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Peruvian cafeteros find that environmentally friendly farming boosts profits: the Peruvian coffee market is gaining momentum and catching up to the rest of the world. This is in part thanks to Pronatur, a nonprofit organization that promotes organic, shade grown Arabica coffee in Peru. Larry Luxner recently visited Peru and reports back on Pronatur's success.

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Jose Olmedo Perez Rodas, 45, has five children and has been a struggling coffee farmer for the past 15 years. But in last five years, he's discovered that growing certified organic coffee can lift campesinos like himself out of poverty." We have learned that we can do things in an environmentally friendly way, and this will bring us additional income," he said. "Thanks to organic coffee, my son now studies agribusiness in Lima. That's something other farmers can't afford."

Maria Justina Llatas Munoz, 44, was born in Cajamarca, Peru, to a family of potato growers. But Cajamarca--environmentally degraded by overpopulation and a proliferation of chemicals used in agriculture--offered little opportunity, so she got married and moved to Moyobamba, in the neighboring jungle department of San Martin.

Starting out with five hectares and buying more land in small parcels over a period of years, Llatas today owns 22 hectares (54 acres) of farmland, six hectares (15 acres) of which are dedicated to organic coffee.

"I've been able to do some projects already, thanks to organic coffee farming," she said. "I've built a new stable for 12 cows, and they are delivering milk which gives additional income. Since I have a well-run stable with concrete floors, I can collect the manure in a better way and this goes back to composting."

Perez and Llatas are among 1,540 or so farmers benefiting from Pronatur, a nonprofit organization that promotes organic, shade-grown Arabica coffee, based in the northern port city of Chiclayo. "Through this organization, we've learned a lot of things," said Llatas. "As campesinos, we knew only to grow coffee, nothing else. But we've seen other members of the organization succeeding in having other alternatives and learning how to diversify into vegetables and other crops."

Jan Bernhard Riggs is general manager of Pronatur, an umbrella organization for 39 regional and sub-regional associations run largely by the campesinos them selves. The team consists of 22 full-time people including agricultural engineers, a sociologist, a "gender equity promoter" and field technicians.

"It's a private company that functions as a nonprofit organization," explained the 41-year-old Bernhard, who's half-Swiss, half-British, and was born in Spain and brought to Peru at the age of six months. "I started Pronatur in 1994, approaching coffee growers and trying to motivate them to get together instead of selling to the 'coyotes.' In 1997, I registered them as a committee," said Berhard, noting that in Peru, farmers' groups are known as associations or committees, because the word "cooperativa" has bad connotations.

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"Cooperatives were established by the military regime and reinforced by the communists," he said. "Most Peruvian coffee was sold to the Soviet bloc."

Bernhard said Peru exports close to 98% of its coffee production, in large part because Peruvians are the lowest per-capita consumers of coffee in Latin America. Some 95% of that production is grown by coffee farmers with fewer than four hectares of land. Another 4% is grown by farmers with four to 15 hectares, while the remaining 1% is grown on farms measuring 15 to 100 hectares. Virtually no one in Peru has coffee farms of larger than 100 hectares, said Bernhard.

"The legal monthly minimum income in Peru is 550 soles ($183) a month," said Bernhard. "An average conventional coffee farmer with three hectares will produce 40 quintales worth 830 soles ($277) at current prices. In our case, the yield and prices are better, so instead of 12 to 14 quintales per hectare, we get 17 to 20 quintales per hectare. This will yield 60 quintales, worth 1,400 soles ($467)."

Certified organic coffee production is around 600,000 69-kg bags a year, equivalent to 15% of Peru's total coffee production of 4 million bags. "But 80% or even 90% of that is organic technically by default, because the people cannot afford fertilizer or pesticides," said Bernhard. "If they could afford to buy them, dragging them eight hours on a mule through the mud into the fincas would end up costing three times as much, so the return doesn't pay off."

Peru exports 60% of its organic coffee to Europe, and the rest to the U.S., according to Raul del Aguila Hidalgo, president of the Junta Nacional de Card (JNC), a Lima-based group that represents Peruvian coffee producers. He says Peru alone produces 500,000 quintales (hundredweights) of organic coffee per year; Mexico is close behind at 400,000 quintales a year. Together, the two countries account for nearly half of the world's organic coffee production.

"What we're trying to do is share our vision of what organic coffee is, and what we can hope for in terms of production and marketing," said Hidalgo, noting that Peru has nearly 25,000 organic coffee growers.

In 2006, according to Bernhard, the country exported $507 million worth of coffee, of which $85 million was organic-certified coffee. Due to disruptions caused by bad weather, Peru's total 2007 coffee production is expected to drop to $350 million, of which organic-certified coffee is likely to be $60 million.

"There are no fixed prices, but depending on quality, organic coffee normally sells for US$0.10 to $0.30 cents/lb. over normal coffee," he said.

The four departments producing most of Peru's organic coffee are San Martin, Amazonas, Cajamarca and Lambayeque.

Pronatur's growing area lies in the Altomayo region, on both banks of the Mayo River, and on the eastern slopes of the mighty Maranon River at an altitude of 1,300 to 2,000 meters above sea level.

"We're only talking about organic-certified, which means taking care of the environment, water sources and social economy," said Bernhard. "If small farmers are certified organic today, this doesn't mean only that they're not using pesticides. It's a whole complicated setup of environmental behavior and socio-economic development, which involves health-care, training and schools."

Bernhard says the average size of the farm Pronatur represents is three hectares. The organization works in tandem with Asociacion de Productores Agroecologicos (APROECO), a farmers' association. Together they account for 50,000 hectares of Amazon highland rainforest belonging to ethnic communities, as well as 3,400 hectares of coffee, 200 hectares planted with mangoes, limes and other fruit and 50 hectares of peas, beans and other legumes for export.

According to Berhnard, Pronatur's annual revenues total around $10 million, of which $8 million come from coffee exports. At least 90% of that goes directly back to the farmers, he said.

Once a year, Pronatur attends the Specialty Coffee Association of America convention but he said, "We don't do any advertising. We have a website that we created ourselves. We even take our own pictures." Bernhard says an alternative crops program recently funded by the U.S. Agency for International Development "was a disaster, because they gave everything to the farmers. When you give everything away, there's no incentive to produce."

He said Pronatur has succeeded in improving incomes in nearby communities "through efficient and transparent methods of production and marketing," and that the concept of Fair Trade continues to be Pronatur's guiding light. Yet Bernhard doesn't have too many kind words for the Fair Trade Labeling Organization (FLO), based in Germany.

"We're fed up with Fair Trade, because they're putting plantations into the Fair Trade system. How can a small coffee grower compete with all the new products FLO is coming up with? How can we compete with economies of scale?" he said. "The initial vision and mission of the founders of the Fair Trade movement was to help small growers and their products. These were the people who developed this very little niche market and found some buyers. But as this movement grows and demand picks up, transnationals come in and see there's a buck to be made."

Bernhard says big producers "are misusing the investment made by small growers who have limited capacity to become big growers. There's a geographical burden, which you cannot overcome. You cannot build a highway over the Peruvian mountains. You cannot get electricity where there are no waterfalls. We work with mules. There are serious limitations. Not a single small grower in Brazil will be able to compete with the large Brazilian plantations."

Despite the enormous challenges, Bernhard said the market for Peruvian organic coffee is catching up and regaining momentum. "Peru's potential to maintain its number one or position in the world in organic coffee is very high. You just need to organize the industry properly and teach your people how to read and write. There's still a 40% illiteracy rate among women here," he said, noting, "Paperwork is a big hassle. This (organic certification) requires a lot of registration and record-keeping of everything that comes into the farm and everything that goes out."

The Tea coffee Trade Journal recently sat down with Bent Ahm from coffee exporter, Karoma, S.A. in the Dominican Republic together with Fidel Sara from IMSA Srl of Peru, manufacturer of coffee processing machinery.

Karoma, which applies anaerobic biodigestors to clean waste water and to produce methane gas, a free source of heating and cooking gas, became involved with IMSA one year ago when they bought a piece of coffee lab equipment. Due to Karoma's dedication to improving the quality of coffee and paying special attention to ecological concerns, it was only logical to continue the conversations with IMSA, which led to Karoma installing IMSA wet mill equipment on their farm and representing IMSA in the Dominican Republic, Africa and Hawaii.

IMSA, a company specializing in eco-equipment and machinery for the coffee industry, was started 25 years ago by brothers Fidel and Sid Sara. The company is headquartered in Villa Rica, Peru, where Fidel Sara also produces coffee and perfects his equipment designs. Additionally, he is a reknowned professional consultant specializing in ecological wet mill and dry milling coffee and the economy of the farmer.

The IMSA wet mill consists of two major parts: the coffee pulper and the oxygen reduction. The coffee pulper, which uses disks, does not cut or bruise the beans and the IMSA design prevents beans from escaping with the pulp. The dramatic reduction of oxygen demand comes from a process that uses re-circulated water, reducing the use of clean water from 13 to 17 liters/kilo of dry parchment coffee to between 0.6 and 0.8 liters/kilo--a reduction of 90-93% or oxygen demand from 330 to 27.

Ideally the coffee is fermented and then washed in the IMSA coffee washer, resulting in a clean end product even with the above mentioned low water use. Coffee that has been mechanically demucilaged still runs a risk of fermenting if the drying process does not take place immediately and uniformly.

For drying, IMSA also offers both aerators and rotary dryers with a heating element called "future." This element uses coffee hulls as fuel and runs completely automatically, maintaining a constant temperature while drying.

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IMSA offers a complete line of coffee and cocoa equipment, including laboratory equipment and industrial coffee roasters.

Most recently, IMSA has contracted a complete dry mill in Peru for organic coffee, applying stainless steel in the necessary parts to maintain the organic nature of the product.

IMSA coffee and cocoa machinery is used in Puerto Rico, Bolivia, Ecuador, Colombia, Costa Rica, Dominican Republic, mainland U.S. and in Peru with an 80% market share. www.imsacafe.com
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Title Annotation:Peru
Comment:Peruvian cafeteros find that environmentally friendly farming boosts profits: the Peruvian coffee market is gaining momentum and catching up to the rest of the world.
Author:Luxner, Larry
Publication:Tea & Coffee Trade Journal
Geographic Code:3PERU
Date:Apr 1, 2008
Words:1894
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