Market Reports

Catracha Coffee Company’s quality undertaking

In the hills of Western Honduras, Central America exists a small community of around 400 coffee farmers. As is the case with the majority of the 110,000 coffee growers registered in Honduras, the farmers of Santa Elena are smallholder farmers. They sell just enough coffee to keep their families going year to year, with an average crop area of less than 5.9 acres. Since the 2008-09 global financial crisis, Honduras has been experiencing moderate recovery. According to the World Bank, growth has been driven by public investments, exports and higher remittances. World Bank figures state a GDP growth of 3.7 per cent in 2010, 3.7 per cent in 2011 and 3.3 per cent in 2012. When this figure dropped to 2.5 per cent in 2013, coffee-farming families were some of the hardest hit. With a largely unequal distribution of wealth, the country struggles with high levels of crime and violence. In fact, Honduras has earned itself the unenviable title of the country with the highest rate of homicide in the world. It is estimated that endemic violence costs Honduras nearly US$900 million per year, or about 10 per cent of the country’s GDP. But with crime mostly centralised around the major cities, country coffee farmers are largely isolated enough to be exempt from that figure. Although, in the years that coffee production has been low, more and more Hondurans have moved to the city in search of work. As was the case in 2013, when coffee rust had devastating effects on a large percentage of the coffee farms in Honduras. The 2012-13 harvest produced 8 million quintals of coffee, but approximately 1.8 million quintals were lost from coffee rust. According to the United Nations World Food Bank, up to 100,000 jobs were lost as a result of the disease, causing them to respond with an emergency US$1.3 million in food aid. Severe drought is having a similar consequence this year. In October the situation was so bad that the Red Cross issued an urgent appeal for donations. In a statement it said that 3500 families were experiencing food insecurity, due to their loss of livelihoods and restricted access to food and water sources. It added that children and poor families were particularly vulnerable, a concerning fact given that chronic malnutrition in Honduras affects 22.6 per cent of people and an estimated 42.5 per cent are living in extreme poverty. “If they were hungry last year, it’s going to be even worse this year,” Mayra Orellana-Powell the Founder of Catracha Coffee Company, tells GCR Magazine. Catracha Coffee is a coffee-buying social enterprise that accesses the specialty coffee market for smallholder farmers in Santa Elena, Honduras. Established by Orellana-Powell in 2010, Catracha gives back to farming families by returning the profits made from the sale of green beans. “Last year’s crops were badly damaged from leaf rust which meant many young people packed up and left their family farms,” says Orellana-Powell. “At home in Santa Elena they are protected from the violence of the cities, but out there they get into trouble.” Although she now lives with her husband in the United States, Orellana-Powell was born to coffee farmers in Santa Elena. Her grandmother raised her in what was then a small village of about 50 houses. Along with her cousins, who still call Honduras home, Orellana-Powell would walk to the nearest town to attend high school. “My grandmother had high expectations of us, she was a teacher and she encouraged me to work hard and make my own way,” says Orellana-Powell. “From a young age, I thought that I too might end up teaching.” Following in her grandmother’s footsteps was put aside when Orellana-Powell received a scholarship to study Business Management in the United States. The opportunity opened up a different path to honour the woman she says had the biggest impact in her life. It was on a trip back to Honduras that she met Lowell Powell, an American who was designing water systems in Honduras with the US Peace Corps. The pair fell in love and moved back to the US to complete their educations. Marrying and settling down together in the US, the couple would make frequent visits to the country where they had first met. They would return to the farm in Santa Elena to help harvest for two weeks of every year. When Orellana-Powell’s grandmother passed away, she inherited her coffee farm of around 300 trees. In the years after, Orellana-Powell and her husband continued to fly to the farm during harvest to help out, returning home with a suitcase full of coffee to try to tempt buyers. “It doesn’t matter how good the coffee is, if you don’t have the connections you don’t get very far,” says Orellana-Powell. “It was very expensive trying to do it all myself and we would end up drinking a lot of the coffee ourselves.” Determined to return to Honduras with a better outcome for herself and for the Santa Elena farmers, Orellana-Powell says she persisted with specialty distributor Royal Coffee until they agreed to sell her coffee. “Royal Coffee opened up the doors for me, helping me to establish the Catracha Coffee Company,” says Orellana-Powell. “It was the first time they’d had someone from Honduras come in and they’ve been supporting us ever since.” Catracha, which is a nickname for a Honduran woman, began profitably exporting the coffee from Orellana-Powell’s farm. Wanting to share her good fortune with her neighbours, she began purchasing coffee from the farmers around her, using the connections she’d made through Royal Coffee. In 2011, Orellana-Powell’s parents began running monthly training sessions with farmers to collectively improve the quality of the coffee. Once a month Santa Elena farmers come together and learn how to pick when the cherries are most ripe, how to fertilise against leaf rust, as well as the importance of sustainable practices like planting vegetable crops for an alternative source of income. “Catracha Coffee Company will only buy coffee off farmers who attend the classes, which allows us to be transparent with them. As well as teaching good practice, the classes create morale and a more positive energy in the community,” says Orellana-Powell. According to Orellana-Powell, the Catracha Coffee Company operates differently to the corporations the farmers have previously sold to. “We offer a unique experience to the farmers because we encourage their input, there’s no hierarchy,” says Orellana-Powell. “Traditionally they’ve produced for large companies which has meant they’ve had to compete and fight over power.  “There’s also been no feedback, so less incentive to improve quality. We keep them in the loop, sending back pictures so they can see the coffee’s journey.” In July 2013, Orellana-Powell realised her goal of giving back to the Santa Elena coffee farmers, with Catracha Coffee Company returning more than US$30,000 to farmers through its profit sharing program.  On a trip to Honduras with Orellana-Powell and her husband in 2013, a close friend Arvin Juan was inspired to contribute in his own way. From that trip, the idea of the Catracha Quality Project was born. The project supports the production of specialty coffee among coffee farmers in Honduras. By introducing data collection practices to farmers, Orellana-Powell and her team are hoping to gain a deeper insight into opportunities to maximise quality during coffee processing. Trialling the project during the upcoming harvest in Santa Elena, the team has high hopes of eventually increasing the quality of coffee right across the country, improving the lives of coffee farmers along the way. The project will introduce data collection practices to farmers. The farmers will map the post-harvest process and record their practices at each step, from receiving, pulping, fermenting and drying, through to storage.  “Many farmers have their particular way of doing things, and our goal is to capture the uniqueness from farm to farm so we can learn from each other and get even better,” says Orellana-Powell.  In addition to collecting the data, the farmers must agree to join the training sessions that are being run by Orellana-Powell’s parents. In phase two they will receive suggestions for better practices and by next year the Quality Project team hope to be able to share their findings with other farmers. “If we can increase the production of specialty coffee in Honduras we will increase the demand for it, which ultimately will better the lives of the coffee farmers,” says Orellana-Powell. “Although currently we are busy working in the US, our plan one day is having a home in Santa Elena. It is our dream to live in a prosperous place, where not just us, but also our neighbours live happy lives.” GCR

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