History of Coffee in Guatemala

While the world coffee crisis of the past few years has increased problems faced by the Mayan people in Guatemala, they have been facing a permanent crisis for centuries, ever since the Spaniards arrived and began to disrupt indigenous ways of life. This began when the Spanish crown awarded large swaths of land to settlers, and what had been traditional Mayan lands became large estates upon which the indigenous people were forced to work. Throughout the colonial period and after Central American independence in 1823, various laws around land tenure either drove indigenous people off their land or converted them into “residents” of the new plantations.

With the invention of chemical dyes in Europe in the 1800s, the export market for Guatemala’s indigo and cochineal collapsed. Coffee was developed as an export crop to take their place, supported by the government through preferential trade and tax treatment. By 1859, over a half million coffee trees had been planted around Antigua, Coban, Fraijanes and San Marcos and close to 400 quintales (100 lb. bags) were exported to Europe. The next year, production tripled to over 1100 quintales1.

Guatemalan dictator Justo Rufino Barrios made the export of coffee the backbone of his government’s program in the 1870s. Barrios expropriated land belonging to the Catholic hierarchy, as well as communal lands held by Mayans, and by 1877, Barrios had virtually eliminated communal ownership of land in Guatemala. By 1880, coffee accounted for 90% of Guatemala's exports2. While exports of sugar, bananas and other fruits and vegetables, as well as beef and clothing, have also grown, coffee remains Guatemala’s largest export3.

The social unrest resulting from the world-wide economic depression of 1929 led to the Matanza (massacre) of 1932 in neighboring El Salvador; to Guatemala it brought the presidency of Jorge Ubico in 1931. Ubico’s dictatorship inaugurated a 13 year repressive campaign against trade unions and other forms of popular organization. The tide began to turn in 1950, when populist Jacobo Arbenz was elected president and slowly began implementing a land reform, incurring the wrath of the large coffee plantation owners as well as the United Fruit Company and the US government. The Arbenz government was overthrown by a CIA-organized coup in 1954. The land reform was reversed, the unions and popular organizations disbanded, and thousands of people were murdered, including organizers and members of agricultural cooperatives.

The terror unleashed by the US overthrow of Arbenz continued through a succession of governments, leading to the outbreak of civil war in 1962, which lasted through 1996 when Peace Accords were finally negotiated. The war functioned as a laboratory for methods of terror as a means to control the population. Entire villages were wiped out as the military, right-wing paramilitary, and government-organized “village patrols” murdered mostly rural, mostly poor, mostly indigenous people with impunity. The Guatemalan civil war resulted in an estimated 200,000 deaths and a society in which violence, distrust of government and law, and a culture of fear continue to this day.

The accomplishment of the peace agreements was that they brought an end to the longest war in the Americas. However, the causes of the conflict -- poverty, hunger, unequal land distribution, and racism faced by the indigenous population -- continue today and continue to define Guatemala’s coffee economy.

Labor relations in the coffee sector have not changed much in the last century. Plantation residents continue to complain of indentured servitude as some farms promote indebtedness through rents, credit policies at the company store, and loans for emergency health care. Many say they were evicted from their ancestral homes without being paid legally-mandated severance benefits. Others, however, have been able to negotiate land titles in exchange for leaving their places of origin. Tensions around land have resulted in some large growers establishing private security forces, increasing the levels of fear, violence, and inequality in rural areas4.

The coffee harvest depends on a massive, seasonal influx of migrant workers who travel to supplement the meager income generated by their small plots of land in the highlands. Seasonal and sometimes daily contract laborers, instead of permanent employees, represent significant savings for growers by not demanding year round wages and benefits. This arrangement also tends to lower wages in general, and makes access to food (and the land to grow it on), housing, medical care and schooling more difficult. In general, a season’s worth of work will only generate 1/3 of a family’s corn and bean calorie requirements for a family5.

Guatemalan coffee production peaked at the turn of the 21st century when it reached around 5 million quintales; however, production fell by 1/3 in just a few years (to 345,000 quintales in 2004) as coffee prices dropped drastically6. The decline in coffee’s price and production increased the already difficult conditions for Guatemala’s peasant farmers.

About the same size as the state of Ohio, Guatemala ranks second in the world (after Colombia) in the amount of high grade coffee it produces, and it has the highest percentage of its crop classified as high quality. Over half its coffee is exported to the US, representing 1/8 of the country’s GNP and generating about 1/3 of Guatemala’s foreign exchange. But when these hundreds of millions of dollars trickle down, this intense labor generates little for the coffee workers. Refugees International’s Larry Thompson believes that in the recent crisis, “those fortunate enough to have found work in the coffee harvest saw their wages fall from a previous average of about $3.00 per day to about $2.00 per day.”7 These starvation wages occur despite the existence of a legal daily rural minimum wage of $2.488.

Although statistics vary significantly, even the more conservative sources like USAID estimate that 56% of the population lives in poverty, and 20% in extreme poverty. Infant mortality is among the worst in the region (39 per 1,000 live births), maternal mortality is extremely high (153 per 100,000 births) and chronic malnutrition remains a serious problem (49%)9. Others believe that as many as 85% of children under 5 are malnourished, and that stunted growth affects up to 95% of non-Spanish speaking children in some regions10. A survey of a region in eastern Guatemala in October 2001 found 2.1% of children under five suffered from acute malnutrition; a March 2002 re-survey of the same region found that acute malnutrition had increased to 4.3%11.

Increased access to land and income in rural areas continues to be key to resolving these stark issues of malnutrition, disease and mortality. Unfortunately, solutions remain among the failed promises of the Peace Accords as real land reform and an end to discrimination against the Mayan peoples seem to be absent from the government’s agenda. While only a small step toward rectifying centuries of injustice, fair trade coffee is helping to improve the situation for Guatemala’s small coffee farmers.

One of Equal Exchange’s partners in Guatemala is Manos Campesinas (Farmers Hands). Founded in 1997 by 620 farmers organized in 6 cooperatives, it now has 1,073 members organized in 7 cooperatives located in the Departments of San Marcos, Quetzaltenango, Retalhuleu and Solola12. The majority of these farmers each own less than 2 ¼ acres of coffee. In their first season (1997-1998), Manos Campesinas exported one container of coffee. The following harvest, they exported four containers. Over the next three years, their exports increased to six, nine and thirteen containers respectively. In 2003, they exported 16 containers, 40% of their total production. Considering that the fair trade price for coffee that year was $1.26, while the market (unfair) price was 60 to 70 cents13, the improvement in coffee farmers’ lives, health and nutrition becomes obvious.

According to Jerónimo Bollen, former General Manager of Manos Campesinas, “Fair Trade keeps farmers on their land. While low coffee prices have forced thousands of farmers to emigrate to Mexico and the U.S., none of our members have had to give up their land.”14

Carlos Reynoso, current General Manager of Manos Campesinas, agrees: “About four or five years ago, coffee prices began to fall. That made our existence and our lives that much more difficult. We received less income for our production, but that also meant less money for food, health care, and education. The premiums we receive from fair trade help us send our children to school, and provide food and medicines for our families.”15

The incentive to organize into cooperatives promoted by Equal Exchange and other fair trade partners is perhaps just as important for survival as is the extra income. When Hurricane Stan devastated Guatemala in October 2005, Manos Campesinas was able to mobilize to help its members and their neighbors. Jerónimo Bollen noted: “In an attempt to alleviate the problems caused by Hurricane Stan, Manos Campesinas first worked to provide emergency assistance such as food and supplies as well as medicines and medical assistance. Once the majority of these needs were met, Manos Campesinas was able to shift its focus onto the reconstruction of houses and infrastructure, economic reactivation, coffee production and the demarcation of landslides to ensure safety.”16

In a world in which inequality and hunger are increasing as a result of corporate-led globalization, Fair Trade is a good example of how globalization-from-below helps to improve people’s lives and strengthen their communities.

A good, readable book about the role of coffee in Guatemalan history from Arbenz through the peace accords is Daniel Wilkinson, Silence on the Mountain: Stories of Terror, Betrayal, and Forgetting in Guatemala (Houghton Mifflin, 2002).