Finca La Perla, an isolated farm located in the Western Highlands of Guatemala, was founded in 1895 by the Arenas family.
Ricardo Arenas now runs the business with his nephew; he divides his time between La Perla and Guatemala City where he was until recently President of Anacafé, the Guatemalan Coffee Association, as well as President of the Rural Coffee Foundation. In 2020 the President of Guatemala appointed Ricardo as ambassador of Guatemala for all issues related to coffee and asked him to be the Presidential Commissioner for the prevention and eradication of the child labour in the country’s coffee sector.
How important is coffee for Guatemala?
It is very important. Coffee is the only agricultural activity that is in all 22 states – departments – in Guatemala. It is the biggest employer in Guatemala.
There are about 125,000 coffee producing families in Guatemala, all living in rural areas. With between five to nine people in each family, this adds up to about one million people who depend directly on coffee. Of those 125,000 families, 121,000 are small producers.
Coffee used to be our country’s number one export in terms of dollar revenues, but sugar has recently taken that number one slot. And now, I have to say, the main source of dollars for the country is remittances from our more than 2 million emigrants, working mainly – and legally – in the US.
Coffee is obviously important in many producing countries in Latin America and Africa, but for Guatemala it is essential. I would go as far as to say that the country’s social and political stability depends on coffee.
Are the 125,000 coffee-growing families able to live with these low coffee prices, or are they suffering?
They are suffering.
We have had a perfect storm these last 10 years. We won a battle against coffee rust disease in Guatemala in the 1980s, but new varieties of rust have been appearing in the past ten years. This is a challenge.
The currencies of both Brazil and Colombia are very weak; this is helping their agricultural exports and means that even with the world price so low producers there are covering their costs. They are happy with world prices at these levels. Guatemala has a very strong currency. This is a big problem for us.
Another problem is that with the exception of Costa Rica and Panama, we have the highest minimum wage of all the countries of Latin America. Even so, we have difficulty in getting labour. Coffee is a labour-intensive crop, but Guatemala has lost a lot of labour through emigration to the US, and also because of the labour demand of Honduras to pick their coffee crop.
The low international price is obviously the main problem. Many of our coffees are speciality coffees that trade at a premium to the world price, but I would say that 95 percent of our growers are suffering. Coffee prices in dollar terms are the same today as they were in 1983, but a dollar then is worth only 63 cents today.
Our production costs are higher than the current world coffee price and higher than other coffee producing countries around the world. Our costs are between $ 2.00 and $ 2.50 because of our minimum wage, strong currency, financial costs and higher taxes. The cost for Central America producers is between 1.75 and $ 2.00 per pound.
Coffee production in Guatemala is not economically sustainable. This is for sure. If the international market — buyers, roasters — want our farmers to keep producing coffee, then they will have to pay us a price that makes it economically sustainable.
Is child labour a problem in Guatemala?
Earlier this year, the UK’s Channel 4 Dispatches programme found children as young as 11 or 12 working long hours in a couple of Guatemala’s coffee farms. As a result of that programme our President has set up a commission to look at this issue; he has asked me to head it. We will be reporting back to the President soon. We still have child labour, and we have to be honest and recognize it, but it’s caused by poverty.
We have poverty in the rural areas of Guatemala. Many farmers can’t afford to pay outside workers to pick their coffee, so their children do it instead. Child labour is linked to poverty, and that goes back to the price that buyers are willing to pay for their coffee. If coffee prices were higher, we would have less rural poverty.
Child labour is an economic issue as much as a social issue. I am not against the roasters and the coffee shops from making money, but they must allow producers to make enough money to support their families without their children having to work on their farms.
Thank you, Ricardo for your time and comments!
© Commodity Conversations ® 2020
This is a brief extract of an interview that will be published in full in my upcoming book Merchants & Roasters – Conversations over Coffee