June 11, 2012 / 4:53 AM / 7 years ago

Analysis - Labour shortages in Costa Rica threaten coffee crop

ATENAS, Costa Rica (Reuters) - Costa Rican coffee farmer Eliecer Perez is struggling to find enough workers to pick his bumper crop this year and fears up to 10 percent of his beans will be lost if they are left to rot on the trees.

A general view of a coffee plantation is seen in San Isidro de Alajuela, northwest of the capital San Jose October 26, 2011. REUTERS/Juan Carlos Ulate

At his family farm in Costa Rica’s lush Central Valley, Perez has watched the usual influx of seasonal workers needed for the Labour-intensive harvest dwindle.

Some migrants have been lured to neighbouring Honduras, where coffee production is booming, and local Costa Ricans are opting for less back-breaking work in the country’s urban areas.

“Workers have become smarter about money, they have better skills and are more calculating,” said Perez, whose family has farmed the land for generations in the small town of Atenas.

“It is harder and harder to recruit because they don’t want to do this work anymore; they would rather be drivers or work in a hotel,” he said.

Labour shortages in coffee-exporting nations reliant on hand-picked beans could lead to shortages that may affect the coffee market, eventually raising questions about quality as production moves to nations with more access to mechanization.

Every year in Central America and Mexico, which together produce about a fifth of the world’s arabica coffee, there are fewer people willing to take the low-paying, Labour-intensive jobs of hand-picking coffee on steep hillsides.

Hobbled by Labour shortages, the region could lose out to competitors like Brazil, the world’s top coffee producer, which is growing more arabica beans that can be harvested by big machines.

Brazil grows mostly robusta coffee, seen as lower quality than the arabica variety favoured by high-end buyers like Starbucks (SBUX.O). But it is moving into more arabica production on its large-scale farms.

“As production slips in traditional washed arabica producing countries - countries like Brazil, that have some advantages in technology and degrees of mechanization - will continue to increase their production to meet market demand,” said Ric Rhinehart, the director of the Specialty Coffee Association of America.

The shift to mechanization could mean a slide in coffee quality, since specialty roasters see hand-picking as a way to ensure that only the best beans make it into the collection baskets.


Last year, Perez lost a tenth of his crop when he could find only half of the 15 workers needed on his 17-acre (7-hectare) farm, and he fears the same will happen again this season. He is now thinking about giving up his coffee farm and getting into cattle ranching, which requires fewer workers.

Costa Rica’s coffee production has dropped by 30 percent in the last 10 years as farmers move to other businesses or sell off their land to the lucrative real estate market.

The national coffee institute Icafe could not estimate how much of the national crop has been lost or damaged due to the lack of workers.

Costa Rica is now the smallest coffee producer in Central America, with the country forecast to harvest 1.79 million 60-kg bags of coffee in the 2012/13 picking season, which begins in October.

That compares to Honduras’ forecast of 5.4 million bags of coffee exports where an aggressive expansion of coffee farms is underway.

Honduras is now luring the migrant workers from Nicaragua who used to spend the season in Costa Rica.

“What is happening is quite rare. Countries that have traditionally been sending migrants are now also receiving them”, said Johnny Ruiz from Costa Rica’s Labour ministry.

Honduran officials say immigration from Nicaragua - the poorest country in Central America - jumped by 70 percent in the last coffee growing season. In Costa Rica, by contrast, the arrival of Nicaraguans is slowing.

Young Costa Ricans are also getting a better education and finding opportunities in the country’s high-tech factories or in the thriving tourism industry that brings year-round visitors to Costa Rica’s jungles and beaches.

The drop in Costa Rica’s coffee output is an ongoing phenomenon that has already been priced into the market, said Jack Scoville, vice president of The Price Group in Chicago.

But deeper losses from the lack of workers could increase the differential price paid for Costa Rican beans, which trade at a premium above the benchmark arabica contract in New York, known as the “C” contract, Scoville said.

Costa Rica’s difficult, mountainous landscape makes mechanization near impossible and puts the country at a disadvantage when competing with coffee-producing countries that use large machinery to pick beans.

“Costa Rica has put its money in the quality of the coffee to distinguish itself from the rest. That’s one reason mechanization is difficult,” said the country’s Agriculture Minister Gloria Abraham.

For now, Ronald Peters who heads Icafe, said farmers will attempt to maximize production through fertilization and land renovation programs, while trying to lure back workers with friendlier immigration laws.

Additional reporting by Ivan Castro in Nicaragua and Gustavo Palencia en Honduras; Editing by Mica Rosenberg and Gunna Dickson

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