Interpreting the Flow: Building An Overall Picture of Farmworker Conditions in El Salvador and Honduras | 25, Issue 16
If there’s one thing coffee folks can agree on, it might be that coffee is complicated; the costs of producing coffee and the labor dynamics involved are no exception.
Professor CARLOS CARPIO, PhD and KATIE VON DER LIETH share a preview of a forthcoming multidisciplinary Coffee Science Foundation research project on specialty coffee labor dynamics in El Salvador and Honduras.
Producing coffee, like many agricultural products, is labor intensive. For specialty coffees, many of the qualities cherished by the specialty coffee community require additional time, expertise, and labor relative to coffees that sit on the commodity side of the spectrum—handpicking only the ripest cherries, careful processing, and sorting out defects and imperfect beans are just a few examples. It’s difficult to imagine our industry without the labor of the millions of farmworkers who grow, harvest, and process the specialty coffees we enjoy.
Though farmworkers are integral to the production of all coffees, we don’t know a lot about them[1]—often, what little we do hear is not good. In the past few years alone, there have been multiple reported incidents of child labor[2] and forced labor,[3] among other issues. These are not unique to coffee production; nor are they issues confined to recent history: agricultural labor has always been dangerous. Farmworkers everywhere, through time and even in more industrialized countries, have been—and still are—subjected to undesirable working conditions.
While the ubiquitousness of undesirable agricultural labor conditions can feel overwhelming, there is momentum from a wide variety of stakeholder groups to improve these conditions. In one example, a US Department of Labor project in Honduras, launched in 2017, intends to help businesses establish systems to eliminate child labor and labor exploitation in coffee supply chains. The Global Living Wage movement, another initiative, provides benchmarks for decent standards worldwide, including in coffee-growing regions. Cost of production studies, which have increased in recent years, also serve as an important foundation to determine whether interventions increase profitability for farmers and wages paid to farmworkers. These are just a few examples; we hope that this project—an analysis of costs and labor dynamics in Salvadoran and Honduran specialty coffee farms— will make a small contribution towards improving our understanding of conditions for farmworkers.
The project, generously funded by Conservation International, Rainforest Alliance, Solidaridad, and the Specialty Coffee Association (SCA), was guided by the following four research questions:
1. What are the current costs of specialty coffee production, specifically labor costs?
2. What are the living wages in the areas of study?
3. How would current total costs and profitability of coffee production be affected if farmworkers were paid living wages?
4. What are farmer and worker perceptions of the key labor practices for producing coffee?
Answering these four questions required three distinct but complementary approaches to building an overall picture of farmworker conditions: cost of production studies, a living wage analysis, and focus groups with coffee farmworkers. In other words, we wanted to understand the flow of money, incoming and outgoing, and gather additional context to help us interpret these numbers.
Our decision to include a living wage analysis as a part of the project was key to helping us situate all the data collected. While documenting “wages paid” provides an essential metric for assessing farmworker well-being, it’s not the only data point we should consider if our goal is to truly understand the conditions of farmworkers. It’s difficult to interpret the results of cost of production studies and the wages paid to farmworkers without understanding the broader costs associated with living in the given geography. Living wage calculations were an obvious fit for this purpose.
In addition, we wanted to ensure these more numeric data were contextualized. To do this, we systematically gathered information, through focus group interviews, from the farmworkers themselves. In these discussions, we wanted to learn how they characterize their work and understand their preferences: we asked what they liked and did not like about working on different types of coffee farms, with a particular focus on differences in labor conditions between the ends of the commercial-to- specialty farm continuum.
Combined, each of these three lines of investigation provided a unique lens to capture a holistic picture of specialty coffee labor in El Salvador and Honduras. Although the full research report will be available through the SCA in 2022, we wanted to take this opportunity to share what we learned during our literature review and the cost of production portion of the project.
What Is the Cost of Producing Coffee?
From the very start of our work and interviews with coffee farmers, it quickly became apparent that there is no single cost of production.[4] Globally, each farmer’s cost of production is completely unique, as it depends on a myriad of factors. These include natural conditions in the farm (e.g., soil conditions, elevation, local climate conditions); production systems (e.g., shade-grown, sun-grown, organic); local economic conditions (e.g., the costs and availability of labor and other inputs); as well as the farmer’s technical and managerial abilities. Production costs are also highly dependent on crop yields, which, in turn, can be impacted by year-to-year variations in pests and disease pressures as well as weather conditions, as recently exemplified by the reported adverse effects of Hurricanes Eta and Iota on coffee farms in Central America.
Variability Everywhere
In addition to the diversity among farmers, our reading of previous studies on cost of production (a “literature review”) also identified high variability in the methods used to estimate production costs, especially when it came to the type of farm each study intended to represent, data collection methods, and the elements considered in the calculations. Studies generally used a “representative” farm in a region or country rather than covering the diversity of farms, but there were = inconsistencies in what was considered to be “representative.” In some studies, the “representative” farm refers to a typical or average farm in a region; in others, it refers to a farm with optimal natural and management conditions.
The variability didn’t end there: the data collection methodology in each study also differed. Some studies used interviews or surveys with coffee farmers; others collected data from coffee experts. Each approach has advantages and disadvantages: in our experience, interviews conducted with a group of farmers where we “walk through” the coffee production cycle from seed to cherry, inquiring about inputs used (number of workers hired, etc.) tend to be more precise and provide more information about the composition of the costs than directly asking farmers about total “money spent” on specific activities such as harvesting. This method of data collection, however, is more expensive and time-consuming than shorter surveys or interviews with experts, making studies with this methodology either significantly smaller in scope or simply less prevalent.
As if that wasn’t enough variability between studies, we found it in the way “cost of production” was calculated, too! Studies included—or excluded—different elements when calculating the total costs of coffee production. While it may seem obvious to state, coffee is a perennial crop with a production cycle that often spans decades, including several years without yields or with low yields: the establishment and renovation of a coffee plantation are long-term investments whose annual “depreciation” must be included when calculating the costs of producing coffee in a mature coffee plantation, but these costs are difficult to calculate and often ignored. Other costs that are also difficult to estimate but need to be considered comprise land costs and farmers’ (and family) time working on the farm—economists refer to these as “opportunity costs.” While it’s not always possible to include every item or element when calculating coffee production costs, studies should always describe the cost elements included or excluded in the calculations.
What Would It Take?
Having a clear picture of the costs required to produce coffee is an important first step to addressing the economic sustainability of coffee farms and improving the working conditions of coffee farmworkers. The push for more transparency in the coffee supply chain is likely to increase the demand for more studies about the costs and profitability of coffee production at the farm level and beyond (processing, shipping, etc.). This is a good thing! But in light of all the variability we just discussed, you might be tempted to ask: “What’s the point if there’s no agreement on what—and how—we’re measuring cost of production?”
These studies provide essential benchmarks for highlighting the vastly different cost of producing coffee across and within countries and through time. A city map may not offer a perfect representation of a city across time and space—it shows us what the cartographer wants us to see, and cities are constantly evolving!—but it does give us a starting place from which to orient ourselves as we navigate a physical space. Similarly, while no single cost of production study will perfectly represent a group of farmers, we can use the resulting numbers as a guide and to better understand the economic situation of coffee production in each place and time.
For production cost estimates to be more useful, the coffee community should require more transparency regarding the methods used to estimate coffee production costs. There is also a need for further collaborations among researchers working in this area to avoid a duplication of efforts while moving towards more standardized methods. With all of coffee’s variability, researchers should consider adopting and using innovative approaches to collect data directly from farmers on a more consistent basis, rather than using a model farm—perhaps using modern technologies. This would give us a better understanding of profitability and labor dynamics over the life cycle of the farm.
Finally, we would like to advocate for an interdisciplinary approach in conducting cost of production and labor research. Though undoubtedly more time-consuming and resource intensive, the addition of the living wage calculation and the results from the focus group in the analysis of cost of production data give us a much richer and more nuanced perspective of the labor dynamics on the coffee farms we studied. While we’re still compiling results, it’s not too early for us to share that the focus group component of this project gave us great insights on what farmworkers desire from their workplace (and, spoiler alert, it’s not just higher wages), which we look forward to sharing with you in more depth in 2022. ◇
Professor CARLOS CARPIO, PhD teaches and researches agricultural and applied economics at Texas Tech University. KATIE VON DER LIETH is the Research Program Manager at the Coffee Science Foundation and Specialty Coffee Association.
This multidisciplinary Coffee Science Foundation project on specialty coffee labor dynamics was generously funded by Conservation International, Rainforest Alliance, Solidaridad, and the Specialty Coffee Association. Learn more at coffeescience.foundation.
References
[1] Andrea Otte, “Vision Check,” 25, 10 (September 2, 2019), https://sca.coffee/sca-news/25-magazine/ issue-10/english/vision- check-25-magazine-issue-10.
[2] Fabio Teixeira, “Nespresso finds child labor at three Guatemalan coffee farms,” Reuters (March 26, 2020), https://www.reuters.com/article/us-guatemala-trafficking-coffee-trfn- idUSKBN21D3IQ.
[3] Benjamin Soloway, “In Brazil’s Coffee Industry, Some Workers Face ‘Conditions Analogous to Slavery’,” (April 13, 2016), FP, https://foreignpolicy.com/ 2016/04/ 13/ in- brazils-coffee-industry-some-workers-face- conditions-analogous-to-slavery/.
[4] Andrea Estrella, Steve Boucher, and Christoph Saenger, “The Cost Conundrum,” 25, 11 (November 28, 2019), https://sca.coffee/sca-news/25-magazine/issue-11/english/the-cost-conundrum-25-magazine-issue-11/.
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