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Friday, February 4, 2005

What to grow: Coffee, Coca/Cocaine, or Opium Poppies?

Coffee farmers in the mountains of South America make a life and death decision when they decide what crop to grow to support their families.

When the coffee giant Starbucks tightens the screws on the prices it pays wholesalers for coffee beans the effects trickle down to the bean growers. Farms must also contend with the drug cartel buyers/wholesalers roaming the coffee farms of Brazil and Colombia offering financial incentives at the point of an automatic weapon to grow coca or opium poppies.

So what should they grow?

The Washington Post article "Coca Invades Columbia's Coffee Fields" from Oct. 2001 suggests what was starting to happen. Is the situation any better four years later?

What is squeezing the coffee farmers are the caprices of economic globalization. Years of good growing weather worldwide and a rising number of countries planting the beans have increased supplies and sent world prices tumbling. As income flowing back to villages like this falls, farmers find themselves pushed away from Columbia's most renowned crop toward its most notorious....

It would be a reach to say that Juan Valdez, the iconic Colombian coffee farmer of television advertising, has turned to drugs. Although hard numbers are impossible to come by, evidence and informed estimates suggest that only about 1,000 of the country's 560,000 coffee farms have scrapped coffee plants in favor of coca or opium poppies. But just about all coffee farmers wonder how they are going to survive at the current prices.

Wikipedia on the Economics of Coffee growing:
It is very questionable whether small growers can generate a high return on capital growing coffee if they have less than 1.2 ha (3 acres or 12,000 m²) and if they are based in the United States. The retail price of the beans varies between about 1 USD/pound for ripe berries to 9 USD/pound for extra fancy Kona milled beans, and there are many costs including fertilizer, irrigation, labour (e.g. picking and pruning) and land value. Integrated operations that capture much or all of the available revenue (by controlling the whole process from growing to retail) may generate higher returns.

It is estimated that 10 million people are working on plantations in the source lands of coffee. A single worker can harvest 50-100 kg of fruits per day, which results in 10-20 kg of raw coffee. Crops from Brazil and Colombia comprise 40% of the worldwide coffee production. As of 1998, the world's coffee production equals about 100 million sacks of coffee.

Many farmers receive a low price for their coffee because of a global market slump. This has led to coffee being available as a 'fair trade' labeled item in many countries.

It is something to think about next time you order a Venti, Skim, half-caf, no sugar, upside down, extra hot, caramel macchiato.

Conscience Coffee - At last. Colombian farmers have a plan for us to turn our morning caffeine shot into a politically correct experience [Gersh Kuntzman]
Colombia's Juan Valdez coffee shops to go public [USA Today, Sept. 8, 2004]
Friends of Juan [FriendsOfJuan.com]
Just Coffee -- a coffee grower cooperative based in Salvador Urbina, Chiapas Mexico, with facilities in Agua Prieta, Sonora Mexico and Douglas Arizona. [justcoffee.org]
CIA Spooks Drinking Lots of Starbucks Espresso [TJN]

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