Why Peru's Coffee Growers Can't Make Ends Meet
Peruvian coffee farmers desperately need help — from both the public and private sectors — to improve quality and bring down production costs.
LIMA — For most of the approximately 220,000 families in Peru who grow and sell coffee beans for a living, things are going from bad to worse, and for a simple reason. Unlike for farmers in Brazil, Colombia or Vietnam, in Peru, coffee is no longer profitable.
The international price of conventional coffee hovers around $100 a quintal. But in Peru, it costs more than that (approximately $120) to produce that amount. Why? For starters, Peruvian cultivators produce less per acre than their peers in Brazil or Vietnam.
In those countries, farmers tend to have more land at their disposal, plus more advanced technology for the production and post-harvest phases. On top of that, the fertilizers and other chemical products needed for coffee farming are subsidized.
Numbers provided by the National Agricultural Census (CENAGRO) show that 95% of Peruvian coffee farmers have less than five hectares, which is not enough to produce any significant amount. Per hectare productivity is also a problem. The average productivity rate nationwide is below 15 quintals (840 kilograms) per hectare. Brazil's is twice that.
Peruvian coffee beans — Photo: Annerella
To improve the situation, farmers first need to produce more coffee in less space. That will require improvements in both crop management (sowing, fertilization, plant defenses and adequate pruning) and at the post-harvest phase (pulping, fermentation, washing and drying of grains). These kinds of skills and techniques can be shared and taught, through training sessions, for example, and in some places, farmers have already made strides: In production zones like Jaén or Moyobamba, growers are producing more than 50 quintals a hectare.
The higher the quality, the more markets will pay.
Another alternative for Peruvian cultivators is to produce specialty coffees, where the priority is cup quality. The higher the quality, the more markets will pay. A quintal of coffee with a cup quality superior to 88 points can reach around $1,000. Again, the key is in the rigorous approach and dosed application of efficient, technological and environmentally friendly farming inputs.
Producing significant quantities of quality coffee is very much a possibility, but for that to happen, the government, private sector, society and sector organizations need to lend a hand by sharing know-how and technology so that small and mid-sized farmers can adopt better farming practices and become more competitive.
*The author serves as regional director for the international chemical company Yara South Pacific.