Victor and Hugo: Life and Faith and the Price of Coffee

(Reprinted from Zion's Herald magazine, September, 2005)

For several years I used to travel each summer to Guatemala with a big red-haired farmer in my congregation named Hugo. He sponsored children through World Vision and took me along to translate for him. One of his kids was named Elvia and she lived high up the Ipala volcano in the Chiquimula province, just this side of the Honduran border. Elvia lived in a dirt floor, one-room home on a wide spot next to the road with her two parents, three siblings and their families and their three children, and two neighbor children. Her older brothers and families live with them because no one can afford to live on their own; the neighbor kids live with them because their parents died in an accident and Elvia's family took them in.

Our first visit was lovely. Her father, Victor, stayed home to greet us and Hugo gave out toys and clothes to the kids. We noticed, however, that a new baby, born to Elvia's older sister looked frail and thin. She had a greenish tint to her skin and never smiled. "Bad water," Victor told us. "And not enough medicines."

Victor and his family are desperately poor. I asked him one time about the coffee farm he works on and he gestured far across the valley and up another mountain. I was amazed. "How far is that?" I asked. He laughed and shook his head. He didn't know, but it had to be a three to four-hour walk. "Every day?" I asked. He laughed again. Of course it was. Why was I so foolish as to ask?

Coffee is a huge portion of Guatemala's economy. It accounts for 12% of Guatemala's entire national income and constitutes 30-35% of its exports. More than 12% of Guatemala's workers are employed in the industry. Around the world coffee is the most frequently traded commodity in the world after oil. It is handled by half a billion people and consumed by more people than drive cars. In recent years it has become a cash cow for specialty shops like Starbucks and Dunkin Donuts. In the early nineties, however, prices paid to local coffee farmers turned steadily downward and are now at what some estimate to be a one-hundred-year low. It was a catastrophe for farmers but meant little to consumers. The price of our coffee never even went up with inflation.

The next year, Hugo and I returned to Guatemala and again trekked up the volcano to see Elvia and her family. During the year Hugo had arranged to send crates of chickens to the family. "For protein," he had said. "Half are 'layers' and half are 'fryers.' So they can eat some and get eggs from the others."

When we arrived, however, we found that all the chickens were gone. A disease had come through. The children had gotten sick and the chickens died. The little baby was still ill. Though her mother cradled her in her arms and sang to her silently, the baby stared vacantly into the distance. Her hair was still thin and yellow.

I asked Victor what had happened. He said he didn't know. A development organization had given them medicine and they took it but it was gone and the baby is still very sick. "Can you afford any on your own?" I asked him.

"No," he said. "We don't have the money for the medicines. Last year the foreman paid me less than he paid me the year before. And this year less than last."

"Why is that?"

He shook his head. He didn't know.

"What will you do?" I asked.

He smiled, but he did not laugh. "I will work harder."

Victor is not wrong about his declining pay. In 2001 farmers around Chiquimula were earning 25 quetzales ($6.00) per day but now they earn between 10 and 15 quetzales ($2.50 to $4.00), which is not enough to survive on. The World Bank estimates that between thirty to sixty million coffee farmers around the world lost their livelihoods because of the crisis. Major coffee regions are in tatters. In Colombia, famous for Juan Valdez commercials, coffee has fallen from first to fourth in its exports, and the federation that produced the commercials is bankrupt. In Ethiopia, the historic birthplace of coffee, coffee has shrunk from 70 percent of its export earnings to 30 percent.

And the "collateral" damage is enormous. Some coffee workers move to the cities to seek jobs in sweat shops so that North Americans can buy ten-dollar shirts. Some flee their country seeking a better life, often dying along the way. Remember the twenty-four Mexicans found suffocated in a boxcar in Iowa a few years ago? More than half were out-of-work coffee farmers.

Others manage to stay on their lands by growing illegal crops. In Colombia, it's coca and poppies. In Africa, it's Khat, an amphetamine-type drug that is illegal in the US and many European countries. It earns about $9 a bushel while coffee brings about $.01. If your family were hungry, what would you do?

Still others have turned their plowshares into swords and joined revolutionary movements. In Chiapas, Mexico, the Zapatista rebels evolved as a direct protest against the state-sponsored reduction in prices paid to coffee farmers. In Colombia, thousands joined the leftist rebels and right wing paramilitaries when farmers lost their incomes. In addition country income itself suffers. In Ethiopia the drop in coffee prices has cost the country $1.12 billion in lost export revenue in the past five years alone. That money could have built thousands of health centers or schools. And the crisis has set back much of the progress achieved by debt-reduction activists in recent years. Ethiopia spent years under the belt-tightening rules of the IMF in order to qualify for $58 million in debt cancellation in 2001. Yet in the same period it lost almost twice that amount from the decline in coffee revenues.

On our way home, Hugo fretted over how to do more to help his kids. "I can send more money," he said. "I can set up a trust, so that whatever happens to me they'll get help." Hugo looked as strong as a bear, but his hips and right thigh were slowly being eaten up with cancer and he knew that one day he would no longer be able to make the journey up into Chiquimula. I tried to walk him through what I knew about the causes of the global crisis and its effects on people like Victor and his family, most of which Hugo could not help with trusts and more gifts. But in the end he said he didn't know anything about that. That was just politics, he said, and he didn't get involved with politics.

The causes of the coffee crisis are legion and have more to do with human sin than "laws" of economics. From the sixties through the eighties there was an International Coffee Agreement that kept coffee prices at a relatively stable price, and most farmers, while poor, at least made a living. The U.S. supported the agreement because it kept poor people in Latin America from getting so hungry that they would consider Cuba a role model and overthrow their oppressive governments. But after the fall of the Soviet Union, the geopolitical need to feed poor people declined, so we changed policy. We pulled out of the agreement (effectively killing it) and almost overnight, new producers jumped into the market and prices paid to local farmers began declining.

It seems to be an almost-intentional policy among wealthy countries, and lending institutions like the World Bank, to keep production high and prices low. It is the basis of the reigning model of economic globalization. During the nineties the IMF and other regional banks made hundreds of loans to develop coffee plantations but with each new coffee farm, more coffee was produced, which drove down prices and drove down farmer incomes.

A dramatic example of this was in the early 1990s when the IMF arranged massive loans by regional banks to help bring Vietnam into the global coffee market. In less than a decade Vietnam moved from being a tiny producer to number two. That so increased the glut of coffee on the market that soon nobody, not even Vietnam, was making money. By 2000, the Vietnamese government was burning hundreds of thousands of hectares of coffee to help drive prices back up—but it was too late. In addition to overproduction, Vietnam also suffered ecologically. During the 1990s, over 400,000 people rushed to the Dak Lak province to plant what they called the "dollar tree." Hundreds of thousands of hectares of ancestral forests were cut down and intensive irrigation led to soil erosion and water shortages. Natural rivers ran dry and underground water levels dropped. When drought struck in 1998, 200 reservoirs dried up and water supplies were drained. And 90% of families in Dak Lak did not have access to sufficient water.

Corporations can also contribute to the damage. For example, in the late 1990s, Nestlé, the world's largest coffee buyer, told its Mexican clients that it was moving to Vietnam where labor was cheaper, so Vietnam increased production by 55,000 tons. But Mexico offered to lower prices paid to coffee growers, so Nestlé purchased only 4,500 tones of Vietnam's coffee and otherwise remained in Mexico. So, Mexican farmers lost because of a cut in prices and Vietnamese farmers lost because of over production and Nestlé made a killing.

In the summer of 2003 I took my last trip to Guatemala with Hugo. His doctor said the cancer was growing and didn't recommend he make the trip. But Hugo had to go. He had his idea for a trust and wanted to tell the family. We took several others from the church with us on that trip, and it was a good thing because he was in a lot of pain, and more than once we had to help him in or out of the truck or down a hill. It was hard, but he was tough, and we managed to make the painful drive one last time up into the mountains so he could see his kids. They knew him well by this time and they all poured out to see him. He was in tears, but he was happy.

I saw Victor again standing by himself away from the crowd, and I asked how his coffee farming was going. He smiled but looked ahead at Hugo playing with the children, including their frail little girl who looked better now, but still not well. Too much damage had occurred at too early an age for her to ever be truly healthy. "Mister Hugo loves our children," he said. "And he wants to help us. But we can no longer farm here and we are going away."

"Where?" I asked.

"There are many of us. We cannot farm here and feed our families. We will ride on the bus to the city where there are jobs in the factories. They hire men who are strong and work hard."

I looked at him with dismay. He looked old and weary. He would never be hired in a factory. What would happen is that his sons would take care of him, and he would be humiliated.

"We cannot feed our families here anymore," he said.

On the way home I told Hugo about my conversation with Victor and he grew silent. Finally he said, "That Victor's a good man. He's a hard worker and doesn't deserve this." Hugo had a lot of respect for Victor and it was a shame that they never got to know each other well because neither could speak the other's language. As two old farmers with big families and big hearts they would have had a lot to talk about.

"I've got to send more money," he said.

"I don't think that would help," I said. "Every year they make less than the year before. You can't just pay for their whole lives."

"But they can't just lose everything." His face tensed for a moment, like someone in pain, and he rubbed his thigh. "Tell me again about that fair trade thing."

Fair trade coffee is actually just one of many ways that people can help farmers in Victor's situation. Oxfam, for example, has promoted a package of proposals under a "Coffee Rescue Plan," such as getting roasters to pay higher wages and reducing the stock of existing coffee. Another campaign worked for years to get the U.S. to rejoin the International Coffee Organization so that its influence could be used to reinstate something like the old coffee price stabilization agreement. The U.S. did rejoin the organization in 2004, but so far has refused to agree to any coffee revitalization program that is not conditioned on laissez faire, free-market principles.

However, the fair trade movement remains the most accessible way for most people to feel they are having a direct impact on the crisis, as well as learning more about it. In a fair trade arrangement, a coffee company will partner directly with farmer co-ops in developing countries, which eliminates the "middle people," and in so doing guarantees a stable living wage. In addition, to be certified the cooperative must do such things as promote democratic principles of governance, gender equality, humane working conditions, and environmental sustainability.

The oldest fair trade company in America is Equal Exchange in Massachusetts. They began back in the eighties and they also have a interfaith outreach program that is a major part of the company. They form partnerships with faith groups and congregations, who in turn sell and promote fair trade products.

By winter Hugo was sick in bed most of the time, and by summer he was too frail to make the trip back to Guatemala. Then, in the early winter, when his church was preparing to welcome the birth of the son of God, and prince of peace, Hugo died. He never found a way to solve all the problems for the family he learned to love so much up on a volcano in Chiquimula.

Not long after that our church joined with Equal Exchange to begin selling Fair Trade products. We put up a big display in the parish hall, ordered a bunch of their coffee, chocolate, and teas, and have been selling them on Sundays ever since. I doubt that our little project will ever help Victor and his family in Chiquimula, who finally had to move away and lost everything they ever had. But I'm certain we've helped other people like them. And I'm certain that somehow in the mystery of pain and love and life and death, that Hugo knows about our little coffee display out in the parish hall, and wherever he is, I think he's glad.