Valdosta Daily Times

Business

June 19, 2014

$23 million promised to help fight coffee-tree disease

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A coalition that includes the U.S. Agency for International Development and Starbucks Corp. launched a $23 million fund to help Latin America farmers fight coffee rust.

The move is part of a growing international effort to combat coffee rust’s devastating impact on Central and South America’s coffee farms, where some of the world’s best beans are grown. Concern is rising in the coffee industry about the potential impact coffee rust may have on the long-term supply of quality arabica, the mild-tasting bean used to brew specialty coffee.

In May, USAID and Texas A&M announced a $5 million partnership to fight the disease, which is caused by a parasitic fungus that is now thriving amidst warming climates and changing rain patterns. The fungus coats leaves with an orange powder, making them look rusty.

The new fund will apply $8 million from USAID and partners Keurig Green Mountain, Cooperative Coffees and Root Capital to train farmers in Mexico, Guatemala, Honduras, El Salvador, Nicaragua and Peru.

In addition, $15 million in investment capital from Root Capital, including $3 million provided by Starbucks, will go toward long-term financing for repairing fields ravaged by the disease. The money will also be used for short-term loans to help keep farmers in business. Root Capital is a nonprofit investment fund based in the Boston area.

Other coffee buyers and roasters are expected to join the fund, according to a USAID release.

For Starbucks, the $3 million commitment is part of a broader $20 million loan program for farmers. Also, the company last year bought a farm in Costa Rica where it is testing farming methods and new coffee tree varieties that may increase resilience to rust and other diseases. “We are heavily invested in helping farmers manage through changes in weather or conditions like coffee rust,” said Craig Russell, who heads the company’s coffee sourcing efforts.

USAID estimates that coffee production in the rust-afflicted regions could fall 15 to 40 percent in coming years. That could cost 500,000 farmers and farm workers their jobs. The disease has caused more than $1 billion in economic damage since the latest bout broke out in 2012.

The rust crisis, experts say, lays bare the underlying fragility of the coffee supply chain, which is straining under the pressure of climate change, poverty and a vulnerability to new diseases because most coffee trees in this region are genetically homogenous and descended from a few trees brought from the Old World centuries ago.

 

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