Today we hear from my colleagues in Nicaragua in the final installment in a week-long series of comments by CRS field staff on the FEWS NET coffee rust shock report for Central America.
Nicaragua has been the center of gravity for CRS coffee programming over the past decade. It was the site of our first coffee project way back in 2002. Since then, we have been leading coffee projects there continuously with private resources and funding from USAID, the Howard G. Buffett Foundation, Green Mountain Coffee Roasters, the Chuck and Ellen Haas Foundation and others. A partial list of coffee projects includes: the CRS Fair Trade Coffee Project (2003-2006), Development Assistance Program (2002-2007), ACORDAR (2007-2012), CAFE Livelihoods (2008-2011) and Bridges from Scarcity to Sufficiency (2011-2014), a Green Mountain-funded food security project. The latest project from Nicaragua, called Rust to Resilience, applies some of the best thinking I have seen to the CLR response.
R2R, as we are calling it, includes financial and agronomic support for coffee renovation and rehabilitation but doesn’t stop there. It takes a holistic approach to recovery and rebuilding at the farm level, where it will diversify farm production for consumption and the marketplace while building natural capital–the basis of the long-term viability of any farm–through specialized support for improved water resource management and increased soil fertility. At the community level, it will build natural capital by restoring degraded landscapes and financial and social capital through continued promotion of community-based savings and lending groups. Here is what my colleagues in Nicaragua had to say about the FEWS NET report and CLR based on their ongoing work in the coffeelands.
What were your general reactions to the special report that FEWS NET released last week?
The report does a good job of summarizing many of the major difficulties that smallholder coffee producers are facing as a result of the CLR outbreak. We suspect, however, that it may underestimate the impacts in Nicaragua, where the entire economy of coffee-producing communities is reeling. With significantly less production, lower prices, less availability of day labor and lower wages, coffee growers and pickers are feeling the effects of CLR. The newspapers here are reporting that coffee traders in coffee producing areas are also suffering large losses of income as a result of the crisis. Given how much the whole economy of the coffeelands revolves around coffee income, even those not directly involved in coffee are suffering.
Is there something in the report that diverges from what you are seeing or hearing, or something the report doesn’t address that you think is essential to understand how things are playing out in Nicaragua?
FEWS NET reports that affected households in Nicaragua have other sources of income that will allow them to meet their food needs. There are places where we are working in the coffeelands where we don’t see these additional sources of income. Basic grains production will mitigate some of the need but not all of it. Beans meet a portion of a family’s food needs but bean prices have been extremely low in Nicaragua this year. They will not likely be enough to cover the costs of another season of good basic grains production–purchase of seed, land rental, wages for day laborers and others–let along other critical household expenses. We fear that many households will be pushed into more acute food insecurity despite the more optimistic projections for Nicaragua in the FEWS NET report.
Our concern is driven largely by the vulnerability of so many smallholder farmers due to over-dependence on coffee income. FEWS NET seems to suggest that this is an isolated phenomenon in referring to “small groups of households who are heavily depend on coffee-related income.” But we have found in our work with coffee growers in the San Juan del Rio Coco region that the breadth and depth of this over-dependence are worrisome.
When we polled 800 coffee-growing households in the region we found them to be dependent on coffee for 94 percent of their income. In the current scenario, growers are being squeezed by low prices and production losses on the crop that accounts for almost all their income. On the farm, these producers were already caught in a trap of low productivity before the CLR outbreak, producing an average of 11.7 quintales per hectare on very small plots, an average size of just 1.3 hectares. There just wasn’t enough production for famers to earn sufficient income to sustain their families year round, let alone invest in practices that will increase productivity reduce vulnerability CLR and other climate-related production challenges. Our estimates are that production losses due to CLR are on the order of 40 percent. In the marketplace, we found that even with the high coffee prices of 2011, 40 percent of the target households suffered food scarcity during some portion of the year and closer to 60 percent had limited dietary diversity, eating mostly corn and beans. In 2013, we saw further declines in dietary diversity as well as reductions in food provisioning. At current prices, and with the production losses we are seeing, we fear that many of the households with which we have been working are vulnerable, and that CLR may push them into severe crisis.
Is there anything you see in the field that is helping smallholders cope effectively with the situation?
Field staff are reporting that producers that have received support and financing for basic grains, sweet potato, and gardens are able to better weather the crisis. At this point, this finding is anecdotal. We will collect hard data in the months ahead.
Also, cooperatives and producers with Fair Trade and organic certifications have had a distinct advantage this year as prices continued to drop. Certifications delivered price premiums of about 30 cents per pound, which helped mitigate the impacts of dramatic declines in production and prices for these producers. We also find that producers whose cooperatives have access to markets for certified coffees are selling a greater percentage of their harvest to the cooperative this year and cooperative membership is expanding.
What is needed to position farmers to be more resilient in the face of CLR and other threats?
We view CLR as a symptom of already existent, chronic problems for these producers. The low productivity and low income, high dependence on coffee, and increasing climate risks for these producers were already affecting the viability of their livelihoods, and we don’t believe that addressing CLR alone or offering credit for renovation alone are going to be viable solutions for this population and others like them. CRS is already working on diversification strategies (honey, bananas, sweet potato) and support for basic grains and garden production, but in addition, we believe that we need to look closely at the coffee production system in relation to supplementary crop production and other sources of income and to develop whole farm/household livelihood strategies that provide sustainable relief for the poverty and vulnerability of these producers.
Thanks for this series of very interesting reports, it’s important to remind everyone that this calamity is far from over.
The final paragraph says it all – it’s not what the coffee industry wants to see, but promoting diversification is the logical response to increased risk. But it’s going to be extremely hard and will need substantial funding to commercialize alternatives, if farmers are to have more than a very basic subsistence lifestyle.
Unfortunately, as far as I can see, the principal donor response to date has been ‘more of the same’ – i.e. getting farmers to borrow more to intensify production. With the new price spike I fear this will encourage them to do just that.
Thanks, as always, for your comment, and sorry for the delay in responding. As I finally get around to a reply, I do so from Bogota a day after the government suspended its subsidies for Colombia’s coffee growers–a measure triggered by the market rally, which pushed Colombia’s internal price above the market floor built into the subsidy mechanism here. Today, front-page newspaper headlines declared confidently that there will be no problems with low coffee prices in 2014. With Colombia returning to its pre-2008 production levels, the country’s coffee sector seems poised to soar.
Which begs the question you rightly fear: what was that you were saying about diversification?