El Salvador

El Salvador

El Salvador’s coffee production was severely hit by La Roya and could be highly exposed to climate change

Download Data Sheet

PDF File 234Kb

R&R Need

~80% of land is in need of R&R

SHF land in R&R need

‘000 hectares

106,000 ha No need
34,000 ha R&R need

Need is driven by exposure to climate change in most of the coffee growing areas, age of trees, and exposure to disease (more than 70% of coffee lands were affected by La Roya).

Current SHF yield & potential uplift

Tons per hectare

0.22
0.44
Current yield
Target yield

Uplift potential

+100%

Significant uplift for SHFs, though little impact on supply

Potential increase in supply

~5-15%

Total national supply could increase ~5-15% if R&R and GAP is implemented on all SHF land in need of R&R2


Notes:
(1) The current yield is calculated on the basis of SHF production divided by SHF land area. The potential yield uplift is based on an internal estimate based on other mixed countries and current yield.
(2) Rounded to the nearest 5%, estimate assumes that R&R and GAP increase yields with 100%, and the range reflects a 25-100% R&R success rate. Sources: USDA, El Salvador: Annual Coffee Report, 2017; Jimmy Sherfey, ‘Salvador’s Coffee Industry at a Crossroads’, https://dailycoffeenews.com/2016/01/06/el-salvadors-coffee-industry-at-a-crossroads/, 2016; International Coffee Organization, Perfil de pais cafetero: El Salvador, 2016.

Other Viability Considerations

  • Many children of coffee farmers turn to more lucrative, or less climate exposed food crops, or to non-farm activities.
  • Minimum daily wage for coffee harvesters is low – approximately USD 4.
  • Labor costs/salaries have decreased by 12% over the past five years, while fertilizer costs have increased by 3% and financial costs by 5%.
  • The “Cup of Excellence” competition promotes specialty coffees in El Salvador. Focusing on specialty coffee markets could increase producers’ revenues.

Farmer Segmentation

Production is dominated by large farmers

  1. Large & medium farmers
  2. Commercial farmers in tight value chains
  3. Commercial farmers in loose value chains
  4. Disconnected farmers

40% of coffee farms are large estates above 70 hectares1. There are 81 large cooperatives, but they do not target SHFs, who are mostly disconnected or in loose value chains.

# SHFs

‘000

17

~0.1% of global SHFs2

# SHF land

‘000 hectares

30

(~30% of national land) – farm size typically ~0.5 hectares

# SHF production

‘000 hectares

9

(~20% of national production)

Assessment of SHF orgs.

HFs are typically not organized in coops.

Links to market

A majority of SHFs have loose and erratic links to market.


Notes:
(1) A majority of coffee estates were parceled out into SHF properties as part of an agrarian reform in the 1980s
(2) Assuming a global SHF population of 20 million. Sources: USDA, El Salvador: Annual Coffee Report, 2017; Jimmy Sherfey, Salvador’s Coffee Industry at a Crossroads, 2016; International Coffee Organization, Perfil de pais cafetero: El Salvador, 2016, Ecuador Government, National Census, 2017.

Enabling Environment for R&R

  • Coffee share of GDP: N/A [Coffee share of exports: 2.6% (2015)]
  • There is insufficient political support to overcome the coffee sector crisis
  • Government assistance programs to support SHFs affected by La Roya have mostly been ineffective.
  • El Salvador is the only coffee producing nation in Latin America that does not have a research institution that provides certified rust resilient seeds .
  • The lead SHF extension service institution, CENTA, aims to provide 8 millions rust resistant plants to SHFs in 2017.
  • SHFs are highly credit constrained.
  • NCBA CLUSA recently partnered with Banco Hipotecario, one of the largest mortgage banks in El Salvador, to create a blended finance facility to deliver long-term credit to SHFs.
  • The Salvadoran Coffee Council and CENTA provide extension services to SHFs. CENTA employs 85 officers who assist 7,000 SHFs with bi-monthly visits and field training.
  • Observers complain about the low efficiency of public extension services.

Examples of R&R programs

Past R&R programs have focused on renovating areas affected by La Roya

Starbucks - One Tree One Bag
2016-2018

For each bag of coffee sold, Starbucks gives USD 0.70 to seed distribution to areas affected by La Roya in Guatemala, El Salvador, and Mexico

NCBA CLUSA - Coffee rehabilitation and agricultural diversification project
2014-2018

CBA CLUSA is working to improve the capacity of 50 cooperatives and 7,500 SHFs to renovate 6,000 hectares.

World Coffee Research - Seed Verification program
2016 – 2020

CR partners with local nurseries to develop genetic control of seeds

Learn more and get involved

There is a lot of work to be done to ensure the long-term supply of coffee from countries where the crop has long shaped the social and economic fabric. Learning to extend the life of their trees and improve yields helps farmers stabilize annual production and in turn, income, while the rest of the world benefits from a steady supply of quality coffee. Continue on to learn more about the immediate attention and action that is required to make this a reality.