Global Coffee Crisis
USAID's Response to the Global Coffee Crisis
 Coffee Branch with Cherries |
USAID is providing resources and coordinating initiatives to address the worldwide coffee crisis. Currently, USAID supports coffee activities in over 25 countries in Latin America, Africa, and Asia.
USAID Coffee Activities work to create sustainable small-holder coffee systems, which provide significant income, employment, social, environmental, and consumer benefits. Where potential exists for farmers to effectively compete within the coffee sector, USAID is working to improve local capacity to produce and effectively market high quality coffee thereby increasing the price farmers earn for their product. At the same time, USAID programs assist farmers that cannot effectively compete within the coffee sector to diversify their activities and identify other sources of income.
Latin America and Caribbean:
When combined with the drought that has plagued many parts of the region, the coffee crisis has added substantially to the region's poverty, malnutrition, and food insecurity. In FY2002, USAID provided $10.1 million in emergency drought assistance.
A new Central American Initiative will provide $8.5 million in FY 2002 and $30 million in FY 2003 to assist Central America and Mexico in realizing opportunities for trade, investment, and rural economic prosperity. This initiative aims to stimulate public and private partnerships throughout Central America and Mexico and create opportunities for agricultural diversification and off-farm employment among the region's poorest inhabitants.
On August 30th, 2002, USAID signed a Quality Coffee agreement with Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, the Dominican Republic and Panama. Under the terms of this agreement, USAID will provide $8 million dollars for a market-based program to assist small and medium coffee producers to improve coffee quality, form new business linkages, secure longer-term contracts with the specialty coffee industry, and identify and implement diversification options for producers that cannot be competitive.
In Colombia, USAID is helping mitigate the present situation by beginning a $7 million 5-year effort on specialty coffee activities in opium poppy and coca cultivation areas. USAID's partners are working in partnership with the Coffee Quality Institute (CQI) and the Specialty Coffee Association of America (SCAA) on coffee quality and market access activities.
This funding for the Latin America and Caribbean region is above and beyond what USAID already spends to help small scale coffee farmers in the region as part of its agricultural program.
Africa:
In Africa, USAID's regional program is working to strengthen the East Africa Fine Coffee Association's (EAFCA) ability to enhance the quality, competitiveness and profitability of the Eastern African coffees in global markets and improve incomes for rural producers. EAFCA was established in 2000, and now boasts 70 members from 11 countries including local producers and exporters, government coffee boards, North American and European importers, the International Coffee Organization (ICO). In 2002 EAFCA conducted the first regional cupping competition involving 26 fine coffees from four countries; launched the first Internet auction of East African fine coffees, and developed a web-site (www.eafca.org) providing market information for the region. Currently, USAID is helping EAFCA establish a regional appellation system for East African coffee.
In addition, USAID bilateral missions are involved in coffee activities in Ethiopia, Rwanda, Tanzania, Uganda and Zambia. In Ethiopia, USAID has assisted in the reorganization and re-registration of over 50 coffee cooperatives and the formation of three coffee cooperative unions. One union is now certified "organic" and overall the unions have exported over 200 tons of coffee directly to specialty markets. In Rwanda, USAID is working to improve market access and ensure consistently high quality of "Maraba Blue" coffee. They have helped a cooperative of over 250 farmers establish a modern washing station, and improve access to markets. A significant number of farmers in the cooperative are now certified "organic". In Uganda, USAID is establishing a Coffee Auction while targeting coffee as a core commodity under the Uganda Trade Revitalization and Diversification Program.
In FY 2002, USAID invested an additional $2.8 million to help coffee producers in Uganda, Tanzania, Ethiopia, and Rwanda. This is above and beyond what USAID already spends to help small-scale coffee farmers in Africa as part of its agricultural program.
Asia:
In Asia, USAID is focusing on increasing incomes of small-scale producers by improving the quality of coffees and access to markets. In the recently independent East Timor, USAID supports a multi-million dollar program to support production of high-quality organic specialty coffee for export. Since 1994, USAID funding to the US National Cooperative Business Association (NCBA) has provided the transfer of appropriate technologies to small-scale producers to improve post-harvest handling and processing. NCBA has assisted farm families in the formation of cooperatives with 17,000 registered farmer members. The project has been successful in improving the quality of coffee to meet the strict requirements of the international specialty coffee market and organic certification. The project's new initiatives will increasingly emphasize research and demonstration activities.
In 2002, USAID/Nepal has catalyzed an alliance among Winrock International, the Nepal Highland Coffee Promotion Company, the Nepal Coffee Producers' Association, the Specialty Coffee Association of America, and other Nepalese organizations. Their common vision is to increase the incomes of small holders, generate employment and alleviate poverty through environmentally and socially sustainable development of the coffee industry. The alliance's strategy is to increase product quality at all levels of farmer production, rural processing and marketing. It will also include the development of supporting institutions/capabilities for delivering extension services to small holders, certifying products (quality, organic, shade grown and other), promoting markets, improving processing and investment required for quality coffee production.
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