Case Study: Cultivating Quality in Honduras through Relationship Coffee

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By Jimmy Sherfey, Abeja

In San Jose de Colinas, located in the Cup of Excellence favorite region of Santa Barbara, Honduras, Arnold Paz shows us the proper level of ripeness, demonstrating the home remedy for harvesting more profitable cherry. “If you’re not sure, squeeze it,” he says, suspending a freshly picked cherry several inches above his forearm. “The ones that are ready: three drops.”

Three drops and the dark red hue signals to Paz it is time to de-pulp that high-altitude seed highly sought-after among a growing legion of craft roasters.

A fourth-generation coffee farmer, Don Arnold Paz Mejia is a jovial character; taking whiffs of drying parchment coffee, he compares himself to a kind of chef. No doubt his attention to detail and quality control classifies him as a new breed of farmers growing in Honduras, previously regarded as a nation largely accustomed to producing coffee en masse with little distinction from one lot to the next. He has farmed in the Santa Barbara region for the past twenty-five years–arguably the most transformative epoch coffee has known since global trade routes first exploded the bean into a widely distributed commodity centuries back. After attending medical school in Paris, Arnold’s father, Jose Paz, returned to his home village of San Jose de Colinas to provide medical care and grow coffee. Jose bequeathed the farm to his son under the condition the coffee would continue to grow as is–only organic farming and no mechanization involved during planting and harvest.NCcoffee-13Though it’s not been feasible for Arnold Paz to finance official organic certification, he’s kept the promise to his father, who can still be seen raking coffee across the drying patio. Farming 10 hectares of quality coffee, Paz also manages COCASJOL one thousand meters down the mountain, a cooperative collecting and marketing for over two hundred fifty producers in the area, the large majority of whom do not speak English. Paz studied agriculture and improved his language skills at University of Florida in the early 90’s. His training has placed several hats on his head, making him the cooperative’s quality control and marketing manager at once.

By the middle of the 2013/2014 harvest, coffee leaf fungus reduced production by half. Now that quality coffee is gaining a premium, often well above the price of commodity coffee, Paz is exploring all avenues to keep his farm, the co-op and the community afloat, in spite of loss in volume.I50A3244A quality pioneer for a decade in this erratic climate–both environmentally and economically–the small producer had to make some bold investments. In 2005, he became one of the first in all of Honduras to bypass large mechanical driers, implementing the use of secadores, a form of raised-bed solar drying which allows beans to desiccate to their desired moisture level of 11-13%. He found the design, calling for a covered top with side ventilation, buried in an agricultural manual from the Honduran Coffee Institute (IHC).

“When I first started to put up things like the secadores, people were calling my farm ‘the circus’ and me ‘the clown,’” Paz explains. The secadores have since been adopted as a necessary practice for farmer’s dealing in direct trade or above commodity levels.

Paz’s colleague on the other end of the chain is Scott Conary. In addition to being the head judge of barista competition at national & world stages, Scott is the buyer for Carrboro Coffee, his roasting company in North Carolina. Located in the eponymous town on the edge of the research triangle. In the cupping lab, adjacent to Carrboro’s roasting room, Arnold Paz’s coffee sits in grain pro bags designed to preserve quality longer.NCcoffee-7In 2007, Conary gained a deeper understanding of Honduras on a USAID-commissioned trip to assess the state of the Honduran coffee industry. After several weeks of thorough canvassing from farms to mills to co-ops, his team produced a 45-page report.

“Whether it was farming, processing, or storage and transport, things we’re always going wrong somewhere,” Conary says. “There were all these disconnects and people would get coffee and find it’s just not that good. Or it was good [when they bought it] and when it got to them it wasn’t good anymore.”

Chris Davidson of Atlas Importers in Seattle also saw these disconnects firsthand when his company sent him to consult the Las Capucas cooperative on quality practices the same year of Conary’s USAID trip. “The biggest problem is access to education and finances, and equipment at the producer organization,” Davidson says.

In spite of these initial shortcomings, Honduras has since garnered a reputation among specialty buyers as some of the highest quality in Central America, a major role reversal from seven years ago.

Atlas stills works with Las Capucas today and Davidson believes the co-op’s home region of Copan as well as Santa Barbara, where Paz’s farm is located, consistently produce the best quality in Honduras.

“Maybe the coffee had always been that way. Maybe it’s that buyers have been identifying these lots,” Davidson says weighing the possible causes of the increase in quality. “I believe [the latter] is more the case rather than farmers changing their activities across the board.”NCcoffee-5Conary certainly does not refute Davidson’s theory. Since that first trip, he’s assembled a select group of farmers willing to invest in good production and build a closer relationship with the buyer, a hallmark of the direct trade movement or what Conary more intimately refers to as Relationship Coffee. Like many of his colleagues he has built these relationships with families across Latin America. Carrboro stands out, however, with four Honduran farmers on their roster.

While he has worked with all of these producers for at least five years, annual contracts are still done on a handshake, a common practice among craft roasters, notes Davidson of Atlas.

“It’s more to give the farmer peace of mind and a display of good faith,” Davidson says. Though the handshakes aren’t legally binding, they are more reassuring than the erratic C-price dictated by global supply.

This outright purchasing often practiced in direct trade & relationship coffee shows more sensitivity to producers faced with an uphill battle made difficult by export taxes and shipping-to-port costs, on top of the costs associated with quality production (e.g. higher pay for properly ripened cherry and financing wet mill construction and maintenance).NCcoffee-15“If there were ever a time the C-price got up to four dollars, I’m sure those outright prices would be re-negotiated,” Davidson says. The Seattle-based buyer also believes the quality supply is just barely meeting demand as Honduras’ cachet swells among craft roasters.

For this reason, a roaster like Carrboro will not soon cut ties with a trusted producer so as not to fall behind the curve in a region where a quality surplus appears to be diminishing.

Conary pays Paz about $3.50 a pound, well above the c-price even after 2014’s spike to $2 a pound on account of the drought in Brazil, the world’s largest producer of coffee.

“Everyone we work with, we’ve been able to help get better quality,” Conary says. “Or we helped maintain quality putting them in a position to grow more.”

NCcoffee-23The sustained partnership between Arnold Paz and Carrboro is one factor affording the farmer some leeway to experiment with different processing methods, what could ultimately boost the value of a given bean. At the wet mill in January with much of harvest bagged and exported he is double-soaking a microlot, a process devised in Africa and uncommon for the region. Conary often calls on Paz to give advice to other farmers looking to climb out of the commodity rut. The price paid for commodity coffee very often does not exceed the cost of production.

“He’s one of the few who has had a much broader view, he’s had more travel, more experience, and schooling so he’s able to take that and apply it,” Conary says. “That’s very rare in agriculture, specifically in coffee, because [most farmers] just sort of rely on traditional methods and if it’s been working, it’s fine and if it doesn’t they don’t bother to find out.”I50A3288Paz has implemented other quality-focused practices such as training locals and fellow producers in protocol for catacion, or cupping as English-speaking quality graders know it. During the off-season locals can attend his lab sessions to learn the pillars of specialty coffee (i.e. roasting curves, water to coffee ratios, brew temperatures and sensory analysis).

While quality training takes root at origin and Honduran Cup of Excellence lots fetch some of the highest prices in Central America, there are plenty of farmers struggling to climb out of the commodity rut – even in the most prized regions.

Photos by Nate Robinson