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Industry News: The Year of the Coffee Curse

An in-depth look at the coffee leaf rust epidemic that has rocked the industry over the last 12 months and the effects this outbreak will have on the new 2013/14 crop year.

With the new coffee year beginning this week, we’ve been reflecting on the highs and lows our industry has faced over the last 12 months. Undoubtedly, the most prominent issue has been the outbreak of coffee leaf rust throughout Central America. The issue has remained the dominant topic of conversation within the industry over the last 12 months and for valid reason - the epidemic has been dubbed the worst the region has seen since the first outbreak in 1976. The severity of the issue has prompted debate from international organisations, research institutes and industry professionals around the world in the hope that a risk management strategy and resolution can be sought. The increased use of social media and blogging throughout the industry has helped to spread news of the issue and facilitate informed debate amongst industry professionals. While we are yet to bear witness to any severe effects of the outbreak through cup quality or supply at a sourcing level; the issue is very real for many people along the supply chain and could have dire consequences for the global coffee community. 

The epidemic has spread throughout Mexico, Central America and Colombia; severely affecting trees and threatening to almost halve the 2013/14 harvest in many producing countries. Costa Rica and Guatemala have declared national states of emergency as a result of the outbreak, with Honduras, El Salvador, Peru and Nicaragua also being heavily affected. Guatemala’s coffee output will reduce by 4 to 5 percent in the 2013/14 season, according to National Coffee Producers group, Anacafe. The origin will produce approximately 3 million 60kg bags of coffee this season, a sharp decline from the 3.14 million bags produced last coffee year. This estimate is based on the assumption that farmers will stand by their crops and fight the disease. If this is not the case, the country could see a much larger drop in production. El Salvador’s 2013/14 output is estimated to reduce by up to 36 percent as reported by the National Coffee Council, and Peru is expecting a 25-30 percent decline in production for the new coffee year. Production declines of up to 40 percent for the 2013/14 season are expected from other affected origins across the region, and there are concerns future crop years could also be affected.

On a more positive note, despite the damage to many coffee plantations in Honduras, the origin’s National Coffee Institute has forecasted a 5% increase in exports for the new October 2013 to September 2014 coffee year. This projected increase is due to a number of rejuvenated coffee farms now coming into higher volume production. The National Coffee Institute have made a point of stating that the issues of leaf rust have not disappeared for Honduras, however they will not impact upon the overall output for the coming year.

The leaf rust disease was first detected in Sri Lanka in the 1870s where it decimated coffee plantations on the island, resulting in the crop being replaced by tea. By the 1960s it had spread throughout Indonesia and the following decade it made its way to the Americas, first appearing in Nicaragua in 1976 and eventually spreading throughout Central America. The disease is hardly new to the region and has been existent in varying degrees ever since its introduction in the 1970s. However it can usually be contained through the use of fungicides. So why has this outbreak been so severe? Causes of the epidemic have been attributed to the effects of climate change; consistently humid conditions and persistent light rainfall proving the perfect microclimate for the disease to spread. Others have credited the lack of genetic diversity within coffee, and changes to land use and farming practices. The SCAA produced a comprehensive article on the subject of leaf rust earlier this year, encompassing all the scientific knowledge of the disease. It is clear that further research is required into causes and prevention of the disease, however given the severity of the current situation it is important to focus on the short term in order to contain the effects.

Many governments and origin-country associations have pledged funds to aid farmers in fighting the infestation. The Mexican government has this week announced a plan to invest 2.75 billion Pesos (225 million AUD) to the cause, assisting farmers to purchase pesticides to counter the disease and support farm rejuvenation programs. These programs involve replacing aged trees with new disease resistant and higher yield varietals. Ecuador has adopted similar industry perspectives, the government importing seed for farmers to steadily replace aged trees with the aim to replant most of the countries Arabica plantations over the next seven years. These programs have met with some debate from the speciality coffee community as many disease resistant strains lack high cup quality traits. It becomes a question of whether one chooses to plant a rust resistant variety with the guarantee of crop, or take the risk of better cup quality with the possibility of no coffee to sell. This loaded question ultimately falls on the shoulders of producers, who at the moment are faced with the short term concern of surviving the new crop year. 

The issue has captured the attention of international organisations around the world. In response to the crisis the “First International Summit on Coffee Rust”, organized by the World Coffee Research (WCR) program and The Regional Cooperative Program for the Technological Development and Modernisation of the Coffee Industry (PROMECAFE), was held in Guatemala in April. The summit gathered together 50 experts including NGOs, government officials, coffee associations and private sector companies to discuss the issues related to coffee rust. Findings from the summit highlighted the extent of the crisis; detailing the obvious impacts upon coffee exports, commodity traders and smallholder coffee communities while also identifying the socio-economic implications such as rural-urban migration, social unrest, environment impacts and food security concerns. Short, medium and long term action plans were discussed and recommended. These included emergency funding and technical assistance, renovation schemes, rust resistant varietals research and increased communication amongst growers. The overarching finding from the summit questioned the feasibility of coffee as major source of revenue for small farmers in Central America and called for research into the long-term viability of coffee growing in the region.

The International Coffee Organisation (ICO) acknowledged the crisis, drafting a Resolution and publishing a report on the outbreak earlier this year. The Resolution identified the severity of the crisis and emphasized the importance of coffee to the region, specifically stating that more than two million Central Americans earn their livelihood from the crop. The report cited official statistics detailing the impact of the outbreak, stating that on average over 50 percent of the coffee growing area in the region has been affected by the disease. It outlined the social impacts of the outbreak, estimating that approximately 374,000 jobs were lost in 2012/13 and predicting that the loss of income to farmers would lead to issues regarding food security. It also made mention of the significant consequences to the speciality coffee industry, given the importance of the region as a source of quality washed Arabica coffees. An action plan in response to the crisis included increased media coverage and political lobbying, technical assistance for growers and access to pesticides, plantation renovation schemes, studies with the World Bank into financial risk management strategies and research into the sustainability of coffee growing in Central America

While the above responses and resolutions seem simple enough in theory, the successful implementation of these action plans depend upon strengthening regional and national coffee associations, undertaking comprehensive research projects, complex bureaucratic coordination and millions of donor dollars. Facilitating international debate and intervention is moving in the right direction, however practical action is required if the region is to overcome the epidemic.

During our recent origin trip to El Salvador we experienced first-hand the devastating effects of the disease and the growing apprehension among the community. Travelling through affected regions, we were confronted with desolate fields with skeletons of trees poking out of the ground. Some farmers were spraying up to six times due to the reduced lifespan of the fungicides. Heavy pruning was commonplace, with many of the trees being reduced to stumps in the ground. Farmers were at a loss with many seriously considering abandoning parts of their farms in pursuit of more profitable crop. Others were hoping that the trees will recover and investing all they could into saving their farms. The number of farmers in affected areas who are solely dependent on coffee as a livelihood was concerning, and demonstrated to us the immense scale of the issue.  

                

After digesting all of this information and personally witnessing the effects of the crisis, we ask ourselves the question – how can we help? While we are halfway across the world and, as previously mentioned are yet to encounter any serious consequences of the crisis; maintaining an educated approach is of utmost importance. This issue not only affects smallholder communities in Central America or those of us who are partial to a Guatemalan Huehue, but the entire coffee industry including green bean buyers. As relationships are such an integral aspect of our business, it is important for us to remain committed to our origin partners in affected regions and to offer what support we can. It is also our role to act as an information resource for our customers and the greater community. Through increased awareness stems debate and zeal, both fundamental to implementing change, and we are committed to playing our part in spreading the word.

With increasing regional (and international) attention on the issue, it is hoped that the effects of the outbreak can be contained coming into the new coffee year and the risk of any future epidemics can be mitigated. We’re crossing our fingers that our next post about leaf rust is a positive one!

Data has been drawn from ICO ‘Report on the outbreak of coffee leaf rust in Central America and Action Plan to combat the pest’, GAIN ‘WCR meeting on Coffee Leaf Rust in Central America’, and WCR & PROMECAFE ‘First International Coffee Rust Summit - Summary of major findings and recommendations’.

Images courtesy of Origin partner farms in El Salvador. All photos by Scott Bennett.
References - SCAA, I&M Smith and SWDCC Market Reports.

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