Wormhole Coffee Log: Mexico

Mexico, this month’s regional profile, is the seventh largest producer of coffee in the world, and the number one producer of organic coffee by volume. Organic, Fair Trade, and Shade Grown coffee all fall under the category of sustainable coffee. The difference between these and what we at the Wormhole, as well as many thousands of roasters and retailers throughout the world, consider to be specialty coffee, is that there are almost no qualifications regarding quality when it comes to sustainable coffee. Specialty coffee, on the other hand, has no environmental or ethical prerequisites, but is simply coffee of a higher level of quality in all links of the market chain – production, roasting, and preparation. Organic coffee has nonetheless made a huge impact on the way people perceive and consume coffee in the past ten years, and has drawn much needed attention to the places and people from which it comes. In Mexico, the organic method and the Fair Trade market system have been adopted so widely by farmers that most of the information I was able to find for this article was written about these particular demarcations of coffee. Because the future of coffee farming, across the entire spectrum of quality, is affected by the same forces that are causing farmers to adopt these methods, in this article we will be mainly focusing the organic movement in Mexico, its history, and its concurrent impact on specialty coffee.

The Geography & The Beans

Being so far above the equator, Mexico does not have the best geography for coffee production in terms of basic growing requirements, with the exception of the southernmost provinces, most notably the states of Veracruz, Oaxaca, and Chiapas. Chiapas is responsible for the majority of the specialty coffee on the market today, followed by Oaxaca (see sources below). 98% of coffee grown in Mexico is of the Arabica sub-species, with the most common varietals being Bourbon, Mundo Novo, Caturra, and Maragogype. Specialty coffees of notoriety are mostly grown in the southeastern corner of the country, in the mountainous regions that border Guatemala, and share many of the same flavour qualities as good high grown Guatemalan coffees. The coffees from this region are typically light in body, with mild chocolate and floral notes, and crisp acidity. The name ‘alturra’ is used in Mexico to indicate high-elevation coffees. Most Mexican coffee, over 82% in one study, is processed using the washed method. The majority of high quality coffee you’ll see from this region uses this processing style, as it tends to have greater consistency and less defects. Due to water shortages and conservation concerns, some Mexican coffees are processed using the semi-washed, or pulped natural method, as it is sometimes called, which uses about a third of the water as traditional washing techniques, and typically has more body and slightly less acidity than fully washed coffees.

The People & The Market

With most of Mexico’s over half a million coffee farmers growing on less than 12 acres of land, it is a working population that sees subsistence as its primary motivator. The efforts of a whole year’s worth of labor are often traded for less than a family needs to survive, leaving many coffee farmers struggling. Chiapas, the state responsible for producing the majority of the country’s specialty coffee, at over 40% has the highest rate of malnutrition in all of Mexico. In more recent history, with so many families losing members to migration, the cost of labor has increased, which already represents about 90% of the cost of production for most farmers. Many coffee farmers lacking access to cooperatives and without means of transportation end up selling their coffees at below-market prices to intermediaries, or coyotes as they are called in Mexico, most of whom work for foreign multi-national corporations.

To give this rather depressing set of facts some historical precedence, in the late 80’s the Mexican government abandoned a state-run coffee institution that had been primarily responsible for the commercialization and export of coffees by smallholders. By the early 90’s, all state-owned coffee processing plants were closed and power was transferred to farmer’s co-ops and the private sector. This transition was difficult and fell at a time when coffee markets around the globe were suffering from over-saturation due to the United States pulling out of (and thus effectively killing) the International Coffee Agreement. The ICA, which regulated how much coffee was to be allowed onto the global market at any given time and by whom, kept countries from flooding the market when they had excesses, keeping market prices relatively stable. Between ‘89 and ‘93, during this time of global deregulation, coffee production in Mexico fell by over a third with a corresponding loss of farmer income of 70%. As a result, many farmers turned to organic and fair trade methods in an attempt to stay afloat in a sinking market. This fallout, which was affected in part by actions on the international level, in particular those of the United States, is key to understanding why Mexican farmers have taken this distinct approach to keeping their livelihoods viable in an unstable market. For example, from 1985 to 1995, the United States, the main international buyer of green coffee from its southern neighbor, saw the retail price of coffee increase by 30%, while during that same period the amount of money per dollar that went to producer countries went from $.38 to $.23, a 40% reduction. This time period saw increasing grower unrest and the advent of the organic and Fair Trade movements as we know them today.

Organic A Struggle

Because the organic movement in America has been broad and at times vague in its approach to consumers, and since more than half the specialty coffee from Mexico is organic, understanding what defines a product as organic is an important step in appreciating this region. Like all agricultural products sold in the United States that are certified organic by the USDA, organic coffee must follow certain guidelines regarding its cultivation and processing that are environmentally sustainable and safe. These include, for example, using only organic fertilizers instead of petrochemicals, implementing crop rotation, ensuring the proper handing of waste materials, and in general following procedures that will maintain or improve the natural resources of the area under cultivation. Organic coffee must be produced, processed, shipped, roasted, and retailed under strict guidelines in order to carry the little green sticker. Organic coffee must not come into contact with commercial coffee, even residually, meaning roasters cannot roast an certified organic coffee directly after roasting a commercial one – they must roast a ‘buffer batch’ in between, that cannot be sold as organic, to essentially ‘purify’ the roaster of the harmful residues of the commercial beans. Some of these standards can be difficult and costly to follow, especially for growers, such as ensuring the coffee does not come into contact with any equipment, materials, or surfaces that are not compliant with the organic standard, for example the bags the coffee cherry is picked into and the tables on which it sorted. Many farmers also struggle with the certification fee – $350 a year – as well as finding a buyer for their organic coffee, a large percentage of which ends up being sold to commercial exporters for lack of a buyer.

The organic market, like the commercial one, has its own fluctuations from year to year, and may not provide enough of a price incentive for some producers for whom the transition to and regulations of organic production come at too high a cost, such as the poorest farmers and those without co-op membership. Instead of, or frequently in addition to, the organic market, many farmers choose to sell their coffee as Fair Trade, a label distinct from organic but emerging from the same concerns regarding commercial practices and market instability. Fair Trade coffees are guaranteed a price-per-pound that does not change from year to year, allowing farmers to avoid the risk of losing everything on a bad year. Additionally, the regulatory agencies that oversee Fair Trade co-operatives provide premiums above the FT price for those organizations that give back to their communities by investing in improvements in such things as roads, schools, and social infrastructure. The drawback is that when the conventional market value goes above the FT price, as it has done the past couple of years, farmers can potentially lose money, discouraging growers and which may dismantle the long-term development plans of many communities. Many have criticized the Fair Trade system for failing to bring communities out of poverty, claiming that they hold them at a certain level where they are essentially treading water. Fairtrade International, the umbrella agency that oversees roughly 20 partner agencies in countries around the globe, in response to market conditions as well as these and other criticisms, has recently announced an overall raise in the Fair Trade minimum price, up from $1.26 to $1.40 for washed Arabica, increases in premiums for Fair Trade coffee that is also grown organically, and additional premiums for community development.

Not All Buzzwords Are Bad

Shade grown coffee, another buzz word that emerged in the early to mid nineties, was created in response to growing concern, mostly from consumer nations, about the damage to ecological diversity, in particular bird species, that is caused by certain cultivation techniques. When coffee is grown in open fields without natural shade, many animals that normally inhabit these regions can no longer survive for lack of food, shelter, or due to environmental toxins that are introduced due to coffee production. Farmers in Mexico have traditionally grown coffee using shade trees as a way to control the development of the coffee’s growing cycles, meaning Mexican coffee farms generally exhibit greater biological diversity than coffee from other countries, such as Costa Rica, who rely heavily on petro-chemicals and more robust varietals such as Catuai, which can handle direct sunlight. Many of these cultural-environmental factors that already existed made it relatively easy for Mexican farmers to convert to sustainable production methods, since their practices were passively organic from the beginning.

Organic and Fair Trade coffees, although offering price stability and environmental and community benefits for those who are able to participate, are still highly reliant on intermediaries, often require costly certification processes, and are not available to all farmers. Buyers for these markets, motivated by consumer demand, are also increasingly concerned with quality, something many growers are unaware of or uneducated about and for which there is an increasing need for outreach and grower education. Specialty coffee offers the greatest farmer compensation of all the various markets, however, Mexico has not turned to increased quality as a source of farmer profits the way other Latin American countries have done, instead relying heavily on the organic and Fair Trade models. With the best tasting Mexican coffees keeping stride with their southern competition, one can only hope that there will be more efforts made to increase grower awareness and support so that more of us here in the US can enjoy them as both organic and delicious.

Sources:

Hernandez, Gabriel, and Mark Ford. United States, Department of Agriculture, Foreign Agriculture Service. Mexico Corners the Market on Organic Coffee Production. Global Agriculture Information Network, May 2010. Link here.

Eakin, Hallie, Catherine Tucker, and Edwin Castellanos. “Responding to the Coffee Crisis: A Pilot Study of Farmer’s Adaptations in Mexico, Guatemala, and Honduras.” The Geographic Journal, Vol 172, No. 2, June 2006.

Beadle, Kristian. “Chiapas Coffee: Price, Politics, and Precipitation.” Miller-McCune. Oct. 25, 2011. Link here.

Dill, Mike. “From the Ground Up: Organic Coffee Certification, Production, and Processing.” Coffeetalk Magazine. Nov. 2009. Link here.

Clay, Jason. World Agriculture and the Environment: A Commodity-by-Commodity Guide to Impacts and Practices. World Wildlife Fund. Island Press, 2004.

Calo, Muriel, and Timothy A. Wise. Revaluing Peasant Coffee Production: Organic and Fair Trade Markets in Mexico. Global Development and Environment Institute, Oct. 2005. Link here.