Variance in Approach Toward a ‘Sustainable’ Coffee Industry in Costa Rica

Front matter

a : ; Variance In Approach Toward ` ae x — A ‘Sustainable’ Coffee Industry e 4 — ae In Costa Rica oy oe | Perspectives From Within: Lessons & sich

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MELIssa VOGT

Chapter 1 Historic account of Costa Rican development: the creation of an identity

Introduction PART I: The Costa Rican colonial experience (1540-1821) PART II: History of independence in Costa Rica (1800-2000) The Central American political experience The Costa Rican political experience Land tenure in Costa Rica and a rural democracy Costa Rica and Coffee Social stratum associated with the Costa Rican coffee industry Expansion of coffee farming (1886-1948)

Softening dependency and insecurity for small and medium coffee farmers (1900-1936)

Increasing intensive coffee farming and mono-export (1950-1970)

Resolving the influence of intensive farming and economic crisis (1970-2000)

Summary Chapter 2 Trade’s influence in development

Introduction Paradigm and praxis cycles counterbalancing created imbalance ‘Sustainability’: meaning and efficacy viii Table of Contents

Chapter 3 The international coffee industry Brief history of coffee

Botanic background of coffee

The Bean Belt: who wears the pants?

Collapse of the International Coffee Agreement Market Saturation

The contrast of a coffee crisis

Summary Chapter 4 Sustainability Certifications

Introduction Sustainability certifications Sustainability certifications and coffee

History of Rainforest Alliance (RA) and Fairtrade coffee sustainability certifications

Costa Rica and sustainably certified coffee

Organisational structure of certifications

Basic differences between Fairtrade and RA premise and standards Approaches to verifying compliance

Compliance requirements for use of label

Chapter 5 Overview of the contemporary Costa Rican coffee industry

Costa Rica compared to regional indicators of development and happiness

Land distribution nurturing cultural and social significance

Costa Rica: Coffee, sustainability and poverty reduction

Conservation and sustainable development efforts during intensification Physical suitability of coffee farming locations

Coffee farming in Costa Rica (from the 2000s)

Coffee Industry structure

Lowering popularity of cooperativismo

Farming coffee: complications and implications

Disease and pest epidemics

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Table of Contents ix

Environmental impact Environmental and health (in)security South-South Labour Migration: Destination Costa Rican coffee farms

Perspectives from within Costa Rica

Chapter 6 Methodology and Methods Introduction Rainforest Alliance (RA) and Fairtrade

Poverty as a guiding theme within sustainability for fieldwork considerations

Ethics

Methods

Fieldwork

Cooperatives included in fieldwork visits in 2009 Triangulation of fieldwork information Presenting common opinions, quotes and results

Addressing subjectivity and representation of fieldwork presented in results

Quantified summary and assessment according to poverty reduction indicators

Qualifying how findings should be used and understood Findings

Standard development: politics of change and a top down approach Standard development according to certification Producer involvement in standard setting Inappropriate Standards

Chapter 10 Increasing the number of certifications and associated benefits or disadvantages Top down demand

Symptom of a supply chain power imbalance?

Limited capability for market access Certifications as a market movement

The producer perspective: observed and understood difference between certifications

The influences of a top down, market demand-based approach Chapter 11 Reputation beyond intention and influence

Introduction Subsistence farming, and regulated and reduced chemical use

The producer perspective: the difficulty of assigning influence of change to certifications

Frustration with Fairtrade Certifying existing practices?

Scope for improvement: more recent changes Requirements for implementation: Minimal support or building capacity?

Summary Chapter 12 Reinforcing international trade power dynamics?

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Table of Contents xi

Increasing certified markets and resulting compromises

Voluntary regulation and vulnerability to power dynamics Interdependence between corporation and certification

Power dynamics between producers and certifications Monitoring producers more than traders and roasters

Summary Chapter 13 Summative discussion

Introduction Considerations and concerns identified Outcomes associated with RA and Fairtrade An economic loss The cost of becoming certified for small producers compared to benefit Producer voice in Fairtrade organisational processes The challenge of adequately involving producer groups for Fairtrade Hired labour standards Formalised land title Certifications: labels and market-based reputation Quantified summary of key topics against poverty reduction indicators A whim of the market

Reinforcing international trade dynamics

The role of the ‘developed’ world: from Green Revolution to a Sustainable

Revolution?

Positive outcomes and pressure points for influence

Opportunities for Improvement

Chapter 14 Alternatives to and complements for sustainability certifications in Costa Rica Introduction Structured education programs for premium investment Certifying direct trade compared to international sourcing chains Examples of Fairtrade certified and directly traded coffee in Costa Rica Learning from experimental precedents in Costa Rica

Reducing the cost of compliance

Vertical integration of the sourcing chain

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164 165 166

Locally developed standards Limiting international certification schemes to specific situations

Conclusion

Chapter 15 Summarising comments and recent developments

Introduction Quantified summary according to poverty reduction indicators

Recognising in-country frustration with international sustainability certification process

The difference between RA and Fairtrade in Costa Rica Overview of achieved intentions Identified benefits

Producer participation

Price and poverty reduction

Considering the benefit of certifications over time Sustainability standards and legal requirements Demand for multiple certifications Summary

Recent developments Epilogue

Coffee: Whose Sustainability?

Introduction Social and cultural significance of coffee in Costa Rica Reducing intensive coffee farming

Bibliography Recommended Reading for Recent Developments Glossary

Appendix A: Themes for fieldwork discussion and interviews

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Figure 9:

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Figure 16:

Figure 17: Figure 18: Figure 19:

List of Figures

Classification of coffee: species and varieties The bean belt

Periphery of coffee belt: coffee consumption by country (60kg bags/year)

Basic In-country coffee sourcing chain

Example of variance in country specific sourcing chains Coffee export price per pound (1969-2015)

Coffee export price per pound (2009-2018)

International coffee production during two coffee crises (1990-2003)

International coffee prices during two coffee crises (1983-2008)

RA organisational structure 2017 Fairtrade International organisational structure

Costa Rican export of coffee green by quantity and value

Costa Rica: major agricultural exports International coffee production yield per hectare

Four horizontal and vertical tiers of coffee industry structure

Ten coffee farming communities and three cooperative visited in 2009

Two coffee farming communities farm visited in 2014 Basic comparison: direct trade and certifications

Costa Rican green coffee imports by quantity and value

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Table 1: Table 2: Table 3: Table 4: Table 5: Table 6: Table 7: Table 8:

Table 9:

List of Tables

Major traders in coffee industry

Comparing RA and Fairtrade hired labour standards Regional indicators

Export trade matrix, coffee, green

Interview schedule 2009

Information about cooperatives visited in 2009 Poverty reduction indicators to summarise fieldwork

Accumulated poverty reduction indicators and outcomes by identified issue

Production, supply, demand data statistics

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AECID ASCONA CAN Coocafe

EFTA FAO FLAANZ GDP HDI HPI ICAFE ICO ILO INEC IOM ECLAC FI GATT INBio MDG MNC NAMA NEWS OECD RA SAN SAP SDG TNC WCED WTO WFTO

Acronyms

Agencia Española de Cooperación Internacional para el Desarrollo Costa Rican Association for the Conservation of Nature Community Agroecology Network

Consorcio de Cooperativas de Caficultores de Guanacaste y Montes de Oro

European Fair Trade Association

Food and Agriculture Organisation

Fairtrade Labelling Association of Australia and New Zealand Gross Domestic Product

Human Development Index

Happy Planet Index

Instituto de Café, Costa Rica

International Coffee Organisation

International Labour Organisation

Instituto Nacional de Estadisticas y Censos, Costa Rica International Organisation for Migration

Economic Commission for Latin America

Fairtrade International

General Agreement on Tariffs and Trade

Instituto Nacional de Biodiversidad

Millenium Development Goals

Multinational Corporation

Nationally Appropriate Mitigation Actions

Network of European World Shops

Organisation for Economic Co-operation and Development Rainforest Alliance

Sustainable Agriculture Network

Structural Adjustment Programs

Sustainable Development Goals

Transnational Corporation

World Commission on Environment and Development World Trade Organisation

World Fair Trade Organisation

Introduction: Aim and Scope

I was to walk two hundred metres and turn right, to find the house with a blue facade and a family waiting for me. It was a small coffee farming community in the south of Costa Rica surrounded by mountains, forest and coffee, slightly run down; the community was similar in design to a town on the Caribbean Coast, Cahuita. Walking through their house, it seemed like most houses in Costa Rica until I looked straight through the back window to a tropical forest garden. I was given a personal tour of the large variety of trees, fruits and orchids growing through the one-hectare space that used to be a small coffee farm. Practicing some ornithology, I identified approximately nine species of birds that would visit every morning to eat the bananas grown in the garden. The diverse range of fruits included some kiwi fruits introduced by an international exchange student. It was a beautiful and peaceful location to stay for a couple of days. Breakfast was served with a cup of coffee and a knowing smile, some gallo pinto’,

! ‘Spotted roaster’ is a traditional Costa Rican dish of rice, beans, coriander, red capsicum and lizano sauce.

Vogt, M. 2019. Variance in Approach Toward a Sustainable’ Coffee Industry in Costa Rica: Perspectives from Within; Lessons and Insights. Pp. 3-5. London: Ubiquity Press. DOI: https://doi.org/10.5334/bce.a. License: CC-BY 4.0

4 Variance in Approach Toward a ‘Sustainable’ Coffee Industry in Costa Rica eggs, a tortilla’, plátano del horno, with some natilla* on the side. Most of the food was served from the garden or traded with neighbours. The barter economy is alive and well in Costa Rican rural areas. The father of the family explained why he would never grow coffee again now focusing on cultivating organic lettuce amongst other activities. There was a coffee shop in town which locals rarely visit as they can make perfectly good coffee at home or, even better, agua dulce? or refresco.” In Costa Rica, all coffee exported is of first grade quality; the second grade is consumed in Costa Rica, it is better quality anyway” (Ronaldo, Cooperative employee 13 April 2009). The atmosphere of a coftee shop cannot compare to the smell of fresh air, forests, and the sound of birds that enrich many regions of Costa Rica. It is from this side of the coffee trade that this book develops.

Using interviews, focus groups and observations in ten coffee farming communities in Costa Rica, the influence of sustainability certifications is considered. The methodology provides perspectives from within the country and a different and more detailed way of understanding the influence of sustainability certifications. The study aims to consider the role of Rainforest Alliance and Fairtrade in the Costa Rican coffee industry context to evaluate the advantages and disadvantages for farmers, cooperatives and communities and identify opportunities for improvement.

To encourage a better understanding of the regional and international context, the history of the region and of Costa Rica and associated coffee industries is presented in three historic periods.

The influence of trade in development is considered within a poverty reduction and sustainability frame; a summary of the international coffee industry; and an explanation of sustainability certifications are provided in the following sections: Introduction; Background; Methodology and methods: perspectives from within Costa Rica; Findings: Advantages and disadvantages of sustainability certification experience; Further developments and opportunity for improvement. The epilogue considers the meaning of sustainability according to stakeholder, and how aligned the coffee industry is

2 A small flat cake, similar in shape to a pancake made of corn flour and water.

* Sour cream.

5 He made enough money from his organic lettuce, which was sold in a new organic section of the fruit and vegetable section at the local supermarket dedicated to the tourist and expatriate market.

° Warm drink made from sugar cane and water.

$ The coffee berries/beans are graded by size and sorted at the mill.

Introduction: Aim and Scope 5 with sustainability. Suggestions for adjustments in producing countries with cultural and social implication for producing communities and consumers are made to encourage a conceptual rather than a limited, and often subjectively determined sustainability.

Background

In the early mid 2000s I started volunteering with Oxfam campaigns and became involved in their shop and Fair trade products. At that time, Fairtrade products were mainly available overseas. Having completed a double degree in Management (Marketing) and Arts (International studies) I was intrigued by how to effectively integrate trade with sustainability and fairness, and how products could be certified or guaranteed as sustainable. Initially, my interest was primarily from a marketing point of view and how consumers could learn about topics and situations in producing countries through their daily consumption practices.

In 2006 Fairtrade certified products were introduced to the Australian market. I was, at that time, volunteering with the Fairtrade head office in Melbourne, Australia. Living between Adelaide and Melbourne I became involved in coordinating Fairtrade fortnights in Adelaide, a national marketing and promotion activity for newly introduced fairtrade certified products which were sold mainly in Oxfam shops and in Coles through Australia. During these promotional activities, Fairtrade organised for representatives of Fairtrade certified cooperatives to visit Australia and speak about their experiences with

Vogt, M. 2019. Variance in Approach Toward a Sustainable’ Coffee Industry in Costa Rica: Perspectives from Within; Lessons and Insights. Pp. 9-11. London: Ubiquity Press. DOI: https://doi.org/10.5334/bce.b. License: CC-BY 4.0

10 Variance in Approach Toward a ‘Sustainable’ Coffee Industry in Costa Rica

Fairtrade. I hosted cacao cooperative representatives from Ghana and a coffee cooperative representative from Costa Rica in consecutive years. Speaking with these representatives at length, their experiences as, not only representatives of cooperatives but as farmers led to an interest in what these logos were achieving in the producing country.

While I believed sustainable products needed to be available on the market and mainstreamed, it was also important that their influence in producing countries was aligning with marketing claims. At this time, and at a more political level, concerns about the fairtrade minimum price were expressed by various thinktanks which favoured liberal trade arrangements. They considered Fairtrade to be fixing prices which was not sustainable. There were therefore several discussions occurring about whether fairtrade was sustainable and what it was achieving.

I was interviewed around that time (2006.2007) about my opinions on fairtrade, and when I read it back, (see https://fairtradematters.wordpress.com/ interview-with-melissa-vogt), I still agree with most of what I said but there was still so much to consider.

In 2009, as part of a MA in International Development, I went to Costa Rica to consider how Fairtrade coffee was achieving stated intentions in a producing country. I would visit coffee farming communities according to their affiliation and membership with an umbrella cooperative, Coocafe while also allowing an opportunity to visit other coffee farming communities. It was the beginning of my exploration of sustainability certifications related to in-country contexts.

Leading to the fieldwork component of my study, I worked in Sydney with an organisation that sought to improve legal and actual protections for migrant workers who worked in Australia making clothes. At that time company codes of conduct, an independent label, legal frameworks and industry reviews were developing and occurring. The garment and coffee industry; and Australia and Costa Rica are extremely different contexts and no comparison was possible in this regard. What was beneficial from the experience in Sydney was an ability to consider how the various mechanisms were necessary and how each served specific and important roles to make an industry more socially just and therefore sustainable. Of course, what sustainable meant in the context of socially just was an additional consideration.

The monograph has therefore arisen from years of considering how to make trade more sustainable, with a starting focus on the coffee industry and international trade. Fieldwork from 2009 is complemented with secondary literature and follow-up fieldwork to consider not only findings from 2009, written into a dissertation in 2011, but also how these findings resonated years later. It was a conscious decision to not publish dissertation findings in 2011 despite it being recommended by an examiner. The findings were quite controversial related to the effectiveness of Fairtrade certification and the risk of damaging what was quite a promising introduction to improving consumer awareness about where, how and who the products they consume daily were

Background || produced, sourced and traded seemed too great. Had I come to the topic from an academic background only I may have felt differently. For marketing and consumption practice benefit, I was not sure that it was the appropriate measure, instead I chose to continue studying and considering the topic. There was also, at that time, concern about how subjective the findings were. Eventually I decided the findings were complicated to a point they might confuse opinions about the bigger picture benefit of sustainability certifications. While they were not demonstrating positive, and in fact, in Costa Rica Fairtrade demonstrated to be creating situations contrary to marketing claims, there were benefits that required further consideration before introducing an idea that they do not work.

Since my study in 2001 there has only been one other based in Costa Rica that has considered the number of cooperatives that I visited and interviewed. This study has been conducted through a larger research institute, CATIE which could influence the discussions and findings. My study was more organic and informal in design and approach, and there would therefore be a difference in how participants viewed me and how they would respond to my questions and our discussion.

While the method is not necessarily superior, in-depth interviews with few participants can successfully demonstrate common perspectives, opinions and thinking across a group of similar experience related to specific topics. Combining these studies with in-depth community studies could be an effective method for future considerations. It is useful to consider an entire industry, community or organisation of farmers alongside certifications, instead of considering certifications as the focal point of all in-field studies. To say in a different way, the context within which certifications operate is extremely relevant and important to consider. In-depth interviews and discussions allow considerations inclusive of but not only specific to certifications.

Opinions related to sustainability certifications have changed over time, the marketing and promotions in 2006 and 2007 no longer exist, and an idea of their being an absolute solution for sustainable trade has diminished, slightly. How certifications are viewed by smaller roasters is not exactly or consistently positive. There have however been replacement buyers of certified produce to ensure a continuing increase in sales of certified products.

With an improved understanding of how certified products benefit producing countries, and how it varies, and knowing that most certifications are working to improve their processes, and that institutions and organisations have been founded and are developing to support these improvements, presenting the findings from 2009 and complementing them with further considerations is considered good timing.

CHAPTER |

Historic account of Costa Rican development: the creation of an identity

With research and writing assistance from Leonardo Astorga Sanchez

A detailed history of Costa Rica provides a context for the monograph. How the Costa Rican experience differs to neighbouring countries is described to ensure an understanding of Costa Rica in the Central American region, and as compared to other coffee farming countries. Understanding the difference is important as extrapolating findings to other country’s experience with certifications could be inappropriate. The first part of this chapter is based on the colonial experience (1540-1821); and the second part provides information about contemporary history.