Jamaica coffee gets IFC help to reverse productivity decline
Published:Monday | December 14, 2015 | 11:45 AMSteven Jackson
Jamaica coffee prices are at an all-time high, yet the industry's earnings are at an all-time low.
This apparent contradiction led the IFC, the financing arm of the World Bank, to embark on a technical support project worth over US$560,000 ($67 million) to improve the productivity of the globally respected crop.
The project, revealed this week, seeks to work with coffee-processing and/or exporting firms to implement a proposed action plan to "reverse" the declining trend of farm productivity and preserve Jamaica's reputation for premium coffee, according to the IFC.
"The overall goal of the project is to contribute to establishing the conditions to preserve the Jamaican coffee brand and protect smallholder coffee farmers' livelihood by maintaining the quality and increasing the quantity of coffee produced," the IFC said.
The project also aims to facilitate Jamaican coffee-processing firms by providing "high quality" technical support to coffee farmers.
"We have been in discussions at various levels with IFC and they have been accommodating and offering to assist with research," said Jason Sharp, director of Coffee Traders Limited and chairman of Jamaica Coffee Exporters Association (JCEA), on Monday.
Although the IFC disclosed the project this week, work actually began in January 2015 and aims to end in December 2016.
Coffee Traders represents one of the largest exporters of Jamaica Blue Mountain coffee. It also sells a number of roasted brands and operates CafÈ Blue coffee shops across the island. Sharp indicated that the umbrella grouping of processors, Jamaica Coffee Exporters Association, wants assistance to create a registry of the six-to-seven thousand coffee farmers. It is aimed at collecting technical and productivity data of each farmer, reducing crop theft and facilitating the restart of crop insurance.
In 2013, the World Bank publicly released a study done in 2011 on the feasibility of weather insurance for the coffee sector in Jamaica. That study was reportedly read by the coffee sector regulator, the Coffee Industry Board. Talk of crop insurance, however, is still ongoing.
The industry was previously insured through the defunct Dyoll Insurance as the local broker. That scheme ended with the demise of Dyoll in the mid-2000s. Sharp indicated that insurers now require more sophisticated data from farmers and farming zones in order to compute the output per farm and risk associated with growing zones hit by fires or hurricanes.
"They are working with the JCEA to assist the association in its drive to modernise the industry in farmer registration and access to micro-financing," Sharp said of the IFC. "We have been working together but nothing is formalised as yet from a JCEA perspective. But I know IFC has been working with various other entities, including assisting with a seedling programme."
The seedling programme should allow farmers to replant and increase productivity, all things being equal. Experts agree that many of Jamaica's farms produce yields of 30 to 50 boxes per acre, while 75 to 100 boxes remains the target.
"There is a great need for coffee seedlings, especially since the fires earlier this year," said one respected farmer, who requested anonymity as he is not directly involved in the seedling programme. "Farmers are getting record prices now, but it's coming from two years of drought and rust disease, so productivity is low. This IFC programme is a good thing if it can increase productivity."
Jamaica exported US$33.8 million ($3.03 billion) worth of coffee in 2009 but that dropped to US$13.4 million ($1.5 billion) in 2014 one of the lowest in decades. Over the same period, coffee farmers' earnings for a box of cherry coffee fluctuated slightly at around $2,500. However, the price rocketed to $5,000 in early 2014 with steady increases to its current level of $11,000 a box.
The shortage of coffee, along with its increased demand in Asia, catapulted the prices. It resulted in disheartened farmers returning to the industry, some of whom went right back to old practices and methods.