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c Origin

What would be necessary for arabica coffee to win out Finally, if all of the above conditions are met, current
over coca? First, farmers would need protection from armed commodity prices will not suffice to make coffee-growing a
local actors known to murder farmers both for growing coca viable alternative to coca for small farmers. However, they
and for cutting down coca. As arabica coffee is a complicat- are not that far off. Based on current average coffee and coca
ed plant to cultivate compared with coca, and it’s processing prices and production costs in Colombia, farmers would need
is extremely delicate, new coffee farmers would need signif- to earn just 7 US cents per pound (15 cents/kg) over com-
icant training, processing infrastructure, and ongoing support modity parchment price. This translates to roughly $1.68/lb
to be successful. Furthermore, coca provides it’s first harvest FOB (exporter sale price), $2.19/lb ($4.83/kg) FOT (import-
after planting in less than a year, and at least 4 harvests per er sale price), supposing of course that the supply chain remits
year, while coffee takes about 3 years to mature and provides the price premium back to the farmer, which cannot be
one or two harvests per year. It is unlikely that many small guaranteed without full supply chain transparency.
farmers have the savings to weather this transition period. The solution is well within reach. However, the situa-
Without affordable transportation to commercial centers, tion will only worsen unless the supply chain can cease to
coffee produced at the farm level is worthless to the farmer, squeeze former links, depressing the real price paid to
therefore many coca-heavy areas will need roads and trans- farmers, as it has for the last 16 years, and consumers can
portation hire cheap enough so as not to eat up the difference see beyond a $.07/lb price difference. The future of thou-
between production cost and sale price. This is a particular- sands of poor rural families in Colombia will be cast by the
ly difficult hurdle due to cost and time, especially in areas decisions of cocaine and coffee consumers in the rich world.
with delicate civil order and where municipal budgets tend
to evaporate quickly.

COFFEE

- 1400 kg parchment/
hectare/year
- US$1.32/lb average
FOB price COCA
- $5840 pesos/kilo
parchment base price paid by FNC - 4800 kg leaf/hectare/year average production
- $5368 pesos/kilo cost of parchment production - 1181 kg leaf/1kg coca paste
- $5760 pesos/kilo cost of specialty quality parch- - $2,005,700 pesos/kilo coca paste
ment production - $1,711,000 production cost coca paste
- $660,800 pesos/hectare/year profit - $1,173,340 pesos/hectare/year profit

TO MAKE COFFEE EQUALLY PROFITABLE AS COCA

- 336.1 peso/kilo parchment coffee difference
- Implies an additional 7 cents/lb parchment cost
- This translates to an approximate minimum $1.60/lb FOB price
to make coffee as profitable as coca
- Since quality must accompany a price increase, thereby
increasing production costs, the minimum FOB price is $1.68
- Which translates to an approximate minimum $2.19/lb FOT
from warehouse in consumption country.
- Essentially, if you purchase coffee FOB for less than $1.68 or
$2.19 FOT in your country, the farmers who grew it could be at
risk of resorting to coca.

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