Percolating Profits: USAID Helps Brew Timor-Leste Coffee Into №1 Agricultural Export

Planting seeds of self-reliance for the country’s coffee industry

Ripening coffee beans on the tree. Premium grade Arabica beans grow high in the Timor-Leste mountains and have helped make coffee the country’s top agricultural export to international companies such as Starbucks. / James Reindl, USAID

LETEFOHO, TIMOR-LESTE

Coffee is the cash crop king of Timor-Leste’s agricultural exports. At $12 million annually, it’s a mere drop in the pot of the $30.6 billion global coffee market, but it’s a major achievement for the small Southeast Asia island nation.

Coffee ranks second behind oil in Timor-Leste exports. And while oil funds government operations, it’s coffee that has come the furthest in offering sustainable income to the farmers who grow it.

USAID had a role from the beginning.

“Before, during the Portuguese time, we sold all of our coffee to a Chinese company and during that time we didn’t know exactly how much was the price. We only filled in one box and the price was just based on that,” said coffee grower Miguel Babo. “We thank all the donors that already provided support to us, especially to USAID because for 20 years USAID never forgot us and kept supporting us.”

Timor-Leste, a former Portuguese colony, shares half the island of Timor with Indonesia. Located about 400 miles northwest of Australia, Timor-Leste declared independence in 1975, was invaded and occupied by Indonesia, then regained its independence in 2002.

The story of coffee assistance in Timor-Leste actually starts with USAID in 1994.

From left, coffee farmers Domingos Santos, Silvia Soares, Miguel Babo and Lucia Maia share a light moment as they recall the years of support from USAID that helped bring Timor-Leste coffee to international markets and raised their standards of living. / James Reindl, USAID

USAID’s mission in Indonesia convinced the Indonesian government to begin giving up control over Timor-Leste’s tiny coffee industry. When the Suharto government loosened its grip, USAID helped the National Cooperative Business Association (NCBA) organize 450 coffee farmers into what has become the Cooperatíva Café Timor (CCT), now the largest coffee exporter in Timor-Leste, with at least 24,000 farmer members. CCT also is a major employer of women; 40 percent of its 580 workers are female.

Bulk coffee awaits shipment in a Cooperatíva Café Timor warehouse in the Timor-Leste capital of Dili. USAID helped launch the commercial coffee industry in the small Southeast Asian nation more than 20 years ago. Coffee is now the top agricultural export with a value of about $12 million a year, a significant sum for the country of 1.2 million people. / James Reindl, USAID

Now, CCT not only exports coffee, but also has added high-value spices and other crops. It also runs a string of health clinics providing services to more than 100,000 people.

The United States is one of Timor-Leste’s main trading partners and two customers for CCT’s coffee and spices include McCormick & Co. for spice and Starbucks for Timor Fair Trade certified coffee.

In fact, the demand from Starbucks, which bought its first CCT coffee in 1996, exceeds the supply, said Sam Filiaci of NCBA. Filiaci notes that properly pruned coffee trees and further clearing of thick forest to provide adequate sunlight will increase production in the future.

“We would be happy to buy more volume from Timor-Leste if it were available,” said Starbucks spokesperson Molly Spence. “We have highlighted (Timor coffee) in limited single-origin offerings like Starbucks Reserve East Timor Peaberry and Starbucks East Timor Tatamailau. These are coffee series where we have provided some education about the qualities of coffee from different regions.”

Coffee trees must be pruned periodically in order to force them to launch new shoots, which make for a fuller and more productive tree. Many Timorese coffee growers traditionally avoid pruning because it takes trees out of production until the shoots mature, but Cooperatíva Café Timor, which USAID helped launch in the 1990s, teaches farmers the benefits of pruning and other production techniques. / James Reindl, USAID

USAID’s work with coffee ended in 2013 when the U.S. Department of Agriculture (USDA) began developing the spice industry through CCT. USDA’s project ended this April.

On a recent damp afternoon, Miguel and three other coffee farmers sat sheltered from the rain under a small bamboo hut amid a hillside of coffee trees accessible by a steep set of steps from the road. They talked about the changes coffee development brought to their lives.

Domingos Santos has been growing coffee in Timor-Leste more than 20 years. His two hectares can bring him about $500 per harvest. He has used the money to send his children to school and build a new house. / James Reindl, USAID

“I have around two hectares and from one hectare I sometimes get around $500,” said Domingos Santos, a coffee grower for more than 20 years who also grows vegetables to sell in the local market. “That money helps me to take my kids to school, build a new house and also for daily needs.”

CCT’s project manager in Letefoho, Longuinhos Salsinha, has been with CCT since the beginning. He has seen the benefit of U.S. assistance even in the face of some farmers’ reluctance to adopt practices that enhance production, such as pruning trees to encourage fuller growth.

“From the coffee, the farmers are able to receive money and use it right away, not like other revenue such as oil,” he said in his office. “From the coffee, farmers can directly feel what they have done. They plant. They harvest. They receive money and are able to use that money to sustain their family.”

Longuinhos Salsinha is the project manager in Letefoho, Timor-Leste for Cooperatíva Café Timor, the largest coffee cooperative in the country with more than 24,000 farmers. Cooperatíva Café Timor was started with help from USAID in the 1990s. He says that coffee, unlike oil, Timor-Leste’s top export, brings instant income to growers to help them in their daily lives. / James Reindl, USAID

Nearly 20 years after USAID perked up the coffee industry here, a 2012 study of Timor-Leste’s agricultural development by Sweden’s Research Institute of Industrial Economics highlighted how Starbucks’ decision to buy Timorese coffee opened a potential global market.

Miguel agrees and is grateful for the support Timorese coffee farmers have received.

“People in the world know Timor coffee,” he said. “If in the future we stand on our own feet, we will not forget the support and lessons that we got from USAID and that is something we are going to use for the future.”

Timor-Leste Minister of Agriculture and Fisheries Joaquim José Gusmão Dos Reis Martins cups coffee at a recent event celebrating U. S. support for the coffee industry, which USAID helped launch in the 1990s through the creation of Cooperatíva Café Timor. / James Reindl, USAID

About the Author

James Reindl is the Supervisory Development Outreach Communications Officer for USAID’s mission in Timor-Leste. A former journalist, he’s been with USAID since 2017.