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Peru expanding role as specialty coffee leader


LA MERCED, Peru, Aug 18 (Reuters) – Coffee production in Peru, the world’s largest exporter of organic coffee, is booming as growers focus on quality, develop niche markets and find ways around walls that can block growth.

After starting his farm four years ago, Peruvian coffee farmer Oscar Chavez, 32, has transformed his organic project into a viable business. He stood on the top ridge of his fair-trade field recently, gazing at plants bursting with fire red and yellow berries, and saw a bright future.“Growing coffee is very profitable. It’s better than growing plantains or yucca. Prices are good, especially for organic coffee,” said Chavez, whose 35-acre (14 hectares) farm is tucked outside La Merced, a lush-green jungle town 150 miles (240 kilometers) east of Lima, the country’s capital.

For years, Peru’s government has encouraged farmers to plant coffee rather than coca, the raw ingredient in cocaine. While coca is still on the rise in Peru — the world’s second-largest producer of the plant — it is growing at a much slower clip than coffee.

High and reasonably steady prices are also lifting coffee exports, which account for some 95 percent of Peru’s output.

This year, Peru is expected to ship 5.8 million 46-kilogram bags of coffee, according to the national growers’ group. That would be a 15 percent rise from 2006, the last on-year crop.

Specialty coffees — like organic, fair-trade, kosher, and even ones raised with an eye toward protecting bird life — have led the surge. They comprise 30 percent of coffee exports, up from a pittance a decade ago.

Organic coffee in particular is a good fit in Peru, a country with little history of high-tech, large-scale farming, said Paul Rice, president and chief executive of TransFair USA, an organization that certifies fair-trade products.

Many growers cannot afford chemical fertilizers, so growing organic, which pays a premium over conventional coffee, comes at a relatively low cost. Also, poor producers tend to work small plots with limited technology, which means their coffee is hand-picked and sun-dried.

“It wasn’t a huge leap to take them from passive organic to certified, active organic,” said Rice.


Though small plot farmers do not have economies of scale, their coffee is ideal for some specialized markets.

Finicky coffee drinkers in the United States and Europe, which buy the bulk of Peru’s coffee, say beans grown 3,280 feet (1,000 meters) above sea level are of especially good quality. Peru grows much of its coffee in the Andes, at high altitudes.

“In terms of volume, we could not compete with countries like Brazil and Colombia … so we had to find our comparative advantages,” said Cesar Rivas, president of the national growers’ group and head of La Florida, a cooperative in La Merced that focuses on organic and fair-trade coffees.

Despite the boom, leaders of the cooperative say growers still face challenges — such as getting their crop to market and paying for natural fertilizers to boost yields.

Transport costs are high in Peru where roads are narrow, windy, and frequently washed out by mudslides.

In other places, paths do not exist. Chavez carried sacks of coffee to the cooperative on his back before building a road to link his farm to a public street. Still, Chavez says he is planning to stick with coffee.

“I love coffee. I’d like to start my own export business,” he said.

(Editing by Terry Wade and Matthew Lewis)


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