Covid is taking its toll on the coffee supply chain in ways we don't even see. We report on the situation in northern Nicaragua and the looming consequences. In short: the outlook is bleak.
Normally, our coffee from Finca Santa Rita would be being hulled, sorted by size, and cleared of defects right now. Our team would be bagging it and loading it into trucks for the port of Corinto on Nicaragua's west coast.
But things are different at the moment: the coffee is still sitting unsorted in the warehouse in Ocotal, unhulled and unpacked. Warehouse operations are down to a minimum; only in the lab are coffees being tasted. Tim Willems, our farm manager in Nicaragua and founder of BridAzul, the dry mill, told me:
We had to send almost all our staff home. I can't say yet if it was the right decision, but it felt like the right thing to do.
Tim Willems
“Social distancing in coffee is hardly feasible,” says Tim. Heaving heavy sacks, sorting coffee as a group, and bagging—all of this is unrealistic without physical contact or maintaining a two-meter distance. Ultimately, the health of his employees took precedence for him, and he didn't want to offer any work that would put his staff in danger. Many families live together across several generations in very tight spaces. The risk of infection in rural areas is very high within families.
Furthermore, the healthcare system in Nicaragua is very weak, and Covid is hitting Nicaragua, even if the government reports only 10 infections and 2 deaths. If you don't test, you don't find. At the same time, cases of pneumonia are reportedly rising dramatically, many with fatal outcomes.
In Nicaragua, dark theories are once again circulating through social media, and everyone is accusing the government of a nasty cover-up: pneumonia just happens, whereas Covid could have been prevented. If Covid is the cause of death, the problem is self-inflicted. If it is pneumonia, well, that just happens every now and then.
Day laborers don't work from home
The decision by our partners to send their employees home temporarily was difficult. They knew that their staff needed to earn money and that many would go looking for odd jobs. Nevertheless, our partners wanted to protect their employees and send them home. A difficult decision. They are now trying to provide support in the form of food.
Wage advances are currently hardly possible because the coffee hasn't been sold yet and the last few months have consumed a lot of capital. Emergency parachutes, like those currently being distributed quickly and unbureaucratically to companies in Switzerland, Germany, or Austria, don't exist everywhere. Not in Nicaragua either. As partners, we are now challenged more than ever.
Covid not only highlights the differences in handling the crisis but also structural and social inequalities. Day laborers cannot continue working from home. The government in Nicaragua uses the vocabulary of class warfare and shouts loudly: “Only the rich stay home!” They are even said to have stated before Easter week that people should finally recover from this Covid discourse and go on holiday to the beach. The government is also inviting people to demonstrations for health and against Covid—people are walking the streets in masses.
The farm as a sanctuary
Together with his team on-site, Tim manages two farms: Finca Santa Rita and Finca el Arbol. Most employees are back in their villages, but a skeleton crew remains on the farm to keep things running. At the end of the day, a coffee farm is an agricultural business, and there is always work to do.
On the finca, it is quiet, and you don't really notice anything of what is happening. However, work is piling up right now that would be hard to complete on time with only a small team.
Difficult 2019/20 harvest
Last year's harvest, which should actually be on a ship soon, was difficult. A long dry spell in large parts of Central America shortly after the blooming caused the cherries to grow unevenly. The seeds inside the cherry—the coffee beans later on—often failed to develop properly, or at all.
From southern Mexico, through Guatemala, Honduras, and on to Nicaragua, Costa Rica, and Panama, yields dropped by between 10% and 40% due to the drought. That is massive. Various traders have reported to us that even average qualities from Honduras were sold for a price that can normally be achieved for a microlot.
Santa Rita status
At Santa Rita, we have a loss of exportable coffee of about 35% compared to the previous year. The reasons are, on the one hand, the aforementioned drought and, on the other, our renovation program.
Since 2017, we have been renovating the farm piece by piece. We are thinning out the plantation, pruning very old trees first—if they don't sprout more strongly the following year, we remove them too and thin out the population to about 1,100 trees per hectare. Now, some of the old trees didn't respond to this drastic treatment and were removed. Because if the input (fertilizer and work) for a plant is greater than its output, it has to go.
Next year there will be even lower yields at Santa Rita because we have thinned out the tree population again. In return, we expect the first harvest from 1,000 varietals, which should come to about 10 bags.
No access to fertilizer and pesticides
Since the political unrest began in Nicaragua two years ago, the local currency has lost significant value, and imports have suddenly become more expensive. Nitrogen, for example, on which synthetic fertilizers are based, became 30% to 40% more expensive.
The majority of fertilizers in northern Nicaragua are imported from Honduras, but now there is Covid: the border with Honduras is closed. Anyone needing fertilizer or pesticides now faces a huge problem. The shortage has caused prices to rise dramatically again. But if you don't fertilize now, the next harvest will be even smaller. A vicious circle.
Those who have focused on organic farming methods are slightly less affected in this regard, provided that the input can be produced on the farm itself. However, this requires a great deal of know-how, which is only available in pockets, as well as the exchange with experts who are not currently traveling.
Got a bit lucky
In January, our team planted Canavalia on a large scale, also known as the jack bean. The vine species has large leaves and covers the ground like a carpet. The reasons for planting were:
- Large leaves cover the ground =
- less irritation from UV light
- less water loss
- less erosion
- drastically reduced weed growth, which could compete with the plants for nutrients
Now, Canavalias are also strong nitrogen fixers. They store it and slowly release it back into the soil. Especially in times when it is difficult to obtain nitrogen-based fertilizers, Canavalias and other nitrogen fixers help a little in times of need.
What now?
Predicting the coffee situation is difficult. The information is piecemeal and communication from the government is virtually non-existent.
However, what we do know is the following:
- The export of our coffee is not yet foreseeable—we are cautiously counting on the arrival of the coffee in October
- Many producers cannot invest in the farm because they
- could produce less coffee
- and were able to sell less of what they did produce
- which will lead to a smaller harvest next year
- the import of fertilizer and pesticides is severely limited
A few months ago, we sharpened the future direction of Finca Santa Rita. We want to produce organic coffee and become largely independent of external inputs. The current situation strengthens our resolve, demonstrates the urgency, and motivates us—even if and because we know that the coming months in Nicaragua will be very difficult.
We will discuss what Covid means for the coffee chain on Sunday in this webinar: Coffee & Corona. Challenges, Chances, Change.
https://kaffeemacher.de/blogs/kaffeewissen/santa-rita
