Tea & Coffee Trade Journal / January 2003
By Larry Luxner
SAN JOSE — Costa Rica's 2001-02 coffee crop came to 1.9 million 60-kg bags, a 6% less by volume than the year before. But in dollar terms, the drop is more severe: $168 million this season, nearly $37 million less than the $205 million generated by Costa Rica's coffee industry in 2000-01.
Lilia Gallardo is executive director of the Specialty Coffee Association of Costa Rica, whose 33 members represent half of Costa Rica's specialty coffee industry.
"We were supposed to export 20,000 certified bags last year, but we only exported 6,000 to 8,000 bags as specialty coffee," she said. "The rest was sold, but not as specialty coffee."
Paul Katzeff: CEO of Thanksgiving Coffee in Fort Bragg, Calif., says Costa Rica has ruined its coffee.
"I've been roasting Costa Rican coffee for 30 years. Most of it is sun-grown," he said. "Costa Rica was once a great producer of coffee, now it's a producer of good coffee. And they're suffering too."
According to Gallardo, the overall situation is "very bad" right now — not just in Costa Rica but throughout Central America.
"We are having problems, especially the small growers. Some of them are closing down or trying to find something else to do," she told The Tea & Coffee Trade Journal. "We're not getting the prices we need to survive. The big multinationals are making money and they don't have any problems; it's the small growers who have problems."
The Instituto del Café de Costa Rica (ICAFE) estimates that the next coffee crop will come to 2.9 million bags, and that the 2003-04 crop will reach only 2.6 million bags, which represents a drop of more than 400,000 bags between this year and the next two.
It's likely that Costa Rica will see its crop continue to fall in coming years, as more land is now being used for construction, housing and industry. At the same time, traditional coffee producers are fleeing the sector due to low prices.
Help may soon come from the U.S. government. A $4 million project to help the region's struggling coffee industry is being coordinated by the U.S. Agency for International Development's office in Guatemala City. The project will cover all six Central American countries plus the Dominican Republic.
"This project is in response to the crisis caused by low coffee prices," says Michael Schwartz, an official with Washington-based Chemonics International Inc., one of three companies bidding on the USAID project. The other two are believed to be Associates in Rural Development, based in Burlington, Vt., and Development Associates Inc., headquartered in Arlington, Va.
"The project is for $4 million, with the expectation that individual aid missions will come up with additional money," he said. "Our strategy is based on the idea that good-quality coffee has a better chance of getting high prices. Secondly, we want to give these countries more direct access and be more responsive to what the consumer wants.
"Finally, our focus is on alliances," said Schwartz. "We want to take the burden of development off AID and the government and incorporate the private sector."