History of Coffee in Bolivia

Bolivian coffee is just starting to make a name for itself in the world of Specialty coffees. Once considered a producer of low-quality coffee, only suitable for blended roasts, Bolivia is working to change its image one bean at a time. For this heavily impoverished country, it is a matter of creating the infrastructure, technology, and skills needed to produce a quality product that supports economic, social, and environmental sustainability. Initiatives such as Fair Trade and organic, along with economic development projects have provided opportunity and support to coffee producers on the local, national, and international level.

Geography and Environment

Bolivia is located in the western heart of South America and covers an area of 1,098,581 square kilometers – roughly three times the size of Montana. Two ranges of the Andes Mountains stretch across western Bolivia and shape the country’s three major geographic regions: the mountainous highlands and Altiplano in the west, the semitropical Yungas and temperate valleys of the eastern mountain slopes, and the tropical lowlands that span across the northern and eastern regions, known as the Oriente1.

Coffee

Coffee production in Bolivia is concentrated in the rural areas of the Yungas, where approximately 95% cultivation occurs2. Other growing regions include Santa Cruz, Beni, Cochabamba, Tarija, and Pando. While commercial farms and haciendas exist, governmental land reforms have expropriated most of the large landholdings and redistributed them back to rural farming families3. These small plots range from 1-8 hectares and produce between 85-95% of Bolivia’s coffee, most of which is the Arabica variety and grown organically3.

Bolivia has all the ingredients to be a high-quality coffee producer, such as altitude, fertile soil, and a consistent rainy season. However, the rugged terrain and lack of infrastructure and technology make post-harvest quality control a challenging task. Funds from development agencies are working to establish processing facilities in rural areas so that farmers have access to the resources that will help ensure quality beans, while also adding value to their product4.

Within the entire industry, 28 privately owned firms control more than 70 percent of coffee export trade2. The remaining percentage is traded by Bolivia’s 17 coffee cooperatives. Both the private and cooperative sectors are members of the Bolivian Coffee Committee, or Cobolca2. Most of Bolivia’s (green) beans are exported to the United States, Germany and other parts of Europe, the Russian Federation, and Japan5.

The Coffee Crisis

The global coffee crisis has produced devastating effects for Bolivia’s rural farming population, as well as the economy as a whole. With coffee prices reaching as low as $0.40 in early 2002, many producers have been unable to cover the costs of production6. Despite a price spike in 1997, coffee production and its value on the international market has been decreasing steadily since the early 1990’s7. The role of coffee in the national economy fluctuates based on the highly volatile international commodity price, or New York “C” price. In 1997, Bolivia exported 6,725 metric tons of coffee (green) and received $26,040,000, meaning that each metric ton was worth approximately $38727. However, in 2003 coffee exports (green) totaled 4,453 metric tons and returned only $6,389,000, thus valuing each metric ton at a mere $1,4237 . This staggering price disparity reflects (on a smaller scale) the natural boom and bust cycles of the coffee economy, making small-scale farmers extremely vulnerable to cyclical price shocks.

Deforestation for the purposes of agriculture cultivation and timber exports pose a serious threat to the environment and biodiversity of Bolivia8. Soil erosion due to cattle grazing and unsustainable farming practices, such as the “slash-and-burn” method, have also become a major problem, particularly for conventional farmers8. Water pollution ails the country as well.

Yet there is hope on the horizon. Bolivia is currently working to transform its coffee industry, developing infrastructure such as processing mills where they previously did not exist, and looking to the growing specialty coffee market for better prices. Also, many predict that Bolivia’s war on drugs will greatly benefit the coffee industry, providing increased funding and development opportunities for coca farmers transitioning to legal farming activities.

Activism and social change

In the past few years specialty labeling (Fair Trade, organic, and shade grown) and the cooperative movement have been gaining momentum among various rural commodity producers, including such goods as coffee, cocoa, bananas, and crafts. The purpose of these initiatives is to support sustainable livelihoods, improve working conditions, allocate credit, and promote environmentally sound agricultural practices, such as biodiversity, while maintaining productivity. In general, producer cooperatives form as a means to building solidarity, sharing knowledge and skills, and breaking out of the exploitive conventional agriculture system9. One of the most influential and empowering aspects of this cooperative structure is that a part of the coop’s income is dedicated to social projects, community development, technical training, and creating environmentally sustainable practices built from the ground up9.

Many cooperatives have united under this movement, yet others are incapable of paying the certification costs, which are considerable in the context of such poverty. ANTOFAGASTA, established near La Paz in 1992, was one of the first cooperatives on the Fair Trade register that sells a portion of their coffee through Equal Exchange’s Fair Trade market. This is just one example of the many cooperatives that are helping farmers take control of their own production, gain marketing power, and provide for their communities.

Sources

  1. "Bolivia." Country Studies.
  2. “Exports: Commodities by Country.” Key Statistics of Food and Agriculture External Trade. 1997 & 2003. Food and Agriculture Organization of the United Nations.
  3. Clasen, Mary Pat. "Analysis of the Coffee Cooperatives of the Yungas." USAID, Bolivia April 2004.
  4. Luxner, Larry. "Bolivian Coffee Struggles to Break Out of Obscurity." The Tea & Coffee Trade Journal July 1998.
  5. "Chapter 4: Position of Interested Parties."
  6. "Country Profile: Bolivia." BBC News.
  7. “Imports: Commodities by Country.” Key Statistics of Food and Agriculture External Trade. 1997 & 2003. Food and Agriculture Organization of the United Nations.
  8. "Bolivia." The World Factbook. Central Intelligence Agency.
  9. "Bolivia." Swedish NGOs in South America.