FOUR hundred coffee farmers will benefit from some US$1.2-million loan ($107 million) to improve coffee competitiveness and boast local consumption.

The International Coffee Organisation (ICO) through the Common Fund for Commodities (CFC) loaned US$4.3 million in a joint project with Guatemala whereby they will receive US$3.2 million and Jamaica will receive US$1.18 million. Jamaica will seek to improve the competitiveness of farmers in the High Mountain Region; improve the administrative capacity of co-operatives; and increase local coffee consumption.

Christopher Gentles, director general of the Coffee Industry Board, stated that the team at the CIB has been working on this project for the last 30 months.

Managing director of the CFC ambassador McCrumo, outlined that the CFC was willing to finance coffee projects across the developing world.

“Coffee plays a central role in the economies of many developing countries and the common fund is cognisant of this fact and it is for this reason that coffee remains the leading commodity benefiting from CFC assistance among the more than 32 commodities which receive CFC financing,” he said.

Over the last 20 years, the Common Fund has financed 32 projects on coffee development (22 regular and 10 Fast Track projects) with a total cost of US$93.5 million of which CFC has provided US$51.1 million and of which US$40.3 million in the form of grants and US$10.8 million as concessional loans. The measures and actions supported by the Common Fund in the coffee sector cover interventions such as production and productivity improvement, value addition, finding new markets, introducing new trading systems, improving access to finance through structured trade finance and piloting innovative credit schemes.

Mchumo added that for rural populations, essential income is derived from production and trade of commodities in developing countries, as well as a larger proportion of revenues and foreign exchange earnings. “We are aware that although coffee has transformed itself into a global commodity, coffee remains essentially a commodity connected with poverty, mainly because it is grown or harvested by poor smallholder farmers in rural areas in Central America, which have not yet benefited from the global coffee industry.”

Jamaica’s Blue Mountain Coffee is regarded as a premium beverage on the world market and exports of the product earned the country US$33.9 million between January and October last year, a 31.9 per cent improvement over 2008 according to the Bank of Jamaica. However, the future of Jamaica’s coffee will likely be determined by its past as foward production has been slashed by a third and the state has yet to divest Wallenford — the largest coffee factory. Former CIB director general Graham Dunkley previously told the Business Observer’s sister product Caribbean Business Report that given the impact of the drought conditions and the effect of the worldwide recession on demand for Jamaican coffee, projections place exports of Blue Mountain Coffee at even lower levels this year.

Already, the CIB has revised its estimates of expected production downwards from approximately 406,000 boxes of Blue Mountain Coffee, to 275,000 boxes and from over 80,000 to 60,000 boxes of High Mountain Coffee to be exported this year, signalling a drop in export earnings for the sector.