Coffee is such a versatile bean that it allows the preparation of hot drinks, like a cappuccino, or cold, like a iced latte. However, for that drink to reach our table, there is a process behind coffee production.
Part of it takes place in Santa Lucía Milpas Altas, Sacatepéquez, where it is located Chica Bean, a coffee production center with more than 14 years of history. In that time, they have identified that in Guatemala the challenge to produce coffee is the profitability, since the value chain of this grain can add up to 12 actors in which, little by little, profits are diluted.
This Guatemalan company chose to develop a shared value business model, which allows the coffee production chain to be simplified to just three steps. The first consists of the direct purchase of coffee beans to 36 women producers in different regions of the country. The second, which occurs in Santa Lucía Milpas Altas, covers roasting, grinding and packaging of coffee. This is the differentiator that Josué Martínez, co-founder and manager of Chica Bean, highlights, because by executing the roasting process in Guatemala he allows them “compete with any roaster within the United States.”
The third and final step is to market online and export, most of it, to the United States. However, its market is so broad that in 2023 Chica Bean placed this Guatemalan coffee in 18 countries, including Canada, France and Spain.
The plight of the Green Deal
Chica Bean’s social approach makes it eligible to export to highly demanding markets, such as the European. However, the sector is attentive to the new measures that could come into force in 2025.
Since 2019, the European Commission raised the Green Dealin order to “meet the great challenges presented by climate change and the need to evolve towards a more sustainable productive and life model,” details Silvia Mirandaeconomics and trade officer for Central America of the Delegation of the European Union in Costa Rica.
Miranda adds that regarding the focus on agricultural production “there are several criteria that are related to deforestation, pollution, the productive chains most resilient to climate change, as well as the evolution of productive processes. so that they are increasingly more friendly to the environment.”
For the National Coffee Association, Anacafethis is an issue that they have been addressing for a couple of years, specifically focused on deforestation, since said guideline “prohibits the marketing of products to the European Union if there was deforestation in production. Under this regulation, coffee produced on deforested lands after December 31, 2020 cannot be imported into the European Union.”
To ensure that none of the more than 305 thousand hectares that grow coffee are excluded from the possibility of being exported, they have focused in the coffee uprisinga study that has allowed them to identify the “points where this European Union regulation is not complied with”, which correspond, according to figures provided by González, 2% of the land in the entire country. This is a methodology that, with the use of satellite tools, allows them to verify the points where there are coffee plantations in the national territory.
Although there are farms in Guatemala that “are already trying to catch up with the demands of the European Union to comply with the Green Deal regulations,” There are pending challenges to achieve the guidelines for export, among the ones who Jorge Duranmember of the board of directors of Differentiated Coffees of the Guatemalan Association of Exporters (Agexport), includes “recovering and raising the level of production, as well as maintaining and increasing quality standards as much as possible.”
Another challenge for the coffee sector is assistance in mapping, strengthening institutional capacities in the development of agroforestry systems and training for producers.
To this, González adds the need to find a way to “demonstrate internationally that Guatemalan coffee is produced sustainably.” and that it is not a product linked to deforestation”. In this case, the support of government authorities is necessary, specifically the Ministry of Agriculture, Livestock and Food (Maga).
In this context, from the Delegation of the European Union, Miranda identifies the need to promote certifications for coffee productionsince this is an “important support because it will help producers to position their products in a better way, depending on the market niche that they may be interested in in Europe.”
Urgent support from Maga
In a document provided by the Ministry of Agriculture to Free Pressamong the actions for sustainable food production in line with the requirements of the Green Deal, they list tasks such as the review of the directive on el sustainable use of pesticides and improvement of integrated pest managementthe revision of the Regulations to facilitate phytosanitary products containing biological active substances, as well as an action plan for integrated nutrient management to reduce pollution produced by fertilizers.
Another action is the Green Deal strategy known as “From the field to the table”, a plan that, according to Miranda, “will include measures to significantly reduce the use and risk of chemical pesticides, as well as the use of fertilizers and antibiotics. The implementation of the strategy will be possible through the development of a policy and a regulatory framework for sustainable food systems.” According to information from Maga, “the competent authorities of our country are already beginning to generate risk-based sampling plans for exported foods, as well as for those for national consumption.” However, when consulting on a specific action schedule for 2025, no response was obtained.
With months to go before the deadline, Durán emphasizes the importance of the role that the Ministry of Agriculture must play now to establish “the regulations and protocols for compliance with the Green Pact, which allow us to show how we are going to generate the traceability that is required to export to Europe.” This in order to have a backup of the quality of the coffee, as well as ensuring that the harvest process meets environmental care standards.
Race against time
In the scenario that Guatemala fails to comply with the guidelines by 2025, there is the possibility to put exports to Europe on the tightropewhich during the 2022-2023 coffee year recorded shipments to Belgium (10%), Italy (5%), Germany (4%), the Netherlands (2%), as well as the United Kingdom (1%), France ( 1%) and the Nordic Countries (1%).
Given this, González identifies as one of the consequences the triggering of “a competitiveness problem for Guatemalan companies and, therefore, a decrease in employment.” Currently, Anacafé registers that the coffee activity provides more than 500 thousand jobs annually. In addition, Guatemala could face a more serious scenario that would directly hit the agricultural sector due to the decrease in income for coffee growers.
This impact can translate into greater dependence on the United States as a market and thus increased vulnerability to economic fluctuations. “Unfortunately, we are against time. We require that special people be designated in all institutions for this. Although there is some progress, it will take a long time to comply with the Green Pact regulations,” Durán demands.
Guatemalan coffee is a highly exportable product, since, according to data from the Bank of Guatemala (Banguat) from 2023, this is the country’s first agro-industrial export product.
In the last recorded coffee year, which runs from October 2022 to September 2023, Anacafé recorded US$944.37 million in Guatemalan coffee exports. Durán highlights that “Guatemala is among the top ten producers worldwide. Production in recent years has reached an average of three and a half million bags –each contains about 132 pounds of coffee-, that gives us approximately one 2.6% of the world supply of exportable coffee.”
The first export destination for this grain is the United States (41%), followed by Japan (12%) and Belgium (10%). Although the North American country is “Guatemala’s main trading partner, 26% of coffee is exported to the European Union,” highlights José Tulio González, president of Anacafé. Along these lines, Guatemala faces a challenge to avoid losing just over a quarter of its coffee exports. destined for the European market following the guidelines of the Green Deal for 2025.
What is the green pact?
The Green Deal is the strategy of the European Union to achieve climate neutrality by 2050. In 2019, one of the conclusions of the European Council emphasized the range of opportunities that would arise as a result of achieving this objective, “such as the potential for economic growth, new business models and new markets, as well as job creation and technological development.”
This is a policy framework that encompasses a wide range of measures to address climate change and environmental degradation issues. Among which are sustainable agriculture in the European Union, guaranteeing global food supply and food security, the reform of the common agricultural policy and European green deal, the strategy “From farm to table”the action plan for the development of organic production, the welfare of farm animals, nutritional labeling, strategic plans of the common agricultural policy, the agri-food promotion policy of the European Union and the sustainable use of pesticides.
From the point of view of the Delegation of the European Union in Costa Rica, the Green Pact “has triggered the review of the policies and laws established in the European framework, not only for production, but also for the export of products from other countries that enter the European Union”.
“In Guatemala it can be applied in the construction of a circular and sustainable economy with the aim of achieving an inclusive, equitable and respectful society of natural resources,” González emphasizes. Specifically, the pact regulation focused on deforestation links the regulation of six products, such as cattle, cocoa, coffee, palm, rubber and soy, as well as their derivatives.
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