
the beans.
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The washed coffee is most often placed in a tank with
water and left to ferment for 24–31 hours. The
beans are then placed in the sun and turned with a rake
several times a day until dry.
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