M.S. Research Paper by Jennifer McLean
University of Maryland, December 1997

II. The Past and Present Context of Coffee
in Latin America

A Quick Tour of the Coffee World

Distribution of cultivated coffee.
Coffee (family Rubiaceae, genus Coffea) is native to East Africa and Arabia but has been introduced around the globe and is currently exported by at least 43 countries. It is estimated that approximately 11 million hectares are in coffee cultivation around the world, an area equivalent to a solid 1-mile-wide band at the equator (Katzeff 96). The two species cultivated for consumption are Coffea arabica and Coffea canephora. Numerous varieties of these two species have been developed. The growing conditions for coffee limit its distribution to the tropics. Coffee requires constant humidity and mild temperatures, therefore it tends to grow best in moist montane areas. However, coffee does not necessarily have to be grown on mountain slopes; rather, it has historically been planted in areas where the altitude or soil do not support less hardy crops.

The history of coffee in the largest producing country, Brazil, is much different than the situations that evolved in parts of Colombia and in Central America and Mexico. The bulk of the coffee that is grown at low elevations in Brazil is the Robusta type - considered by the roasting industry to be of �inferior� taste and reserved for instant coffees. Brazil also produces a considerable amount of Arabica. This "unwashed" Arabica is treated as a separate type of coffee. Nevertheless, although Brazil can be treated separately of the other Arabica producers, events in Brazil still send shocks through the whole coffee trading world.

Introduction of coffee to the New World.
The island of Ceylon had been the principal supplier of coffee to Europe until outbreaks of coffee rust in the 19th century destroyed the industry. Coffee was first introduced into the New World in 1714 by Dutch colonists in Suriname (Palacios 80). From there it spread slowly through Brazil, Colombia, and Venezuela as well as the Antilles, Puerto Rico, and Cuba. Haiti had been the largest exporter of coffee. Destruction of plantations and disruption of commerce during and after the Haitian revolution (1791) allowed Brazil to take the lead in coffee export, which it still holds today. Central America and Mexico are relative latecomers, where coffee was not being produced in large enough quantities for export until the mid- and late 1800s (5) . One possible explanation is that the early producers were those colonies that imported great numbers of slaves: Haiti, Puerto Rico, and Brazil. �Falto de brazos� (shortage of labour) was the constant complaint of landowners in Central American countries and in Brazil after the abolition of slavery.

Table 1. Some differences between Arabica and Robusta coffees.

Arabica (Coffea arabica)	Robusta (Coffea canephora) �Robusta� = name given to all the varieties of the sp. Coffea canephora
70% of world trade	nearly 30% of world trade
First species cultivated for consumption and therefore the more accepted taste - has acidity that Robusta lacks	Considered inferior in taste to Arabica, used in instant coffee
Colombia is the largest producer	Brazil is the largest producer
Terminal market in New York	Terminal market in London

Processing of green (unroasted) coffee.
There are two different processes for removing the fruit pulp from the harvested coffee - washed and unwashed. The �unwashed� or sun-dried method is the most economical way - the coffee cherries are simply spread out in the sun to dry. However, it takes as much as three weeks for the beans to dry and periodic turning is necessary to prevent rot. In Central America and Mexico, this method is typically used in less productive areas where a large supply of water is not available and/or where the harvest is small enough that a time-sensitive factory-type process is not necessary. However, in Brazil, even large producers of Arabica use the unwashed method and seem to have perfected it so that quality does not suffer. After the beans have dried in the sun, the thin parchment left is removed by milling at the �beneficio�. The husked beans are kept in storage for final drying.

For washed coffee, a pulping machine fed with constant running water removes much of the fruit. What is left is mucilage-covered coffee beans. When these are soaked in clean water for 16 hours or more, the enzymes left on the bean dissolve away the remaining mucilage. This requires a constant supply of water from a fresh source. The pulp-laden water is usually returned to the river source, leading to significant nutrient loading. The cleaned bean and parchment is then dried for a short time either in the open air or in an artificial dryer. As in the sun-dried method, the dry beans are then milled to remove the parchment. The washed method is used for most coffee in Colombia, Central America, and Mexico. �Washed� and �unwashed� Arabica are recognized as two different types, with their own pricing, at the New York terminal market.

The coffee market.
The dried green coffee is either sold directly to roasters who visit different coffee farms in search of beans of a certain quality, or it is sold by the farmer, cooperative, or estate to private or institutional buyers who then ship the coffee. The two terminal markets (commodity exchanges) where green coffee is sold are in New York (mainly Arabica) and London (Robusta). The terminal market price has always been a barometer of world coffee production. News of an imminent frost or labor strike trigger speculative buying and selling in New York - changes in price of one source of coffee setting off the others.

The International Coffee Organization (ICO), now with 43 member countries, was formed with the express goal of regulating the volume of coffee exported from all the major producing countries and in this way assure a stable price on the world market. For the last fifty years or more, coffee has been the second largest traded commodity in the world (next to petroleum). Coffee amounts to 30-50% of the export income for at least a dozen countries. A speculative market can seriously undermine the economic and social stability of these countries. This is what motivated the top producers to sign the International Coffee Agreement in 1962. Uncontrolled selling, leading to supply shortages, such as the �black freeze� of 1976, and resulting price increases of as much as ten-fold or more, induced the consumer countries (i.e., USA) to continue with the agreement. Brazil, and later Colombia then manipulated the terms of the ICA to secure dominance of the market (see, for example, the discussion on �special deals� in Font 90, Bates 97, and Lucier 88).

For over twenty years, under the International Coffee Agreement (ICA), the price at which varieties of Arabica were sold in New York determined the export quota that was allotted each of the producing countries. This control on supply moderated the price of coffee from 1962 to 1989 (with a breakdown in the agreement from 1972 to 1976). However, since the breakdown of the ICA in 1989, the New York price is no longer used as a way to regulate the world coffee supply. In 1993 a group of producer countries formed the Association of Coffee-Producing Countries (ACPC), which, unlike the ICA, is a true cartel as it does not include the consumer countries. The ACPC has aimed to cut the world supply by as much as 30% in order to bring up declining prices for green coffee (Maxey 97). The ACPC includes Brazil, Colombia, Costa Rica, El Salvador, Honduras, and Nicaragua, but not Guatemala or Mexico. The new arrangement has had limited success due to undercutting by the members and events outside their control, such as frosts in Brazil or strikes. The market is as speculative as ever. Coffee futures are traded with lightning speed by market speculators hoping to profit from coffee�s price volatility. The New York price has become increasingly sensitive to rumoured or actual upheavals in coffee production; a recent example is a frost forecast in Brazil in early 1997, which, coupled with a train-loaders strike, caused the price of coffee to double in a matter of days and later decrease by as much. Small farmers whose harvest seasons did not coincide with the brief price spike, lost out.

The ICA was the longest-standing international commodity agreement until it was broken in 1989. (For possible causes of the ICA breakdown, see Maxey 96 and Bates 97.) With the breakdown of price controls and quotas several countries were forced to abandon or weaken their national coffee marketing programs. These institutions, such as INMECAFE of Mexico and ANACAFE of Guatemala had regulated the coffee sector by buying from growers (and stockpiling when necessary), setting quality standards, and taxing exports. They also represent the interests of the coffee sector in the ICO. Since 1989, however, institutions like INMECAFE have been reduced in scope and function to little more than technical assistance programs. The only national coffee institution to survive intact the dissolution of the ICA is the long-established and politically powerful Federacion Nacional de Cafeteros (FNC) of Colombia and, to a lesser extent, the Instituto Brasiliero de Cafe (IBC). The reason may simply be that these institutions are supported by tax revenues from the hemisphere�s two largest coffee harvests.

Specialty roasts that use certification, such as shade coffee, Fair Trade coffee, and for the most part Organic Coffee, come from small holdings (<= 5 ha) and not the large plantations of Brazil and parts of Colombia. For this reason the discussion will focus on small farms and farm cooperatives of Mexico and Central America, and on the specialty coffee roasters who buy from them. These are small roasters, who, unlike the major buyers such as Folgers and Nescafe, buy from diverse areas (including Africa and Indonesia) and usually from small holders or collectives. It is both a necessity and an advantage of their scale of operation that small roasters, not being dependent on nor able to deal with large shipments from one or a few growers, purchase relatively small amounts of green coffee from different areas and specialize in different roasts. Arguably, growers of high quality beans benefit from doing business with small roasters who pay them higher prices for their coffee, instead of selling to large roasters or government programs who will mix their coffee with lower quality beans in order to reach the volume demanded. The specialty or gourmet coffee market in the US has increased their market share but it is still only about 5% of the US coffee market (the other 95% being the National Coffee Association members).

Since the breaking of the ICA and weakening of national programs, foreign buyers are now permitted (even in Colombia to a limited extent) to purchase directly from growers. The growers are no longer required to stockpile a portion of the harvest according to a quota system but neither can they count on regular purchases from the government. It is debatable whether the net effect for growers has been positive or negative. As for coffee roasters, it has opened up the territory somewhat, US and European buyers have been given more opportunity to purchase directly from small farms and therefore pick and choose the exact blend or single-origin coffee to market to fastidious customers. Specialty coffee depends on the ability to promote the unique characteristics of their roasts, for example, that the beans came from a single farm. Buying from a national program, where all the coffee from one region had been sorted by grade and mixed together, prevented this specialization.

Checking the Assumptions

In order to begin a frank discussion of what �sustainable� or �progressive� coffee production might be, it is necessary to dispel some myths that are due in part to creative promotion. The US specialty coffee industry began in the 1970s as a niche that new entrants could fill by giving the sophisticated consumer a variety of tastes or an exotic association not found in the regular supermarket brands. Growing consumer sophistication (and the aforementioned liberalization of national policies after 1989) continued to expand the specialty coffee sector. From only a few specialty roasters in the 1970s there are now hundreds and it is possible to buy smaller and smaller quantities of green coffee from specific localities or even individual fincas. In the US especially, electronic marketing and courier delivery have opened the market to new entrants with small investments. On any given day there are hundreds of micro-roasters advertising on the World Wide Web; the majority of these have only formed in the last couple of years and have no storefront location but instead operate by mail-order only.

Only recently has specialty coffee in the US become associated with political or conservation values. Like any self-respecting businesspeople, both entrant and established coffee roasters are capitalizing on these new selling points. Undoubtedly there are many buyers and roasters who are genuinely concerned with reforming coffee and make daily decisions based on their own established criteria for social justice and land stewardship. At the same time there is a plethora of glamorous and dubious advertisements from a whole new crop of micro-roasters. The advertisements for many specialty coffees tout the value of a product that is grown in the �traditional way� in Mexico and Central America, even going so far as to call coffee the sacred beverage of the ancient Mayans and Aztecs - which is completely wrong. Coffee farms - like vineyards before them - are gaining a romantic aura. �Estate� coffees are becoming popular. Tourists can now pay to help pick coffee on selected farms where they can appreciate where their favourite beverage comes from and take in the mountain scenery and indigenous culture. Specialty coffee drinkers are, not surprisingly, patrons of cafes and coffee houses and have soaked up the unfiltered ideological and ecological lore of coffee. There is a grain of truth in the stories going back and forth in mail-order catalogues and on the WorldWide Web but embracing them uncritically means that coffee could be reduced in American minds to, on the one hand, a symbolic banner of radicalism, or, on the other, an emblem of affluent liberal comfort, while the issues go unaddressed and the potential for consumer activism untapped.

The following industry assertions or popular beliefs should therefore be assessed:

1. Buying coffee ensures cultural survival as coffee is the traditional mountain crop of native peoples of Mexico and Central America.
2. Buying coffee from small farms helps these families remain independent, since the small shade-coffee farm is self-sufficient.
3. Bypassing the coffee trader (�coyote�) by purchasing directly from the farmers is the surest way to reform the coffee system.
4. Coffee produced on family-run shade farms is by nature of better quality than unshaded coffee.
5. Promoting organic coffee means securing bird habitat since organic coffee is shade-grown.

1. Coffee and cultural survival.
Buying some kinds of coffee may indeed help native cultures to survive but coffee cannot be considered �traditional� to these cultures unless one starts the clock of tradition for the Mayan people in 1850. It is true that coffee, being shade tolerant and hardy, was easily incorporated into the forest gardens of traditional peoples, where, for example, cacao had been grown. (Alcorn 81, 84) However, the mountain areas where coffee is now concentrated are not the traditional homesteads of indigenous people, as is popularly believed. The regions of southern Mexico and Central America where coffee is grown do not correspond to areas of previous settlement (with the exception of the more densely populated El Salvador). Rather, these mountain areas correspond to areas of refuge where ethnic groups whose land was appropriated by the ladinos retreated to scratch out a living and, in the case of 20th century Guatemala and Chiapas, organize resistance movements against the State. Mountain slopes are not appropriate for the production of staple foods such as maize and beans. Ladinos converted mountain slopes to coffee to squeeze out the last income from the land as the availability of lowland decreased. In the case of indigenous peoples, they worked coffee farms for wages or retreated into the mountains to farm their own holdings. (Refer to Cambranes 85, Roseberry 95, Williams 94, McCreary 95, and Bergad 82 for history of displacement of native peoples by coffee.)

The practice of growing coffee in Latin America is not only more recent than most people realize but has not always been beneficial to the people who work the farms. Brazil quickly gained dominance of the market and retains it still by government policies designed for the �permanent defense� of coffee (see Bates 97 and Font 90 for a review). These policies have ranged from national stockpiling policy to control prices, manipulation of the ICA rules (see above) and, in the 19th century, the use of slaves or indentured workers. A large slave population and later immigrant share-croppers held in place by debt worked the huge coffee plantations held by the Brazilian elite in the mid-to-late 1800s. The history of coffee in Mexico and Guatemala is similarly fraught with policies of usury and oppression implemented by a government of elites. To this day, for many indigenous Guatemalans, coffee is not at all synonymous with land, self-sufficiency, or independence. The coffee �tradition� for 14,000 Mayans is to follow the harvest season north into the plantations of Chiapas every year to work as hired pickers (Cruz 97). The optimist might considers this picture of coffee an opportunity for the poor, others would see it as the continuation of a system designed to keep the peasantry poor and permanently available as cheap labor for a seasonally labor-intensive cash crop.

There are two significant shared characteristics of coffee elites in different countries. One is that the plantation owners or grant-holders were able, through family relations and money interests, to manipulate the State legal mechanism to legitimize forced migration and forced labour; for example, the Guatemalan �anti-vagrancy� laws and the mandamiento of 1871 required departmental governors to �supply� the required number of workers to the plantations. Secondly, plantation owners (characterized as those needing a large external work force to harvest the coffee) exercised a type of racism that did not aim so much at the subjugation of native peoples for its own sake but rather the guarantee of a continued malleable workforce - whether that be Indian, white, or an Indian population suffused with European mores. The colour of the workers did not matter as much to the coffee capitalists so long as there could be maintained a definite classification of people, backed up by debt peonage and land tenure laws, that would keep the classes distinct and the labour input for their plantations guaranteed. If the Indian population has shown persistent, even armed resistance to the rules of coffee capitalism then so much the better if the landowners could make the workforce more white. Poor, white immigrants after all could be more easily employed having nothing to lose - arriving in the country with nothing, no land to defend, and possessing no cultural or political organization. Racist assertions of European superiority, that at the time were politically correct, concealed the plain usury of the situation.

What the Liberals wanted was a �modern� white working class which could accept the wages and conditions which centuries of European rule had forced upon the Indians. By �bleaching out� the lower classes they sought a radical transformation of the ethnic but not the social structure. �An infusion of fresh and vigorous life� provided by mass white immigration would �speed the clogged blood� of the nation. An influx of Europeans would increase the �intelligent� work force available, revolutionize agricultural production, and spread civilized morals and values among the lower order. (McCreery 1995)

The generally accepted theory for the differences between Guatemala, for example, and Costa Rica in terms of size of coffee farms and relative independence of producers is that while Costa Rica encouraged immigration of Europeans to work in agriculture, Guatemalan landowners depended instead on the indigenous population for labor. The Mayan population was still sparse enough in Guatemala in the 19th century that there was a �shortage� of agricultural labour (in the sense of large-scale commodity production) The land-holders worked with the State to devise policies of forced migration of the indigenous people (the anti-vagrancy laws) to secure a work force at times of harvest (Roseberry 93).

Clearly, coffee is neither traditional to indigenous peoples nor has it helped them survive. If anything, indigenous cultures have managed to survive despite coffee.

2. Shade coffee and farmer independence.
It has become a tenet of sustainable development that farms that provide most of their own sustenance are more independent economically than are cash-earning farms or wage-earners and that therefore these �self-sufficient� production systems are the places in which political or cultural independence will also take place. The Fair Trade movement as well as some organic coffee certifications promote the fact that shade-coffee provides alternative sources of income, food, or fuelwood for the farmer and that the work is done by the whole family.

Planning farms such that families or communities can provide for themselves is certainly a worthwhile goal. However, in pursuing this goal, one should be aware of the sensitive political and cultural meanings attached to the notion of �self-provisioning� on coffee farms. Self-provisioning was a methodical strategy pursued by estate owners to economize on the cost of maintaining a large work-force. Workers were allotted a piece of land near the coffee fields in which to grow their own food or even coffee to sell for cash. This practice was especially common in 19th century Brazil and Colombia (Stolke 95, Palacios 80). Intact family households on the plantation were encouraged as a further means of economizing on labour costs and holding the workers to the plantation. The plantation owners saw the advantage in utilizing all members of the household, either to grow food or assist in the harvest. Of course, the workers themselves fought for the right of self-provisioning since it gave them more autonomy and security than they would have if they depended solely on wages for their survival. But self-provisioning was neither a charitable act on the part of the owner nor a victory on the part of the workers. It was simply an economic policy designed to get the most product from the least input (as argued in Stolcke 1995). The lands allotted for self-provisioning was, like all of the plantation land, confiscated from the native people and given to influential colonists. Where land for self-provisioning was simply �given� to the workers (rather than rented), the plantation owners appeared magnanimous and progressive. In fact, whether the land was given or rented, the intention behind self provisioning was merely to increase the likelihood of holding onto a healthy and relatively pacific workforce through yearly fluctuations in coffee prices and wages.

Small-scale coffee farms of Mexico, Guatemala, Colombia, Venezuela, and Puerto Rico came about for different political and economic reasons and it is not so simple as making a distinction between small holdings of shade coffee (< 5 ha for example) and the �sun plantations�. Systems of small farms are not necessarily the triumphs of rural democracy over the oligarchic plantations. To this day, small coffee farms operate under their own power hierarchy - that is as much determined by labour availability and access to commercial credit and traders (who are also creditors and provisioners) as it is to land tenure. In areas of mixed large and small holdings - such as Costa Rica and the Antioquia of Colombia - small coffee farmers also work for wages on large plantations (Roseberry 95, Quinlan pers.comm). Consequently, their economic �independence� does not derive solely from planting shade coffee on their own farms.

Thus, the notions of �self-sustaining� and �traditional� coffee farms can actually have negative connotations with reference to coffee�s history in particular countries. The new goal of coffee roasters and their certifiers to seek out �sustainable� coffee is in danger of being viewed as a recouching of the self-provisioning strategy and therefore neo-colonialist. The current emphasis by agroforestry on optimal and diversified timber and fruit production and efficient allocation of resources (see Swantz 97 and citations for example) is also open to criticism when such an emphasis on efficiency is given by the foreign researcher and not the farmers themselves -- it is not impossible to find some similarity in tone or logic between the agroforester�s resource allocation studies and the 19th century elite�s laments of �inefficient� use of the land by the Indians.

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