Second only to petroleum, coffee is the largest traded commodity on the world market, playing a colossal roll in the US and world economy. With an estimated 11 million hectares of the world’s farmland dedicated to the cultivation of coffee, more than 25 million farmers work in 50 different countries to produce the global supply.

Within the US, coffee is a mammoth when considering the domestic consumer market – the US’s largest food import, with approximately 130 million Americans consuming 1/5 of the world’s coffee. With much to gain, the market is controlled by giant producers and international financiers, with the major players being the familiar names of Philip Morris (Maxwell House), Proctor & Gamble (Folgers and Millstone) and Nestle Company.

Purchasing primarily from Brazil, Colombia, Mexico, Guatemala, and Vietnam, the US coffee market purchases more than 2.72 billion pounds annually, presumably indicating a highly beneficial trade level between the US and other economies.

The reality, however, is quite different, as increased production has led to a saturated market, in turn driving the price to rock bottom.

Global Collapse
The recent collapse of world coffee prices has pushed millions of families in nearly 50 countries to the brink of starvation and economic ruin. Comparing the average price of ‘green’ coffee, according to the International Coffee Organization (ICO), coffee prices over the past couple years are the lowest they have been in a century. Using the peak price of $2.02/lb for the 1990’s, the average price per pound in the last several years has stagnated at around $.50/lb.

The reason for such dramatic price declines, many indicate, is an excess supply of coffee on world markets. Production has grown dramatically in recent years, even in countries with existing high levels of output. Since 1995, Brazil has increased its production by 61%; Ivory Coast by 67%, and Indonesia by 36%.

However, the largest increases have come from Vietnam, a country hardly acknowledged as a coffee producer even 15 years ago. Since 1995, it has increased its production by 293%, making it the second largest producer in the world after Brazil (ICO 2007).

Guatemala ~ Case Study
Particularly in Guatemala, a country with a significant percentage of its population living on coffee plantations, low coffee prices signify even poorer living conditions. As global coffee prices have lowered, large coffee producers have been under constant pressure to cut costs.

A recent study of plantations in Guatemala showed that over half of all coffee pickers don't receive the minimum wage, in violation of Guatemalan labor laws. Workers interviewed in the study were also subject to forced overtime without compensation, and most often did not receive their legally-mandated employee benefits.

The study concluded that the total average income reported per family was approximately ($127.37/month), compared with the monthly cost of the basic food basket for a family of five : ($171.37), according to data published by Guatemala's National Institute of Statistics.

Small Coffee Producers
Beyond the great coffee plantations there are thousands of small coffee farmers who own their land. Traditionally, the only way to get their product to market is to sell to middlemen called “coyotes” who pay below the market price. As such, many coffee farmers receive prices for their harvest that can be less than the costs of production, forcing them into a cycle of poverty and debt.

The problem faced by small growers is the absolute lack of control over any aspect of the coffee market except for their small holding. The stages that follow the picking of the berries off the tree are handled by others - the giant finca (plantation) to whom they might have to sell at take-it-or-leave-it prices, large processors in-country, or multinational agribusiness giants.

Every step, from processing the beans, to transporting, roasting, blending, packaging, advertising, and retailing, generates value added for someone other than the local farmer. For this reason, small growers receive only pennies from the final product.

Small is Beautifull ~ Juan Ana Coffee
The Juan Ana Coffee program works to alter the situation in which many small Guatemalan coffee growers have found themselves. The project, run and owned by the San Lucas Mission, provides adequate, sustainable living for coffee farmers by paying fair, consistent wages for their coffee, regardless of the market value. In turn, these farmers provide the project with only the highest quality coffee.

Promoting the integral development of the community as a whole, the Juan Ana Coffee program is unique because of the role it plays in community-wide economic development. Coffee is but one program of many – including education, health care, housing, land development, potable water systems, fuel-efficient stoves, reforestation, and experimental farming.

Together, these programs work to liberate families from the crushing poverty associated with life on the coffee plantations.