SMH Monday, May 28, 2001

Timor farmers smell the coffee rip-off

East Timorese road workers repairing the road to the coffee region under a UN development program. Photo: Andrew Meares

By Mark Dodd, Herald Correspondent in Gleno, East Timor

Ironically, it is neglect which has produced independent East Timor's first major export crop: world-class organic, forest-grown coffee.

While the rest of the world was adding pesticides to crops and developing agri-business, the fine Arabica coffee trees, planted more than 80 years ago by Portuguese colonisers, were slowly melting into the pristine East Timorese jungle.

Long abandoned, they grew wild under the jungle canopy and scattered along roadsides. Every year subsistence farmers turned out to pick their crop, usually selling off the beans to Indonesian officials at regulated prices that are now remembered with fondness.

The trees are now heavy with fruit, and the picking season has created a vital source of income for tens of thousands once-a-year coffee harvesters.

This fine, organic coffee has become East Timor's economic engine after much of its infrastructure was destroyed in 1999. But for the first time the farmers are competing in a deregulated market and facing a slump in coffee prices worldwide.

This season East Timor's biggest coffee buyer, the National Co-operative Business Association (NCBA) will pay between $A23 million and $28.8 million to farmers for what is expected to be a bumper crop of 10,000 tonnes of exportable green beans.

But farmers say the price of about 19c a kilogram, or about 23¢ if delivered to the nearest processing centre, is too low.

In the soot-stained ruins of a former Indonesian government office last week more than 1,000 farmers and student supporters gathered to listen to two industry officials brought in to explain the downward price spiral.

What began peacefully as a dialogue quickly degenerated into a kangaroo court. The crowd accused one company of monopolising the trade and of being part of an international conspiracy to short change local farmers.

"If we don't get 30¢ a kilogram we'll burn your trucks and burn your warehouses," shouted Jacinto Maia, one of the meeting's organisers, to loud applause.

Many speakers and participants carried copies of a report from the British charity Oxfam contrasting record profits by international coffee companies while millions of coffee farmers in developing countries live in extreme poverty.

The NCBA director, Mr Sam Filiaci, strongly denied accusations his company was ripping off farmers.

"This is caused by very low international prices, and we tried to explain this to the farmers. Unfortunately, the people who have to bear the brunt of the low prices are the producers.''

Coffee is East Timor's only cash crop, with annual production of 7,000-10,000 tonnes, about 1 per cent of world production.

But what East Timor has been able to create for itself is a valuable market niche; its highly prized organic-grown beans attract premium prices from coffee connoisseurs in Hamburg and Seattle-based Starbucks.

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