Coffee and Coronavirus: A World of Difference – Resilience

In the pastoral village of Santa María de Dota, not far from the Costa Rican coffee producing region of Tarrazú, coffee is everything. It directs all aspects of life: the economy, the cultural and social fabric, and the health of the environment. CoopeDota, the pillar of the community, plays a vital role in the lives of most residents. One only needs to visit Dota in the picking season to gain an appreciation of the extent of the activity surrounding the cooperative: farmers transporting truckloads of coffee cherries to the mill for processing, Nicaraguan workers walking from one field to another to ensure they have not forgotten any ripe fruit on the coffee bushes, indigenous Ngobe families from the Panamanian border frequenting establishments in town after a hard day’s work in the fields. This region is endowed with all the essential components to grow the finest coffee in the entire country. Dota coffee is increasingly sought after in the international market for its flavor as much as for the conditions under which it is produced. Year after year, this award-winning coffee is highly prized by connoisseurs the world over.

While most community members deliver their cherries to the coop, some independent growers, such as Carlos “Piro” Ureña, have chosen a different path. Piro owns La Pira de Dota, and is referred to as “the scientist” because of the unique innovations he deploys on his specialty farm. A visit to La Pira reveals lush fields where coffee thrives among an extensive array of native shade, citrus, and banana trees. Less obvious are the exceptional fertilizers Piro concocts. He mixes precise combinations of inorganic ingredients with bacteria in large drums. These not only maximize the growth of the plants but also produce some of the highest quality coffee in the region. At night he meticulously trickles water on the building’s roof, which cools the entire facility where coffee is stored. These are just a few of the clever techniques that set his coffee apart. As farmers compete for the best prices, innovations such as these can be rewarded on the international specialty coffee market, particularly in Asia, Europe, and the United States, where Piro’s coffee retails for about $54 a kilo. Piro’s methods have the added value of being environmentally friendly along with providing healthy conditions for farm workers. Many farming families in the region aspire to create similar self-sufficient agroecological farms that control the entire coffee value chain in order to stop depending on the lower prices offered by the coops to which they currently sell the coffee cherries for processing and marketing. Typically, producers deliver coffee to mills or coops on consignment, and the amount paid to them is regulated by the national Coffee Institute (ICAFE). In Costa Rica there are no contracts between producers and mills; some elect to share their profits with producers when the coffee is sold, but there is no clear market relationship that protects the producer. Therefore, some farmers dream of having their beans rate high enough for them to market them directly to international consumers or small roasters who then sell it to specialized coffee shops and online to connoisseurs.

Coffee is the third national export, after bananas and pineapples, and brings about $300 million a year into the country. Costa Rican farmers who can overcome the financial and cultural barriers to gain access to specialty markets are a source of national pride. This also promotes the long-standing notion of Costa Rican exceptionalism, which has been woven into the country’s national identity since the mid-1800s. In January 2020, Congress declared coffee a “national symbol” to celebrate the contributions of this crop to the development of the nation over the past two centuries. The law recognizes the efforts of Costa Rican farmers, which number over 50,000, in moving from subsistence agriculture to a system that produces some of the world’s best coffee.

But the focus on quality has taken a back seat to other considerations with the arrival of the novel coronavirus outbreak. The insidious nature of this virus has placed unforseen pressures on farmers, especially those who have been producing specialty coffee. The closure of coffee shops and restaurants the world over has dramatically decreased the demand for this type of coffee even at this early stage of the pandemic. At the same time, supermarkets that carry mostly conventional coffee have seen nary a drop in consumption patterns or coffee sales–in fact, quite the opposite. According to the International Coffee Organization, panic buying has led many to stockpile coffee, “though this is unlikely to have a sustained effect on consumption.”[1]

So what’s the difference between specialty and conventional coffee, and why does it matter? The casual consumer may detect variations in color, aroma, and flavor profiles, but it is really the growth conditions that determine not only the taste, but the market niche and value added from its origin to its consumption. Ultimately, it is what we do not see that has the highest impact: the farm’s environmental practices. Conventional coffee is largely produced as a monoculture, much like corn or soybeans, using pesticides, herbicides, and synthetic fertilizers. This method is designed to maximize crop yields and high profits for intermediaries, though not necessarily for farmers. Often, however, a substantial amount of pollution results from the runoff of chemicals into waterways that surround these fields. Specialty coffee, on the other hand, is grown with more control over field conditions, processed artisanally, and marketed through personalized channels. This coffee is largely grown organically or using environmentally friendly methods. These farms pollute less and support a wide array of wildlife. Specialty producers also tend to have their own micro-mills where they process and dry their beans, often in the sun to preserve the fruit’s natural sugars. When you drink specialty coffee, you are not only benefiting from a better flavor profile, but you are also making consumer choices that promote socially and environmentally responsible practices. Due to its labor-intensive nature and its smaller quantities–known as micro-lots–this type of coffee typically fetches higher prices and rewards innovative thinking. The techniques employed over the entire year and especially throughout the picking season have profound implications on how cherries are rated, marketed, and ultimately consumed.

The coronavirus pandemic has created an unusual set of circumstances for growers and businesses that support the coffee industry. In Costa Rica, the 2019-2020 harvest was a boon: 1.9 million fanegas (87.4 million kgs) versus 1.7 million fanegas (78.2 million kgs), a 12% increase.[2]  Because of this, things were looking up for farmers that were strapped for cash by the previous year’s smaller harvest, largely caused by plant diseases and unpredictable weather. Along with increasing debt, climate change had been hitting producers hard, and most of their innovations had been directed at creating disease-resistant varieties and growing coffee in shaded conditions at higher altitudes. In fact, according to Gerardo Astúa, former official cupper of ICAFE, nearly all seminars offered to producers up to this point had to do with mitigating climate change. It is likely that ICAFE will need to redirect its farmer support programs toward dealing with the unpredictable market conditions they will face in the coming years. In addition, the government’s support of farmers will be stretched thin. A large amount of resources is being utilized to attend to the health emergency, and also for temporary subsidies to the newly unemployed and the most vulnerable families. Therefore, there will be many needs and little money in the government’s hands to provide financial assistance to growers.[3]

As non-essential businesses in coffee-consuming countries closed, and some operated on a restricted basis, demand for specialty coffee was severely reduced even for the current harvest. Though many farmers considered their stock already sold since last year, some orders that were under contract are now in limbo, as ink on paper means little when those who signed a purchase order seem to have disappeared from the face of the earth, says Minor Corrales, a representative for the Association of Families of Organic Farmers of Costa Rica, whose clients of fifteen years have stopped answering communications. Consequently, coffee farms and mills have already begun to feel the pinch as they need to figure out how to recoup their investments and access capital.

Paradoxically, coffee produced in a conventional manner still has a solid market and sells well in supermarkets throughout the world, including producing countries like Costa Rica, where coffee is considered a basic necessity. The conventional coffee harvest had already been sold when coronavirus hit, particularly as larger producers and exporters began to stock up in anticipation of border and seaport closings. The specialty coffee market is very different, since many farmers sell directly to specialized distributors and roasters that prize the personal relationship and advertise the narrative about the family farm along with the product. These micro-lots are placed in the market almost exclusively through the personal visits of representatives and cuppers to the farms to rate every single bag purchased. The closure of coffee shops, particularly in the Asian markets that had become their major clients in the last few years, has meant canceled or reduced orders. While farmers continue to send samples to their clients, they are finding that absent that personal touch, new orders are not materializing. The 2020-2021 harvest looks even more uncertain for these farmers whose innovations led to a more expensive, higher quality, exclusive product, given that massive unemployment throughout the world is going to lead coffee drinkers to prioritize other necessities and purchase lower-priced coffee. Though many farmers had intended to find viable, secure markets on their own, this now seems impossible, and therefore the coops and multinational exporters will play an even more important role in selling the product even when this generates tensions and questions about price transparency.

Historically, every time there has been a catastrophe such as war, famine, or extreme weather events, Costa Rican coffee prices have gone up, and there is hope that history will repeat itself with the current pandemic. Sustainable Harvest, a specialty coffee importer based in Portland, Oregon, reported that producers of specialty coffee in Ecuador “are trying to develop strategies to compete in lower-quality, higher-volume markets, but this will be challenging due to higher costs of production given the orientation toward producing and processing micro-lots and other super-premium coffees.”[4] Costa Rican farmers are already discussing how they will adapt to this situation by abandoning some of their innovative techniques in order to remain solvent in the conventional coffee market.

Coffee producing countries in Central and South America are also facing an unprecedented labor crisis if the current pandemic continues. In Costa Rica, 70% of agricultural workers are foreign, most from neighboring Nicaragua and Panama. The border between Costa Rica and Nicaragua is now closed and heavily policed and Nicaraguans have been warned that if they return home they will not be allowed to reenter.[5] Many expect that, if the virus persists, Costa Ricans will be forced to get back to their traditional farm roots. There are few Costa Ricans whose families are not in some way connected to coffee, and it is likely that many will come back to family farms in the coming season. However, younger generations had transitioned to service jobs, many of them in the tourism industry, which has been shut down due to the pandemic, causing extensive unemployment. Growers, particularly the smaller family farms that produce the majority of the country’s coffee, are counting on a national workforce returning to the fields if borders continue to be closed during the next picking season, which typically begins in October and ends in March. However, the low wages earned by field workers will likely not be agreeable for unemployed Costa Rican professionals, whose recent coffee picking experience may be reduced to “helping” their families rather than doing this work for a living. While family help may be a good solution for small farms, large farms will see their operations severely affected. For now, coronavirus has hit at a time when the harvest was already picked, the plants are in bloom, and fewer workers are needed to prepare for the next season.

So in a sense, farmers may have been given a respite during the blooming season to regroup and think about new labor and market strategies. However, this is not to say that financial resources are not needed during these months following the harvest for general maintenance and fertilization purposes. Many farms take on loans against the balances of contracts that may not be fulfilled, or self-finance through activities such as coffee tours, which can in some areas be more lucrative than the coffee itself. After several decades of focusing on the presentation of their fields for tourist packages, these farmers may now need to go back to producing coffee as their main source of income.

If the pandemic extends into the next harvest, farmers like Piro may be forced to focus on maximizing yield at the expense of innovation, quality, and conservation. The long-term consequences are not just for our palates or our pockets, but for the environment. The gains made by these farmers over the past few decades in fighting climate change and biodiversity loss by increasing the amount of forest cover in coffee plantations may all be for naught. This is especially concerning in a country that places a great deal of value on its natural resources and land preservation. Furthermore, the potential degradation of the environment as the indirect result of market forces driven by the coronavirus pandemic could have far-reaching implications for the economy, the environment, and the social fabric of the country. For Costa Rica to remain a global leader in conservation, the country will have to balance international demands for coffee, its farmers’ economic survival, and the long-term need to protect the environment for future generations even in the challenging time of a worldwide crisis.

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Acknowledgments

The authors thank Universidad Nacional professors Kattia Vasconcelos Vázquez and Rafael Díaz Porras for their contributions to this article. Gerardo Astúa Román, Miguel Castro, Minor Corrales, Bryan Jara Calderón, and José Enrique Cordero also contributed valuable insights based on their personal expertise

[1] ICO, APRIL 2020.  “Impact of COVID-19 on the Global Coffee Sector: The Demand Side.” p. 3.

[2]Producción de café en Costa Rica creció 12%” 14 March 2020.

[3] The authors thank Rafael Díaz Porras of the Centre for Economic Policy for Sustainable Development of the Universidad Nacional de Costa Rica for this insight.

[4] Sustainable Harvest. “COVID-19 Port/Warehouse Status Updates.” 17 April 2020.

[5] “Costa Rica refuerza su frontera mientras ve con temor la política sanitaria de Nicaragua.” El País 12 April 2020.

Teaser photo credit: By José Reynaldo da Fonseca, CC BY 2.5