Caring for coffee in Latin America

Caring for coffee in Latin America


Seasonal worker for Cooperativa Cafetalera Capucas Limitada

05 March | 2014

As part of Oikocredit’s focus on agriculture, it supports various agricultural value chains, in particular coffee in Latin America. Coffee contributes to approximately 36% of Oikocredit’s total agricultural portfolio in Latin America, making it a focus area for investment in many countries. Coffee has been farmed in Latin America for centuries. Recently, this important sector was struck by a fast spreading fungal disease that could devastate farmers and the entire industry. The fungus causes coffee leaf rust, infecting the coffee plant’s leaves, making them fall off and weaken (and in extreme cases, kill) the coffee tree.

In Latin America, an estimated 40% of coffee fields have been affected by rust, with Honduras, Costa Rica and Guatemala having declared a state of emergency due to the impact it had on both the quality of the coffee and most importantly, the socio-economic wellbeing of small producers. Due to the severity of the rust, many producers have been faced with the difficult decision of sacrificing the quality of the coffee by renewing their farms with lower quality varieties more resistant to coffee leaf rust.

This was the case for coffee producing Oikocredit partner, Cooperativa Cafetalera Capucas Limitada, known as Capucas, in Honduras. Capucas produces and commercialises around 110,000 bags of green coffee a year, 95% of which is sold directly to American, European and Asian markets. Capucas has been a partner of Oikocredit since 2010, having received several credit lines to upgrade facilities to meet international demand. Capucas made the decision to continue the production of specialty, high quality coffee varieties to maintain the support from clients in the USA, Europe and Asia.

Oikocredit country manager for Honduras, Gerardo López, said this decision by Capucas required longer-term loans for crop renovation, as coffee plants take around three years before they are ready for their first harvest. “In an effort to support coffee farmers like Capucas, Oikocredit revised product offerings and rescheduled loans for some producers,” said Gerardo. Oikocredit also united with international coffee importer, Sustainable Harvest, to finance a series of workshops and conferences in Latin America focussed on rust management and control. A number of Oikocredit partners have taken a proactive approach by initiating their own rust management programmes. Capucas organized a coffee renovation programme for its members, renewing around 350 hectares of land and providing producers with funds, coffee plants, agricultural inputs and technical assistance. As an expression of solidarity, Oikocredit financed around 60% of Capucas’ programme.

While the threat of coffee leaf rust remains, Oikocredit will continue its support of the coffee value chain, providing partners with financing, training and technical assistance. Capucas expects farmers affected by coffee leaf rust to fully recover their production over a period of three years, as is the case with many other Oikocredit partners across Latin America.

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