Is your coffee building Trump’s wall? Part 3: Requiem for a Coffee Republic

James Harper

Hey there, this is part 3 of a series.

If you haven't heard parts 1 and 2, I recommend you go check them out before you listen to this.

I'm with our economist Alvaro again, in the private members club, and we're playing around with a spreadsheet.

Alvaro is showing what happened to El Salvador's coffee sector after the civil war ended in 1992.

I wanted this episode to be a story about how the peasants of El Salvador moved into the middle class now that they finally owned some of the coffee lands.

But Alvaro's numbers tell a different story.

Alvaro's graph shows the Salvadoran coffee sector getting smaller and smaller all the way to last year.

Which is why this episode is going to be about what it takes to almost kill coffee completely.

I'm James Harper and this is Filter Stories, the untold stories hidden in your cup of coffee.

In this episode, we're going to hear from a lot of different people, and we're going to weave a story looking first at the cooperatives, then the coffee price, and then a coffee disease, and finishing with the gangs.

It's important for us to know that these are the conditions in which our coffees are grown.

One of the first things I did when I landed in El Salvador was connect with Africa 70.

It's this Italian NGO that's helping smallholder farmers grow coffee sustainably.

Now they invited me to this gathering of smallholder farmers on this remote farm near the Guatemalan border.

And on the day there were about a hundred farmers catching up and telling jokes.

I spoke to a lot of people that day.

Older men.

Women in their 20s and 30s.

They all owned small pieces of land, an acre or two.

The most insightful conversation I had though was with Olga.

Olga's 60 and her black hair caught my attention.

It was tightly wrapped together in this meter-long ponytail that fell all the way to her waist.

She and I walked slowly to a quiet place to have a conversation.

Her limp wouldn't let her walk any faster.

So in 1984, Olga and her husband joined this newly formed cooperative.

But problems start to brew.

Here's Alvaro again, our economist.

As in, the government tells the peasants, this land we've just taken from the wealthy families, it's now yours to run as a cooperative.

The new owners of these lands, the peasants, didn't have the business skills to manage these agricultural enterprises.

And the cooperatives start drowning in debt.

Because although the land was transferred from the wealthy families to the peasants, they weren't getting it for free.

They had to pay for it.

And they could only do that by taking on debt.

But because they were paying that debt, plus more debt to cover the cost of the operations, oh, and the fact that they're stuck in the middle of a civil war, each year their harvest got smaller and smaller until...

Álvaro Castro

I'm sure you have seen it.

So all these cooperatives that used to produce coffee, and the bigger ones that had coffee and bananas and sugar and whatever, nothing.

James Harper

Olga's cooperative went bankrupt too.

It fractured into little pieces, and everyone got their little piece of land.

So now Olga went from being a cooperative member to owning just her little piece of land and the house she lived in.

By the early 90s, El Salvador is awash with little smallholder coffee farmers like Olga.

And they all had like these little geese that lay golden eggs, and everyone's hoping that coffee will give them, you know, some decent income finally.

But in the late 80s, two big things happen to the world of coffee.

For one, the international coffee cartel collapses.

For decades, this cartel had helped keep prices high, and now there was no floor to the coffee price.

And second, Vietnam enters the coffee market.

It comes out of nowhere to become the second biggest coffee producer in the world.

All this to say, coffee prices are pushed very low, and they don't really ever recover.

Even today, the price of coffee is unsustainably low for the majority of farmers in the world.

So Olga and all her neighbors have their pieces of coffee land, and they can't make any money.

And so they sell up, make a fast buck.

And Olga tells me that she thinks this is foolish, because after three months, they spent the money, and then they were back to having little money and no farm at all.

But a part of me feels like maybe she got it wrong.

She should have got out of agriculture.

Because she then tells me she can't make a living through coffee.

And then for the next couple of minutes, she tells me what she does make money from.

Buckle up, it's quite the list.

So she tells me that the night before, she made pork rind, and her grandson managed to sell four little bags of it.

Then she packaged pepper, cabbage, cinnamon, spices.

And then at home, she has this small store where she sells eggs, cream, soda.

And then I asked Olga, how much money do you make per day?

Five dollars a day.

The day before, I was in the car with the Food and Agricultural Organization.

It's an agency of the United Nations.

We were visiting a collective of producers called Azules Piedras, Blue Rocks.

I'm visiting them to get another perspective, because they are slightly larger farmers, seven times bigger than Olga.

And these farmers decided to form their own cooperative.

And they are still in coffee, despite decades of low prices.

So we're 10 minutes drive from the Guatemalan border.

There are military men all around us with machine guns and balaclavas.

Diego FAO

Yeah, just standard, I guess.

James Harper

The military are on the lookout for drug smugglers on this border with Guatemala.

We park up on a hill and walk to meet some producers at their wet mill.

Diego, one of the FAO representatives, radios back to base.

We arrange plastic chairs in a semicircle.

I introduce myself to everybody here and we begin discussing the challenges the Piedras Azules is facing.

I expected them to say they were seriously considering throwing in the towel.

But Luis here says quite the opposite.

Diego, the UN rep, helps translate.

Diego FAO

They still hold strong beliefs that the chain is important, not just for them, but just as a country level crop.

Most of them are trying not to give up.

They don't want to give up.

That's the main thing.

James Harper

At one point, a man with a well-groomed white beard and a cameo cap walks in to the conversation.

Roberto is the president of this cooperative, and he stays quiet for about 15 minutes as everyone else tells me their stories.

And then he interjects.

And he shows me some calculations on his phone.

And it's some very depressing maths.

He has to pay his pickers about $32 for the equivalent of a thousand coffees.

But for that 1,000 coffees, he only earned $38.

That leaves him $6 to pay for all the expenses that go into producing 1,000 coffees.

And $6 doesn't go anywhere near covering the other expenses.

He is losing money.

It's crazy, he tells me.

You pay $1.50 for a coffee in a cafe.

Because the price of coffee is controlled by buyers, he says, this $1,500 that we coffee drinkers pay to have 1,000 coffees, he only earned $38, 32 of which will go to his pickers.

I just can't figure out how they're surviving.

But like, how do you feed yourself when you can't even cover the cost of your production right now?

Diego FAO

To survive, to ensure that they at least have a meal a day, is that they depend on beans and corn for like basic surviving.

It's looking grim, exactly.

James Harper

It's subsistence agriculture.

On top of low prices, coffee producers in El Salvador have to fight the roya.

It's also known as the coffee leaf rust.

It's a disease that stops coffee trees from producing as many cherries, so it dramatically lowers incomes.

And because of climate change, this disease has made a devastating resurgence.

I was with a younger coffee farmer, a guy called Marco Ariz.

We had just finished a tour of his farm, he's a wealthy farmer, and we were driving down the road and left and right of us were trees affected by roya.

I asked him to stop the car.

Marco Ariz

Yeah, very few leaves.

And in fact, you can tell they're overridden with all kinds of things that aren't, you know, all kinds of different vines and things.

James Harper

I mean, it just looks like a forest to me, like a bush.

Absolutely.

Marco Ariz

Absolutely, very foresty, you know.

And you can tell that coffee isn't even the main plant you see here now.

And this all used to be coffee, you know.

It's just one of the many...

I mean, how many farms, you know, have ended up like this?

Uh, maybe at least 80% of all farms in El Salvador.

The roya was that bad.

Oh, it devastated the country.

We're not even a tenth of what we used to be in strength.

James Harper

To give an idea of how big an issue roya is, it's already affected people we've heard from in this story.

Remember Olga?

Her production dropped to a tenth, just 150 pounds of coffee.

An entire year's harvest, giving her revenue of less than $100.

San Carlos Dos, the cooperative that got caught in a civil war in part two.

They were hit just as hard as Olga.

Israel Marquez

In 2015.

James Harper

Farmers can combat roya by replacing the older trees with younger ones, planting more resistant varieties, treating them with chemicals.

But this costs money.

Now, as if low prices and the roya aren't enough, coffee farmers in El Salvador have to contend with the gangs.

Now, let me connect the dots between that huge wave of migration in the 1980s from people fleeing the civil war to today's gang problems in El Salvador.

And a lot of it can be revealed in the story of just one gang, MS-13.

So this is the story as presented in a 2018 study on MS-13 by American University and Insight Crime.

The report details how in the late 70s and 80s, many Salvadorans fled the civil war and came to Los Angeles, looking for more economic opportunities.

Young adults and teenagers joined MS-13 seeking protection from other Latino gangs and their connected fellow Salvadorans.

But soon, rivalries between these gangs emerged.

Los Angeles police imprisoned many gang members.

And it's in jail that these gang members learn how to turn their gang into a business.

Extortion, drug smuggling, the usual.

But then the US starts deporting these business-savvy gang members back to El Salvador.

And their business activities eventually find their way into the coffee fields.

One weekday afternoon, I spent time with Ronnie in a cafe in Santa Ana.

His family has a coffee farm, but he works in construction as an engineer.

Ronnie is one of the many people in El Salvador who have dealt with the gangs first-hand on their coffee farms.

And to give an idea of the scope of the problem, in 2014, the Central Bank of El Salvador reported that gangs cost the economy over 750 million dollars.

That's about 3% of GDP.

Ronnie recounts the story of a time he and his father left the country to find coffee pickers.

My friend Tyler sat in on the conversation.

And he will translate what happened next.

Picture the scene.

They've just driven up to the farm with a car full of coffee pickers who are ready to work.

And there are no cherries left to pick.

Ronnie Cordero

It was really frustrating to see all of that work basically go to nothing.

One of their pickers is an older woman.

And I just remember in that moment, there was an older woman crying.

Ronnie Cordero

She's like around 55 years old.

And it was a reminder to me that it's not just us owners losing something here.

These are people that are in poverty that don't have very many resources.

And she was crying because that was potentially what she would have used to pay for her light bill to put food on the table.

Ronnie Cordero

And the gangs do more than just steal coffee cherries.

They might steal the land itself.

The gangs come to the farm.

Ronnie Cordero

And they make it so everyone has to leave.

All the workers have to leave.

They kick them out.

And the people out of so much fear, they basically leave with the clothes on their back.

And these are very poor people.

This is all their whole life.

They're basically leaving behind.

This seems to always happen to small producers.

That means this seems to be the main victims of this.

James Harper

And when small producers can't work their farms or their neighbors' farms, they're often forced to move to the cities to find work.

And the gangs are also one of the major reasons that I met so few younger coffee farmers.

Ronnie Cordero

The reason most of the people harvesting coffee are older are because if they're a younger person, like a teenager, if he's thought to be from the rival gang, then they'll kill him.

There's no negotiation or anything.

That person's just killed.

And so that's why workers are usually at least 35 years and older.

Ronnie Cordero

Muchachos no se pueden tener.

James Harper

And the murders of young people even happen on the big farms.

Have you ever had somebody hurt on your farm by the gangs?

Mauricio Escalon

Yes.

We had three guys killed this past year in La Esperanza.

James Harper

This is Mauricio Escalon.

We heard him in episode one and two.

He's the man with the great, great, great, great grandfather, Pedro Jose.

Mauricio Escalon

I was going on Friday and on Friday morning, they called me, look, don't even try to come because there are three dead people inside of the farm.

And that was a gang problem between because of the area of the farm.

We have one gang here and one gang here.

And we are in the upper part.

James Harper

So you have workers who are affiliated to gangs working on your farms.

Mauricio Escalon

I didn't know that.

I knew till that time.

He was very nice.

He was a nice people.

He was always laughing.

He was a very productive guy working and everything.

James Harper

Do you know how they were killed?

Mauricio Escalon

Do you want me to tell you?

They were like cutting pieces.

James Harper

With a machete?

Mauricio Escalon

Yeah.

Sixteen pieces, one of them.

Incredible.

Sixteen pieces.

I didn't see it.

I didn't want to see it.

James Harper

After all these waves of problems, the number of coffee producers in El Salvador has been falling.

In 1992, the year the civil war officially ended, the government estimated there were 215,000 people working in coffee.

And in 2018, those 215,000 fell to 45,000.

But there are some people like Mauricio Escalón, you know, the man we just heard from with the three murders on his farm.

They are thriving today.

Over the last 20 years, the campesino, the small-scale farmer, has had to combat so many issues.

Like, for example, there was the roya.

Then there's the price collapse.

And then, I mean, it just goes on and on and on.

It's this kind of successive waves of just crises.

And many have chosen to leave coffee.

How did you weather those crises?

For example, right now with price.

How are you surviving with this price crisis right now?

Are you surviving the price crisis?

Mauricio Escalon

Look, I can say yes.

I will say that's the work for 10 years, yeah?

Because when we decided to do this, one of the things that we put into the table was that we won't see the New York spot again.

James Harper

As in, Mauricio doesn't sell his coffee at the very low $1 per pound price that most coffee producers are stuck with.

In the next episode, we explore what he and other coffee farmers are doing differently and what this means for El Salvador's troubled relationship with inequality and coffee.

Thank you for listening.

I'd like to recommend a podcast that has been very helpful to me in creating this series.

So, the Coffee Podcast, which is hosted by Jesse Hartman, he's just done a series on a coffee price crisis.

And he has an interview with the coffee historian, Jonathan Morris.

We talk about this coffee price crisis, you know, being a recent phenomenon.

It actually began even before our grandparents were born.

Jonathan talks about all of this and more.

And the Specialty Coffee Association also has a podcast.

And there was a talk by political economist, Yanina Grabs.

You've heard her voice before because she featured in the Filter Stories, Sophia episode.

In the Specialty Coffee Association podcast, Yanina takes a cold hard look into the future of coffee prices and specialty coffee on a global scale.

Both of these put everything we've been talking about and more in perspective.

And there are links to both of them in the episode description.

This episode was sound mixed by Dom Edgley.

You can find more of his work at domedgleysound.com.

And the Filter Stories logo was created by Headquarters, a branding and packaging design team.

You can find more of their work at headquarters.studio. Thank you so much.

Until next time.