Peru Agriculture Ministry launches $10 million coffee plantation restoration project

Peru has launched an ambitious $10 million coffee plantation restoration and renewal project to span over the next four years, according to Agriculture minister Carlos Leyton.

The project aims to make credit readily available to the more than 110,000 coffee growers in Peru, currently farming 370,000 hectares in the cloud forests in the central and southern Andes.

“Our per capita consumption of coffee is barely 400 grams, while Brazilians and Costa Ricans consume up to 8 kilos per capita,” said Leyton from Peru’s 11th National Coffee Festival in Pichanaki, a small frontier town in the central Department of Junín. “We have to do something.”

Though coffee is Peru’s prime agroexport and brought in more than $640 million last year, Peruvians consume very little locally-grown coffee, often preferring tea, imported instant coffee, or other beverages. The over-riding reason is price. To change this trend, Peru’s Agriculture Ministry – in collaboration with regional and municipal governments – has announced plans to launch a nationwide campaign to persuade people to drink more Peruvian-grown coffee.

In addition to the coffee plantation restoration project and campaign, a National Coffee Institute will be established in the town of Pichanaki. The town, between La Merced and Satipo in an area plagued by terrorism in the 1980s and 1990s, is east of one of Peru’s leading organic coffee growing areas at Villa Rica and Chanchamayo and, according to the ministry, where 24 percent of Peru’s coffee is grown.

Peru’s coffee exports account for two percent of both the national economy and the global coffee supply, and Peru is quickly building a global reputation for producing traditionally cultivated, shade grown, high quality Arabica beans.

According to Equal Exchange, an estimated 15-25 percent of Peru’s 110,000 smallholders now belong to cooperative organizations.

“These cooperatives have linked with international Fair Trade and organic networks to stimulate their growth. Working together with partners like Equal Exchange, Peruvian smallholder cooperatives quickly became the second largest suppliers of Fair Trade certified coffee after Mexico and one of the world’s top organic producers,” reports Equal Exchange on its website.

Government support for the industry is also aimed at attracting farmers away from coca production.

In spite of recent certification efforts, the coffee industry in Peru has been affected by a lack of investment and government aid, as well as the proliferation of coca crops, which have grown to supplant coffee plantations in certain regions.

Peru was, until 1996, the world’s largest coca leaf producer, and is now the world’s second largest producer of coca leaf, now second to Colombia.

Peru slashed its production by 70 percent between 1995 and 2001 primarily because of low coca prices, interdiction, forced eradication of coca fields and programs that encourage farmers to grow alternative crops.

But by 2002, the number of hectares used to illegally grow coca in Peru increased as efforts to eradicate the crop in Colombia forced production southward again.

This can be explained, in part, by the balloon effect, or the drug fields’ tendency to shift elsewhere and sometimes to smaller and harder-to-reach plots in response to local eradication campaigns, and the fact that for farmers, the coca harvest provides more money than any other crop: up to five times as much can be earned for a kilogram of coca than for a kilogram of coffee.

Additionally, government efforts to help farmers switch to legal crops has never had a follow-up with long-term transport facilities and assistance to reach profitable markets.

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