Cup of Excellence, Fair Trade, Organic Coffee

Is there a future for coffee in Nicaragua? The Cup of Excellence is more like a lottery than a widely applicable recipe. Meanwhile, with fair trade and organic coffee providing better options, higher prices and new markets, there are still opportunities to be tested and gambles to be taken.

José Luis Rocha

When coffee prices plunged in 2001, the crisis generated widespread panic: two banks went under, others teetered on the brink, farms were embargoed left, right and center, rural unemployment increased significantly and the government reached certain agreements with hundreds of starving families that it has never been able to honor—or perhaps never really wanted to. Since then the groups of hungry and unemployed people drawing attention to their plight by camping out along the highway between Matagalpa and Managua have only increased.

Gourmet coffee and the
search for “hidden gems”

Is there any future for coffee in Nicaragua? While debated on a daily basis, the reflections this basic question generates are loaded with uncertainties. The gourmet coffee market has been perhaps over-hyped by those calling for efforts to salvage the coffee sector and turn the crisis around. It has more than a few enthusiasts... and its fair share of skeptics. In this particular market, producers have to compete with already-established brands and those with greater competitive edges. This makes it essential to implement measures to ensure that the bulk of the profits don’t end up in other coffers, in a market controlled by the eternal big fish.

With an eye to extracting the kind of benefits that Nicaraguan coffee quality deserves, stopping others from getting the lion’s share and exploiting the diversified markets, a group of coffee growers launched the annual Cup of Excellence competition. This event culminates in the certification of quality coffee and an internet auction that provides prices differentiated according to the coffee’s classification. It also appears to offer the chance of starting a dialogue between consumers and producers.

Brazil and Guatemala pioneered this experience, which Nicaragua took up in 2002. In that first year there were 285 participants, of which 23 were selected. The best coffees came from Nueva Segovia and Madriz. Auctioned over internet, the coffee obtained a base price of US$120 a hundredweight, or quintal. To the surprise of almost everyone, the first prize winner broke the record when it was purchased at $1,175 per quintal. The top two prizes were awarded to Eliseo Lumbí and Arturo González, two small-scale growers from Jinotega.

Three rounds of tasting guarantee the quality of the selected coffee. The final round includes the participation of the best international tasters who can detect the most highly prized chocolaty, citric or fruity tastes. Coffee grower Erwing Mierisch, who coordinates the competition’s national committee, stressed that the competition’s basic aim is “to find Nicaragua’s gems, its hidden diamonds; to discover them and make them available not only to the traditional buyers but also to roasters, so they can enter into direct contact with our producers.”

According to the UN’s Economic Commission for Latin America and the Caribbean (ECLAC), 80% of Nicaraguan coffee is eligible for marketing in the specialized coffee markets, but lacks a national identifying seal. The Cup of Excellence is aimed at getting duly identified Nicaraguan coffee out onto the international market and get international traders to recognize its quality. This is a very worthwhile effort in a context in which the big marketing companies are seeking greater benefits by selling lower quality products on a massive scale.

In 2003, some 385 samples were entered in the competition and 38 growers—24 individuals and 14 cooperatives, mainly from Jinotega and Nueva Segovia—were selected. Of those, 7 sold their coffee on the “fair trade” markets. The highest price reached at auction was $705 a quintal, less than half the price achieved a year earlier.

According to a study aimed at revealing the secret of better quality coffee, most of those selected in the 2003 Cup of Excellence concentrate on the caturra variety at an average altitude of 1,185 meters above sea level. They work with few varieties, do soil conservation work, systematically fertilize with moderate amounts, keep their plantations under shade, weed at least twice a year, have access to their own sources of clean water, have pulping machines that are in good working order and ferment their coffee in 24 to 36 hours.
This year 497 producers competed in the competition, and 29 were selected—in other words, more participants but fewer won than in 2003. The first prize went to Daniel Canales, a grower from Estelí. His batch will probably bring in $30,000, providing his business with an excellent boost.

A lottery for the select few

As with any event involving magic, politics, scandal or a lot of money, as is clearly the case here, the media have blown the importance, impact and meaning of the Cup of Excellence out of proportion. Although presented as the salvation of national coffee growing, the Cup of Excellence event is quite a lottery. It involves relative few participants, the rewards drop off abruptly the further down the ranking you are and, above all, a few seconds more or less in the roasting—to mention just one step on the processing ladder—can make an enormous difference in the coffee’s value.

But an even more serious problem is the competition’s elitism. As one organizer put it, “By definition this coffee is for a select public. The demand is small, although it pays well.” In other words, it can’t be reproduced on a massive scale. Gourmet coffee is aimed at a minority public, with a certain palate and income to match. This year a policy decision was made to reduce the number of winners by raising the minimum acceptable quality to 84 points, which explains why the number selected fell from 37 to 29.
The Cup of Excellence only accepts limited harvests, coinciding with the International Coffee Organization’s strategy to reduce the volume of coffee marketed in accordance with quality criteria. In 2003, the minimum weight for participation was 22.5 quintals of export-ready beans and the maximum weight was 225 quintals. The winner of the first prize in this year’s competition entered a batch of just 27.36 quintals.

How much does a cup of coffee cost when it comes from a quintal valued at over a thousand dollars? How many coffee addicts could afford such a price? How long will we have to wait for Nicaragua’s 30,000 coffee growers to obtain the recognition and prize that will change their lives at the current rate of 29 per year?

The Cup of Excellence is not the national panacea, although the fanfare with which it was announced certainly created that illusion. Other, more widely applicable solutions have to be sought that aim for wider markets while maintaining quality.

In the world market:
Some suffer and others have windfalls

Coffee is big business for the processing and distributing companies. Sociologist Orlando Núñez calculates that, at $300 per quintal of processed and packaged coffee, the businesspeople of the industrialized metropolis would make a profit of $140 million on the million quintals of coffee Nicaragua exports.

While the big marketers’ profits have skyrocketed, the benefits received in the producer countries have fallen. Ten years ago, the coffee producing countries earned $10 billion in a market worth $30 billion. But now, with a much bigger market, producer countries don’t even break the $6 billion mark. Coffee growers receive 1% or less of the price of a cup sold in the Starbucks US coffee shop chain and 6% or less of the price of a bag of coffee sold in an English supermarket. And while unroasted coffee represented 64% of the retail price in the United States in 1984, it only accounted for 18% of that price in 2001.

Producers have seen their participation in and benefits from coffee’s chain of value added drop dramatically. According to sociologist René Mendoza, the gross income of a Nicaraguan grower fell from 27.6% of the coffee’s final price in 1980 to 14-18% in 1996. During the same years, the price of Nicaragua’s coffee delivered to the export dock fell from 50.4% to 24.9% of the final price.

Out of the $2.77 that 100 grams of coffee cost in England in 1996, a grower in Jalapa received $0.52, leaving a net profit off $0.22. When prices fall, the producers’ profit margin can even go into the red, as happened in 2001, when it was calculated that growers were losing $0.04 for every 100 grams of coffee. ECLAC calculated the loss at $27 per quintal.

The decline in coffee prices and in the growers’ net profits are two critical factors that make the terms of exchange increasingly unfavorable for coffee growers. Two decades ago, a coffee grower could buy the simplest model of the famous Swiss Army knife in exchange for 9 lbs of coffee. Today, that same knife costs the equivalent of 23 lbs.

Monopolies and big profits:
The world trade giants

The future of thousands of coffee producers is decided at the Coffee, Sugar and Cocoa Exchange Inc. of New York, created to reduce the risks linked to the physical exchange of coffee. The New York Coffee Exchange has become the Mecca for trading in standardized arabica coffee following the failure in 1989 of the international coffee agreement, which regulated that market by means of a system of quotas and price bands. Speculators now go to the Exchange to buy up harvests and wait for favorable selling times. Their transactions are sometimes big enough in themselves to influence sudden price changes.

There are hundreds of coffee roasting and distribution companies in the world, the largest being Kraft, Nestlé, Procter & Gamble, Sara Lee and Tchibo, which together buy up almost half of the world’s unroasted coffee stocks. The first two alone alone buy up a quarter.

Kraft Foods International Inc. (Altria Group) produces foods, coffee and sweets under the following brand names, among others: Aladdin, Altoids, Bensdorp, Carte Noire, Côte d’Or, Fineza, Jacobs, Kaffee Hag, Kaba, Kraft, Lila Pause, Lunchables Marabou, Maxwell House, Milka, Mirabell Mozartkugeln, Miracoli, Nussini, Onko, Oreo, Philadelphia, Ritz, Suchard and Toblerone. In 2002 its sales were worth 76.6 billion euros, leaving it with profits to the tune of 10.6 billion euros. The US multinational tobacco company Philip Morris Company Inc. absorbed Kraft in 1988, then two years later bought the German company Jacobs Suchard, which is the world leader in the coffee market. Kraft’s Maxwell House brand has a sizable share of the US coffee market.

For its part, Nestlé produces foods and sweets under the following brand names, among others: After Eight, Alete, Aquarel, Bärenmarke, Beba, Bübchen, Buitoni, Caro, Choco Crossies, Herta, KitKat, LC1, Lion, Maggi, Milkybar, Motta, Nescau, Nescafé, Nespresso, Nesquik, Perrier, San Pellegrino, Smarties, Thomy, Vittel, Yoco and Yes. Its sales were worth 61 billion euros in 2002, providing it with profits of 5.2 billion euros. According to Austrian journalists Klaus Werner and Hans Weiss, Nestlé is Switzerland’s biggest industrial consortium and, with its 520 factories in 82 countries, the biggest food company in the world.

Nestlé boasts that 3,900 cups of Nescafé are drunk every second in over 120 countries and that it earns a net profit of 30% on the price of its instant coffee. This explains why the coffee business is so attractive for these companies. The Heineken company only made a 12% profit on its famous beer in 2001, while the price of Danon yogurts only provided an 11% profit during the same year and Sara Lee netted 10% on the price of its packaged meats in 2002 and didn’t even hit 5.5% with its bakery goods.

Growers vs. exporters

In Nicaragua, the proliferation of exporters has not improved our country’s negotiating capacity. There are currently 40 coffee exporting firms in Nicaragua, the strongest of which is Exportadora Atlantic, run by foreign capital, which negotiates 25% of national coffee exports. It and the other three companies that move the largest export volumes buy and sell 67% of the coffee exported by Nicaragua. Some exporting firms charge a flat commission of US$1-2 per quintal. In the growers’ view, this commission-based operation, designed to cushion the exporters from the many risks involved, does not help strengthen the community of interests between growers and exporters. In lean times, the exporters are thus not affected by the price fluctuations, provided the overall volume being bought and sold does not fall.

There are other negotiating methods, the most dangerous of which occurs when the exporters also control the coffee processing, a very profitable activity that generates net earnings of $2-3 per quintal. Growers often cannot accurately judge the quality of the coffee they produce and some feel that the exporters adulterate their coffee by mixing it with lesser-quality coffee beans so they can pay them less than they really deserve.

This point alone leads to habitual squabbles and generates a level of distrust that undermines institutions and consolidates underdevelopment. And it lays the foundations for guile in which each link of the chain tries to exploit the rest in order to reap the greatest individual benefit at the expense of their untrusted counterparts. But this friction hasn’t stopped some growers from obtaining what they consider very favorable agreements with the exporters, which include credit and technical assistance, thus generating the desired synergy between different links of the chain.

Fair trade: One of the best options

Fair trade has emerged as a very effective way to increase the growers’ profits. The first fair trade coffee was imported by Holland from Guatemalan cooperatives in 1973. Thirty years on there are 200 coffee cooperative unions in the world made up of 675,000 growers plus 350 coffee companies that meet the standards established by the Fair Trade Labeling Organizations International.

This is a growing and promising alternative. The sale of fair trade coffee on the world market increased by 12% in 2001, even though coffee consumption increased by just 1.5%. Fair trade accounts for over 1.4 million quintals of coffee in Latin America and almost 2.5 million quintals globally. During the 2002-2003 cycle, Nicaragua channeled 85,334 quintals of coffee through fair trade, representing 6.12% of the Latin American and 3.45% of the world totals. The democratization of coffee cultivation in Nicaragua has provided favorable conditions for fair trade. Cooperatives and small-scale producers are very attractive to the institutions promoting this alternative to the conventional market, such as Espanica, a fair trade organization in Spain that distributes coffee grown in Matagalpa and Condega by small-scale growers organized in cooperatives whose land was part of the Area of People’s Property in the eighties.

PRODECOOP: A titanic undertaking

The Promoter of Cooperative Development in the Segovias (PRODECOOP) is one of the most successful coffee cooperatives incorporated into the fair trade markets. It was founded in 1993 and represents over 2,000 small growers belonging to 40 cooperatives. In its 11-year existence it has accumulated an enormous amount of experience that has allowed it to run various programs, develop links with many international organizations and market 37,000 quintals of green coffee in 2002.

Its credit program granted nearly $150,000 in short-term loans to its associates during the 2001-2002 cycle, and since 1998 it has disbursed $93,000 in housing credits and 57,000 for wet processing plants, as well as financing the renovation of just over 376 manzanas of coffee plantations belonging to the growers most affected by Hurricane Mitch (1 manzana = .7 hectares).

In 2002, PRODECOOP was worth over a million dollars. Part of this is being invested in training small-scale coffee growers in credit, production techniques, strategic planning, gender approach, social support and organic agriculture. It invested nearly half a million dollars in a dry processing plant, which has made it independent of the big processors. The plant now has bean sorting machines and other equipment that enable it to guarantee the quality of its coffee and to win two prizes in the 2002 Cup of Excellence.

Fair trade = higher prices

The price fetched by fair trade coffee is considerably higher than the one set on the New York Exchange. With the average price in the 2002-2003 cycle at $68.93 a quintal, PRODECOOP and another fair-trade linked association of northern coffee producing cooperatives (CECOCAFEN) respectively paid $110 and $104.76 per quintal. The average prices paid out by CISA and Atlantic Exportadora, both big exporters, were $71.15 and $64.94 per quintal, respectively.

Fair trade’s relatively captive clientele means that the price difference between fair trade coffee and the coffee on the New York Exchange becomes even greater in times of crisis. In 2001, with an average national price of $60.22 a quintal and CISA and Atlantic offering no more than $56, the Union of Agricultural Cooperatives (UCA) paid $87.15, PRODECOOP $80.25, CECOCAFEN an average of $99.61 and COSATIN, a cooperative from Boaco, as much as $104.

The weight of these exporting firms is increasing significantly. CECOCAFEN and PRODECOOP respectively account for 3% and 2.4% of Nicaraguan coffee exports, making them the country’s seventh and ninth biggest coffee exporters.

For David to beat the Nestlé Goliath...

There is still much to be done to improve the fair trade system. For example, the producing countries need to sell more roasted coffee. Almost 100% of the coffee that passes along the fair trade chains worldwide leaves the producing countries as green beans. Companies from industrialized countries always dominate a good part of the process: the buying of green coffee, relations with the shipping companies, roasting, grinding, publicity and distribution to the retailers. This is one of the factors impeding the growers from receiving a more significant percentage of the final price.

While the grower receives 8% of the final price in the traditional coffee chain, some of the fair trade companies offer them only 8.4%. The advantage for the grower comes from the higher final price—almost a dollar more per 100 grams of retail coffee. In other words, the fair trade companies offer the growers a higher price based on the mark-up paid by consumers, not on the profit margin, as in the traditional chain. In fact, the scale of operations of fair trade companies keeps their unit costs higher: while Nestlé controls 87% of instant coffee sales in the United Kingdom, Cafédirect sells just 1.5%.

Fair trade also has its work cut out with respect both to informing its consumers just how the benefit really gets back to the producers, and to quality, which is sometimes reduced by fraudulent practices during processing in the country of origin. It should also seek to outperform the traditional chains in its storage networks, offer of credit and timely payment and should improve the growers’ cash flow to enable them to buy products such as maize when prices are at their cheapest. By correcting these and other weaknesses, the small David of PRODECOOP/Cafédirect will be better able to take on the Nestlé Goliath and may even have a greater possibility of defeating him.

Coffee with a gender agenda

Another fair trade experience in Nicaragua is the Society of Small-Scale Coffee Producers and Exporters (SOPPEXCCA), in which women play a very relevant part. Founded in 1983, this union of 12 cooperatives is currently seeking better prices for its members’ coffee in the fair trade arena. Its 450 members, 200 of them women, each own between 1.5 and 3 manzanas of coffee producing land. All of them live in dispersed communities in the mountains around Jinotega City, where some of Nicaragua’s best coffees are produced.

SOPPEXCCA runs a training program on organic agriculture, an education program for young cooperative members and another program that supports recently formed women’s cooperatives. Having recovered from fraudulent administration that left them with a $700,000 debt and a sullied image, they exported four containers of green coffee from the 1999-2000 harvest, the first time they registered as SOPPEXCCA. They hope to export as much as 25 containers of green coffee from the 2003-2004 harvest to the United States, Germany, Italy, Austria and France.

“We’re working to make the transformation from traditional to ecological coffee,” explained SOPPEXCCA vice president Víctor Manuel González. “We’ve demonstrated that the cooperative model is a good one if it’s run transparently and efficiently. It’s the leaders and administrators we’ve had who’ve been bad and harmful. If it wasn’t for Fátima Espinoza, the manager we have today, we wouldn’t be where we are.”

Women are also showing a particular talent for coffee tasting. After taking various intensive courses, Marbelí García López is now recognized as one of the best coffee tasters in the world at the tender age of 23. She was first invited to work as a coffee taster for SOPPEXCCA and was later on the national jury at the 2002 Cup of Excellence. She then traveled to Norway to participate in the Coffee Fair there and to Brazil where she was an international judge at its Cup of Excellence 2002. During that event she placed third among the international tasters. This young woman from the community of Puertas Azules in the department of Estelí is now the main guarantee of the quality of coffee grown and exported by SOPPEXCCA, whose members have placed three times in the Cup of Excellence competition.

The organic coffee fad

Another widely reproducible option for pulling the country out of the crisis is organic coffee. Nicaragua’s cultivation of organic coffee was initiated in the coffee farms on the slopes of Granada’s Mombacho volcano at the end of the eighties by the then state-run “Mauricio Duarte” company. When the company was turned into a cooperative and joined the Union of Agricultural Cooperatives (UCA), the UCA and the National Farmers’ and Ranchers’ Union (UNAG) assumed the promotion of this method. The Nicaraguan Environmentalist Movement (MAN) provided the certification, technical assistance and marketing contacts.

A few years later this form of cultivation was adopted by two cooperatives on the San Cristóbal volcano in the department of León, five cooperatives on the Carazo plateau and 12 cooperatives in San Juan de Río Coco in Madriz. According to a survey by UNICAFE, 16.91% of the country’s coffee farms are currently run organically. If this sample is representative, there are around 5,000 organic coffee farms in the country. The departments of Nueva Segovia and Madriz are particularly notable for their organic coffee farms. Small and medium farmers are the only devotees of organic coffee, as it suits their particular situation, which is long on family labor but short on money for agrochemicals. The big producers’ costs skyrocket if they invest in the work required for organic crops.

Forced by circumstances

Organic coffee had a predecessor in “natural” coffee, a form of agriculture that many producers were forced to take up because of circumstances, particularly problems involved in getting hold of and paying for agrochemicals. The “Pedro Joaquín Chamorro Cardenal” and “Armando Gutiérrez Pérez” cooperatives in Carazo quit using agrochemicals in 1983 to reduce production costs in light of the increase in agricultural input prices and their fear of intoxication. The Pancasán Cooperative on Mombacho gave up chemicals in 1989, when they became a cooperative and were awarded state lands. The reduced credit availability imposed by the Central Bank to bring down inflation was a decisive factor in their decision to dedicate themselves to the organic fad.

One of the most successful examples of organic coffee cultivation is in San Juan de Río Coco. Many of the zone’s coffee growers abandoned their farms during the war and returned at the end of the conflict to find their plantations completely overgrown after over five years devoid of management. Such events, added to the difficulties in obtaining credit under the new market economy with its liberalized banking system, led many producers to try to run their coffee plantations without agrochemicals. Unaware that they were on the path to organic production, they viewed the situation as making the most of a bad situation until the NGO Cenzontle informed them of the advantages of organic coffee in the international markets.

The Nicaraguan Environmentalist Movement certified their coffee as “natural” rather than “organic,” but after they joined the UCA in 1990, they exported 375 quintals of organic coffee. This incipient success encouraged them to extensively reproduce the experience and seek certification from important international institutions such as the International Federation of Organic Agriculture Movements (IFOAM), the agency responsible for governing the global movements of organic production. They later linked up with the Association for the Improvement of Organic Products (OCIA International), which runs one of the biggest certification programs in the world. The multiplication of certifying entities has brought with it a reduction in certification costs.

Five-tier coffee plantations

The challenge for organic coffee growers has been to increase the yields from just 1.5 to 6 quintals per manzana, which is the national average. In seven years they have managed to achieve close to 4 quintals per manzana, but to do so, they had to change from natural to organic coffee, which involved a lot of work. As grower Claudio Hernández from San Juan de Río Coco put it, “The important thing in the struggle to improve production is not to sit back, which we’re no longer doing, but were back then, when we were pinning our hopes on natural coffee.” With time, Hernández and many other growers became experts in the use of green fertilizers, crop rotation, incorporation of organic matter, soil conservation techniques such as contour plowing, seed selection, shade regulation, the breeding of worms and organic control of pests and diseases.

Projects that aim for harmony between coffee growing and the environment propose incorporating coffee plantations into a five-tier diversified forestry system. The highest tier is a layer of tall wood-bearing trees that provide shade for the coffee bushes and can be profitably managed in a way beneficial to the ecosystem. The second is made up of species that provide, firewood and fruit as well as shade. The third involves interspersing coffee furrows with plantain or banana trees, as well as avocado and citric trees to provide food and short-term income for the family. The fourth tier contains the coffee bushes and the fifth the plants that immediately cover the soil, protecting it, preventing erosion and providing organic matter.

This form of coffee growing includes integrated pest management, agroforestry combinations in harmony with the different coffee growing zones, improvement of the tropical biodiversity, natural forestry management, recovery of water sources and treatment of the waste water from the coffee processing. In addition to catering to the environment and health, organic coffee growers have a real economic incentive: the organic model avoids dependence on imported agricultural inputs and thus shields them from the increasingly unfavorable terms of commercial exchange.

Nicaragua: A leading organic light

In the 2002-2003 cycle, Nicaragua produced 62,843 quintals of organic coffee. Since the mid-nineties, it has been one of the main organic coffee exporters, accounting for 6.8% of world production. The only countries exporting more are Mexico (20.5%), Guatemala (9.6%) and Kenya (9.6%), three of the countries with the greatest volume of coffee production and number of inhabitants.

Latin America currently produces only 1.29 billion quintals of organic coffee from 221,778 manzanas of land, with an average productivity of around 5.8 quintals per manzana. The yields in Nicaragua are slightly below that average so it can be estimated that there are around 10-11,000 manzanas of organic coffee. The production of organic coffee in the 2002-2003 cycle represented almost 6% of national production. While that is a good level, it means there’s still a long way to go and many conversions to be undertaken.

In any case, there’s a need to act quickly, because the market has its limits, its logic and its trends. German, British, Dutch, Austrian and Italian companies buy organic coffee and pay the international market price plus a 10% mark-up for natural coffee and a 30% mark-up for organic coffee. This mark-up can even go higher. In the middle of the crisis, with an average price of $60.22 per quintal in Nicaragua, the Union of Organic Coffee Producing Cooperatives (UCPCO) paid $144.51 per quintal. That was a strong incentive for more growers to take up the idea. But a slight drop in growth can already be detected in the main consumer markets, causing a reduction in prices. The supply is starting to overtake demand and Nestlé is already selling organic instant coffee in England on a massive scale.

Increasing awareness
and developing a new palate

Increasing demand implies increasing awareness. Some propose opening new markets in eastern Europe and Asia, but perhaps we should also turn more of our attention and our coffee toward the national market. For now virtually all of the organic coffee produced by Nicaraguan coffee growers is exported. There is no campaign aimed at making the national consumer appreciate and reward this product, nor has any attempt been made to develop an ideological or ethical palate in Nicaragua for improving health and respecting the environment. Mexico and Brazil are magnificent examples to copy, as they respectively reserve 52,920 and 39,690 quintals for domestic consumption. In terms of production, we’re not doing at all badly, producing almost half as much organic coffee as Brazil, the world’s coffee giant. But the big problem is the absence of domestic consumers. The challenge is to turn that absence into an opportunity.

Those in favor of increasingly gambling on fair markets and organic coffee know that the current battles are focused on the search for new market niches offering non-standardized merchandise, such as healthy and environmentally friendly products (the organic niche), ethical products based on solidarity with the most vulnerable (fair trade) and high quality products. The struggle is not being waged in the arena of cost reduction through massive serial production, but rather made-to-measure products tailored to the consumer’s own particular taste. For example, three unions of cooperatives in Nueva Segovia and Madriz have banded together to subcontract a local company to roast, grind and package their organic shade grown coffee—with the option of grinding organic cinnamon or cardamom seeds into it—then market it nationally through a peasant-owned distribution cooperative called Nicaraocoop under the label VIDA, productos naturales y orgánicos. So far they have only exported their coffee green, but are now looking to break into the European export market for these special roasted varieties.

The income boom in developed countries, added to a growing awareness of the situation of coffee growers and the effects of certain agricultural practices on the environment, is segmenting their markets and paving the way for consumers with a more distinguished palate and guided by ideological factors who can also afford to cater to their interests. Certain Nicaraguan growers are already exploiting the growing market segmentation resulting from the diversification of consumer taste. Public policy makers, researchers and journalist, among others, could help by turning their attention and efforts towards such experiences, which are much more promising than the much publicized Cup of Excellence.

José Luis Rocha is a researcher for Nitlapán-UCA and a member of envío’s editorial council

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