- The Washington Times - Tuesday, May 7, 2002

PUEBLO NUEVO, Guatemala Hilda Niz opened the wire-mesh door, reached into the small wooden hutch and pulled out a fat, black rabbit.
"We sell them for 25 quetzales [about $3.25] for people to eat," she said, proudly displaying one of the dozen residents of the hutch. "This is a business we started with the profits we made from our coffee."
That Mrs. Niz and her husband, Conrado Lopez, started a business in this remote village deep in the Guatemalan highlands is a bit of a rarity. But the fact that they did so with profits earned from their coffee crop is nearly a miracle.
A worldwide glut of coffee has sent prices tumbling to a 100-year low, triggering a crisis in dozens of coffee-producing countries. In Guatemala, where the crop has long been an economic mainstay and a way for poor families to earn decent money, thousands of small landowners have abandoned their plots, while thousands of landless coffee workers have left their homes in search of other jobs.
But a few dozen farmers in Pueblo Nuevo and a few thousand others across Guatemala have so far escaped the brunt of the coffee crisis by selling their crop to buyers committed to paying a price high enough that the farmers are guaranteed a living wage.
The system called "Fair Trade" began about 20 years ago, started by a group based in Europe. The goal is to cut out several middlemen in a market that has seen small farmers paid extremely low prices for a crop that is marked up over and over.
"It's a classic case of the farmers being left at the whim of a system over which they have no control," said Bill Harris, founder of Cooperative Coffees, an Americus, Ga., firm that imports coffee grown in Pueblo Nuevo and sells it to 14 small roasting companies around the United States and Canada.
His customers include his own coffee roasting and retailing firm, Cafe Campesino, which sells over the Internet, as well as Los Armadillos, an Austin, Texas outfit.
"In some cases, the coffee passes through 10 hands between the farmer and the consumer," Mr. Harris said. "We're trying to cut out some of those people and ensure that the farmers earn more."
With the coffee crisis, the difference is dramatic. While typical small farmers in Guatemala received about $50 per 100-pound bag of their beans this year, the Fair Trade farmers earned about double that amount.
While the cost of production varies widely because of terrain, weather, the farmer's ability and other factors, many Guatemalan growers who received the regular market price say that by the time they paid for fertilizer, maintaining their coffee trees, harvesting and processing, they lost money.
The Fair Trade farmers are lucky, but they also work hard for the label that enables them to earn a higher price. Their farms must be certified by monitors who visit to see that they meet the Fair Trade criteria, which include limits on the size of the farm and the amount of hired labor they can use.
Because much of the coffee sold in the United States goes to health-food stores, most of the farmers must also guarantee that their crop is raised organically, without chemicals and with sound land-use practices.
Those requirements scare off many poor farmers, even when they learn their neighbors are earning double the regular market price.
"Out of an estimated 85,000 small producers in Guatemala, I'd guess that only about 5,000 to 7,000 are involved with Fair Trade," said Jeroen Bollen, who runs the Manos Campesinas (Farmer's Hands) cooperative, which helps coffee farmers throughout northern Guatemala. "We have grown, but it's still only a tiny percentage of all the coffee produced in Guatemala."
In Pueblo Nuevo, the farmers started their own association in the early 1990s, after they decided that pooling their crop might help them earn a better price. Four years ago, the group was certified to sell Fair Trade coffee. Those farmers' production and incomes have risen steadily while the coffee crisis has devastated many of their neighbors.


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