The contribution of the coffee sector to foreign exchange earnings in Jamaica has declined by a half in the last 10 years. The Jamaican government is consequently undertaking consultations with stakeholders to see how this situation can be reversed. Roger Clarke, the Minister of Agriculture, announced in February that the government was “looking at the possibility of applying a cess [a tax] on imported coffee to use for the development of the local industry”.
This comes against the background of rising imports of coffee: between 2008 and 2012, the volume of coffee imports rose by 23%. John Minott, President of the Jamaica Coffee Growers Association (JCGA), described the 2013 Jamaican coffee crop as “the worst… in 20 years”. According to press reports, “the effects of rust disease, along with hurricanes and the abandonment of farms, has reduced available trees and, therefore, production since the onset of the Western financial crisis in 2008.” The poor year in 2013 followed a fall in the value of exports in 2012 to US$17.3 million, in a context where the crop had traditionally earned around US$25 million prior to 2008.
According to John Minott, “Jamaica Blue Mountain (JBM) and Jamaica High Mountain (JHM) coffee production is expected to dip towards 130,000 boxes and 31,000 boxes respectively for the ensuing 2013/14 crop,” representing a 40% (JBM) and 27% (JHM) decline from 2012/13 levels (a box is 60 lbs of coffee cherry). Mr Minott called for “an importation window during which replanting should occur”. Jamaica’s current import regime for coffee involves the submission of an import application to the Coffee Industry Board (CIB), with the decision lying with the Minister of Agriculture, based on recommendations from the CIB. The Chairman of the CIB has called for a clear import policy so that “stakeholders can have an understanding of the playing field”. The Minister of Agriculture acknowledged the need for such a clear policy “to avoid informal importation”.
At present, shortages of coffee on the local market have “resulted in small farmers getting record prices”. This has seen calls for a relaxation of import restrictions, but local coffee processors have called for instant coffee to be excluded from any such relaxation of import restrictions.
On the export market, JBM and JHM are both premium brands, attracting prices of US$50/lb and US$30/lb respectively, and a number of distributors have reported a rise in demand for these premium coffees. Stakeholders at the meeting in February also discussed the problem of yields: those for Blue Mountain coffee were only 30–40% of the level required for profitability, while those for High Mountain coffee yields were around 70%.
Also in February, Coffee Roasters of Jamaica announced that it was now compliant with the US Food Safety and Modernisation Act, and that this would enable it also to increase exports to the EU.
While the government of Jamaica remains an active player in the coffee sector, processes of government disengagement from commercial activities and institutional reform are under way. In 2013, the government sold the Wallenford Coffee Company (WCC) to AIC International Investments Limited (AIIL). As in other sectors, the sales agreement included clear commitments on new investments, with AIIL committing to a US$23.5-million, 4-year investment programme, aimed at improving the quality of green beans and strengthening the Wallenford brand by diversifying the product offerings in existing and new markets.
At the farm level, this involves upgrading equipment and facilities, improving extension services and expanding the area under coffee. In terms of product development, the coffee beverage industry is growing swiftly, with new blends, coffee products, brewing equipment and service offerings being introduced to the market with remarkable rapidity. However, at present, value-added coffee products remain a relatively minor component of the sector in Jamaica. It remains unclear to what extent AIIL plans to lead a drive into greater local value addition.
In addition to favouring a tax on imported coffee, the government of Jamaica is looking to rationalise institutional arrangements for the production and export of selected commodities (including coffee), with consideration being given to the creation of a new Agricultural Commodities Regulatory Authority (ACRA).
More broadly, the fact that the world-renowned, premium-brand Jamaican Blue Mountain coffee has seen production halved in a decade is a matter of grave concern. While this is attributed to the standard operational risks of farming in the Caribbean (hurricane damage and disease outbreaks), the absence of effective strategies to control coffee plant diseases and reduce the adverse effects of hurricanes for this very high-value and sought-after product suggests a need to intensify efforts to combat coffee plant diseases and identify ways in which hurricane damage can be minimised or rapidly redressed, if the coffee sector is to be placed on a sustainable path to recovery.