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This report is a joint effort by the Natural Resources Defense Council and the Smithsonian Migratory Bird Center. It represents the second in a series of the Smithsonian Migratory Bird Center's White Papers.
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Robert A. Rice currently works on policy issues for the Smithsonian Migratory Bird Center in Washington, D.C. He was previously a Fulbright Fellow at the Instituto de Investigaciones, Universidad del Valle de Guatemala, and with the Department of Geography, University of California at Berkeley. He has conducted research and written on land use changes in Latin America and the environmental consequences of different agricultural production systems.
Justin R. Ward is a senior policy specialist with the Natural Resources Defense Council's International Program in Washington, D.C. His current activities focus primarily on tropical forest conservation in Latin America, with emphasis on the biodiversity programs of the Global Environment Facility. Since joining the NRDC staff in 1983, Mr. Ward has conducted policy analysis and advocacy on issues surrounding U.S. national forest management, sustainable agriculture, global climate change, water pollution control, and international trade agreements.
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Founded in 1970, the Natural Resources Defense Council (NRDC) is a non-profit organization with offices in New York City, Washington, D.C., San Francisco and Los Angeles, dedicated to protecting the world's natural resources and ensuring a safe and healthy environment for all people. With 235,000 members and its staff comprising lawyers, scientists and environmental policy specialists, NRDC seeks to develop and implement solutions to a wide range of pressing environmental problems. For nearly two decades, NRDC has been active in the environmental dimensions of United States foreign assistance, trade policy and investment. The organization's international program priorities include conservation of forest ecosystems and biological diversity in Latin America.
The authors are grateful to a number of experts who took time to review drafts of this report and to furnish valuable editorial comments. These authorities include Gilberto Amaya, Douglas Boucher, Jonathan Fox, Russell Greenberg, David Griswold, Luís Hernández Navarro, Ronald Nigh, Peter Rosset, Michael Saxenian, Jacob Scherr, Olman Segura, Bob Thomson, Lori Ann Thrupp, and John Vandermeer. Additional helpful information and advice was provided by Jesus Alvarado, David Bray, Jorge Cuevas, Rink Dickinson, Manuel Fernandez, Sergio Garcia, Tom Harding, Ayo Heinegg, Ellen Hickey, Polly Hoppin, Tony Kleese, Ann Mendenhall, Elsa Nivia, and Matthew Wexler. Research on key factual and policy issues was conducted by NRDC Program Assistant Stacey Justus. The authors are solely responsible for the contents of this report.
II. Coffee as a Key Ingredient in the Economies of Northern Latin America
III. Transforming the Physical and Economic Landscape of Coffee
IV. Environmental Dimensions of Coffee Production
V. Marketplace Actions for Sustainable Coffee
VI. Policy Support: Governments and International Institutions
I. INTRODUCTION back
Coffee drinkers historically have had little reason to contemplate the environmental
dimensions of their habit. Yet, over the past 15 to 20 years, dramatic changes
associated with the ecological, social and economic sustainability of coffee
have redefined coffee production in northern Latin America. Only recently
has it come to light that the way coffee is produced profoundly affects
migratory bird diversity and other ecological indicators of environmental
health.
For coffee devoteés in the North, getting a good cup of coffee each
morning ranks high on our personal comfort list. Many of us now talk about
different coffee blends as wine tasters talk about vintage wines, feeling
satisfied that we understand so much about this coveted beverage. But to
feel really informed, we should understand some of the changes occurring
at the production end of that coffee.
From Colombia to Mexico, an industrial transformation of the coffee sector
threatens the traditional coffee agroecosystem through the loss of biodiversity,
habitat fragmentation, pesticide poisoning and soil erosion. In the simplest
terms, the change is from shade coffee to sun coffee. The region harbors
some of the highest levels of biodiversity on the globe--levels that are
maintained to a surprisingly high degree within the traditional coffee system.
Changing the structure and management of this system may spell trouble for
the region's overall environmental health, as well as for the economic resilience
of small growers and rural communities. Coffee management choices in the
future will profoundly affect conservation objectives in countries throughout
the hemisphere. One example is El Salvador, where coffee plantations represent
about 60 percent of the nation's remaining forested area.
The transformation involves switching from the traditionally canopy-covered
coffee farm with a mixed plant community in the overstory, to a virtual
monoculture of coffee that may include moderate to sparse shade cover of
a single species, or, in some cases, no shade at all. The path from the
shade into the sun is dressed with new fertilizer-responsive varieties of
coffee and a list of agro-chemicals. Of the 2.8 million hectares (6.9 million
acres) planted to coffee in Mexico, Colombia, Central America and the Caribbean
through the early 1990s, 1.1 million hectares (about 40 percent) have been
converted to sun coffee or "technified." And while the changes
have occurred too recently to be evaluated in terms of total impact upon
the region, the overall land and food security of small producers will surely
be affected by the transformation to more intensified production.
As the map on page three shows, some countries have embraced the transformation
of their coffee sector much more heartily than others (see Table 1 for area
figures and sources). Costa Rica and Colombia, for instance, display relatively
high levels of technified coffee lands. Although producers in some areas
have recently begun to re-introduce and increase shade levels, the overall
trend in the past two decades has been one of shade removal or reduction,
resulting in landscape transformations with long-term ramifications for
conservation and environmental protection.
Interestingly, recent years have seen an increased awareness of the environmental
and social links to coffee on the part of producers, marketers and consumers.
Producer organizations throughout northern Latin America, usually formed
into peasant cooperatives, are beginning to address coffee's environmental
aspects by maintaining a mixed shade cover. Marketing strategies based on
organic coffee or social justice and fair commodity prices paid to farmers
are emerging in many countries. Consumers are now faced with a growing array
of coffees produced beneath a variety of systems, but seldom realize the
distinction being made. For those consumers concerned with the environmental
and social aspects of coffee, there is an interesting--and vitally important--story
to be told.
In this report, we examine the issues related to the industrialization of
the coffee sector in northern Latin America, and connect these seemingly
distant changes in agricultural production to the morning ritual played
out in hundreds of millions of homes throughout the world. We first establish
the importance of coffee to the countries of the region, showing how national
economies, agricultural area and wage labor evolved to supply the North's
coffee craving. Next, we present the changes that have been reshaping the
coffee landscape over the past couple of decades--changes that seek to bring
greater yields and higher income to the rural sector, but that may be doing
so at tremendous environmental and social cost to the region in the long-term.
The following section presents the environmental dimensions of modern coffee
production, identifying concerns that are both local and global in scope,
and contrasting the benefits of shade coffee with the damages resulting
frequently from sun plantations. Finally, the report recommends actions
on the part of policy makers, private sector businesses, consumers, and
coffee growers, processors, and roasters to promote a sustainable future
for the environment and economy of northern Latin America.
II. COFFEE A KEY INGREDIENT TO ECONOMIES
IN NORTHERN LATIN AMERICA back
This report focuses on the countries of northern Latin America, which make
up a region of extraordinary biological richness. The countries of concern
include Mexico, Colombia, much of Central America, and many of the Caribbean
nations. Since the latter half of the 19th century, coffee has been an important
export for many countries throughout the region. Favorable climatic and
processing conditions, ready access to labor, and government programs dedicated
to protecting the interests of the coffee sector have enabled these countries
to play a central role in supplying the world with quality coffee. In terms
of quality, Colombia and Central America figure strongly in world production,
historically having enjoyed a five to ten percent premium above international
prices for the "mild" (washed) coffees they produce. The premium-quality
arabica coffees produced in northern Latin America can sometimes command
prices 30 percent above the lower quality robustas or unwashed arabicas,
coffees produced for mass consumption.
The portion of foreign exchange it has generated, the area of agricultural
land it has occupied, and the number of people it has employed place coffee
in a distinctive role in these societies. In Central America, no other crop
in history approaches the importance of coffee, with the possible exception
of indigo (a plant used as a dye) during Spanish colonial times. Concentration
upon coffee production in the 1800s, a time of growing demand spurred by
unprecedented global economic growth, provided firm footing for the economies
of northern Latin America. Demand soared again during the boom economy that
followed World War II. Since World War II, the countries of northern Latin
America have provided anywhere from one-quarter to one-third of the world's
coffee (see Table 2).
Today, coffee still forms the economic backbone of many of these countries.
Coffee exports from Guatemala, for instance, generated $450 million in 1994/95
season. For the current season, exports are expected to bring in even more
revenues. In El Salvador, even amid that country's civil war during the
1980s, coffee exports accounted for 44 percent of the value added (constant
prices) to the national economy in 1989. In Costa Rica, coffee exports accounted
for anywhere between 20 percent and 30 percent of total exports from 1970
to 1989. Colombia's reliance upon coffee is similar, although on a larger
scale than the Central American countries. In 1994, Colombia's coffee exports
were valued at over $1.4 billion.
Coffee obviously generates tremendous labor demands on these countries'
societies, a situation that has contoured the rural population for more
than 150 years in some nations. Comparatively, other traditional crops produced
in northern Latin America rely on less labor. Whereas in Guatemala coffee
demands 73 person-days per hectare during its production cycle, food crops
like corn and beans require 58 and 61 person-days per hectare, respectively.
On small farms, the chores involved in coffee cultivation keep entire families
busy, with women and children playing crucial roles. Not only are workers
needed to harvest the coffee, but tasks anticipating and preparing for the
harvest, such as fertilizer application, weed and pest control, ground maintenance
around trees, shade regulation and maintenance of roads and fences, keep
permanent work forces occupied all year on many farms. In Colombia, a country
with 42 percent of its 33.3 million citizens designated as "rural,"
nearly 23 percent of the agricultural labor force is involved in coffee.
The prevalence of coffee upon the physical and social landscapes of northern
Latin America is considerable. Its national importance to the region becomes
clear by expressing coffee area as a percentage of the "permanent cropland,"
which refers to that agricultural land devoted to perennial crops and excluding
pasture lands for livestock. For the region as a whole, 44 percent of the
permanent cropland is covered by coffee (see Table 3).
Coffee is a major source of export income for countries throughout northern
Latin America (see Table 4). For several decades, agriculture's share of
total exports has declined steadily in countries like Colombia or Mexico,
due to increasing reliance upon exports from manufacturing and non-agricultural
extractive industries. Yet, while the overall agricultural share has shrunk,
coffee's proportional contribution to the sector's earnings has remained
unchanged. Wide fluctuations in international coffee prices have nevertheless
caused major swings in all Latin American countries' total export revenues
from coffee. Prices and export receipts took a sharp downturn for a four-year
period following the 1990 collapse of the International Coffee Agreement,
but have climbed over the past year and a half following major frost damage
to the Brazilian coffee crop.
The structure of these countries' coffee industries is generally skewed
toward large numbers of small producers, who often exist at or below the
poverty level. Northern Latin America is home to more than 700,000 small
coffee producers. They account for the lion's share of coffee farms (see
Table 5), while larger producers usually control the bulk of coffee area.
Moreover, large producers tend to hold disproportionate amounts of the better
quality agricutural land. Throughout Central America in the early 1980s,
some 239,000 farmers participated in coffee production. The United States
Agency for International Development (USAID) estimated that 86 percent of
these could be classified as "small farmers," the majority of
whom grow and harvest coffee with the sole help of their families.
Coffee farms often produce more than coffee. It is common among small farms
for the household to extract useful products like firewood, construction
materials, fence posts, and fruits from the holding, in addition to the
coffee harvested each year. The source of these items is the shade tree
cover associated with many coffee farms. As peasant producers living precarious
livelihoods year to year, such "non-coffee" products provide the
family with items that can be used directly or traded locally for other
cash or other needed products.
III. TRANSFORMING THE PHYSICAL AND
ECONOMIC LANDSCAPE OF COFFEE back
The coffee landscape of northern Latin America reflects the culmination
of the human activities associated with coffee's introduction, acceptance,
and spread as it came to replace the cash crops of colonial times and to
gain a place of prominence into the late twentieth century. The "traditional"
coffee of today has actually evolved since this African shrub was first
brought to the New World in the 18th century. Early on, coffee was often
placed in the open sun, a practice that growers soon changed by planting
shade or placing coffee in areas only partially cleared of their native
forests. By the dawn of this century, a production system characterized
by diverse shade and biological richness dominated the coffee landscape.
Even after World War II and into the last quarter of this century, most
countries of the region (with exceptions like Costa Rica) displayed coffee
areas blanketed with a variety of shade trees.
But by the 1970s, things began to change quickly and dramatically. Coffee
farmers, just like producers of other crops around the world, found themselves
face to face with the forces of modernization. Added emphasis to change
production technology came from agronomic problems like threats from diseases.
The result has been a sweeping tendency to shift from traditional production
techniques to more modern ones, a move that usually involves changes in
the shade cover, its management, and the use of agrochemicals.
A. The nature of the traditional coffee farm
back
Traditionally, the structural profile of a coffee farm in northern Latin
America has resembled that of a forest. With coffee as the understory shrub,
a mixed shade cover of fruit trees, banana plants, and towering hardwood
species forms a forest-like agroecosystem. Such an agroforestry structure
results in a fairly stable production system, providing protection from
soil erosion, favorable local temperature and humidity regimes, constant
replenishment of the soil organic matter via leaf litter production, and
home to an array of beneficial insects that can act to control potential
economic pests without the use of toxic chemicals. Traditional coffee, in
fact, has been cited as the region's most environmentally benign and ecologically
stable agroecosystem.
A strong consideration for the small grower is what the shade coffee system
produces in addition to the coffee harvest each year. Indeed, several "non-coffee"
products are harvested on a continual basis from traditional coffee holdings.
This diversification helps shield small producers from risks arising from
the vagaries of nature, international market fluctuations, or societal structures.
For many coffee producers in Central America, the mixed nature of shade
cover traditionally maintained in coffee provides insurance against uncertainty,
and maximum use of limited land holdings becomes an effective survival strategy.
The coffee harvest provides income each year, the absolute amount of which
depends upon yields and international prices. Other plants and trees in
the coffee holding provide a host of products that the grower would otherwise
have to buy on the local market (see Box on "Edible, Usable Biodiversity").
A famer's entire family is often involved in traditional coffee production,
especially for the harvest.
Income from selective timber harvest derived from shade trees can be substantial.
In studies based on Costa Rican practices, timber stands of Cordia alliodora
used as shade in densities of 120-290 trees per hectare, can produce a sustainable
output of 6-15 cubic meters per hectare per year of commercial wood. Timber
output such as this can help provide income security for small farmers;
for instance, timber harvests from shaded cacao plantations saw Costa Rican
producers through several years of tough financial times in the early 1980s,
when plant disease decimated cacao production.
The species composition and structure of a traditional coffee system will
vary according to country, ecological zone and grower. But examples from
several places within northern Latin America point to the similarities of
traditional coffee regardless of location. In particular, producers in many
countries make use of shade trees in their coffee holdings, with smaller
producers tending to make use of a variety of trees that provide edible
fruits. In Nicaragua's southern uplands known as the Carazo district, just
south of Managua, traditional coffee holdings have at least 25 species of
fruit and timber trees associated with them, many of which are native species
to this seasonally dry forest zone. Throughout the region, many farmers
plant nitrogen-fixing shade trees belonging to genera such as Inga, Gliricidia,
and Erythrina. Small growers prefer to have fruit trees as well,
such as citrus, bananas, and guavas. A study in Venezuela showed growers
choosing a mixture of shade trees (distinct from fruit or timber species),
fruit trees, bananas and timber species, regardless of the ecological zone
in which they happened to produce. The density of shade trees approached
353 per hectare, and total tree density in this study (not counting coffee
bushes) reached 561 per hectare in some farm systems.
Edible, Usable Biodiversity back
Many small coffee producers throughout Central America, Colombia, Mexico and the Caribbean maintain a varied mix of useful trees used as shade for the coffee. Depending upon local ecological conditions, local history of growing practices, and the grower, a "coffee farm" may in fact have a useful array of non-coffee products that come from the farm. On Guatemala's Pacific slope descending from the colonial town of Antigua toward the piedmont city of Esquintla, coffee growers purposefully intersperse citrus, bananas, and a popular palm ("pacaya") within the coffee. These and other fruits offer a ready source of food and/or income when harvested, often during periods that do not overlap with the coffee harvest itself.
Below is a list of trees (some fruit trees--f, some timber species--t , some strictly shade species--s ) found in the southern uplands region of Nicaragua. All are sources of firewood.
Beginning in the mid-1970s, a successful push to "renovate,"
"technify" or "modernize" the coffee sector in much
of northern Latin America emerged. The force behind this move came from
a fungal disease known as coffee leaf rust (Hemileia vastatrix),
also known by its Spanish name, la roya ("the rust"), spreading
throughout the region. The devastating potential of the rust was known from
historical records in India and Sri Lanka (formerly Ceylon), where the disease
halted coffee production within two decades in the second half of the 19th
century. The wind-borne spores finally made a New World landfall in 1970
on the east coast of Brazil, an event that triggered panic throughout the
coffee industry in the Americas.
Outbreaks and spread in Nicaragua's southern coffee district of Carazo in
1976 heralded the arrival of coffee leaf rust in Central America, prompting
an urgent search for solutions. The most popular response was a technological
one proposed by the United States Agency for International Development (see
Box on Subsidies for Industrial Coffee Production in Recent Decades). With
the coordination and financing of USAID or on their own, governments throughout
the region implemented or participated in programs to technify their coffee.
For most of the region, coffee leaf rust has not posed the problems originally
anticipated. This most likely is due to the high elevation (and hence cool
temperature) and/or the prolonged, intense dry season -- physical conditions
not conducive to the disease's proliferation -- characterizing much of the
coffee zone.
Technification -- now more commonly referred to as "modernization"
-- consists of the replacement of old, traditional varieties of coffee such
as típica or bourbón with newer varieties that
respond well to chemical fertilizers. Another feature of the modernization
process involves the elimination or reduction of shade, the goal being to
open the coffee up to the sun to deter the spread of fungal diseases, and
to increase coffee yields.
In many cases, shade removal and establishment of high-yielding coffee plants
have not achieved the intended objectives. For example, technification has
often entailed planting of caturra, a dwarf mutant coffee variety
discovered in Brazil during the last century and brought to Central America
in the 1950s, which yields about 30 percent more coffee per shrub if supplied
with fertilizer inputs. Although initially touted as being resistant to
coffee leaf rust, caturra is, in fact, susceptible to the disease.
The transformation resembles in many ways the changes that began in basic
grain production throughout much of the developing world in the 1950s. The
high-yielding varieties of coffee, the use of agrochemicals, and the restructuring
of the production unit itself all have their parallels in the "green
revolution" associated with corn, wheat and rice production in the
South. For coffee, the transformation means increasing the density of coffee
plants from 1100-1500 per hectare to 4000-7000 plants per hectare. These
higher-yielding varieties are planted very close together and typically
plied with petroleum-based fertilizers, as well as herbicides, insecticides
and fungicides. As discussed in the following section, these chemical inputs
can create their own challenges, not the least of which is toxic exposure
for farmworkers due to lack of information about the use and effects of
chemical products or the unfeasibility of wearing protective clothing in
hot weather.
The transformed coffee landscape elicits images of industrial agriculture.
The neat rows of coffee beneath direct sun or scant shade resemble an English
hedge-row compared to the shrubby understory of a traditional farm. Shade
trees, when present in this industrial system, receive "scientific"
pruning techniques that produce a thin laminar look to the canopy, thus
reducing the structural diversity of what might otherwise offer an array
of niches to insects, birds and other animals. Moreover, the limited shade
trees sometimes retained in technified sun plantations often tend toward
a single species. As discussed below, the modern coffee agroecosystem features
much lower levels of structural and species diversity than the traditional
coffee farm (see Box on Distinguishing Characteristics of Traditional and
Intensified Coffee Production Technologies).
C. A spectrum of management types from
forest to open field back
Conditions in the real world are more complicated than a strict dichotomy
of "traditional" versus "modern" or "shade"
versus "sun" coffee. Many examples of both these management systems
exist across the coffee landscape of Latin America. In practice, however,
they represent the extreme ends of a continuum of intensification within
the coffee sector, and, as with any continuum, plenty of examples fall between
the two extremes. Many issues will influence the final appearance of the
coffee holding, including conditions associated with geographical setting--that
is, factors such as topography, ecological zone, and rainfall. The collective
knowledge of a region's coffee growers, and the social and political interactions
among the producers, will also shape a particular area's general management
style. Likewise, institutions can affect where along the continuum coffee
holdings in a particular zone may fit (see following section). Of course,
an individual grower's own assessment of how to manage a coffee farm plays
a central role in the final outcome of its appearance. This often involves
inter-generational communication of knowledge. Fieldwork reveals that many
growers manage their holdings in a way taught them by their fathers, uncles,
or grand-fathers. Whatever the various factors, the reality of the coffee
landscape across much of Latin America is one of diverse management styles.
One categorization of these management styles that serves as a starting
point for understanding this "management spectrum" was devised
years ago by some Mexican coffee researchers and technicians. It identifies
five different management types, using shade levels and management as indicators
for intensification. The less shade there is, the more intensified the production
system. Implied in the scheme is a tendency to be more dependent upon the
market, and less inclined to produce a variety of commodities for household
use, as a holding is more intensified or industrialized. (See Figure 1.)
"Rustic coffee" displays the least intensified management system,
which is characterized by the coffee plants being inserted into the existing
forest with little or no alteration of the native, already-present vegetation.
Production under these conditions is destined for the market, but little
time and less capital is invested in realizing this production. The "traditional
polyculture" holding mimics the rustic coffee in structure, but the
species diversity can be much greater because of the deliberate planting
of other plants valuable to the household. Yields in "commercial polyculture"
systems are usually higher than those found in the less-intensified holdings,
but commercial polycultures also include several non-coffee products that
provide food and/or income for the grower. A "reduced" or "specialized
shade" system normally displays a single canopy species (e.g., genera
such as Inga, Erythrina, Gliricidia, Grevillea), the maintenance
of which is highly controlled, giving an overall manicured appearance. This
distinctive system often has a laminar look to the shade layer, and is in
effect a two- or three-species agricultural system (the coffee plus the
one or two shade species). Finally, there is the "open-sun" management
practice, which eliminates the overstory completely. This system resembles
tightly packed hedgerows, is highly productive if given the requisite chemical
inputs, and is, like the reduced shade system, oriented solely to producing
coffee for the market.
D. The role of institutions back
The transformation of traditional coffee into a more intensive production
system has a host of proponents. In Mexico, the now-defunct Instituto Mexicano
del Café (INMECAFE) advocated the adoption of industrial practices
during the 1970s and 1980s. Nationally, the impact of this institution's
attempt to technify the coffee sector has not succeeded as other institutional
forces have in other countries. Still, in areas like eastern Chiapas, the
modernization program carried out by INMECAFE coincided spatially with areas
of recent social upheaval.
Colombia presents a good example of the degree to which a well-organized
national institution can implement a policy it deems necessary. A key institution
is the Colombian National Coffee Growers' Federation, known as "FEDERACAFE."
As part of a strategy to increase production and to revamp the Colombian
coffee industry, FEDERACAFE advocated the technification of production.
The experience of coffee growers in the community of El Palmar illustrates
the organization's role in the process. Located in the southwestern Andes
in Colombia's department of Valle de Cauca, growers in El Palmar received
the full attention of the Federation's efforts designed to allow Colombia
to take advantage of the high international coffee prices that were hiked
up after the Brazilian coffee frosts of 1973 and 1975. The technification
efforts included the use of the high-yielding variety caturra, the
reduction of shade cover, and the intensification of agrochemical use.
El Palmar is only one example. Whereas twenty-five years ago, the majority
of Colombia's area and production was associated with traditional systems,
today 755,000 hectares of the country's total 1,104,000 hectares (2,728,000
acres) of coffee (68 percent) are technified. With modern farms capable
of producing more coffee per unit area, the actual production on the technified
area accounts for 86 percent of Colombia's total coffee produced. In years
of high international coffee prices, Colombia uses upward of 400,000 metric
tons of chemical fertilizers in coffee production.
Aside from national institutions, international aid programs have also played
a part in the industrial transformation of the coffee sector in northern
Latin America. Most notable is the United States Agency for International
Development (USAID), which, for a 15-20 year period beginning in the early
to mid-1970s, instituted a series of projects aimed at increasing production
for the small coffee producer in several countries of Central America and
the Caribbean. USAID's strategy for bringing more capital to the rural sector
has involved technology transfer to small growers. The technology being
transferred has normally entailed a more industrial approach to production,
including shade reduction and heavy chemical inputs. During this coffee
technification period, the total cost of USAID projects in the region totaled
about $80 million. There are still USAID projects aimed at coffee growers
in El Salvador, Haiti and Guatemala.
Some recent and pending USAID funding will be directed to environmentally
sound coffee production via the development of market connections in some
of the region's "smaller economies." This new hemispheric-scale
project with $10 million to spend on free market support mechanisms will
supposedly target small coffee producers in small coffee producing countries.
One of the emphases will be fostering organic coffee markets for producers
in Latin America and the Caribbean. The agency's El Salvador project has
a strong environmental component, with organic coffee production playing
a strategic role in capturing specialized markets (see Box on Supporting
Sustainable Coffee at the Local Level).
E. Redefining modern coffee production back
The changes occurring in coffee production technology are part and parcel
of the general trend in world agriculture characterized by a progression
toward evermore intensive practices. Since agriculture's beginnings, and
especially since the advent of the industrial revolution, a relentless march
within agriculture has continually refined, reshaped and sometimes remade
farming and crop cultivation in the image of industry. Parts of the production
process in a host of crops around the world have changed significantly over
the past two or three centuries, giving rise to completely new cultivars,
hybrid varieties, labor regimes, chemical inputs, and, ultimately, foods
upon our tables.
These changes, as well as many others, increase the efficiency and volume
of production, similar to parallel technological introductions in the industrial
sector. They are part of a concept of "modernization" that has
proceeded in agriculture without sufficient regard to environmental consequences.
Topsoil loss on erosion-prone croplands, pesticide poisoning of workers
and the groundwater supply, huge increases in energy costs to bring one
bushel of corn to the grain exchange, and an ever-increasing number of resistant
insect pests appearing on the scene are just some of the problems facing
industrial agriculture at the close of the twentieth century.
For the issue at hand -- the transformation of coffee production -- perhaps
our task is to redefine "modern." While modern generally refers
to the latest version or method associated with some phenomenon, the concept
is incomplete without a component that reflects today's environmental challenges.
This implies a commitment to using and understanding the best knowledge
available to get something done in such a way as to minimize the impact
upon the land. There are plenty of industrialized aspects of agriculture
that can be used wisely in production. At the same time, there is a mountain
of information that can be gleaned from generations of producers who have
made it their everyday business (indeed, their survival strategy) to produce
in such a way as to minimize risk and protect the land they use.
For coffee production, there are generations of knowledge collectively housed
in the cultures of northern Latin America based on lifetimes of practical
applied work. The traditional coffee system and the knowledge base associated
with it is a veritable library of successful cultural practices. It is these
practices that should be examined and tested for their present-day applicability
and compatibility with more recent techniques. Being modern, in short, should
incorporate the best knowledge from whatever system -- old or new, "folk"
or "scientific" -- that preserves the productive base upon which
long-term production depends. Hence, a truly "modern" production
system can be regarded as one that benefits the grower with sustained yields
and lowered costs over the long run, while at the same time maintaining
or enhancing biodiversity, as well as protecting the land from erosion,
chemical contamination, and the inhibition of natural nutrient cycling.
Decisions about what technologies are ultimately used, as well as how best
to insert oneself into the increasingly complex international marketplace,
must obviously be made by those producing coffee. There is an urgent need
to create the conditions in which social, political and economic structures
allow such decisions, and provide growers with a wide range of knowledge
upon which to base these decisions.
The United States Agency for International Development has played a pivotal role in the transformation of coffee lands in Central America and the Caribbean. More than $80 million dollars have been directed to small producers in the region, much of it funneled through a Costa Rica-based program called Programa de Mejoramiento del Café (PROMECAFE). Begun in the 1970s, PROMECAFE has been one of the major forces in promoting the modernization of the coffee sector. Initially, the idea was to intensify production via green revolution-like strategies, as is clear from one of the USAID Regional Office on Central America and Panama (ROCAP) reports of 1981:
"Technification" refers to a combination of measures, including scientific pruning, shading, application of fertilizer, insecticides and fungicides, planting high-yielding varieties as soon as they become available, and increasing the number of plants per manzana*, so the average yields will increase from 7-10 quintales "dry bean" to 30-35 per manzana.
More recently, a project evaluation in Guatemala related: Existing coffee plantings are typically old, low-density plantings which suffer from disease and insect problems, lack proper nutrition, are unpruned and heavily shaded. These conditions and practices greatly restrict yields and reduce productivity. In order to effectively use proven production practices which consistently yield 30 or more cwt. per manzana, it is necessary to completely remove the present plantings and introduce new varieties and a technical package of inputs and procedures which farmers -- through extension, education and training -- can readily employ.
Various projects in Honduras, Guatemala, Haiti, El Salvador, and the Dominican Republic, as well as region-wide projects created a coffee intensification boom, reflected in the popularity and enthusiastic embrace given technification by many of the region's coffee researchers and extension agents. Even agricultural advisors to the Sandinista government of Nicaragua -- a government that had enacted a number of strong environmental laws -- were enamored enough with the industrialization scheme to convince their government to "renovate" much of the Carazo district in 1980. This resulted in what essentially was the deforestation of more than 10,000 manzanas.
*one manzana = 0.69 hectare
IV. ENVIRONMENTAL DIMENSIONS OF COFFEE PRODUCTION
back
The way coffee is grown and processed has profound environmental importance
both locally and internationally. This section focuses on four themes intimately
related to the coffee sector: biodiversity and conservation of forest ecosystems;
agro-chemical use; water pollution from coffee processing; and soil quality.
Each of these factors is critical to environmental quality in northern Latin
America.
A. Conservation of forest ecosystems back
Deforestation trends are serious throughout the coffee-producing lands of
Latin America. Seven of the ten countries in the world with the highest
deforestation rates are in Latin America and the Caribbean; these seven
countries include Jamaica, Haiti, Costa Rica, Paraguay, Ecuador, Guatemala
and Mexico. In a number of areas, tropical forest ecosystems have disappeared
or are on a path to elimination in the near-term. By the late 1980s, for
example, only an estimated one-fourth of the primary moist tropical forest
in Colombia remained.
Remarkable biodiversity values are at stake. Latin American tropical forests
are critical ecologically for purposes of protection of atmospheric dynamics,
water quality, and wildlife species, as well as economically as reservoirs
of germplasm with multiple applications for food, medicine, and industrial
products.
The region's threatened natural heritage transcends national boundaries.
For instance, neotropical migratory birds that winter in northern Latin
America constitute 60 to 80 percent of the bird species that inhabit forests
throughout the eastern U.S. and Canada; neotropical migrants also constitute
a large fraction of bird species in the forests of the Pacific Northwest.
Birds numbering in the hundreds of millions and representing more than 120
species migrate annually through or to the part of the Central American
isthmus composed of Costa Rica and Panama.
Traditional, shade coffee production has been shown to be highly beneficial
to biodiversity conservation in tropical forest ecosystems. In northern
Latin America, traditional coffee covers very significant areas with closed
canopy, agro-forestry systems with high species diversity. Smithsonian Migratory
Bird Center biologists conducting research in the southern Mexican state
of Chiapas discovered that traditionally-managed coffee and cacao (chocolate)
plantations support at least 180 species of birds, an amount significantly
greater than bird numbers found on other agricultural lands and exceeded
only by undisturbed tropical forest. The attraction of industrial sun coffee
for birds falls well short of that seen in traditional shade systems. For
example, studies in Colombia and Mexico have identified over 90 percent
fewer bird species in sun-grown plantations than in shade coffee.
Shade coffee also provides essential habitat for diverse communities of
other tropical forest species. Findings by University of Michigan biologist
Ivette Perfecto and colleagues from research in Costa Rica suggest that
local species diversity of beetles, ants, wasps and spiders on a single
tree species (Erythrina poeppigiana ) in shade coffee plantations
approximates the arthropod diversity levels on single tree species sampled
in undisturbed tropical forest.
Additional recent studies on tropical forest ecology have been conducted
by scientists from Mexico's National University and Chicago's Lincoln Park
Zoo. These researchers' work in Veracruz, Mexico, has shown that shaded
agricultural plantations, as compared to unshaded agricultural landscapes,
feature richer diversity of small mammals such as opossums, squirrels and
mice. Bats, important dispersers of seeds and pollinators of many tree species,
as well as natural predators of insects, also show a presence in such systems.
Comparing forest habitat to several agricultural lands, these same researchers
found that habitats designated as "mixed plantation" (cacao, coffee,
bananas, and citrus) and "coffee" (coffee with shade trees) jointly
contained 74% of the species richness.
Traditional coffee is often integral to agro-forestry systems in which tree
species are cultivated together with the coffee and other agricultural commodities.
Where geographic and market conditions are favorable, economic returns can
be achieved through sustained-yield timber production in association with
coffee. For example, research in Costa Rica has shown
that timber from the precious hardwood species Cordia
alliadora can occur with no significant damage to growing coffee crops.
Agro-forestry systems, including those involving coffee, have potential
to enhance the economic and ecological stability of poor rural areas in
northern Latin America. By providing an alternative to deforestation, traditional
coffee systems constitute an important check against greenhouse gas emissions
that contribute to global warming.
B. Agrochemical use in coffee back
Traditional shade coffee systems typically rely on much lower chemical inputs
than industrial plantations. This is because planting coffee among natural
vegetation, or among trees planted for shade, fruit or timber, can reduce
susceptibility to pests. Moreover, because many traditional methods have
been passed down to today's farmers by previous generations before synthetic
pesticides and fertilizers were widely used in agriculture, a human-land
use equilibrium has evolved in coffee production over time.
Intensive pesticide use within industrial coffee production often employs
chemicals that present serious health and ecological concerns. Sampling
of imported green coffee beans conducted by the U.S. Food and Drug Administration
(FDA) in the late 1970s and early 1980s revealed frequent detections of
DDT, BHC (benzine hexachloride) and other pesticides banned in the U.S.
because of possible carcinogenicity or long-term persistence in the environment.
In 1983, the Natural Resources Defense Council retained the services of
an outside contract laboratory to conduct independent testing on imported
coffee beans. The analysis revealed multiple pesticide residues on all samples
when green coffee beans were tested using detection methods many times more
precise than the FDA procedures (see Table 6). The roasting process reduced
detectable levels of pesticide residues on the bean samples; however, the
test of one sample of the Brazilian coffee beans retained the original level
of DDD (the toxic metabolite of DDT) that had been detected on the beans
before roasting. It should be noted that while DDT is rarely used on coffee
today, other chemicals are used to combat insect pests, weeds, and diseases.
Over the last decade, governments throughout the Western Hemisphere have
taken steps to prohibit use of a number of pesticides banned in the U.S.
Certain banned chemicals remain approved for agricultural use in some Latin
American countries, however. For instance, a 1990 report from the General
Accounting Office found that Costa Rica continues to permit use of chlordane,
a highly toxic insecticide that persists for years in the environment. Attempts
to restrict U.S. exports of banned pesticides have failed in recent years;
for example, "circle of poison" legislation passed by the U.S.
House and Senate fell short of final enactment in the 1990 farm bill.
Under-regulated pesticide use also threatens farmers and other rural residents
with exposures to toxic substances in the workplace or in water supplies.
For example, serious public health and water quality impacts have been linked
to pesticide use in Mexico; in one documented case in 1987, more than 200
people became sick from drinking water contaminated with agricultural pesticides
and fertilizers in the western Mexican state of Jalisco.
A recent World Resources Institute (WRI) report documented extensive human
exposure to pesticides in Latin America and elsewhere in the developing
world; for example, studies of farmworkers and their families in Nicaragua
have revealed significant decreases in the activity of cholinesterase, an
enzyme vital for normal neuro-muscular functioning. The WRI report notes
that "inadequate safety and hygiene practices are the norm" in
developing country pesticide use.
Recently, concerns have been raised about human health and environmental
impacts associated with expanded use of the highly toxic insecticide, endosulfan,
in Colombia to combat a coffee insect pest known as "la broca."
According to official accounts compiled by Pesticide Action Network North
America (PANNA), more than 100 human poisonings and one death were attributed
to endosulfan use in coffee during 1993; more than 100 poisonings and three
deaths were reported in 1994. Although the Colombian health ministry took
steps to ban endosulfan use in January 1995, concerns continue to be raised
that this move has not been implemented fully. The Colombian Coffee Growers'
Federation and the country's National Center for Coffee Research have pointed
out the availability of less-toxic chemicals, as well as biological methods
for coffee pest management, and have prohibited their field technicians
from recommending use of extremely or highly toxic pesticides on coffee.
Farmworkers historically unaccustomed to technified coffee production systems
encounter an array of chemicals that are supposed to be applied with protective
gear such as masks, long-sleeved shirts, long pants and boots -- clothing
that frequently goes unused in the heat and humidity of tropical environments.
Recent field research by the U.S. Environmental Protection Agency (EPA)
documented widespread lapses in the use of protective clothing among pesticide
applicators working in the Mississippi Delta. These EPA staff findings have
important implications for farmworker health and safety in technified coffee
production in northern Latin America. Current pesticide regulatory systems,
including in the United States, take insufficient account of the practical
limitations of wearing protective gear in hot weather.
Increased nitrogen fertilizer applications have gone hand in hand with the
widespread removal of shade cover from Central American coffee plantations.
Heavy synthetic fertilizer inputs in coffee have contributed to nitrate
contamination of drinking water aquifers in Costa Rica, with the documented
groundwater pollution in some cases exceeding World Health Organization
levels. In high concentrations, nitrates can cause infant methemoglobinemia
("blue-baby syndrome"), a potentially fatal condition that impedes
oxygen transport in infants' bloodstreams. Other human health concerns surrounding
nitrate contamination of groundwater include suspected links between nitrates
and certain cancers, birth defects, hypertension, and developmental problems
in children.
C. Water pollution from coffee processing
back
Largely irrespective of how coffee is grown, discharges from coffee beneficios
(processing plants) represent a major source of river pollution in northern
Latin America. The process of separating the commercial product (the beans)
from coffee cherries generates enormous volumes of waste material in the
form of pulp, residual water and parchment. For example, the Guatemala-based
Instituto Centroamericano de Investigación y Tecnología Industrial
estimated that over a six month period during 1988, the processing of 547,000
tons of coffee in Central America generated 1.1 million tons of pulp and
polluted 110,000 cubic meters of water per day, resulting in discharges
to the region's waterways equivalent to raw sewage dumping from a city of
four million people.
Coffee beneficios exist in a wide range of sizes. In Guatemala, for
instance, where a total of some 4000 processing facilities are estimated
to dot the landscape, the National Association of Coffee Growers divides
them into micro-facilities (those with a capacity to process 500 to 5000
pounds of harvested coffee per day), medium facilities (5000 to 50,000 pounds
per day), and large (greater than 50,000 pounds per day). The 100 beneficios
belonging to this last category (3% of all Guatemala's beneficios
) process 60% of the coffee produced annually.
Ecological impacts result from the discharge of organic pollutants from
beneficios to waterways, robbing aquatic plants and wildlife of essential
oxygen. Costa Rican health officials have expressed concerns over harms
to marine life along parts of the Pacific Coast where rivers contaminated
by coffee processing wastes flow into the ocean. According to Costa Rican
government estimates from the early 1980s, coffee processing residues account
for two-thirds of the total biochemical oxygen demand (the principal measure
of organic pollutant discharges) in the country's rivers. In 1992, Costa
Rica instituted a plan to upgrade the nation's coffee processing systems,
with the objective of cutting organic pollutant discharges to surface waters
by 80 percent within five years.
Recent years have witnessed important progress in the development of pollution
control technology in coffee processing. A small but growing number of beneficios
are substantially reducing the volume of water used in "wet" processing
of coffee; this in turn, reduces the amount of water requiring treatment
before being discharged from the processing facilities. Additional environmentally
sound measures include composting coffee husks mixed with farm animal manure
to use as organic fertilizer on crops, as well as digesters that produce
methane gas that can be used for practical applications like powering the
processing plant. Success has been demonstrated with these measures in various
parts of northern Latin America, including the major coffee areas of Mexico's
Veracruz state. Without a concerted regional investment plan in improved
technology, however, pollution prevention will remain the exception to the
rule in this part of Latin America.
D. Soil quality back
Soil quality benefits of traditional agricultural resource management in
northern Latin America have been well documented by Colorado State University
geographer Gene C. Wilken in his 1987 book, Good Farmers. Regarding
soils, Wilken attributes the success of traditional systems to key factors
such as the following:
Such practices are typical within shade coffee production systems, which
demonstrate remarkable technical sophistication in soil management. Additional
benefits derive from substantially reduced or foregone use of pesticides,
whose over-application can eliminate insects and micro-organisms that play
vital roles in the enhancement of soil productivity and plant nutrition.
Elimination of shade cover can cause significant impacts on various soil
quality parameters. Research in Nicaragua in the late 1980s documented that,
relative to traditional systems, significantly higher erosion rates occurred
on renovated coffee plantations where shade had been reduced. This study
also showed that shade coffee systems demonstrated higher levels of soil
moisture and organic material.
Nutrient cycling also reacts to changes in the shade cover in coffee. In
Costa Rica's Central Valley, where rainfall can reach up to 2.5 meters annually,
the leaching of soil nutrients into the groundwater can be significant.
Within these high-rainfall areas, unshaded coffee loses nearly three times
more soil nitrogen than shaded plantations. In general, shade coffee systems
have been shown to be more conservative recyclers of nitrogen than unshaded
plantations.
V. MARKETPLACE ACTIONS FOR SUSTAINABLE
COFFEE back
The impetus for ecologically sound coffee production in Latin America must
come from the "demand side," as discriminating companies and consumers
insist upon coffee that comes from growing and processing systems that protect
environmental values and enhance economic conditions for farmers and rural
communities. The potential is enormous given the skyrocketing international
growth in demand for specialty coffee. In the U.S., which accounts for about
half the global market for roasted gourmet coffee, sales of such coffee
increased from approximately $1 billion in 1990 to $2.5 billion in 1995.
The question is how continued market expansion can be harnessed to promote
forest conservation, environmental quality and higher incomes for coffee
growers who implement methods to protect the environment.
Coffee drinkers who are concerned about issues such as migratory bird decline,
pesticide impacts, or rural poverty in developing countries need to make
their views known to the supermarkets and specialty coffee outlets where
they shop. Consumers should press coffee retailers to provide specific information
on the environmental and social conditions under which their coffee was
grown and processed. Businesses and government agencies should consider
the environmental dimensions when choosing the coffees they provide to their
customers or employees. Shareholders in firms dealing in coffee should urge
company managers to integrate environmental criteria into their commercial
decisions.
The specialty coffee industry has yet to begin any large-scale, concerted
initiative to promote environmental protection in coffee producing countries.
Nevertheless, the Specialty Coffee Association of America recently established
an Environmental Policy Task Force to address ecological issues associated
with coffee. The International Coffee Organization (ICO), the principal
coffee trade group worldwide, held a seminar on "Coffee and the Environment"
in May 1996 at the ICO's headquarters in London. A number of specialty coffee
firms will be participating in the First Sustainable Coffee Congress on
September 16-18, 1996, in Washington, D.C., which is being hosted and organized
by the Smithsonian Migratory Bird Center.
Environmentally conscious consumers should use the power of their purchasing
decisions to support coffees that are certified organic, marketed through
alternative trade or social justice channels, or backed by environmental
criteria such as forest conservation or water pollution prevention. These
three categories vary in areas of emphasis, but share a common thread of
environmental protection.
A. Certified organic coffee back
At present, organic coffee accounts for just one or two percent of the $5
billion worldwide market for specialty coffee. However, organic coffee currently
exhibits the fastest growth among gourmet coffee types. In addition to exports,
significant growth potential exists in coffee producing countries where
gourmet coffee is just beginning to emerge in domestic markets. For example,
coffee co-ops from Chiapas, Mexico, have recently established retail outlets
in Mexico City to sell their organically-grown "La Selva" coffee
(see illustration, "Amantes del Buen Café").
Production of certified organic coffee has expanded recently in northern
Latin America. Such production can be found in all countries throughout
the region (see box on Supporting Sustainable Coffee). One example is Indígenas
de la Sierra Madre (ISMAM), which is made up of 1,200 small-scale "campesino"
coffee growers in Chiapas, Mexico. The ISMAM co-op exported 20,000 sacks
of gourmet organic coffee in 1995 directly to Europe, the United States
and Japan. Within Latin America, Peru outstrips other countries in terms
of area, with nearly 44,000 hectares under certified production. Mexico,
which produces nearly as much organic coffee as Peru, does so on just under
26,000 hectares. Other countries with land devoted to certified organic
coffee include Guatemala (more than 7000 hectares), El Salvador (4900 hectares),
Nicaragua(1400 hectares), and Costa Rica (550 hectares).
Certified organic coffee fetches significant price premiums on the order
of 10 to 15 percent above gourmet coffee without the organic trademark.
The price premium often translates into substantially higher returns for
coffee growers, although the net benefits of moving to certified organic
production can vary substantially from producer to producer, depending on
added production costs and other variables. Organic coffee co-ops pay thousands
of dollars each year to cover certification costs such as the time and travel
expenses of field inspectors. The downside to organic certification from
many growers' perspective is the cost of periodic inspection. For the multitude
of small coffee growers who are de facto or "passively"
organic producers because they cannot afford to use agrochemicals, inspection
costs can present a formidable obstacle to certification, and hence to the
premium price they might otherwise obtain for their coffee.
Organic coffee growers are typically organized into local cooperatives that
are affiliated with, and bound by the standards of, international certification
programs. The largest of such programs is Organic Crop Improvement Association
International (OCIA), which as of late 1995 claimed more than one million
certified hectares (2.5 million acres) and 30,000 grower-members worldwide.
Other programs certifying organic coffee in northern Latin America include
the European-based Naturland and Demeter.
The international certification programs serve several functions. For example,
OCIA sponsors crop improvement seminars and other technical assistance for
farmers implementing organic systems; independent third-party inspection
of certified farms, with an audit trail to track coffee and other commodities
from consumers to producers; and a trademark that appears as a label on
OCIA-certified coffee and other organic products.
Sound environmental stewardship is a central tenet of the organic agriculture
movement. For example, soil building practices are key OCIA requirements
for certified organic farms. The OCIA standards permit certification only
of fields or farms where no synthetic pesticides or fertilizers have been
applied during the preceding three years.
Diversified forest cover appears to be one common approach by which organic
coffee farmers achieve certification standards for soil quality and chemical
use. For example, organic coffee growers in Mexico maintain diverse shade
cover to enhance soil fertility and to reduce their production systems'
vulnerability to pests. OCIA currently encourages its coffee producing members
to diversify the shade cover, so that growers can benefit from a variety
of products associated with their holdings. However, existing organic standards
do not contain explicit, measurable criteria for diversified shade cover.
The soil building techniques used in organic coffee farms often help reduce
the waste stream of pollutants to water supplies. The Asociación
de Caficultores Orgánicos de Colombia, a co-op in the process of
obtaining OCIA certification, composts all organic waste from coffee processing
to create a rich mulch for use as a natural source of nutrients for coffee
plants. Nevertheless, measurable pollution prevention standards are not
part of existing organic certification regimes.
B. The alternative trade and social justice
market back
Coffee producers in certain countries enjoy premium prices for their coffee
due to the connections they have forged during the last decade with groups
that make up what is known variously as the "solidarity," "social
justice," "alternative trade," or "fair trade"
movement. The movement is based on the idea that producers of traded commodities
in developing countries are capable of achieving economic success provided
they receive fair prices in international markets for what they produce.
Recent years have seen a growth of the movement, with trade unions, church
groups, and women's organizations becoming involved. Throughout Europe,
for example, fair trade coffee accounts for 11,000 metric tons of traded
coffee annually, finding outlets in some 35,000 supermarkets.
Like coffee that is certified organic, coffee distributed through alternative
trade channels currently represents a very small fraction of the worldwide
specialty coffee market. Sales have increased, however, as more and more
coffee drinkers have learned about the poverty and dismal working conditions
characterizing small coffee producers' lives. Global sales of coffee in
the social justice market amounted to $400 million in 1995, according to
estimates from the International Federation of Alternative Trade (IFAT),
an association that oversees 36 alternative trade organizations worldwide
through a code of ethics established in 1990 and updated in 1995.
The social justice market is organized around the International Coffee Register,
which is essentially a company owned by the fair trade groups Max Havelaar,
TransFair, and the Fair Trade Foundation. A total of 286 coffee-producing
cooperatives are members of the Register, representing about half a million
growers around the world. Under current arrangements, grower groups are
guaranteed $1.26 per pound for "green" (ready-to-roast) coffee.
If world prices average above this figure, producers receive five cents
per pound above the world price.
There are currently about 15 licensed importers of fair trade coffee. If
a producer cooperative needs a cash advance to use for purposes of extending
credit to individual growers, or for other expenditures, it falls to the
importers to provide advanced funding that can total up to 60 percent of
the contracted coffee with that cooperative, at rates of interest negotiated
between the importer and the coffee cooperative.
The social justice movement and its corresponding market are much more developed
in Europe, where they originated, than they are in the United States and
Canada. European solidarity groups have long been active in Latin America,
with institutional support available to them through social democrat governments
and a solid base of non-governmental organizations. Community development
projects funded by the private sector or via government funds have long
been a hallmark of development work conducted by countries like Belgium,
the Netherlands, Germany, France and Great Britain.
In 1988, Max Havelaar Netherlands developed a market label to link small
coffee growers in Mexico directly to international markets. The label propelled
the Dutch "alternative" trade in coffee from a mere 0.3 percent
of national consumption to 2.3 percent by 1995. In Switzerland, it has captured
5 percent of the market. The Max Havelaar label now has a presence in at
least six European countries, including its home country, Belgium, Austria,
Germany, France and Switzerland. Another social justice label, TransFair,
exists in eight nations around the globe, including Canada, Japan, the US,
Italy, Germany and Austria.
An innovative direct marketing strategy has been employed by Aztec Harvest
Coffee Company, which is owned by Mexican small-farmer cooperatives and
is structured to bypass intermediaries (and thus maximize growers' profits)
in selling coffee to US and European buyers. Substantial portions of the
coffee traded through Aztec Harvest come from certified organic co-ops.
Well-known Aztec Harvest customers have included Ben & Jerry's and United
Airlines.
Although focused primarily on social justice for small coffee growers, the
alternative trade movement has incorporated environmental objectives in
a general way. For example, criteria for the International Fair Trade Coffee
Producers' Register (overseen by Max Havelaar Netherlands in conjunction
with other Max Havelaar and TransFair groups) specifies that any producer
organization wanting to participate must be committed to "sustainable
development strategies, applying production techniques which respect specific
ecosystems and contribute to the conservation and a sustainable use of natural
resources, in order to avoid as much as possible -- or even totally -- the
use of chemical inputs."
Moreover, the IFAT's Code of Ethics spells out environmental expectations
for the participation of alternative trading organizations (ATOs). The two-point
environmental section of the code states:
a) It is also the aim of ATOs to encourage the production of goods by means
which preserve the environment and conserve scarce resources and in ways
which cherish the skills and develop the capacities of the producers and
do not harm their health. This applies equally in the First World as in
the Third World.
b) ATOs are committed to encouraging development which is sustainable and
responsible in terms of the long term survival of the human species and
of the natural world.
In many cases, strong overlap exists between the certified organic and social
justice coffee movements. The Massachusetts-based Equal Exchange works primarily
to ensure fair prices to small growers, and deals mostly in certified organic
coffees. In other cases, the fair trade market makes linkages with small
peasant producers who, because of their inability or unwillingness to use
costly chemical inputs, produce what can be regarded as a "passively"
organic or "organic by default" coffee.
C. Further integration of environmental criteria
in consumers' coffee choices back
There are many good reasons to buy certified organic or social justice coffee.
There is also a need to develop and apply a broader range of environmental
criteria than may be covered by existing certification regimes. For example,
explicit criteria for coffee produced through "shade-grown" or
"bird friendly®" management systems could provide a powerful
market force for forest conservation and sustainable economic development
in northern Latin America and other coffee producing regions. Additional
criteria are needed to reflect whether pollution prevention measures have
been applied in coffee processing.
To ensure consumer confidence, any new environmental criteria for coffee
must be measurable, scientifically rigorous and consistent. The criteria
should not be one-dimensional, but rather should reflect the complexity
of coffee management systems and the biodiversity values of various levels
and composition of shade cover. Additionally, the criteria should be evolutionary,
that is, subject to refinement in the face of improved scientific understanding
or technological innovations.
Environmental criteria might find expression in the marketplace in a number
of ways. Adding or overlaying new environmental metrics within existing
certified organic or alternative trade systems is one possibility. Another
is a separate certification regime such as the Rainforest Alliance's "ECO-O.K."
Program, which is moving toward certifying coffee with criteria developed
by Fundación Interamericana para Investigaciones Tropicales, a Guatemalan
NGO. Draft criteria for the "ECO-O.K." effort on coffee include
maintenance of a minimum number of shade trees per hectare and encouragement
to growers to minimize agrochemical applications. The use of native perennials
as shade, as well as the maintenance of vegetation buffer zones next to
rivers, streams, and lakes constitute other criteria stipulated for "ECO-O.K."
certification.
One option worth serious consideration is a system that, as distinct from
dichotomous certification regimes (where products are either certified or
not), rates coffees according to their performance on a range of environmental
parameters. Hypothetically, for example, a scoring method might be devised
where a coffee receives "one star" if grown under shade cover
with limited diversity, or "two stars" if the shade cover features
a highly diverse plant community and forest canopy structure. Similar gradations
could be developed to reflect varying degrees of pollution prevention and
waste recycling in coffee processing.
These options are not necessarily mutually exclusive. However, any further
integration of environmental criteria into coffee markets must proceed in
a way that informs rather than confuses consumers. Moreover, such integration
must ultimately satisfy coffee roasters' primary interest in product quality
and competitive prices. It would be unrealistic to assume that new environmental
criteria, no matter how compelling, will be sufficient to "pull"
particular coffees through the market irrespective of price and quality
considerations.
VI. POLICY SUPPORT GOVERNMENTS AND
INTERNATIONAL INSTITUTIONS back
People throughout the Western Hemisphere have much to gain from ecologically
sound coffee production. Governments and international institutions should
thus mobilize their efforts to support traditional coffee farmers whose
agricultural practices preserve biodiversity and enhance soil quality in
Latin America. Individuals and institutions should likewise direct their
efforts into boosting methods of coffee processing that substantially reduce
solid and liquid waste dumping into water supplies.
Local governments, bilateral funders, and multilateral institutions should
find ample reason to target environmentally sensitive coffee production
and processing as acceptable funding opportunities. Establishing policies
that preserve shade coffee production and allow small coffee growers to
benefit from the good land stewardship practices that many already have
in operation not only will help maintain the biodiversity associated with
shade coffee, but will bring greater economic benefits to the coffee communities
involved. Moreover, ecologically sound shade coffee production falls squarely
within the realm of carbon sequestration, and producers could potentially
fit within programs such as the United States Joint Implementation Initiative.
A priority will be to provide financial incentives, credit, and technical
assistance for coffee growers and processors to adopt methods that maintain
crop yields and profits while benefiting environmental values. Agriculture,
tax and trade policies should be reformed to encourage, rather than create
barriers to, environmentally sensitive coffee production. Support is also
needed for expanded research on the ecology and economics of coffee production
and markets in the Americas.
A. Funding incentives for environmentally
sound coffee production back
Adoption of sustainable coffee systems presents transitional economic risks
for growers and processors. Targeted incentives are needed to enable more
small-scale coffee growers in Latin America to maintain or implement environmentally
sound management practices that help sustain long-term productivity and
profitability. Sustainable development in the Latin American coffee sector
should be a priority for bilateral economic assistance, the Global Environment
Facility, multilateral development banks, and national environmental funds.
1. Bilateral assistance back
Through its various programs for bilateral foreign assistance, the United
States should support sustainable coffee production in Latin America. Recent
examples from the Inter-American Foundation and the U.S. Agency for International
Development illustrate the potential for bilateral funding to improve economic
and environmental conditions for coffee producers (see Box on "Supporting
Sustainable Coffee at the Local Level"). The need for incentives connected
to environmentally sensitive coffee argues strongly for increased bilateral
assistance for sustainable development in developing countries. Unfortunately,
current political trends in the US are toward sharp reductions in foreign
assistance funding.
The role of NGOs operating internationally will become increasingly important
in providing financial and technical assistance for environmentally sound
coffee production. For instance, Conservation International is developing
a multi-faceted program to work with local farmer organizations in priority
biodiversity areas in Latin America and worldwide. The program will be designed
to provide pre-harvest financing to enable growers to store their coffee
until they can obtain a favorable price from buyers, technical support in
environmentally sound production methods, and transitional costs for implementing
positive land stewardship practices. In Mexico, the Coordinadora
de Pequeños Productores del Café de Chiapas (COOPCAFE) is
undertaking a program under a grant from the John D. and Catherine T. MacArthur
Foundation to train peasant farmers in that state in organic coffee production
and to support ecologically sound agriculture by farmers operating in the
buffer zone of the Lacandon rain forest.
2. Global Environment Facility back
The Global Environment Facility (GEF) is the world's only multilateral
dedicated fund for the environment, providing grants to developing countries
to protect global resources. The GEF is governed by an independent Council,
and the projects it funds are implemented by the World Bank, United Nations
Development Program (UNDP) and United Nations Environment Program (UNEP).
The GEF was launched in 1991 as a pilot program. In 1994, the Facility completed
a restructuring process that reflected many recommendations by conservation
groups and governments, as well as an independent evaluation of the pilot
phase. Total funding for the GEF over the next three years is set at $2
billion -- an amount to be contributed in annual installments by 26 nations.
The U.S.-agreed share of the GEF replenishment is $430 million, of which
Congress appropriated $90 million for fiscal year 1995, but just $35 million
for fiscal year 1996.
The GEF's purpose is to address environmental problems that are "global"
in nature. Hence, GEF-funded projects must fit within one or more of the
Facility's focal areas of biological diversity, climate change, international
waters, ozone depletion, and land degradation.
Environmentally sound coffee production should fall squarely within the
GEF guidelines, in the biodiversity area and perhaps others. In its discussion
of forest ecosystems, the operational strategy recently approved by the
GEF states that priority will be given to "conservation of areas of
importance for migratory species." The strategy's list of activities
for sustainable use of biodiversity includes "[P]romotion of sustainable
production and use of natural products, such as nontimber forest products.
. .and agrobiodiversity-related products, including the development and
implementation of sustainable harvesting and marketing regimes." These
and other passages in the document are directly relevant to coffee production
in northern Latin America.
Global Environment Facility grants are available not only to national governments,
but also to non-governmental organizations and private sector businesses.
A small fraction of GEF funds are allocated through a UNDP-administered
Small Grants Program for projects conducted by non-governmental organizations
and local communities. Conservation groups have urged enlargement of the
existing Small Grants Program, as well as establishment of a Medium Grants
Program for NGO projects whose scale falls between the small grants program
and the regular GEF funding available to governments. The small and medium
grants approach would be well-suited to funding local environmentally sensitive
coffee enterprises in Latin America.
Another potential funding window for ecologically sound coffee is a newly
proposed "Biodiversity Enterprise Fund for Latin America," to
be directed by the International Finance Corporation (IFC) with partial
support from the Global Environment Facility. Affiliated with the World
Bank, the IFC is the largest multilateral source of private sector financing
in developing countries.
Supporting Sustainable Coffee at the Local Level:
Two Examples
Addressing Economic and Environmental Needs in Southern Mexico
The U.S. government established the Inter-American Foundation in 1969
to provide direct financial support for self-help efforts initiated by poor
people in Latin America and the Caribbean. Funded primarily by Congressional
appropriations, the Foundation awards approximately 200 grants per year.
The Inter-American Foundation made a grant in 1992 to the Unión de
Ejidos de La Selva (La Selva), an organization of small-scale agricultural
enterprises in the southern Mexican state of Chiapas. The grant was made
in support of La Selva's program for producing and marketing organic coffee.
The John D. and Catherine T. MacArthur Foundation provided additional support
to La Selva for development of a coffee quality control program.
The program was designed to expand the acreage devoted to active organic
farming through the delivery of cost-effective agricultural extension services
to farmers. Beneficiaries receive practical advice from other local farmers
on management issues such as terracing of hillslopes, composting of organic
matter, pruning of coffee plants, inter-cropping techniques to diversify
the agricultural landscape and the mix of marketable products, and the process
of obtaining the necessary certification that enables coffee to be labeled
as "organic."
Among the program's main results has been to increase the attractiveness
for local coffee growers to take risks associated with making the transition
to conservation-based organic production. Participating farmers have benefited
from new-found access to international niche markets for high quality organic
coffee. Moreover, expanded production of organic, shade-grown coffee has
provided an ecologically sound alternative to tropical forest destruction
in an area of Mexico's Lacandón rainforest neighboring the Montes
Azules Biosphere Reserve. The program has provided a successful model with
significant potential for replication elsewhere in the region.
Infrastructure for Sustainable Coffee in El Salvador
A recent project sponsored by the U.S. Agency for International Development
has helped the La Providencia Cooperative in El Salvador tap into organic
coffee markets in the U.S., Canada, Germany and Japan. A USAID-funded non-governmental
organization known as the Cooperative League of the United States (CLUSA)
has assisted members of the Salvadoran co-op in their adoption of soil and
water conservation practices, implementation of composting methods that
provide natural fertilizer for coffee plants, and certification of their
product by the internationally-recognized Organic Crop Improvement Association.
The organic coffee known as "Pipil" recently won El Salvador's
national environmental award, and CLUSA is being approached by additional
producers interested in raising organic coffee.
Installation of power through USAID's rural electrification program has
provided additional assistance to La Providencia's organic coffee venture.
The La Providencia project represents a welcome departure from USAID's previous
emphasis on funding coffee technification in northern Latin America and
the Caribbean.
Sources: Ellen Contreras Murphy, "La Selva and the Magnetic
Pull of Markets: Organic Coffee-Growing in Mexico," 19 Grassroots
Development (Journal of the Inter-American Foundation, 1995), 27-34;
"New Organic Coffee Gets Salvadoran Economy Brewing," 1 USAID
Developments (USAID, Summer 1995), 4; personal communication with Stanley
Kuehn, Director of the CLUSA project in El Salvador, October 1995.
Preliminary documents describing the Biodiversity Enterprise Fund for Latin America suggest there may be significant potential for financing of coffee operations that protect ecological values. The project proposal submitted to the GEF notes specifically that "fast growing markets for biodiversity-linked products" are creating new opportunities for projects that advance both conservation and development objectives. The IFC's draft feasibility study for the project states that, among its priorities, the fund will support investments in "alternative, certified organic, or biologically diverse agricultural methods."
3. Multilateral Development Banks back
Within their Western Hemisphere lending, the World Bank and Inter-American
Development Bank (IDB) appear to be increasing their programmatic emphasis
on biodiversity and other environmental objectives. The 1987-1993 World
Bank portfolio contains numerous projects involving agriculture and forest
management in Latin America and the Caribbean. The IDB's draft plan for
implementing the Action Plan from the 1994 Summit of the Americas states
that the Bank will "make biodiversity concerns an integral element
of rural development initiatives."
Support for sustainable coffee production should be a priority for multilateral
development bank programs in Latin America. World Bank and IDB loans for
forestry and agriculture projects in the region should be assessed for potential
impacts on small-scale, traditional coffee growers and local communities.
The Banks could play a particularly important role in addressing funding
needs for projects requiring significant capital investment, such as pollution
prevention technology in coffee processing facilities. For example, water
use reduction and recycling are part of an IDB-funded project being implemented
by small-scale grower cooperatives in El Salvador in partnership with Appropriate
Technology International.
The World Bank is currently developing a $200 million Agriculture Development
and Rural Poverty project for Mexico. Slated for approval in mid-1996, the
project targets the extremely poor rural areas in Mexico's southern states
that encompass much of the country's coffee-growing lands. If properly designed
and implemented, the project could benefit sustainable, shade-grown coffee
enterprises. The Bank's public information document describing the project
observes that "government price and trade policy for agriculture has
favored larger commercial farmers. . .as well as commercial livestock producers"
and, moreover, that "[D]uring the past six years, government agricultural
programs aimed at poor producers have diminished in scope and in effectiveness."
The project's defined objective is to promote long-term sustainability for
poor, small-scale farmers and rural organizations through measures such
as soil and water conservation, and improved processing and marketing of
agricultural commodities. Examples of possible areas for project financing
include on-farm investments in sustainable natural resource management,
applied research and agricultural extension, and assistance to producer
organizations to improve their capacity for marketing, access to credit
and adoption of sustainable production technologies.
Two additional funding institutions, created under the environmental agreements
accompanying the North American Free Trade Agreement (NAFTA) among Mexico,
Canada, and the United States, have potential to fund sustainable coffee
production in Mexico. One is the North American Development Bank (NADBank),
whose estimated $7-8 billion in total financing capability over the next
decade will be directed toward funding public works projects for sewage
treatment, solid waste management and other environmental infrastructure
projects needed in the U.S.-Mexico border region. The Bank nevertheless
features a "Community Adjustment and Investment Program" under
which 10 percent of the NADBank capital is supposed to go toward grants
and loans to communities throughout Mexico and the U.S. affected by economic
integration. Support for communities in southern Mexico engaged in environmentally
sound coffee production should receive priority attention within implementation
of the NADBank's community adjustment window.
The other institution of concern is the Commission for Environmental Cooperation
(CEC). At the October 1995 meeting of the CEC Council, the environmental
ministers from the three countries jointly announced creation of a $2 million
North American Environment Fund. Grants from the fund will support local
community organizations "for projects that promote an integrated approach
to ecosystem management and the sustainable use of natural resources important
to the region as a whole." Use of the fund to support sustainable,
shade-grown coffee would fit well with the Commission's current priority
focus on protection of migratory bird habitat.
4. National environmental funds back
An additional funding source for ecologically sensitive coffee production
may be found in national environmental funds, which comprise various mechanisms
such as trust funds, foundations and endowments that provide financial support
for activities that benefit biodiversity conservation and other environmental
purposes. Such funds are typically governed by Boards of Directors with
governmental and non-governmental representatives, are able to receive and
manage money from a variety of sources, and can disburse grants to non-governmental
organizations and community groups.
National environmental funds have demonstrated considerable promise in financing
local conservation and sustainable development projects, building NGO capacity,
and strengthening democracy and the role of civil society in conservation
policy choices. The role of national environmental funds becomes even more
compelling in the face of cutbacks in U.S. bilateral and multilateral assistance
for sustainable development in developing countries.
Recent years have witnessed a rapid and diverse proliferation of national
environmental funds in Latin America. One example is ECOFONDO, which is
a private trust fund established in 1993 and managed jointly by the Colombian
government and the NGO community. Major funding sources for ECOFONDO have
included forgiveness of official USAID debt through the Enterprise for the
Americas Initiative, and a subsequent grant from the government of Canada.
Environmentally sound coffee production certainly falls within several categories
of activities eligible for ECOFONDO grants, such as "sustainable development
of watersheds," and "conservation and sustainable management of
ecologically important areas."
B. Reform of agriculture and tax policies
back
It is essential that national farm policies -- through whatever mix of price
and income support, commodity supply management, credit assistance, research,
extension, conservation cost-sharing or other instruments they may employ
-- be structured to encourage rather than penalize traditional coffee producers
who practice good land stewardship. Government intervention, for example,
should be targeted to boost the productivity of under-managed, "passively"
organic coffee farms that, for reasons of poverty and/or neglect, have not
attained adequate yields. Another priority is to ensure that small-scale
coffee growers have access to adequate credit to enable them to implement
environmentally sensitive practices and obtain good prices for their coffee.
Unfortunately, agricultural policy frameworks in Latin America have done
little to provide incentives for sustainable coffee producers. It has instead
been more common for commodity subsidies and related programs to reward
large-scale operations and create bias against small-scale, diversified
farming systems.
Mexico is a case in point. Until the early 1990s, Mexico subsidized livestock
heavily through artificially low feed prices; this created implicit taxation
of shade coffee crops and encouraged conversion of forests to pasture. Notwithstanding
benefits delivered to some small producers, the National Solidarity Program
implemented under the Salinas administration has been criticized for not
addressing underlying problems facing the Mexican coffee sector such as
the untenable debt loads of many small growers. Recent social unrest in
southern Mexican states such as Chiapas and Guererro, has been attributable,
at least in part, to the long-standing failure of government policies to
address the extreme poverty among coffee growers.
As noted above, during the 1970s and 1980s, the Mexican government's Instituto
Mexicano del Café (INMECAFE) promoted intensified coffee production
through the reduction or removal of diverse shade cover, planting of high-yielding
hybrid coffee varieties, and increased agrochemical inputs. Privatization
of INMECAFE went forward in the late 1980s and early 1990s without effective
safeguards against small farmer dislocation. In a move that seems reminiscent
of the production-oriented policies of the 1970s and 1980s, the Mexican
government recently announced an ambitious proposal to provide coffee plants,
credit and technical assistance to growers wishing to renovate their operations
in search of higher yields. As part of a larger production-oriented program
known as "Alianza Para El Campo" ("Countryside Alliance"),
planners believe this new policy can position Mexico's total coffee output
ahead of Colombia's within the next decade. Experts have criticized this
initiative, among other reasons, for ignoring its negative environmental
implications.
Since 1993, Mexico has been instituting a package of agricultural reforms
known as PROCAMPO (Programa de Apoyos Directos al Campo, or "Program
of Director Support to the Countryside"), designed to replace commodity
price supports with fixed income support payments made directly to farmers
over the next 10 years, and phased out over the subsequent five years. In
one change that could conceivably benefit the competitive position of organic
coffee growers, the PROCAMPO reforms remove most subsidies for inputs such
as purchased chemical pesticides.
The overall impact of PROCAMPO on the environmental practices of coffee
producers is not immediately clear because the program is so new and its
early implementation has been complicated by the Mexican economic crisis
following the December 1994 peso devaluation. Changes announced by a Mexican
inter-governmental commission in October 1995 will broaden the scope of
PROCAMPO to include greater emphasis on technical assistance, decentralization
of decision-making authority to the state and local levels, and a new program
called "PRODUCE" under which the government will pay up to 50
percent of certain costs incurred by the poorest farmers.
Because its benefits are not linked to production of specific commodities,
PROCAMPO is expected to reduce incentives for surplus production of major
crops such as corn, soybeans and sorghum. This represents a shift away from
certain previous policies that, as noted above, have favored large-scale
grain producers and commercial livestock operations at the expense of forest
conservation and diversified farming systems including coffee. On the other
hand, some non-governmental organizations and community forestry associations
in Mexico have expressed concern that PROCAMPO encourages conversion of
land to production of agricultural commodities as opposed to sustainable
forestry enterprises.
Reforms to change the incentive structure for coffee producers will not
be complete without a review of tax policies. This examination should focus
on removing perverse tax preferences that favor unsustainable farming methods,
as well as on providing tax benefits to encourage development of sustainable
land use and resource management.
One promising strategy would be the creation of sustainable agriculture
funds through taxes on pesticides. Such revenues could be channeled into
national environmental funds, as mentioned above. This would be a means
of "internalizing" the costs to environmental quality and human
health that result from chemical-intensive sun coffee production. Useful
precedents for taxing agricultural chemicals exist in several European countries,
as well as in states such as California and Iowa.
A related approach is to recapture a portion of revenues associated with
international coffee trade, to be directed toward social and environmental
purposes. For example, Colombia has used savings from the 1990 elimination
of the European Community's four percent tariff on coffee imports to establish
an Ecological Fund for Coffee Zones. Interest from the investments of these
revenues now supports projects focusing on the integrated management of
watersheds, the recycling, composting, and management of municipal garbage,
water treatment, and community development via environmental education programs.
The Fund, overseen by the Federación Nacional de Cafeteros de Colombia,
is administered in Bogotá, with each coffee department receiving
funds proportional to its coffee production.
Finally, agricultural and tax policy reforms should be accompanied by measures
to strengthen regulation and monitoring of pesticides. Tighter restrictions
are needed on exports of banned pesticides, in addition to upgrading of
domestic regulatory regimes. Another priority for countries throughout the
Americas is to implement "right-to-know" requirements that assure
provision of reliable pesticide use information to farmworkers, regulators
and the public.
C. Research back
Scientific evidence now available makes a compelling case documenting the
environmental damages of industrial coffee production, and the corresponding
environmental advantages of traditional methods. The various studies conducted
to date provide a strong basis to move forward, without delay, to mobilize
market and policy forces on behalf of sustainable coffee systems.
A coffee strategy to promote environmental protection and sustainable development
in northern Latin America, however, will require a commitment to expanded
research. This commitment is needed to improve our understanding of the
complex agro-ecology and economics of coffee, and thus to give needed direction
to choices made in policy, funding and markets. The research strategy should
be geared toward providing practical information to coffee growers on how
they can implement environmentally sound production systems, and achieve
success in domestic and international markets.
The following are examples of priorities for additional research on environmentally
sensitive coffee:
a) mapping of Latin American countries to determine the current spatial
distribution of traditional, shaded, biodiverse coffee lands;
b) research on the tree species known to be associated with greater biodiversity
of birds, insects, etc.;
c) studies to determine the appropriate levels of thinning or pruning of
the overstory trees that will maximize associated biodiversity and coffee
production;
d) the role of physiological characteristics of shade species, such as flowering
and fruiting patterns, to determine what mix of shade best enhances biodiversity
levels;
e) studies comparing the performance of shade and sun coffee on environmental
parameters such as migratory species, biological diversity, soil productivity
and water pollution;
f) market analysis for environmentally sound coffee and the non-coffee products
raised on coffee farms;
g) economic studies to measure the external costs of coffee production,
and to describe options for internalizing those costs; and
h) studies comparing the economics of environmentally sound versus conventional
production systems at the farm level.
Research strategies in these and related areas will necessarily include
documentation of traditional knowledge by working with local people and
communities; development of incentives for case studies on working farms
and farmer-to-farmer information exchanges; increased support for research
and monitoring activities over long time horizons; and establishment of
regional networks of researchers and data bases for biogeographical and
market information.
D. International coffee agreements back
International coffee markets are subject to wide fluctuations, in general
adhering to supply and demand relationships. Major swings in coffee prices
may go largely unnoticed by consumers in wealthy industrial countries, but
are critical to individual coffee growers and national economies throughout
much of Latin America. When coffee prices drop precipitously, the impacts
fall hardest on low-income farmers and laborers. The consequences are frequently
acute for small-scale growers practicing environmentally sound coffee production.
Since the early 1960s, a series of international agreements have failed
to achieve long-term solutions to price instability in the coffee sector.
Unemployment and financial impoverishment resulting from the collapse of
the International Coffee Agreement in 1989 affected millions of farmers
and farm workers in the coffee growing countries of Latin America. Prices
have risen dramatically since the 1993 Coffee Retention Plan, which is an
accord among 28 coffee producing countries from Latin America, Asia and
Africa that seeks to restrict international market supplies by requiring
members to withhold 20 percent of coffee stocks from exportation. However,
much of the recent boost in prices is attributable to a mid-1994 freeze
that destroyed a large portion of the Brazilian coffee crop. It is too early
to assess whether the 1993 scheme will lead to more enduring coffee price
stabilization than the previous international agreements.
The world's trading partners have taken initial steps toward integrating
environmental concerns into the International Coffee Agreement. Article
35 of the 1994 version of the Agreement requires members to: [g]ive due
consideration to the sustainable management of coffee resources and processing,
bearing in mind the principles and objectives on sustainable development
agreed at the Eighth Session of the United Nations Conference on Trade and
Development and the United Nations Conference on Environment and Development.
Agenda 21, the comprehensive action plan adopted at the 1992 United Nations
Conference on Environment and Development in Rio de Janeiro (the "Earth
Summit"), contains abundant provisions that apply to ecologically sound
coffee. Examples include commitments aimed at "international cooperation
to accelerate sustainable development in developing countries," "combating
deforestation," and "meeting agricultural needs without destroying
the land."
Future coffee trade negotiations should better serve the interests of sustainable
coffee producers, with the goal of ensuring prices that enable a reasonable
return on sales and that reflect costs incurred in making production systems
environmentally sound. Toward this end, for example, international agreements
should never undercut the ability of producers to bypass the "middle
man" in international commodity markets, and to sell their products
directly to roasters and consumers wishing to purchase coffee that is grown
and processed without environmental degradation.
One option for future reform of coffee trade regimes is to promote agricultural
shifts from sun-grown coffee into environmentally sound alternative crops.
In addition to reversing the environmental damages from industrial coffee
plantations, such shifts could help reduce surplus coffee volumes and thus
contribute to more lasting price stability for sustainable coffee producers.
Precedent for this approach might be found in the "Diversification
Fund" contained in the 1968 version of the International Coffee Agreement.
This fund required contributions from signatory countries to be used for
the purpose of developing alternative crops and economic enterprises in
coffee exporting countries. Reinstatement of a diversification fund or similar
instrument should be carefully structured to promote shifts away from unsustainable
sun-grown coffee and into crops that reduce chemical inputs and conserve
natural resources.
LE FastCounter
VII. TABLES back
References are available upon request from authors.