For the past 18 months, we have been working with a small network of specialty coffee producers and partners in Guatemala and El Salvador.
In the wake of the recent coffee price crisis, industry professionals are collaborating to develop and test Business Tool Workshops with the Grounds for Empowerment program, one of many initiatives that aim to cultivate a more progressive global market for specialty coffee producers.
Little did we know that just after our third workshop closed in March, the global pandemic would shake up our colleagues in the coffee zones.
We have contacted numerous coffee producers and other industry professionals in Guatemala and El Salvador to learn how their operations have been affected in recent weeks. These conversations helped illuminate a side of the coffee value chain that too often has been left in the dark as the COVID-19 response has spread across the globe.
Unfortunately for many producers, the COVID-19 pandemic is putting even more pressure on operations that were already affected by the rust crisis that started in 2012, as well as the ongoing price crisis.
This is what our colleagues in Guatemala and El Salvador would like us all to know:
Coffee farms are experiencing immediate outages
Producers who are harvesting and processing the latest of their 2020 coffees face challenges in retaining their staff and maintaining their work schedules as internal mobility within each country becomes more difficult.
Following COVID-19, both Guatemala and El Salvador established household quarantines and curfews. Although many industries closed entirely, agriculture is considered essential and was not covered by these restrictions.
However, there are still problems for coffee farms. Workers who live near farms and dry mills can get around, but those who live further afield struggle to find reliable transportation to and from their jobs. At the same time, limited banking hours and services mean that many farm owners are struggling to get cash to pay their workers.
Ashley Prentice of Gento Coffee in Guatemala told us that many producers are having higher operating expenses by hiring private transportation services for their workers while investing in additional health and protection measures. At the same time, he said that many coffee buyers were forced to cancel their trips to origin. Uncertainty in the market about the immediate future makes many buyers hesitate to confirm purchases, while others buy smaller volumes.
We must remember that these logistical uncertainties and higher production costs come in addition to the current price crisis.
Additional disruptions occur beyond the farm gate
After the coffees are processed and sold, they must reach the market. Ana Lucrecia Glaesel and Luisa Fernanda Correa, from the National Coffee Association of Guatemala (Anacafé), said that unfortunately, some ports are experiencing a significant slowdown.
Boats and containers do not arrive normally due to international restrictions. Export permits also take longer to process due to staff reductions at various offices. In El Salvador, the Salvadoran Coffee Council has a limited staff working in the offices. The rest work from home.
These delays can lead to canceled contracts. For other buyers who really want expedited shipping, there is limited capacity to fulfill their requests due to permit delays. All this means that the coffees that are ready for export can wait in the port for long periods.
This delays the arrival of critical income to the farms and affects the income of support organizations such as Anacafé, which uses these funds to support coffee producers with technical assistance, a research center, multiple laboratories, a roaster and a school of coffee, while promoting Guatemalan coffees nationally and internationally.
In addition to their immediate effects on cash flows, it is unknown whether or how these bottlenecks will be resolved in the coming months.
As PROMECAFE’s René León-Gómez told us, producers have additional concerns about the effects that COVID-19 will have on the final demand for their coffees and, therefore, on prices.
Furthermore, there is concern among producers that delays in shipments could affect coffee quality, which could lead to strained relations with buyers.
Structures of support for under pressure
Support organizations know that coffee producers are still dealing with the price crisis and climate change. However, as COVID-19 disruptions create more challenges for coffee growers, support organizations become even more limited, for several reasons.
First, technicians cannot reach some farms to offer advisory services. Ana Lucrecia and Luisa Fernanda from Anacafé described how the group had to minimize technical assistance in person in late March due to distance, mobility and scheduling restrictions. They relied on SMS, Whatsapp, phone calls and video calls for farms that they have not been able to visit during this time.
Second, support organizations are forced to modify their budgets to meet the immediate needs related to COVID-19. Both the Salvadoran Coffee Council and the Inter-American Institute for Cooperation on Agriculture (IICA) had to suspend several investment and training projects to free up funds for these more immediate needs.
Third, as PROMECAFE’s René León-Gómez reminded us, many national coffee institutions face reduced capacity to support producers due to reduced financing, which is directly related to coffee exports and prices.
Facing this trifecta of challenges (bans on visiting farms, increased responsibilities, and fewer resources), groups like Anacafé are helping some specialty coffee producers move their smaller lots using air cargo.
In Guatemala, Anacafé and FedEx have negotiated special air freight rates for Anacafé associates for the shipment of micro-lots. This brings some of the premium coffees to market so that the money can go back to the producers. At the same time, they are driving efforts to increase local consumption.
Ana Lucrecia from Anacafé emphasized that the group “is taking things one day at a time and recognizes that things are changing day by day. Today we are proud to be able to support the sector in the best possible way, given the circumstances. ”
Producers need reliable partners
This prolonged period of compulsory isolation or social distancing reminds us how important it is to stay connected. Gabriela Flores de J. Hill y Cía. and Marjorie Canjura of Belco Café, both based in El Salvador, said buyers with stronger relationships are likely less inclined to cancel contracts.
Gento’s Ashley Prentice reflected on how long-term buyer conversations, covering a variety of topics, from business to life in general, can provide critical peace of mind for producers.
There is a collective belief among our sources that coffee growers who have long-term, reliable relationships with their buyers will be in a better position to invest in emerging from the COVID-19 crisis, largely because there is a common interest in maintaining a future for specialty coffee.
Ashley suggested that coffee buyers should keep the lines of communication open and continue to invest in their relationships. Gabriela Flores of J. Hill y Cia took that concept one step further by suggesting that more progressive buyers should consider committing to multi-year purchases, providing incentives to invest in building capacity for future harvests.
Marjorie Canjura de Belco urged producers to continue looking for ways to differentiate themselves, while continuing to tell their stories. As global mobility restrictions ease, marketing will play an important role in reconstruction efforts.
Overall, our colleagues also highlighted the resilience of the coffee communities. We do not have to go far back to identify the numerous crises that have fallen on coffee producers. While they continue to grapple with rust disease and the coffee price crisis, they will also have to navigate the logistical and economic realities of the COVID-19 response.
To reinforce this resilience, coffee producers must have a support network to know that they are not alone, neither now nor during the period of reconstruction that will surely come.
Peter Roberts and Giselle Barrera Carias
Peter Roberts and Giselle Barrera Carias are part of the team that leads the Grounds for Empowerment Program. Peter is the Emory University professor who founded Transparent Trade Coffee and the Specialty Coffee Transaction Guide. Giselle lives in El Salvador and works as Latin American programs lead for Social Enterprise @ Goizueta. These programs include the Grounds for Empowerment Business Tools Workshops in Guatemala and El Salvador, which empower women coffee farmers to participate more effectively in specialty coffee markets.