From Bean to Cup

Coffee is the second most traded commodity in the world—second only to oil. Coffee shop chains do well in promoting coffee as a life style, rather than a hot beverage. The Philippines as a coffee growing country experience a similar development with major international coffee shops like Starbucks and national coffee houses like Bo’s Coffee contributing to coffee’s fame. While businessmen, students and call center employees sip their coffees in air conditioned coffee shops, little is known about the farmers’ struggle to put the beans into their cup.

The lines on Lilla Camasura’s sun-tanned face tell the story of the life of a coffee farmer. She is one of several coffee farmers in Cabagna-an, a coffee growing community on the foot of Mount Kanla-on in Negros. She went into coffee in 1963 when a market price of 3 Pesos and 20 Centavos per “ganta“ of Robusta coffee—a measurement used back in the day for an equivalent of 2.75kg—was considered attractive. Today, a kilogram of Robusta has a market value of around 70 Pesos. At age 71, Lilla Camasura is a witness to the Philippine coffee industry’s development. “I started to grow coffee from seedlings to earn more money,“ she recalls. She started to plant coffee on half a hectare of land and slowly acquired neighboring property to expand to a total of three hectares. In 1969, her farm benefited from Mount Kanala-on’s volcanic eruption, which caused heavily fertile soil. “For a couple of years, our coffee trees would yield as much as 150 sacks per harvest,” Camasura remembers. “We made good money then.” Until the 1980s coffee exports earned the Philippines US$150 million a year. However, the 90’s marked a dark age for the coffee industry. Market prices around the world dropped. As a result, most coffee farmers in the Philippines cut their trees and converted their land into sugar cane farms. Coffee exports declined to as little as US$500,000 a year. “At that time I had already invested too much to convert my farm,” she says. “Coffee was already a part of my life which I could not give up.” Until today, coffee farming is the sole source of income for Lilla and her family. And she is proud to say she managed to feed all of her 11 children and even sent some of them to college.

It was in the 90’s when Antonieta Betio ventured into coffee. “I knew coffee prices were low at that time,” she says. “But I didn’t have any source of income so I took the opportunity when they offered me and five others to buy a coffee farm whose owner had just died.” Today she owns a Sari Sari store, where she sells—in small quantities—processed native coffee to the local community. “People in Cabagna-an usually prefer to drink our native coffee. Only if we are out of stock we drink Nestlé instant coffee.” Nestlé is the major buyer for the low altitude coffee variety Robusta in the Philippines. With caffeine content twice as high as in Arabica coffee, it is most suited for instant coffee production. However, being a business-woman, Miss Betio’s advice is to concentrate on more than just one source of income. “Besides our coffee farm and Sari Sari store, I and my husband also raise cows to make money,” she says.

Even though coffee prices increased over the past years, the incentive to grow coffee is still limited. Carmelita Balono was 21 when she took over 8 hectares of family owned coffee farmland. “We earn more now with coffee than we did 28 years ago,” Balano says. “But cost of labor and living expenses increased as well. I only save 1,000 to 2,000 Pesos per harvest.” This is one of the reasons why in the Philippines, once the 4^th largest coffee producer in the world, imports coffee today. Half of the 60,000 metric tons of green beans needed for local consumption per year is sourced from countries like Vietnam and Indonesia.

Unsatisfied with the small profit margin provided by selling green beans, Teresita and Ricarlito Inocencio came up with their own business idea. For generations Ricarlito’s family used to grow and harvest coffee and then sell the unprocessed beans to traders. The young couple realized quickly, that there is more money in coffee if they would already add value to the green beans. In January 2003, the Inocencios started their roasting business. Equipped with a simple roasting pan over an open fireplace they are able to supply small stores and local coffee shops in nearby communities and cities with roasted and ground coffee. The old-fashioned way of roasting is labor intense. “I can roast three to four kilograms at a time,” Teresita says. “But I have to constantly stir the beans for one hour so they will not burn.” The profit is worth the effort. “We currently charge 140 Pesos per kilogram.” Ricarlito says. To jump start their coffee business the Inocencios gave an incentive to their now loyal customers. “Most shop owners wanted to sell ground or brewed local coffee but lacked the initial capital. We gave them the first kilogram of coffee as a cash advance so they can make money to buy the next batch from us.” The orders kept coming in and paid off Ricarlito’s investment. “Only if they cancel their order, they have to pay back the first coffee loan.”

Entrepreneurs like the Inocencios spark hope that farmers’ perception of coffee will go beyond that of a commodity to make a living. By making available their own coffee to them in a cup will raise farmers’ understanding of quality and value for their produce. Combined with the right profit margin farmers will keep on growing coffee—the number one priority for coffee shops around the world.