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The Cost of Coffee Cultivation

From the August 2011 issue.

Evaporating labour forces, flourishing fertiliser prices and plantations in need of renovation are squeezing coffee growers’ margins more than ever before. Jacqueline McArthur looks at the increasing burden for farmers.

Coffee farmer drying beansAs coffee connoisseurs consider the consequences of another price hike for their daily caffeine fix, they should spare a thought for farmers facing rises for all production costs at a time when unprecedented weather events are affecting yields worldwide. 

Food commodity prices have risen 60 per cent since June 2010 – an increase reminiscent of the 2007/2008 price spike that spread anxiety among policymakers and low-income consumers. Prices for coffee, tea, fish, wool, and palm oil have also risen significantly since mid-2010, and all were higher in April 2011 than when they peaked in 2008.

According to International Coffee Organisation (ICO) figures, cultivation costs have jumped for the 2010/2011 crop in most coffee producing regions.

Brazilian natural Arabica cultivation costs are now US$136.13 per 60kg bag. Labour (seasonal and fixed) costs are US$84.71 per bag, fertiliser at US$25.33 and crop protection products (fungicides, pesticides and herbicides) are US$12.72. With other production costs this amounts to US$166.61 in total. Brazilian Robusta production costs are US$91.52 with cultivation costs of US$59 (including labour at US$26.36) and fertiliser at US$16.21.

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