Coffee

Coffee production requires little machinery but considerable labour for planting trees, weeding and harvesting. It takes four years for a coffee plant to yield fruit and up to six years to produce optimum yields.

There are two main types of coffee - arabica, which has a milder taste and tends to be more expensive, and higher yielding robusta, widely used in instant coffee and in stronger roasts.

Coffee is a tropical plant requiring specific environmental conditions. Ideal temperatures are 15°C-25°C for arabica and 24°C-30°C for robusta.

As well as an annual rainfall of between 1,500 and 3,000mm; a dry period is necessary to stimulate flowering. Whereas robusta can be grown at sea level, arabica does best at higher altitudes and is typically grown in highland areas.

In addition to fluctuating prices and domination of the supply chain by a few large multinationals, there are many other challenges facing the average coffee producer. Coffee farmers typically survive on less than $2 a day, growing food crops such as maize and supplementing their income from coffee with "cash crops" such as bananas. They may also rear livestock and carry out casual labour. Their farms are located in remote rural areas with increasingly erratic climatic conditions.

Arabica production, in particular, tends to be located in mountainous areas away from paved roads. These areas are sometimes accessible only on foot or horseback, along tracks susceptible to flooding. There is often little government investment in education, healthcare, transport, or the provision of clean water and access to electricity.

Fairtrade coffee is extremely important. When a co-operative sells coffee on fair trade terms, the standards guarantee that they will receive at least the fair trade minimum price as well as an additional premium for investment in community development projects. The minimum price is set at a level that ensures growers can cover the average costs of sustainable production. This acts as a safety net at times when world markets fall. However, when the market price is higher than the fair trade minimum price, the buyer must pay the market price.

The amount of money we lend against coffee has gradually increased over the past few years. As coffee is a commodity traded in international markets, the fluctuation in prices represents a risk so we operate "prudential limits" that provide the maximum amount we can lend overall as well as in certain regions.

Fair trade enables small scale farmers to join forces to own and govern their own farming organisation with a democratic decision making structure.

You might want to read about Huatusco, a coffee co-operative which represents 43 producers groups with over 2,000 individual farmers.