Manuel Otero | Coffee: a crisis we must overcome swiftly and efficiently
Warnings have been issued and they must serve as powerful calls to action, urging us to undertake swift, effective and long-term actions involving governments and the coffee agroindustrial chain.
The collapse of prices for coffee – the second most traded agricultural product at the global level, representing about $15 billion per year – is generating a crisis with a considerable impact at the social, economic and productive levels, especially among small-scale producers in Latin America and the Caribbean.
In 2018, the average price of a pound of Arabica coffee of the highest quality was 1.01 dollars. Last April, the price plummeted to less than 0.95 dollars, the lowest average monthly price in almost 13 years.
Mexico, Costa Rica, Panama, El Salvador, Guatemala, Honduras, Belize, Colombia, Peru, Ecuador, Bolivia, the Dominican Republic, Jamaica and Brazil have been heavily impacted. In Colombia and Honduras, in particular, coffee accounts for close to one-third of exports. Falling prices also correlate with job losses and have an impact on income and migration flows.
The inability of coffee producers to cover production costs, overcome debts, maintain employment levels or tend to their crops with the minimum investment required for farming will lead to a greater number of pests and lower productivity levels. Many farmers are on the verge of poverty and are threatened by food insecurity.
The profitability crisis and the increasingly frequent extreme climate events (such as those that batter the Central American Dry Corridor) provide a breeding ground for increased abandonment of rural territories and massive migration.
Close to 14 million people depend on or are involved in coffee farming in Latin America and the Caribbean.
The price crisis is a pressing issue that is beyond the control of producers. Therefore, there is an urgent need to develop policies that foster dialogue between chain stakeholders and improve access to information and competitively priced supplies, while also driving the renewal of plantations with more productive, early maturing crop varieties that are more resistant to pests and diseases.
It is also crucial to add value based on quality and uniqueness, issuing certifications and differentiation seals for special types of coffee, coffee from specific geographic areas, speciality or gourmet coffee, coffee produced using sustainable or carbon-neutral systems, as well as organic or fair trade coffee.
Essentially, we must undertake actions at the macroeconomic level, by adopting policies that improve public investment and boost the chain’s competitiveness in markets and in interactions with large suppliers.
This is the focus of a hemispheric-wide, high-level discussion of the contemporary world’s most pressing issues. It is also an integral part of IICA’s activities and one of the main priorities of its technical cooperation agenda.
Manuel Otero is the director general of the Inter-American Institute for Cooperation on Agriculture (IICA). Email feedback to email@example.com