PERU ORIGIN REPORT

Peru is home to an estimated 220,000 smallholder coffee farmers and is the largest producer of certified organic coffees in the world. Each farmer averages about two hectares of coffee, with an average yield of 14 quintales (46kg) per hectare. Exportable production for the 2018 crop, now underway, is projected at 4.2 million (60kg) bags.

It is estimated that 25% of coffee farmers belong to a cooperative or farmer organisation, while 75% farm independently.

Production is on the rise after the crop was severely impacted by an outbreak of Leaf Rust, (a fungal disease that causes defoliation of the trees, effectively stopping the tree’s ability to photosynthesise). Not only have the trees recovered, but new, apparently rust resistant varieties have also been introduced to the origin.

A couple of weeks ago we travelled through northern Peru, the newest of the three producing regions with the youngest tree population. New plantings mean healthier root stock and higher production, so the rise in export volumes is primarily being driven from this region. This is evident by the number of dry mills under construction on the outskirts of the town of Jaen, the main coffee town in the department of Cajamarca.

The road from Jaen to San Ignacio

Over the period of a week, we visited the producing regions of Cajamarca, San Martin and Amazonas, spending time with co-operatives, independent farming communities and local exporters. We observed the following:

CURRENT CROP

The crop is approximately 4 weeks late in most areas, due to heavy rains in the early part of the harvest. The low market is posing a significant threat to quality. At an average farm size of two hectares, most farmers have to hire seasonal labour to help harvest the crop. The crop is harvested by pickers moving through the coffee lands between four and six times over the course of the cherry ripening period. With a minimum wage of about US$10 per day plus food and lodging, labour costs exceed 40% of total production cost. Low coffee prices are translating to farmers reducing their labour costs by picking their crop in two cycles, whether ripe or not. The result in some regions is a poor picking standard of green, ripe and black cherry pods being wet processed together on farms. With many farmers receiving a standard price on the day for wet or dry parchment, there is little or no incentive to maintain picking discipline, or to shoulder the burden of higher production costs that come with it.

An example of picking and processing overripe, ripe and underripe cherries — Chirinos

Local exporters told us that farmers are precariously close to the threshold price where it makes no commercial sense to harvest the coffee at all. Once below this threshold, farmers abandon the harvest altogether. Unusually, it is the lower growing regions that benefited from better prices as they harvested earlier, at a time when prices were firmer, if only marginally so.

El Bosque de Protección Alto Mayo

We witnessed a wide range of post-harvest processing practices, some less admirable than others. Peru reminds me of Uganda and Honduras in some ways: all three origins have occupied the place of “value coffees” for many roasters. The discount value has come about from reputations of off-cups, poor drying and high defects. The supply chain culture, on the whole, is one of mass volume and single price to a farming population who have experienced limited incentives. They have never been offered training in the disciplines and related costs it takes to produce high quality Strictly Hard Bean coffees. The potential is enormous. Typica and Caturra varieties grow all the way up to 2000 metres above sea level, in volume, across multiple regions. We see no reason why the best of Peru should not stand shoulder to shoulder with that of Colombia and Guatemala in the years ahead.

To this end, Falcon’s coffee processing specialist, Simon Brown, departs at the end of July to spend six weeks working with communities on their picking standards and all post-harvest processing. In 2017, Simon won an award doing the same work with a coffee producing community in Copan, Honduras, where cup scores amongst those farmers who took part in the project rose by an average of 3.45 points on the SCA scale. Alongside Simon, we have hired a full-time field coordinator, Reynaldo Alberca, who will give training sessions, compile traceability information and organise the logistics of buying parchment. We will manage the quality control from both Jaen and Lima and buy based on cup score, to begin with. However, once producers with potential are identified, we intend to broaden quality requirements to buy more of the farmers’ total production, rather than just skimming the cream off the top.

Reynaldo Alberca, speaking with farmers in Las Pirias, Chirinos

By working directly with producers we’re able to pay more for their coffee and manage quality closely manage quality to minimise the risk for everyone in the supply chain. This model represents something very different to those employed by other buyers operating in Peru, especially with our flexibility to take coffees covering a fairly wide spectrum of qualities. It’s a much more holistic approach.

As mentioned, QC will be managed from both Jaen and Lima, where we have established a new cupping lab run by another Falcon recruit, David Cahuapaza. Like Reynaldo, David previously worked for a large cooperative in Peru, and has many years of cupping experience to draw from. Whilst in the country we were able to spend several days in the lab, cupping samples we had picked up on our travels and calibrating with David. All of our Peru samples now flow through the Lima lab prior to sampling back in the UK, so the time spent in in the capital was invaluable for ensuring our continued dialogue and analysis of this season’s crop.

David in the new Falcon cupping lab in Lima

We look forward to sharing more news of our upcoming quality project, and our 2018 crop coffees once they begin to land in the coming months.

Konrad Brits

Like what you read? Give Falcon Coffees a round of applause.

From a quick cheer to a standing ovation, clap to show how much you enjoyed this story.