GIVEN THE amount consumed worldwide each day, there is a good chance you have a cup of coffee within reach as you read this article. After all, it is the world’s second most-consumed beverage – behind tea – and its caffeine hit is mankind’s legal stimulant of choice. If oil runs our machines, coffee increasingly runs us.
But while oil prices are a subject for the nightly news, the wild fluctuations in the coffee markets rarely grab our attention. However, ignorance about the economies of this bean is a rich-world privilege. In the developing world, the price of coffee is vital. There, only crude oil is a more important export commodity. But whereas oil is controlled by multinational and state oil companies, 70 per cent of global coffee production comes from small farmers, the highest share of any global commodity, making it a crop of crucial social importance.
Juan José Centeno Blandon, a 54-year-old smallholder in the verdant hill country around Nicaragua’s coffee capital of Jinotega, knows only too well the impact of coffee’s wild price swings. Asked what the record lows of a decade ago meant for his family and he is blunt: “Before, food was a problem.”
That collapse in prices was caused by a glut of coffee following Vietnam’s aggressive entry into the market. As a result, Nicaraguan coffee farmers let their beans – their only cash crop – rot in the field. It cost more to harvest than they could make at market. Families began to drift away from the land towards city slums where there were few jobs waiting for them.
But the crisis encouraged many who stayed to band together and find safety in the country’s burgeoning co-operative movement. Six years ago Blandon accepted the invitation of several compañeros and joined a co-op, one of 18 that make up a local co-op union.
Called Soppexcca, the union has won fair trade certification for the coffee grown by its 650 producers. Fair trade works on the principle that there is a growing number of consumers in rich countries who do in fact care about the price of coffee, or at least the price small coffee farmers earn for their crop.
According to fair trade rules these consumers and the companies that supply them are willing to pay a social premium on top of market prices for certified fair trade products, as well as guaranteeing a minimum price to help insulate producers from market shocks. This extra money is then reinvested in the farmers’ communities.
Soppexcca has taken the social premium it gets for its members’ coffee and invested it in numerous social projects including the building of two new rural schools, scholarship programmes for farmers’ children, and providing basic healthcare in some of Latin America’s poorest communities where the state’s presence is often feeble.
“The co-op members now have a sense of belonging and developing their own plans and seeing a future for themselves compared to 10 years ago when it was a complete crisis,” says Al Cunningham of Christian Aid Ireland, the charity owned by Ireland’s main protestant churches and one of the founders of the fair trade movement. Over the past decade, the charity has partnered with Soppexcca on many of its social projects.
Such benefits mean Soppexcca’s general manager Fátima Ismael Espinoza gives short shrift to critics of fair trade who claim its benefits are opaque and oversold. “Here a coffee drinker from Ireland can see and feel the impact of their investment when they drink a cup of fair trade coffee,” she says. “They can see it in our children, our women, our families.”
As one of Soppexcca’s biggest customers is Bewley’s, much of this social premium does indeed come from Irish coffee drinkers. Soppexcca’s beans are sold in Ireland under Bewley’s Explore Nicaragua fair trade brand. Just this week Bewley’s signed a deal with convenience retailer Mace to sell Soppexcca coffee in Mace’s 120 locations around the country.
But as he tastes Soppexcca’s latest harvest ahead of confirming his order for the year, Bewley’s master roaster and chief buyer Paul O’Toole is quick to point out, “This is not about charity. I wouldn’t be here if the coffee was not right.”
Seeking out the quality fair trade coffee his customers want has allowed O’Toole to bypass the industry’s middlemen and build relations directly with coffee growers, important considering that much of the world’s crop comes from regions prone to natural disaster or civil unrest. “In my business I want to be close to my producers and fair trade has given me that introduction,” he says.
Soppexcca is also keen to cut out middlemen. With help from Christian Aid Ireland among other donors, it now owns its own processing mills.
This means it no longer has to sell freshly harvested beans to third parties to process into the more valuable green beans that European roasters buy.
With local banks quoting loans with interest rates of more than 100 per cent for small producer co-ops, Soppexcca still needed foreign aid in order to make this climb up the value chain. Now Espinoza is hopeful that, in years to come they will see the union turn itself into a self-standing business, able to generate its own investment capital.
“But,” she quickly adds, “Without ever losing our social or environmental rationale.”
A taste of Nicaragua
When Bewley’s master roaster Paul O’Toole started buying coffee 30 years ago the only product available from Central America was a contract for a basket of disparate beans sold in New York as Central American Standard 1.
“I didn’t know whether it was coming from Nicaragua, El Salvador or Honduras,” says O’Toole. “I wouldn’t have known then that Honduran coffee has a more tropical taste and Nicaraguan a sweeter one or that Guatemalan has a smoother quality. Up until recently all that was lobbed into a big commercial standard that they could trade in New York where they didn’t know what they were talking about.”
But, as with wine, Irish coffee drinkers have become increasingly sophisticated in recent decades and European roasters such as O’Toole are now seeking out distinctive local producers across the tropics who can offer new varieties to more demanding palates back home. Broad and bland regional categories are no longer in flavour.
For small coffee farmers such as those in the Soppexcca co-op, this raises the hope that their ever more knowledgeable customers will one day arrive as tourists to visit the regions which produce the world’s top coffee, much as wine lovers descend on famous wineries. For coffee drinkers, it raises the prospect of waking up in Nicaragua’s lush mountains and drinking your favourite cup on the small farm that produced it.
