Student Research: Stronger Links: Strengthening the adaptive capacity of Guatemala’s coffee supply chain

by Adam Houston (MIB 2017)

A leaf affected by drought and coffee rust at high altitude in Chimaltenango district

As the climate changes, so will the coffee industry. In Guatemala in particular, the amount of suitable land for growing coffee and the livelihoods of thousands are projected to change profoundly due to climate change. According to current models, increasingly unpredictable weather patterns, increased temperatures, and extended reach of traditionally lower-altitude diseases like coffee rust are likely to be proof of this change, reducing yields for approximately 93% of Guatemala’s current coffee growing land by the year 2050. As the country’s third largest export, this threat to coffee will have a very real economic affect on the country’s GDP; the ability — or lack thereof —  to adapt to these predicted changes will threaten the livelihoods of the more than 100,000 largely smallholder coffee producers. Without the financial means or technical knowledge to adapt to a changing climate, or even a more basic recognition of the gravity of the threat itself, the entire value chain of the Guatemalan coffee industry faces a bleak future.

To better assess the links among actors in this value chain, I traveled to Guatemala to interview smallholder farmers, large-scale farmers, exporters, traders, and experts in the country’s national coffee association, Anacafe. These cases help paint a more holistic picture of what the greatest obstacles are to better adaptation as a form of prevention.

My research took me to Guatemala City and the surrounding states of Chimaltenango and Sacatepéquez, where I spoke with various actors about their response to climate-induced crises like the outbreak of coffee rust six years ago that destroyed 25% of the country’s crop and the much more recent drought. A common theme arose in these meetings that Guatemalan coffee is reactive, rather than proactive in regards to climate events. When the coffee rust outbreak started, Anacafe began more research into the early signs of coffee rust and the best treatment methods at different altitudes and in varying micro-climates. Large-scale farms had better access to information than smaller farmers and were able to afford necessary fungicides, but there was no precedent or literature to guide them. Smallholder farmers had even less access to information about the gravity of the outbreak, and were caught even more off guard by both the outbreak’s length and severity, and had little recourse as a result. Each link in the chain began to look for more creative solutions, but among all actors the missing link was access to information.

Anacafe headquarters in Guatemala City

The large-scale farms, or fincas, claimed that more information was needed, and pointed to Anacafe to provide it. The smallholders I spoke with, however, looked to each other. One, who asked that I withhold his name for fear of retribution, claimed that Anacafe was only for the elites and didn’t have the resources or the will to help a smallholder like him, so he had to look to his farming cooperative for help. When I asked Anacafe about this burden of responsibility, the representatives I spoke with were surprisingly frank about the organization’s shortfalls, but were committed to fill these gaps in coverage by working smarter.

In 2017, they plan to launch an app called Coffee Cloud that will push new research, recommendations, and climate data to anyone with a phone, so that they will be better warned when climate conditions begin to mirror those leading up to past droughts, diseases, or pest outbreaks. It is the most that the organization can do with a budget that is, compared to other Central American coffee-producing countries like Honduras, inadequate. To fund the 70 technicians (i.e. approximately one technician for every 1,430 coffee producers) that Anacafe uses to advise and train producers, a 1% tax (roughly 6.65 million USD) is levied on all coffee exports. In contrast, Honduras’s analog organization collects 6% (46.96 million USD).

Whether this disparity in funding can provide a better service is beyond the scope of my research, but my time in Guatemala showed me that without ingenuity and better preparation, the country’s value chain will be much less valuable in the coming decades.

Adam Houston is a 2017 Master of International Business candidate at The Fletcher School.

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