Is Organic Coffee a Boon or a Bust for Nicaraguan Farmers?

April 24, 2011

A Canadian news source just published an online article about a German university’s study of organic coffee production in Nicaragua. The University of Hohenheim researchers found that organic coffee farmers have become poorer when compared to conventional coffee growers over the 10-year period studied. This was blamed on the higher costs in labor and smaller crop sizes of organic farms. These findings have been disputed by importers of the organic coffee and spokesmen for the co-ops that represent the Nicaraguan farmers. In the current debate, some interesting points have been made about organic coffee production in general. The co-op representative reports that he has seen an improvement in the area in Nicaragua with which he deals; the farmers there are being paid more for their coffee and actually seeing their land become more productive with mixed crops. Crops grown along with the coffee include bananas, mangoes, and cocoa, plus animals such as pigs, goats, and chickens. The livestock provides fertilizer for the crops as another benefit. The co-op pays the farmers an upfront pre-season deposit to insure they have working capital. In Canada, the coffee sells for $12 per 400 grams (just under a pound). The farmers receive about twice as much for their organic coffee as the conventional famers do for theirs. Two other Canadians who deal with the farmers stated that, if the farmers were not progressing financially, they wouldn’t continue to grow the organic coffee. The farmers were not growing it for ideological reasons, only for the financial incentives. In fact, one comment was that the farmers grow organically because they can’t afford the conventional fertilizers and herbicides. Both sides agreed that organic coffee and conventionally grown coffee involve different financial pluses and minuses; each has some extra costs and each realizes extra benefits. Conventional coffee has lower labor costs and higher production, with higher costs for crop enhancement (herbicides etc.), while organic coffee has higher labor costs, lower production, but much lower costs for enhancements. These still don’t balance each other out, because the organic farmers are being paid twice as much for their crops. The question that arose but not really answered was: Won’t the extra price for the crops compensate for the higher production costs and lower yields? This question is the crux of the matter. In the long run though, because the organic farmers are bettering their soil every year, while the conventional farmers are depleting theirs, the organic producers should gain the advantage in future comparisons between the two groups. Also, any growth in demand for organic free-trade coffees will be a big boon that will further tip the scales in favor of the organic farmers. So if you like organic Nicaraguan coffees, your continued purchases can only help the organic farmers. Brew on organically!



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