Coping with the Coffee Crisis: A Household Analysis of Coffee Producers’ Response to the Coffee Crisis in Polo, Dominican Republic

A thesis presented to the faculty of the College of Arts and Sciences of Ohio University

In partial fulfillment Of the requirements for the degree Master of Science

Katie L. Hammond March 2010 © 2010 Katie L. Hammond. All Rights Reserved 2 Coping with the Coffee Crisis: A Household Analysis of Coffee Producers’ Response to the Coffee Crisis in Polo, Dominican Republic

By KATIE L. HAMMOND

Has been approved for the Program of Environmental Studies of the College of Arts and Sciences by

______Brad. D. Jokisch Associate Professor of Geography

______Benjamin M. Ogles Dean, College of Arts and Sciences 3 Abstract

HAMMOND, KATIE L., M.S., March 2010, Environmental Studies Coping with the Coffee Crisis: A Household Analysis of Coffee Producers’ Response to the Coffee Crisis in Polo, Dominican Republic (72 pp.) Director of Thesis: Brad D. Jokisch Over the last decade coffee prices have plummeted to historic lows and smallholder coffee farmers throughout Latin America are struggling to adapt to the low market price. With prices unable to cover the cost of production, some coffee farmers have cut ecologically diverse coffee forests to cultivate other crops. This paper examines coffee producers’ reactions to the coffee crisis in Polo, a coffee-dependent village in the Southwest region of the Dominican Republic. Household Interviews were conducted to determine how farmers have been able to weather this economic crisis with coffee forests in tact. Results indicate primarily that availability of arable land in the region has allowed farmers to diversify crops without cutting forests. Further statistical analysis suggests that households with highest and lowest levels of wealth are more likely than households of medium wealth to participate in labor intensive agricultural strategies to weather the crisis. These results provide policy makers a better understanding of the varied response to the global coffee crisis and an illustration of how one rural community of smallholder coffee growers was able to weather the crisis without clearing ecologically diverse coffee forests.

______Brad. D. Jokisch Associate Professor of Geography 4 Dedication

Para los Cafetaleros de Polo 5 Table of Contents

Abstract ...... 3 Dedication ...... 4 List of Figures ...... 7 List of Tables ...... 8 Chapter 1: Introduction ...... 9 Chapter 2: Coffee and Coffee Crisis ...... 11 2.1 Coffee Ecology and Cultivation ...... 11 2.2 Coffee as a Commodity ...... 13 2.3 The Coffee Crisis ...... 15 Chapter 3: Farmer Decision Making and Response to the Coffee Crisis ...... 18 3.1 Farmer Decision Making ...... 18 3.2 Parallel Studies: Smallholder Response to the Coffee Crisis in Latin America ..... 21 Chapter 4: Research Questions and Study Area ...... 26 4.1 Research Question ...... 26 4.2 The Dominican Republic ...... 27 Economy of the Dominican Republic ...... 27 Coffee in the Dominican Republic ...... 27 4.3 The study area: A small coffee producing village in the Dominican Republic ...... 28 The Municipality of Polo ...... 29 Chapter 5: Methodology ...... 32 5.1 Methodology of the study ...... 32 Secondary Materials In-Country ...... 32 Interviews with Key Informants ...... 33 Focus Groups ...... 33 Household Interviews ...... 35 5.2 Reliability and Limitations of the Methods ...... 36 Chapter 6: Results ...... 38 6.1 Reduction of Shade-Grown Coffee ...... 39 6.2 Farmer Response to the Coffee Crisis ...... 40 Agricultural Diversification ...... 44 Using the Credit System ...... 47 Off-farm Livelihood Diversification ...... 48 Remittances ...... 50 6.3 Socio-economic Indicators and Land use Change ...... 52 The Cultivation of Short-cycle Crops ...... 55 Chapter 7: Discussion ...... 58 6 7.1 Diversification without deforestation ...... 58 Land Abundance ...... 58 Economic Opportunity ...... 60 Commitment to Coffee...... 61 7.2 Levels of Household Diversification and Opportunity Cost of Labor ...... 62 Chapter 8: Conclusions ...... 64 Literature Cited ...... 67 Appendix A: Household Interview Guide ...... 71

7 List of Figures Page Figure 2.1 Global coffee prices (Source: FAO, 2007) ...... 16

Figure 4.1 Study area: Polo, Dominican Republic ...... 29

Figure 5.1: Participants from the focus group in Breton ...... 34 Figure 5.2: Coffee co-op presidents participating in a focus group ...... 35

Figure 6.1 Frequency table of family members per household ...... 38 Figure 6.2: A small cleared section amongst the coffee farms (Author, 2007) ...... 40 Figure 6.3: A farmer augments his plantation with new coffee shrubs provided though CODOCAFE (IDIAF, 2007) ...... 41 Figure 6.4: A Haitian day laborer weeds a coffee farm with a machete ...... 42 Figure 6.5: Ill-maintained coffee plot ...... 43 Figure 6.6: Amount of land involved in short-cycle crops ...... 45 Figure 6.7: This family gathered sour oranges ...... 46 Figure 6.8: This family is with their black bean harvest...... 46 Figure 6.9: This farmer took advantage of his yard to grow a small crop of lettuce ...... 47 Figure 6.10: Preparing dough to fry from his home ...... 50 Figure 6.11 Migrant destinations among households interviewed ...... 51 8 List of Tables Page Table 3.1 Recent Parallel Studies and Their Findings ...... 22

Table 6.1: Table of Household Characteristics ...... 39 Table 6.2: Off-Farm Occupation in Households Interviewed ...... 48 Table 6.3: Household Member Off-Farm Occupation ...... 49 Table 6.4: Classifications for Degree of Diversification ...... 55 Table 6.5: Cross Tabulation of the Household Diversification Classification and the Cultivation of Alternative Crops ...... 56 Table 6.6: G Test of Level of Diversification and the Cultivation of Alternative Crops ..56 Table 6.7: Percentage of Households Who Planted Short-Cycle Crops By Level of ...... Diversification...... 56 Table 6.8: Cross Tabulation of Household Diversification Classification and Maintenance of Coffee Fields...... 57 Table 6.9: G Test of Levels of Diversification and Maintenance of Coffee Fields ...... 57 Table 6.10: Percentage of Household Diversification Classification and Maintenance of Coffee Fields ...... 57 9 Chapter 1: Introduction

In the mid 1990’s a market surplus caused global coffee prices to plummet, an event commonly known as the ‘coffee crisis.’ The index price of coffee fell 70% in a period of four years and has been slow to recover (USAID, 2002). No longer a cash generating crop, coffee farmers have been struggling to adapt to the decline in prices (Eakin et al., 2006; Ponette-Gonzalez, 2007). The collapse has had significant consequences for the livelihoods of coffee farmers, and has prompted land use changes that threatened valuable shade-grown coffee (Oxfam GB, 2001). Smallholder farmers who have relatively few resources with which to cope are most acutely affected by this price decline. This struggle has resulted in land conversion, farm abandonment, increased emigration rates and increased off-farm employment among coffee producing households throughout Latin America (Blackman et al., 2007; Eakin et al., 2006; Hauserman et al., 2008; O’Connor, 2005). As smallholder coffee farmers opt out of shade-grown coffee production as their sole source of income, a concern exists for the shade coffee forests and the ecological services they provide. Unlike “sun” coffee grown throughout the world, much of the coffee produced in Latin America is grown beneath a shade canopy in mountainous regions that are ecologically diverse. The shade canopies are made of natural or managed forests that provide many ecological services including preventing soil erosion, recharging aquifers, and sequestering carbon (Blackman et al., 2005; Rice, 1999). Coffee thrives in tropical regions which have been identified as mega-diverse (Perfecto et al., 2005) and on mid- elevation slopes where deforestation is prevalent (Rice, 1999). The sudden decline in coffee prices has caught the attention of conservationists concerned for the coffee forests and biodiversity they harbor, creating a need to understand how shade-grown coffee farms are affected by the crisis and how smallholder coffee farmers react to global commodity changes. Literature has indicated that smallholder coffee farmers throughout Latin America have cleared farms and the shade trees to accommodate various alternative economic activities in response to the coffee crisis (Blackman et al., 2007; Hauserman et al., 2008; Eakin et al., 2006, O’Connor, 2005). Though numerous studies have examined the 10 environmental effects of agrarian change in response to the coffee crisis, the complexity of household decisions reflect a wide range of choices in strategies adapted by smallholders (Ponette-Gonzalez, 2007) and encourage research of a finer scale. Only one study has examined the effects of the coffee crisis on smallholder farmers at the household level and no academic research has been conducted to study these responses in the Dominican Republic and to date. The aim of this study is to examine farmers’ response to the coffee crisis at the household level in Polo, Dominican Republic. Polo is a mountainous region of the country whose economy is strongly dependent on the production of coffee. Specifically, using both quantitative and qualitative analyses, this research will test if there is a relationship between household characteristics, and land management and agricultural production strategies in reaction to the coffee crisis. The following questions are addressed in the research: 1) what have farmers done in response to the current coffee crisis? 2) what socio-economic variables are associated with the likelihood of land use change and the destruction of shade forests? 3) what, if any, socio-economic indicators predict land use change (ie the destruction of shade coffee forests) as a response to the coffee crisis? This research is guided by the academic literature that addresses farmer decision making, and from parallel studies of coffee growers elsewhere in Latin America. This thesis is organized in the following manner: It begins with a general overview of coffee production, the ecological importance of shade-grown coffee and significance of coffee as a commodity. An exploration of existing literature follows. Next the study area and research methods are presented followed by the results of the research and a discussion of the research findings. Lastly implications of this research for future environmental management and policies addressing the cultivation of coffee are discussed. 11 Chapter 2: Coffee and Coffee Crisis

2.1 Coffee Ecology and Cultivation Most coffee grown globally is either Coffae Arabica (Arabica) or Coffae Canephora (Robusta). Seventy percent of the world coffee production is made up of Arabica beans; the remainder is made up of Robusta along with two additional species grown on a smaller scale (International Coffee Organization, 2008). The Arabica plants can grow in cooler temperatures, at higher altitudes and with less rainfall which makes the plants adaptable to mountain climates. Arabica plants take longer to mature and are known to produce beans that are marketed in higher quality rich blends. The Robusta plants however, are mostly produced in larger, agriculturally-intense farms and the beans are limited to lower-grade coffee blends. They are often used as filler (Rice, 1999). Arabica coffee is most often shade grown, whereas Robusta coffee is grown in direct sunlight. Arabica coffee plants require specific environmental conditions for commercial production. The plants thrive when grown at least 800m above sea level, within a temperature range of 15-24 ºC, moderate sunlight, and well-drained, nutrient rich soil moistened by 1500-20000mm/year rainfall (CODOCAFE, 2007). Of course coffee plants can be cultivated in less-than-ideal conditions, however the quality of the beans may be compromised. Arabica beans cultivated in higher than 1200m above sea level are considered to be extra rich and are often marketed in supreme blends. The other growing conditions have less of an impact on bean quality assuming the plants have the required nutrients needed for production. Shade-grown coffee involves cultivating coffee shrubs beneath a forest canopy. This form of production is lauded for its environmental services, especially compared to monoculture production. Shaded canopies commonly provide habitat for native plants and animals and are known for high levels of diversity. The large shade trees also sequester carbon, offer natural protection from mountain slope erosion and provide other ecological services (Badgley, 2002). Shade coffee, which mimics many natural forest processes, is distinct from the coffee monocultures of “sun coffee” (i.e. Robusta). Coffee monocultures are a simplified ecosystem that requires considerable forest clearing, high 12 levels of pesticide treatments, and subject the field to soil erosion. Sun coffee commonly produces a higher yield than shade coffee because shaded fields have less plant density and are susceptible to disease (Rappole et al., 2003). The ecological services shade-grown coffee provides makes the production of Arabica coffee beans less stressful on the environment than the sun coffee production of Robusta beans (Rice, 1999) The Food and Agriculture Organization has reported that more than 3.6 million hectares of land were dedicated to coffee cultivation in Latin America in 2002, the majority, shade-grown (FAO, 2002). The ecological impact of the cultivation of coffee however, stretches beyond the amount of land involved. The particular location where the plants are grown also holds ecological significance. In Latin America, for example, coffee is grown on mid-elevation volcanic slopes where deforestation is prevalent (Perfecto et al., 2005). Latin American has seven of the ten countries with the highest deforestation rates in the world (Rice, 1999). Coffee is a perennial crop and does not need to be replanted each season. Coffee plants can produce coffee beans for up to 60 years, but in commercial cultivation they are likely cut when production slows after 20-30 years (International Coffee Organization, 2008). The shrub-like trees are started in nurseries and transplanted to farms after 5-6 months. The lag in production of coffee beans is substantial. A plant will begin to bear coffee beans after 3 years, but a plant will not reach maturity and be in full production until it is 5-7 years old. Once in full production, one Arabica coffee plant produces between two and three pounds of coffee in a typical year (CODOCAFE Interview, August 2007). The beans begin with white, fragrant flowers. After pollination, green berries appear and then ripen into a sweeter, red berry often called a cherry. When the berry is red but still firm it is ready to be picked. The harvest period for coffee lasts 3 months and in a year of high production beans may be gathered from the same plants up to five times over a period of several months. A seasonal crop, the beans are harvested throughout the same three month period each year. Once harvested, the beans are run through a de- pulping machine to remove the red colored-skin and the fleshy tissue that lies between the skin and the bean. The beans are then fermented for 48 hours. After fermentation, the 13 beans are dried either in the sun or in a machine until the moisture content in low enough for the bean to be stored without chance of further fermentation or fungus growth (CODOCAFE Interview, August 2007). Arabica coffee can be farmed with minimal capital and labor investments. Chemical inputs enhance production, but are not essential to the production of useable beans. Dominican coffee farmers in Polo do not use pesticides or herbicides at any stage of production. The essential labor requirements include an annual weeding, ridding the plots of weeds that act as competition for nutrients, and water and harvesting of the beans. In the production of shade-grown Arabica, the weeding and harvesting must be done by hand, carefully removing weeds and carefully picking only the ripe beans. Rice (2000) has said that tending the traditional shade coffee farm is more akin to gardening than to farming. Mechanization of these processes in shade coffee farms has yet to be developed due to the terrain, the forests, the size and shape of coffee plants and the specifications of the methods used (CODOCAFE Interview, August, 2007).

2.2 Coffee as a Commodity Coffee is one of the most traded commodities in the world, second only to oil. Grown in 50 countries around the world on more than 30 million acres, coffee production has a significant impact on land use and the economy (International Coffee Organization, 2007). Latin America is a leading region in coffee production capturing 38% of the market. Coffee is an important commodity in the national economy as a source of foreign exchange for Latin American countries accounting for 30% or more of exports in five countries (FAO, 2006). Though important as foreign exchange and national income, coffee as a commodity plays an additional role. It is a cash crop for a large numbers of producers, the majority of whom in Latin America are small farmers. Coffee has had an elevated importance in Latin America where production has tripled and area under cultivation has doubled since the 1940’s. Tropical America has mountainous areas with mid-high elevations, volcanic soils, rainfall patterns, temperature regimes and cheap labor that make the ideal growing conditions for a good coffee crop (Rice, 1999). Though 38% of the world’s coffee was produced in Latin America in 2006, 14 this percentage underestimates the region’s portion of the market when quality is considered (UNFAO Production Yearbook, 2006). The coffee grown in Latin America, mostly Arabica, is produced in higher elevations than in other parts of the world and the beans are processed through the “wet” method (Rice, 1999). This method of processing is used only on Arabica beans and in regions with moderate or more rainfall. It is touted for its higher quality beans that command a higher market value. Coffee, like many commodities, is vulnerable to steep spikes and depressions in the price it brings in the market. Coffee is highly price inelastic on the demand side because coffee has an addictive nature and price fluctuations do not affect demand. On the supply side however, coffee has short-run elastic price tendencies. As prices go up, farmers are more able to apply agrochemicals or better care for their crops (Rice, 2003), increasing yields and production that may ultimately decrease the market price. Further complicating price tendencies, coffee plants have a lag time in production. It can take up to 7 years for plants to reach maturity and full production levels which easily leads to overproduction in the long run (Petkova, 2006). Starting in 1940, institutional policies were created to stabilize the coffee market. Over the years, these attempts have included curbing supplies in producing countries and establishing international trade agreements. Both efforts of stabilization have had varying degrees of success (Pendergrast, 1999; Petkova, 2006). In 1940 the Inter-American Coffee Agreement (IACA) was formed but it was heavily influenced by politics. The United States divided its coffee purchases between Brazil and Colombia helping their resistance to the Axis Powers Programs during World War II. Later in the 1960s, another trade agreement was formed with political tactics in mind (Rice, 2003). Striving to stem communism in the Americas, Kennedy’s Alliance for Progress Program established the International Coffee Agreement (ICA) that promoted quotas and prices for both consuming and producing countries. Despite ulterior motives, the ICA did help to generate higher prices in producing member countries. It also supported some tropical nations and their ‘coffee as development’ schemes. By the mid 1990’s, the ICA fell apart leaving the coffee market without quotas and as a global free-for-all. Without ICA’s quotas, world coffee prices have been driven 15 down by overproduction that has created a significant surplus in the market and with it, record low prices (Rice, 2003). Although liberalization of the coffee sector has increased producers exposure to market price volatility, it has helped to raise the farmers’ share of the market prices and, in many cases, added to the incentive to expand (Petkova, 2006). Market information can be difficult to access, riddled with conflicting signals and hard to understand, especially to small producers in rural areas. Membership of cartel-like organizations is often encouraged and can send false and protective signals to producers that their governments have the means to bail them out of the consequences of ill-advised planting and agricultural investment decisions (Petkova, 2006). Market signals, such as commodity price fluctuations, do not appear to help producers once they have planted more coffee plants. Considering the lag time in production, the plants may already be in the ground (a considerable investment) by the time market signals reach the producer (Rice, 1999).

2.3 The Coffee Crisis During the 1990s, Vietnam emerged as the second leading exporter of coffee in the world, the majority Robusta. This new Vietnamese production coupled with over production by Brazil, the world’s leading coffee exporter, has led to a glut in the coffee market (FAO, 2002). In 2002, 115 million sacks of coffee were produced globally, while only 108 million bags were consumed. This oversupply has driven coffee prices to their lowest level in 30 years (FAO, 2007). Though coffee prices to producers have dipped to historic lows in the past few years, there has not been a change in prices to consumers. The price of coffee has attracted much international attention and control because the prices and production have direct and high impacts on the producing nations’ exports and welfare. The average composite price fell by 21 percent in 1999, 25 percent in 2000, and 29 percent in 2001, reaching the lowest annual average since 1971 (Hallam, 2004). The factors that contribute to the dramatic price decrease are structural rather than cyclical and make it unlikely that prices will make a rapid turnaround soon (Alvalos- Sartorio et al., 2006).

16 Coffee Crisis Global Coffee Prices in US dollars per ton of green coffee 2500

2000

1500

1000

500

0 1990 1992 1994 1996 1998 2000 2002 2004

Figure 2.1 Global coffee prices. (Source: FAO, 2007)

In addition, a few multinational coffee roasters and traders have dominated the market and compounded the decrease in coffee prices. This has widened the gap between the price per pound that farmers receive for the product and the price per pound that consumers pay for the product (Ponette-Gonzalez, 2007). Smallholder production is increasingly threatened as this gap increases. These farmers struggle as the price of coffee dwindles to a level that does not cover the cost of smallholder production. To summarize, this chapter has provided the environmental and structural context for understanding farmer responses to the coffee crisis in the Dominican Republic, through the following points: • Shade-grown coffee, produced beneath the canopy of shade trees, serves as an ecologically important crop, providing habitat that encourages high 17 levels of biodiversity, providing groundcover to prevent erosion and providing ecological services found in natural tropical forests. • Coffee is a major commodity in Latin America, important to the national economies as an export crop and important in local economies as a market crop. • Most coffee in Latin America is shade-grown and much of it is cultivated by smallholder farmers. • The coffee crisis has had a negative effect on the economies of many countries in Latin America and Caribbean as prices dropped below the cost of production in and after the year 2000. • Many affected by the price drop were smallholder farmers in rural parts of Latin America. These smallholder farmers have fewer resources with which to cope.

18 Chapter 3: Farmer Decision Making and Response to the Coffee Crisis

This research is guided by the bodies of two academic literatures: the literature that addresses farmer decision making, and the parallel studies of coffee growers elsewhere.

3.1 Farmer Decision Making Agricultural change is more than the linear progression from traditional agriculture practice to the technologically advanced systems of today. Agricultural change occurs everyday as farmers all over the world decide what, where and how to cultivate (Stone, 2001). It reaches beyond amount of production, amount of profit and effects on the environment, it is a complex theme linked to societies, cultures, population pressure, demand and consumption (Turner and Ali, 1996; Turner and Brush, 1987; Netting, 1993; Ellis, 2000). Much of the literature of farmer decision making is based on intensification studies, focusing household adaptation theories on farm intensification through the application of chemicals, mechanization and technologically sophisticated cultivation methods (i.e., Boserup et al., 1996; Turner and Brush, 1987). It addresses the diversification of production away from well-established, well-understood subsistence cropping to lesser-understood market crop agricultural systems. The coffee crisis however, forces us to examine agrarian change in a different manner, from market crops that have been cultivated for generations on the same land to the production of subsistence crops that may be necessary to maintain a household. The farmer logics of disintensification- or a lessoning of intensive agricultural practices- as a result of reduced commodity pricing has yet been as exhaustively researched. The theoretical context of this research however, can still be modeled after the same classic theories of decision- making, basing farmer decisions on the three factors of production: labor, land and capital (Turner and Brush, 1987; Boserup and Bartlet, 1980). 19 Small farm households are often classified into two groups: those that rely on family labor for farm production and those that operate within a labor market. Ellis (1988) created alternative economic models when a household is able or permitted to either hire labor from outside to work on the family farm or to engage in off-farm work at the market wage rate. A crucial difference in this labor market model and the predictions it provides is that production decisions become independent from consumption decisions. It is predicted that a household’s response to an increase in output price is the increase in production and therefore the increase in labor (Ellis, 1988). Additional established models such as the Barnum-Squire and the Low farm household models confirm the importance of domestic (family size and structure) and market (prices and wages) variables to generate predictions on household response to change, particularly change in labor (i.e., Ellis, 1988; Handbook on UN Economic Commission of Europe, 2005). In addition to distinct household demographics, smallholder farmers are predicted to react differently in population densities and land availability (Netting, 1993; Turner and Brush, 1989; Ellis, 2000). Many theories of adaptation of agricultural intensification are based on Ester Boserup’s claim that land availability or scarcity could trigger intensification or agrarian change. If consumption pressure rises without resource rich areas in which to expand, farmers would have to increase the amounts of food they produced from a limited area (Netting, 1993), thus potentially changing the use of the limited area. In addition to the availability of land, the physical attributes of the land, or its natural potential to provide, affect smallholders’ decisions in crop choice, cultivation schedule and amount of labor to involve (Brookfield, 2001). In the majority of this literature on agricultural decision-making landholding is considered natural capital (Netting, 1993; Ellis, 2000). Based on the primary purpose of intensification, increasing production outputs with increased inputs, landholdings are the most valued household asset. A more comprehensive study of capital assets for other agricultural decision-making research proposes that more complex categories of capital are required (Brookfield, 2001). These categories are resources upon which a household can rely in the face of economic stress. 20 As smallholder farmers juggle land, labor and capital, the complex variables at hand make it difficult for researchers to explain every facet of a farming system and the factors that lead to specific agricultural decisions. All of the elements are in a constant state of flux and farming systems change with them. Thus, complete explanations of the phenomena involve intricate descriptions and analysis (Turner and Brush, 1989). No one study can possibly detail each variable potentially involved in a smallholders’ decision process. There are two common themes of demand within smallholder farmers- market demands and consumption demands (Turner and Brush, 1987; Ellis, 2000; Laney, 2007; Nederlof et al., 2004). Farmers who are integrated into the market economy are efficient in response to the market (Turner and Brush, 1987). This assumption can be challenged when applied to smallholder farmers who have fewer resources with which to cope. These farmers, with the need to ensure consumption requirements, must be risk-adverse, not risk-takers as the pure commodity producers. The smallholder farmers trapped between consumption and market production trade off risks against profit and maximize utility, not revenue (Turner and Brush, 1987). The interaction of consumption and production within the household causes a unique form of decision-making. It is expected that when an economic crisis occurs, farmers adapt through diversifying agricultural strategies and income sources, combining market and subsistence systems to reduce vulnerability of price fluctuations and environmental stress (Laney, 2007; Ellis, 2000). Households most affected are those that are both highly susceptible to external events and lack the resources and support systems to carry them through periods of economic strain (Ellis, 2000; Netting, 1993). They are resource-poor, smallholder farmers. The agricultural change literature in Geography and Anthropology makes it clear that smallholders are under pressure to match land, resources and consumption needs by adjusting household activities (Ellis, 2000; Turner and Brush, 1987; Netting, 1993). Resources or the household’s ability to react to economic stress remains a factor not yet addressed in the case studies of the responses to the coffee crisis. Though recent research has examined the factors related to shade forest destruction through community, regional 21 and national case study comparisons (Blackman et al., 2003; Eakin et al., 2006), there is a need to understand how farmers within those communities have responded to the economic crisis.

3.2 Parallel Studies: Smallholder Response to the Coffee Crisis in Latin America Not surprisingly, the coffee crisis has sparked recent studies examining the impact of the crisis. These studies of the smallholders’ reaction to the declining prices have verified that in the wake of economic crisis, households have used various resources to weather the economic crisis (Eakin et al., 2006; Blackman et al., 2005; Blackman et al., 2003; Rice, 2003). A number of studies have been published since the onset of the coffee crisis, illustrating producers’ methods of weathering the coffee crisis throughout different regions in Latin America. The following chart summarizes the results of these studies and reports. 22 Table 3.1 Recent Parallel Studies and their Findings Reaction to the crisis Place Reference Urban Sprawl resulting in tree cover El Salvador Blackman et al., 2007 loss Veracruz, Mexico Hausermann et al., 2008 Lumber extraction and firewood El Salvador Blackman et al., 2007 collection resulting in tree cover loss Cultivation of annual subsistence El Salvador Blackman et al., 2007 crops resulting in tree cover loss Oaxaca, Mexico Blackman et al., 2005 Veracruz, Mexico Hausermann et al., 2008 Veracruz, Mexico Eaken et al., 2006* Lempira, Eaken et al., 2006* Honduras Cultivation of annual market crops Oaxaca, Mexico Blackman et al., 2005 resulting in tree cover loss Veracruz, Mexico Hausermann et al., 2008 Veracruz, Mexico Eaken et al., 2006* Lempira, Eaken et al., 2006* Honduras Disintensification of coffee farms Nicaragua O’Connor, 2005 Veracruz, Mexico Hausermann et al., 2008 Diversifying coffee farms through Veracruz, Mexico Eaken et al., 2006 intercropping of fruits and nuts Solola, Eaken et al., 2006 Guatemala Farm abandonment and urban Aquismon, Ponette-Gonzalez, 2007 migration (temporary and long term) Mexico Veracruz, Mexico Nevins, 2007 Nicaragua O’Connor, 2005 Veracruz, Mexico Hausermann et al., 2008 Land conversion from coffee farm to Nicaragua O’Connor, 2005 pasture resulting in tree cover loss Increased cultivation area of coffee Lempira, Eaken et al., 2006 Honduras Conversion to organic coffee Solola, Eaken et al., 2006 production under the promotion of Guatemala non-governmental organizations * Though alternative cultivation was reported, tree cover loss was not specifically examined in the case study

Sick (1997) argues that since coffee is a crop with a long lifespan (30 years), reversion of coffee farms to cultivation of subsistence crops is not a realistic or likely response to the crisis. Her study of responses to commodity pricing precedes the coffee crisis and predicts a continuation in the cultivation of coffee. Research since the onset of 23 the crisis, however has shown that livelihood diversification in response to the crisis has occurred at the expense of the coffee forests. The coffee crisis has forced some producers to explore alternative sources of income, clearing shade coffee forests to sell timber and convert the land to pasture or subsistence agriculture practices (Blackman et al., 2005; Eakin et al., 2006). Two factors were identified as forces behind shade coffee forest clearing: 1) amount of landholding and 2) geophysical variation (Eakin et al., 2006; Blackman et al., 2005; Blackman et al., 2003; Rice, 2003). Coffee producers with smaller landholdings were more likely to clear shade coffee forests, and low lying coffee farms with good soil (well suited for conversion crops) were also more likely to clear (Eakin et al., 2006; Blackman, 2003). In response to the decreased market value, Ponette-Gonzalez (2007) observed variations of management strategies stratified by land availability and household size. In some households, researchers found that smallholders were reducing amounts on inputs (fertilizers and chemicals) to compensate for the decreased market price for the commodity (O’Connor, 2005). Disintensification of the production methods through cutbacks in labor and financial inputs lower production costs. Reducing pruning, weeding and fertilizing normally carried out in the agricultural cycle increases the profit margins at a cost to wages, jobs and the yields of the coffee plants (Rice, 2003). The collection and sales of firewood as well as native animal life and plants result in increased pressure on producers as they try to weather the coffee crisis (Rice, 2003). The benefit-risk ratio of annual crops cultivated in tropical soils without the application of expensive fertilizers does not outweigh the same ration in the cultivation of coffee, which holds years of financial and labor investments. In areas without land scarcity or where annual crops can be cultivated without the destruction of valuable coffee, benefit- risk ratio increases making farm diversification a more viable coping strategy. A number of recent studies have examined migration as a response to the coffee crisis. In southern Mexico and Central America, the crisis has led to an increasing number of migrants, producers and non-landowner workers alike. In cases where the cost of coffee production exceeded the market price, coffee farmers reportedly abandoned farms and the production of coffee to search for off-farm employment (Ponette-Gonzalez, 24 2008; Nevins, 2007; Hauserman et al., 2007). Most often the employment is found in tourist zones, urban areas or even in other countries. In regions with large, commercial farms, many producers told hundreds of thousands of itinerant workers not to show up for the 2001 autumn crop since prices were too low for harvesting (Benquet, 2003). It is difficult to quantify the direct effect of the coffee crisis on illegal migration to the United States, but in May of 2006, six of 14 migrants found dead in the Arizona desert were identified as coffee workers (Nevins, 2007). Whether rooted in the coffee crisis or in other economic factors, this massive external migration has made remittances a critical component of the economy in Latin America. In El Salvador, remittances have both beneficial and detrimental effects on tree cover in coffee growing regions. They are possibly dampening urbanization, enabling households to continue coffee production and/or possibly financing conversion to alternative land uses or fueling demand for urban land uses (Blackman et al., 2007). Farmers who are geographically or demographically similar still cannot be considered a homogenous group (Nederlof, 2004). The overall effect is reflected in a range of outcomes of farmers’ various responses to the same external event (Eakin et al., 2006). Though recent research has examined the factors related to shade forest destruction through community, regional and national case study comparisons (Blackman et al., 2003; Eakin et al., 2006), there is a need to understand a variation within producer- specific responses (Ponette-Gonzalez, 2007). Allowing household-to-household contrast of variables affecting smallholder decision making provides fine-scaled evaluation of farm and farmer-specific factors of the process. This micro-level analysis exposes differences within communities and the varied household responses to similar situations (Ponette-Gonzalez, 2007). In summary, this study is built on a body of literature that assumes farmer decisions are based on the balance of land, labor and capital. Farmers use a livelihood strategy that combines these available resources to weather stress. Specifically in the wake of the coffee crisis, research in parallel studies revealed significant tree cover loss as a result of change in land use strategies. Other reactions included reduction in inputs and migration as reactions to the coffee crisis. Lastly, though a number of studies exist 25 concerning smallholder reactions to the coffee crisis, minimal research has been conducted at the household level. 26 Chapter 4: Research Questions and Study Area

4.1 Research Question The aim of this study is to address smallholder coffee farmers’ response to the coffee crisis in a small mountainous village in the Western region of the Dominican Republic. This study determines if the fallen coffee prices have indeed stimulated agricultural changes unfavorable for the biodiversity and ecological complexity present in shade coffee forests. Specifically, the questions seek to gain an understanding of which farmers are involved in the agricultural change at a household level and under what circumstances the changes have taken place. The following research goals will be addressed: 1. What have farmers done in response to the current coffee crisis? In particular, are farmers reducing shade-grown coffee? 2. Determine what socio-economic variables are associated with the likelihood of land use change and the destruction of shade forests. 3. What, if any, socio-economic indicators predict land use change (i.e., the destruction of shade coffee forests) as a response to the coffee crisis? These questions are answered through broad land-cover change analysis and fine- scaled evaluation of farm and farmer-specific factors that affect producer-specific responses. The results will test the relationship between household factors and likelihood of adaptation through forest destruction. They will highlight the characteristics that are predicted to respond to stress through ecologically unfavorable agricultural changes. To gather data to adequately answer the research questions, the study area is limited to a small geographic region with similar ecological conditions throughout; minimal variations in altitude, predominant soil types, annual rainfall and tropical forest composition between the farms exist. The study area includes farms with a range of sizes and farm families with diverse socio-economic characteristics. Lastly, all farmers in the region have access to market in which to sell their coffee.

27 4.2 The Dominican Republic

Economy of the Dominican Republic The Dominican Republic is regarded as relatively successful in comparison to its Central American neighbors (Sanchez Ancochea, 2005). The country had one of the fastest growing economies in the world from 1995 to 2006 with an average 7.7% annual growth rate (US State Department, 2006). Two major economic fronts in the Dominican Republic include free trade zones and tourism, both complex industries that affect, directly and indirectly, a number of sectors in the economy. The emerging free trade zones and tourism were responsible for almost half of the country’s gross domestic product in 2001, the time of the coffee crisis (ECLAC, 2002). The Dominican economy, once known for the exports of primary goods such as sugar, coffee and tobacco, has transitioned to an economy based on the transformation of semi-processed goods through skilled labor and the service tourism sectors (FTAA, 2004). An additional economic force is emerging in the Dominican Republic. Estimated remittances reached $2.7 billion in 2004 (Suki, 2004) and have become a major source of financing for the country, representing nearly twice Foreign Direct Investment in 2004. It’s no surprise that remittances have been getting quite a bit of attention.

Coffee in the Dominican Republic Coffee, the second leading cash crop in the Dominican Republic, was introduced as early as 1715 and continues to be a leading crop among small farmers today (CIA World Factbook, 2006). Coffee is a market crop that meets multiple objectives in the livelihood systems in the country. It is a cash crop that provides a means to cover education, health and household costs. It also is a permanent crop that provides a higher return than the cultivation of beans, potatoes or other annual crops, making it a logical choice for land use among farmers in regions of prime coffee growing altitudes. It covers 152,000 hectares throughout various mountain ranges in the country (ONE, 2006). In the regions of the country set at high altitudes, coffee production makes up the principal economic activity for over 50,000 Dominican families (IDIAF, 2003). Coffee farming is seasonal, and it entails a labor-intensive harvest involving as many as 250,000 workers, 28 some of whom are Haitians (CODOCAFE, 2006). Output of coffee fluctuates with world prices, which reached a ten-year low in 2001. Dominican farmers tend to put more time and effort into their crops, increasing outputs when market prices are high (CODOCAFE, 2007interview). Coffee yields fall below the island’s potential most likely due to the prevalence of small holdings among Dominican coffee farmers and the inefficiencies associated with small production practices. Coffee plants are also highly vulnerable to weather patterns and hurricanes that frequently ravage the island. Dominican coffee is often sold under the name Santo Domingo and is categorized as Caribbean along with Jamaican and Puerto Rican coffee.

4.3 The study area: A small coffee producing village in the Dominican Republic The Southwestern region of the Dominican Republic is very diverse ecologically, offering pine forests, mountain rain forests and arid desert in and among the Baharuco mountain range. Nestled in the high valleys of the range is the coffee producing community of Polo (figure 4.1). The mountain range provides the area with precipitation and cool climate unique to Polo which is surrounded by deserts that cover the remaining areas of the Southwest. Average temperatures of 22 ºC, abundant rainfall and an elevation range between 600 and 1600 meters make up the tropical climate that supports the most important agricultural land use: coffee production. Nearly 10,000 hectares of land are involved in the production of shade-grown coffee in Polo. The community has a long history of coffee production and is compromised mostly of smallholder farmers, most of whom have less than 5 hectares in production. The area has a landscape dominated by natural and shade coffee forests composing 31% and 27% of the land cover respectively. Other agricultural crops cover 7% of the land while the remaining 35% is deforested for pastoral or developed land use. (Grupo Jaragua, 2005). With the majority of population of Polo working in or producing coffee, the village of Polo was one of many Dominican towns greatly affected by the price drops of the coffee crisis.

29

Figure 4.1 Study area: Polo, Dominican Republic.

The Municipality of Polo The first to settle in the area that is now Polo were inhabitants from the neighboring community of Cabral, located at the base of the mountains 15 km to the east. The early settlers were most likely attracted to the area to hunt the many birds and wild boar. Substantial population growth occurred in the late 1800s with the boom of coffee, bananas and other agricultural crops. By 1896 the area was declared an agricultural zone. As the population grew, the region was designated as a section of Cabral, followed by a municipal district, and finally in May of 2002 Polo became its own municipality, independent of the neighboring municipality of Cabral. Some say Polo earned its name 30 from the cold mountain temperatures, but it is more likely that the name can be attributed to a Haitian founder, Polo Pie. Forming part of the southwestern province of Barahona, the municipality has a population of 9,367 inhabitants (2002 census), 70% of whom reside in the town of Polo, commonly called La Cu. The remainder of the population resides in the rural regions that make up the agricultural areas. It is common for residents to have landholdings both in town and in the outlying rural areas. Many own or rent a house in La Cu, in close proximity to schools, medical care and conveniences. The coffee producers travel to their farms by animal or motorcycle to work the land. Many farmers have since moved from their farms in the rural areas to the center of Polo, closer to schools, provisions and health care. Water is piped through the town and electric wires were strung in the 1990’s offering modern day conveniences that are desirable to families. In 2002, the national telephone company installed a cell phone tower, opening communication to the coast and capital cities. The cell tower also boasts a satellite which captures an array of television stations. These services are not available in the rural mountains that house the coffee farms. Some families rent houses in La Cu, the center, others have purchased small homes and many have earned homes through Habitat for Humanity, Plan International, or the National Government to access the amenities found in town. Families range in age and size and it is typical to cohabitate with extended family members, such as grandparents, aunts or uncles. There are two roads leading to the community. One is the well-traveled and maintained road to Cabral which continues on to the city of Barahona, the center of commerce to the east. The other road is unpaved, less traveled and weaves through the mountain range to the southwest leading to the coastal town of Enriquillo. Whereas public transportation runs daily to the coast via Cabral only private transportation travels the road through the mountain range. The area that makes up the community of Polo is large enough to include a vast number of farms in zones of similar altitude, soil composition and rainfall. The hospital, school and government provide employment and economic opportunities outside the house and farm, allowing the study to include farmers with diverse socio-economic 31 characteristics. And lastly, there are a number of coffee buyers in or near Polo who allow access to the market, either picking up farmers’ yields at their respective farms or offering central drop-off hubs in town. Due to the cool and wet climate, individual coffee farmers in Polo are not able to store their beans in anticipation of higher market prices. After the sweet coffee cherry has been scraped off the beans the coffee must be taken to the dry coastal region within a day to prevent fermentation. Most of the coffee buyers in Polo produce coffee themselves and also act as middle men, buying from other farmers. They have access to coffee ‘factories’ near the coast to dry and bag the beans to be sent and sold in the capital city. Polo was chosen as the research site because it is an area saturated with coffee production, it has an association of coffee growers already established, and the areas is small enough to guarantee ecological homogeneity but large enough to include diversity of farmers. In addition, the researcher was already familiar with the area and the strong effects of the coffee crisis from previous time spent there as a Peace Corps volunteer in 2000-2002. 32 Chapter 5: Methodology

5.1 Methodology of the study Multi-method research techniques combining qualitative and quantitative research techniques were used to understand how and why shade forests have been affected by the coffee crisis. All data collected are used to determine smallholders’ response to the coffee crisis to address the first research question. In country materials were collected in July and August of 2007 and the materials gathered are used to further answer the first research question. Secondary materials and interviews with key informants were used to identify a relationship between environmental conversion and coffee prices. Focus group sessions and survey data collected from household interviews were used to determine the socio economic variables associated with land use change and the variables that predict land use change as a response to the crisis to address the second and third research questions. Lastly, I visited coffee farms in the region to see first hand the livelihood adaptation strategies used by particular households. The following describes in further detail the steps used to collect the necessary data.

Secondary Materials In-Country National data were explored to examine the relationship between the decline in coffee prices and environmental conversion. Agricultural census data were collected from the office of the Secretary of Agriculture and the information was used to identify a change in agricultural production throughout the time period of the crisis. Preliminary data on land use change were collected from the office of the Secretary of State of the Environment as well as from the Dominican Institute of Agricultural and Forest Research. The population censuses as well as local environmental assessments were also reviewed to enhance the research. The secondary data were compiled and analyzed to provide a national context for the study and to provide a historical framework that emphasizes the recent and local changes.

33 Interviews with Key Informants Further region-specific statistics and knowledge were obtained from formal interviews with key informants. Government officials, area specialists, agriculture extension agents and NGO affiliates were contacted to discuss their interpretations of coffee production and land use change. Interviews were held in the capital city, in regional offices in Barahona and in the community of Polo. They included area-specific questions aimed to capture the informant’s knowledge and expertise of coffee production and changes that have taken place since the onset of the crisis. The interviewees were asked to identify any land use changes in the area and identify trends regarding socio- economic factors and the relationship to land use change. The interviews were transcribed and used to form the survey and interpret the results.

Focus Groups Three focus groups were formed, consisting of experienced and knowledgeable coffee producers in the community of Polo. The first groups included the presidents and leaders of four of the coffee cooperatives in the region. The meeting was held at the community center in Polo. The second group consisted of the members of the coffee cooperative in the rural area of Breton in the hills of Polo. The meeting was held as part of a regularly-scheduled cooperative assembly in Breton. The third focus group included coffee growers in the region who were not specifically affiliated with a coffee producers’ cooperative. The group interview was essentially a qualitative data gathering technique used to recall the specific event of the coffee crisis and to stimulate discussion of the experience. The groups were important in giving a local perspective of agricultural change and background through moderately structured discussion. The discussions assisted in the creation of the individual surveys by a local perspective. The members were asked to identify problems associated with coffee production and the recent decline in price; they cataloged methods used to cope with the declining market prices and discussed the diversification and land use change resulting from the economic pressure. Farmers were asked to identify areas that may have been cleared and offer their interpretation of soil quality and altitude as predicting factors of shade coffee forest 34 destruction. Each group recorded their responses on large flipcharts fostering collaboration and integration of discussion. The flip charts and discussion notes were transcribed onto computer and contents analyzed looking for universal or frequently stated coping methods, collective concerns, or detectable patterns of responses to the crisis. Data collected through focus groups of members of the community coffee cooperative were important to determine the local relationship between environmental change and the current coffee crisis.

Figure 5.1: Participants from the focus group in Breton (Author, 2007).

35

Figure 5.2: Coffee co-op presidents participating in a focus group (Author, 2007).

Household Interviews Household interviews were used to collect household data to identify trends associated with agriculture change. Factors associated with consumption pressure, wealth, and geophysical characteristics were among the information collected. Data on household size, education fees and health or other crises were collected to factor household consumption pressure and test the hypothesis that increased pressure increases the likelihood of forest clearing. Three indicators of wealth (amount of land holding, material of house and vehicle ownership) were used to test the theory that farmers with increased adversity to risk are more likely to diversify in response to the pressure. The collective data were compared with each household’s response to the crisis to verify if the suspected variables do indeed predict who is most likely to cut forests. The data were coded and analyzed using SPSS (Norusis, 2006). Spatial and multiple regression analyses were performed on the data in order to test the hypothesis that these factors predict farmer’s environmental response to the coffee crisis and destruction of tropical forests. A sample of 50 households was drawn from the population of coffee producers in the municipality of Polo1. The sample aimed to target households within converted areas identified through focus group discussions. The sample was stratified according to wealth defined by amount of landholdings. The survey captured participants of relatively small

1 Producers were selected from a list compiled by CODOCAFE of coffee producers in the area. The document includes such information as farm size, location, production and altitude. 36 farms (less than 2 hectares) as well as participants with larger land holdings (greater than 2 hectares). As altitude has been identified as a determinate of agricultural change, the sample was also stratified according to height above sea level ensuring the capture of information from farmers involved in coffee production both above and below the estimated median of 900 feet of elevation. The survey was translated into Spanish and reviewed in country to ensure that the survey included the correct regional dialect and cultural sensitivities. The individual survey questions were adjusted as necessary to include information obtained in the focus groups. The survey was then conducted verbally in Spanish to eliminate bias caused by literacy levels or misunderstandings. I personally collected and transcribed the 50 surveys, and found easy access to the coffee farmers and willingness from them to participate. I had previously worked with many of the farmers in 2000-2002 during my Peace Corps service in Polo.

5.2 Reliability and Limitations of the Methods The methods used in this research provided a well-rounded perspective of the reaction to the coffee crisis in Polo, Dominican Republic. There are a few methodology limitations that are worth noting. Ideally, air photos of the region around Polo would have been used to demonstrate changes in forest cover before and after the years of the crisis, and additional data would have been collected concerning the physical characteristics of the individual farms. However, air photos of an appropriate time frame for this study were not available. Similarly, a recent deforestation study by the Dominican Institute of Agricultural and Forestry Research (IDIAF) was conducted in Polo using satellite imagery. The imagery however, was collected with inconsistent classifications and did not create reliable comparisons of forest cover. Therefore, the deforestation study by IDIAF was not used in the analysis of land use change for this research. The findings of the study as it was conducted, however, provide no evidence that physical farm characteristics can be used to predict livelihood adaptations in time of crisis. Also, with a longer time period in which to conduct the study, I would have made regional comparisons with additional nearby coffee communities to see how the farmers 37 in Polo differ. Though I speak and understand the language well and have spent over two years in Polo, there were still occurrences of language and cultural barriers. A final limitation to the study was the destruction of hurricane Dean on August 19, 2007. The availability of coffee farmers and transportation was limited in the aftermath of the storm restricting access to coffee farms and farmers in the extreme rural areas, slightly affecting data collection for household interviews. 38 Chapter 6: Results

The fifty coffee-producing households interviewed represented 19 sectors of the municipality of Polo. The households sampled were diverse in their total amount of landholding ranging from five to 1240 tareas2 including coffee farms, pasture and land in fallow. The amount of land engaged in coffee cultivation ranged between five tareas and 600 tareas with a mean of 60 tareas. The sample of households ranged in size of one to nine members (see Figure 6.1). Households varied in construction consisting of both nuclear families (parents and children) and extended families. Thirty-six of the households included children, in school or under the age of 17 and 7 households included at least one elderly member who required care (see Table 6.1). Other household characteristics were recorded as indicators of wealth, such as construction of the house, the material of the roof, and whether or not the household had a vehicle (see Table 6.1).

12

10

8

6

4 Frequency of Households Frequency

2 Mean =4.82 Std. Dev. =1.966 0 N =50 1 2 3 4 5 6 7 8 9 Number of Family Members per Household Figure 6.1 Frequency table of family members per household.

2 A tarea is a common land measurement in the Dominican Republic. 1 tareas = 0.16 acre, or 0.06 hectare. 39

Table 6.1: Table of Household Characteristics Household Characteristics Households N=50 Construction of House Palm Board 38 Cement Block 12 Roof Material Zinc 41 Cement 9 Vehicle Motorcycle 10 Pickup Truck 2 No Vehicle 38 Children in Household No children 14 1-2 Children 22 3+ Children 14 Elderly in Household No Elderly 43 1-2 Elderly 7

6.1 Reduction of Shade-Grown Coffee

During the coffee crisis, only two households in the sample (4%) cleared sections of their farms, including the shade trees to plant other crops. The additional households were able to cope using a range of livelihood diversification strategies that did not include deforestation. The deforestation that did occur was small and in both cases the clearings represented less than 10% of the land involved in coffee production. Figure 6.2 illustrates a small cleared plot amidst coffee forest in Polo. In the cleared plots identified through household interviews, one farmer planted chayote, an edible gourd to be sold at the market; the other cleared land and planted potatoes also intended for sale at the market. At the time of the interview, both newly cleared plots were in fallow and the farmers intended to replant the plots with coffee when funds allow. Though the farmers who 40 cleared land indicated the deforestation was indeed related to the coffee crisis, the variation in forestry in Polo did not appear to be significant.

Figure 6.2: A small cleared section amongst the coffee farms (Author, 2007).

6.2 Farmer Response to the Coffee Crisis Focus groups and household interviews revealed a variety of adaptation methods in reaction to the coffee crisis. These livelihood diversification strategies include agricultural disintensification, agricultural diversification, increased non-collateral debt, off-farm labor and receipt of remittances. Disintensification In Polo, farmers reported no use of purchased fertilizers or pesticides in the past twenty-five years. Given the non-use of chemicals, the heavy costs in production of coffee in Polo are limited to only three laborious activities after the farm has been established. They include planting of the coffee bushes, annual weeding of the coffee farm and the collection of ripe coffee berries. The following presents the findings on these three activities. A program through CODOCAFE (Dominican Coffee Council3) gifted young coffee plants to farmers in Polo. These gifted plants allowed for an opportunity to expand

3 CODOCAFE is an organization that was established by the national government in the wake of the coffee crisis to assist struggling farmers. 41 production at the cost of labor alone(see Figure 6.3), yet only 35% of the farmers interviewed reportedly planted more bushes between the years 2000-2007. Most coffee farmers in Polo are accustomed to hiring day laborers for the task. Lacking the resources to outsource the labor, the plants were left in nurseries. Given the adversity of low coffee prices, the labor of planting the new trees becomes difficult to envision as profitable.

Figure 6.3: A farmer augments his plantation with new coffee shrubs provided though CODOCAFE (IDIAF, 2007).

To receive peak yields, the cultivated areas must be weeded annually. In addition to competing with the valuable coffee plants and lowering yields, the weeds inhibit the act of harvesting the ripe coffee cherries. Additionally, ill-maintained farms are at increased risk for plagues and pest infestation that harm the coffee plants. The weeds are chopped by hand with a machete in the late summer after the coffee bushes have finished the final bloom. Of the farmers interviewed in Polo, 42% were able to continue the customary annual weedings; 28% reduced the customary weeding by clearing only fractions of their plots each year as resources permitted; and 30% abandoned the routine 42 maintenance altogether. Of those, some have not yet recovered to a financial position to resume the normal activities. The lesser-maintained farms experience exceptionally low yields which lengthen the amount of time to financially recover and allow for the yearly upkeep.

Figure 6.4: A Haitian day laborer weeds a coffee farm with a machete (Author, 2007).

The third laborious activity in the production process of coffee is the collection of the ripe coffee cherries at harvest time. Typically in Polo, day laborers, many of whom are Haitian migrants, are hired to collect the beans. They pick each bean by hand, careful to only pluck the red, ripe coffee cherries. The berries are measured in latas, squared buckets that hold 20 lbs of coffee fruits. The farmers pay the workers by the number of latas they pick each day.

43 “In 2001, at the height of the coffee crisis, workers in Polo were paid 20 pesos for each lata of coffee picked. One lata of coffee brought a market price of only 40 pesos, leaving very little for the producers. The income was not enough to cover costs of sacks, care for the pack animals used to transport the beans or pay for the annual cleaning.” – Coto, coffee farmer

Not able to hire the collection at a net loss, four households sampled (8%) were abandoned and over three-quarters of the households sampled (78%) harvested only portions of the coffee, either leaving portions of their fields abandoned or only harvesting once during the season.

Figure 6.5: Ill-maintained coffee plot--difficult to distinguish valuable coffee plants from undergrowth (Author, 2007).

44 A corresponding decrease in output exists with this disintensification of inputs experienced in Polo. Producers removed the costs of labor and continued to reap what they could from the coffee plots. These neglected plots full of weeds attract pests and coffee borers. In only one season of neglect, a coffee shrub from a neglected plot produces less than a shrub from a well-maintained plot. Record-low market prices compounded by decreased yields resulting from the benign neglect of the farms, left producers struggling to profit from coffee production.

Agricultural Diversification With a much shorter growing cycle than coffee plants, the investment of planting short- cycle crops is recuperated with the harvest, typically only months later. Agricultural data obtained from the Secretary of State of Agriculture in the Dominican Republic shows an increase of 51% in the amount of land cultivated in short-cycle crops between the years 2001-2003 in the Municipality of Polo. Average monthly statistics for the year 2000 show that 16,323 tareas were involved in the production of short-cycle crops. By 2003, 24,677 tareas were cultivated in short- cycle crops. As coffee prices began to recover the amount of land cultivated decreased (see Figure 6.6). The cultivation of pigeon peas accounted for the most land use; corn, beans and auyama (an edible squash) were also among the top short-cycle plants cultivated.

45

30000

25000

20000

15000 tareas

10000

5000

0 2000 2001 2002 2003 2004 2005 2006 2007 years

Figure 6.6: Amount of land involved in short-cycle crops.

Household interviews revealed that, 76% of the farmers sampled cultivated short- cycle crops to supplement their household income. Short-cycle crops such as corn and beans require sunlight and therefore cannot be planted in the coffee fields amongst the coffee plants and shade trees. Of the farmers sampled, 72% owned land suitable for short- cycle crops in addition to their landholdings dedicated to the production of coffee and 66% of the 50 farmers sampled planted short-cycle crops on their land. An additional 24% of the farmers planted short-cycle crops on someone else’s land. It was noted during interviews that several large land owners no longer live in the region, and their land that was formally used as pasture has been abandoned. Local farmers took advantage of the land to plant crops in time of need.

46

Figure 6.7: This family gathered sour oranges from trees within coffee plots and trucked them to the city to be sold (Douglass, 2007).

Figure 6.8: This family is with their black bean harvest. Their yield was sufficient for consumption and was not sold at the market. (Author, 2007).

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Figure 6.9: This farmer took advantage of his yard to grow a small crop of lettuce to sell at the markets on Sundays (Author, 2007).

Using the Credit System Farmers in Polo are accustomed to hiring day laborers to tend the fields. Many of the hired laborers are Haitian migrant workers. The economic cycle of coffee production brings income two months of the year. Thus, most smallholder farmers fund labor employment through a credit system with local buyers. Buyers lend producers reserves to have the fields cleared, then the producers pay the buyers with coffee during the harvest season. The credit system also acts as a buyers’ contract; coffee producers are limited to sell their coffee to the buyer who lent the resources to work the fields, not the buyer who provides the best market price. As the price of coffee dropped, the amount of coffee beans necessary to repay the debt became unattainable to many smallholder producers. Thirty-one farmers reported a significant increase in debt during the coffee crisis; of those, 14 considered the debt more than “substantial”. Unable to repay their debt, many smallholders were not eligible to borrow funds the following year. Experiencing several years without price recovery, some smallholders were left with no option but to repay their debt to the buyers with landholdings. Two 48 farmers interviewed sold parcels of land and an additional four farmers sold livestock to pay off hefty debt.

“My father had 40 tareas of land before the prices fell. In two years he passed 20 tareas to the buyers to pay off the debt. Now he has half of what he had. This is how the big get bigger and we small get smaller.”

Off-farm Livelihood Diversification To weather the low prices of the coffee crisis, small coffee producers in Polo diversified their livelihoods with off-farm labor. Polo is a growing municipality offering a rising number of employment opportunities. Of the producers interviewed, 36% reported pursuing supplemental household income through additional employment. The occupations they secured are listed in Table 6.2.

Table 6.2: Off-Farm Occupation in Households Interviewed Off-farm occupation of producers Small bodega (5) Day laborer (4) Environment or Forestry Department (3) Police (1) Municipality of Polo (1) Barber (1) Truck Driver (1) Construction with Habitat for Humanity (1) Sell raffle tickets (1) Does not work (32)

An additional eight producers reported other household members had sought out employment in Polo (see Table 6.3).

49 Table 6.3 Household Member Off-Farm Occupation Off-farm occupation of other household members Cook at the school (2) Domestic tasks at the medical center (2) Day laborer (2) Security at the hospital (1) Security at the new cell tower (1)

Two households diversified incomes with small ventures run from their home. One man sells fried dough from the front room of his home to ensure an income year- round. His business is exceptionally profitable on market day. Another family purchased sacks of illegal charcoal brought from Haiti and resold it to Dominicans who live in the populated areas of Polo where they are less likely to have access to wood. Charcoal is less expensive than propane and its use increases in time of economic strain. Both families sought out alternative means to income when the price of coffee fell below the costs of production.

50

Figure 6.10: Preparing dough to fry from his home (Author, 2007).

Remittances While some farmers have found successful livelihood diversification strategies in Polo, others are using out-migration to enable their continued participation in coffee production. The majority of the remittances in Polo hail from the urban areas, either the capital city of Santo Domingo or the provincial capital, Barahona. These areas are economic centers that offer employment opportunities in several activities such as trade zones and tourism.

“Our parents lived well off of coffee, off of the land in Polo. Not today though, costs of living have gone up and we can’t live off of what we produce here in Polo. We don’t want to leave Polo, but the work is not here.”

51 In 86% of the households interviewed, at least one member moved away from Polo to work or study and 44% of the households receive regular remittances. Other households also acknowledged receiving remittances, though not regularly. They reported receiving money during the holidays and when those who migrated have sufficient funds to send money home their family in Polo. Remittances appear to enable coffee producing households to continue producing and caring for coffee plots despite the low market price.

Migrant Destinations

34% Santo Domingo 42% Barahona United States Coast Other

4% 15% 5% Figure 6.11 Migrant destinations among households interviewed.

More than four household members had migrated in 44% of the households. In all, 146 individuals left the region, at least 50 now reside in Santo Domingo, 22 in Barahona and eight in the United States. The remainder work in tourism or live in other larger cities around the country. Many emigrants are male family members working as day laborers, mostly in construction and the service industries. With increased transportation services, workers can return to Polo to visit their families. They often return with contributions of sacks of rice and other goods purchased in the city.

“Travel to the Capital has become so popular that Mingo [a local bus driver] started making trips to the city twice a week. He also acts as a courier service, 52 transporting fruits and vegetables we send to our husbands and children to the city and returning with envelopes of pesos [sent back to the families].”

Participating households in the study have continued agricultural practices necessary for the production of coffee regardless of migration status. It is important to note however, that there are a number of households in Polo who have moved out of the region entirely. They were unavailable for interview but identifiable by noticeably abandoned homes and coffee plots. These farms tended to be the largest landholders in Polo. The coffee farms have been left, abandoned outright. The pastures and previously cleared land abandoned by these farmers are often used for the cultivation of short-cycle crops by smallholders who have remained in the region. The environmental significance of the absolute abandonment of coffee plantations is yet to be fully explored. In summary, forest clearing did not appear to be significant in Polo in the wake of the coffee crisis. Farmers used a variety of livelihood diversification methods without clearing forests to weather the crisis. These activities included disintensification, agricultural diversification, increased non-collateral debt, off-farm labor and receipt of remittances.

6.3 Socio-economic Indicators and Land use Change Though forest clearing was not a significant land use change practice in response to the coffee crisis in Polo, other land use change was detected. The two most prominent changes identified were the cultivation of short-cycle crops on existing cleared land and disintensification of existing coffee fields. To determine if there are socio-economic indicators linked with these land use changes, the households were classified into one of three distinct categories based on their level of economic diversification; low, medium or high level of economic diversification. The households’ level of economic diversification is measured by resource allocation through three different variables. Off-farm labor, livestock and the receipt of remittances demonstrate the ability to tap into other economic sources without resorting to deforestation in times of economic stress. Additional indicators of wealth were 53 collected in the household interviews. They include house material, roof material and the possession of a vehicle. Though cement is more expensive than palm board or zinc, house and roof material as variables were considered not true indicators of wealth. Most of the cement houses and roofs in the household interviews were constructed by Habitat for Humanity or other non-governmental development agencies in rebuild projects after the destruction of Hurricane Georges in 1998. Therefore, a family living in a house made of cement did not necessarily have more resources with which to cope than a family living in a house made of palm board. Thus, these two variables were discarded as indicators of wealth for the statistical analyses. Vehicle possession as an indicator of wealth was also problematic in the statistical analyses. The number of households with a motorcycle (10) or pick-up truck (2) were small and led to skewed statistical results. Amount of landholding is often considered capital in many studies of socio- economic indicators. In this paper, however, land-holding and additional capital (livestock in this case) are managed as two separate indicators. Within the households sampled it was found that landholding alone was not a sufficient gauge of diversification. A household with a medium amount of land may depend solely on the production of coffee for their livelihood and houses with small amount of landholding may also participate in several off-farm economic activities, and not all of their land may be dedicated to the production of coffee. Thus, landholding alone is neither an accurate indicator of wealth nor an accurate indicator of livelihood diversification within the households sampled and is analyzed in its own category for household classification. Each of the households falls into one of the following three categories-- Household of little diversification, household of medium diversification and household of high economic diversification. The households of little diversification are coffee dependent. They had little to fall back on during the crisis. The houses of medium diversification had some economic activity in addition to coffee and had more land. The last category is made up of houses of high economic activity. They have more land and are involved in several economic activities. Using the data, natural breaks were found in each of the four criteria. Households with less than 50 tareas of land generally were coffee dependent. Households with more 54 than 50 tareas, but less than 150 tareas of land generally were involved in additional economic activities. Lastly, households with more than 150 tareas of and were most likely involved in various economic activities. Though natural breaks were apparent in the data, not every household fell perfectly into one category. To begin the typology, it was assumed that each household was of little economic diversification. If the household met at least two criteria of the next level of economic diversification, it moved to a household of medium diversification. Those that did not remained in the first category. Then the households in the second category were analyzed. If they met the criteria of the households of highest level of diversification, they were categorized as such.

The households were classified as follows: a) Household of little economic diversification • Less than 50 tareas of land on which to produce coffee and supplement household income with produce from trees within the coffee plantation (ie: citrus, avocados or tubers) or cleared land on which to produce short-cycle crops. • Does not own any livestock (ie: cows and pigs). In this study, chickens and fighting cocks are not considered investments. • Does not receive remittances. • No one in the household works outside the farm b) Household of medium economic diversification must have at least two of the following • Considered a medium-sized landowner, possessing between 50 and 150 tareas of land. • Owns less than five livestock. • May receive remittances from the cities of the United States, but not regularly. The household does not count on remittances to cover expenses. • May receive pay for day work from time to time, but does not regularly receive income. 55 c) Household of high economic diversification must have at least two of the following • Has more than 150 tareas of land on which to produce coffee, short-cycle crops or pasture livestock. • Owns 5 or more livestock. • Receives remittances from family members regularly. • Has regular employment outside of the farm and receives income.

Table 6.4: Classifications for Degree of Diversification

Degree of Diversification Capital Low Medium High Land holdings Less than 50 tareas 50-150 tareas More than 150 tareas Livestock None Fewer than 5 More than 5 Receives remittances None Occasionally Regularly Works outside the farm Never Sporadically Regularly

Of the 50 households interviewed, 19 were lesser diverse, 26 of the households were involved in somewhat diverse income activities and 6 of the household were considered highly diverse. To test the relationship between the household level of economic diversification and the land use change, a g-test was used. The g-test was considered most appropriate for this study because it allows for statistical analysis of a lower ‘n’. The number of households in the high level of diversification category in this study (6) does not meet the assumptions of the Pearson’s chi-squared test to test the goodness of fit (Rohlf, 1995).

The Cultivation of Short-cycle Crops The “type” of household was compared with the cultivation of short-cycle crops by using the g-test. Though there appears to be a pattern in the percentages of types of households who planted short cycle crops, calculations revealed a g-test statistic level of 56 8.38 indicating no statistical significance. Households with more resources with which to weather the crisis showed the same cultivation selection as households with fewer resources. Coffee producing households cultivated pigeon peas and other short-cycle crops when and where they could during the coffee crisis.

Table 6.5: Cross Tabulation of the Household Diversification Classification and the Cultivation of Alternative Crops. Planted alternative crops during the crisis Total Did not plant Planted short- Planted short- short-cycle cycle crops cycle crops on crops on own land borrowed land Little Diversification 3 10 6 19 Medium Diversification 9 8 8 25 High Diversification 1 5 0 6 Total 13 23 14 50

Table 6.6: G-Test of Level of Diversification and the Cultivation of Alternative Crops Degrees of Freedom 4 G-Test Statistic 8.38 Chi-Squared Statistic (x²) 6.90

Table 6.7: Percentages of Households by Level of Diversification who Planted Short- Cycle Crops Level of Diversification Planted Short-cycle Did not Plant Sort Total Crops Cycle Crops Little Diversification 84% 16% 100% Medium Diversification 64% 36% 100% High Diversification 83% 17% 100% Disintensification: Coffee Farm Maintenance

The “types” of houses were compared next with the maintenance of coffee fields using the same statistical g-test. The results revealed a g-test statistic of 7.23, indicating a relationship between types of households and the maintenance of coffee farms. 57 Households of little diversification and households of high level of diversification were more likely to continue regular farm maintenance. Households of a medium level of diversification were less likely to continue maintenance on their coffee farms. The pattern is visible when examining the percentages of the types of households presented in Table 6.10.

Table 6.8: Cross tabulation of Household Diversification Classification and Maintenance of Coffee fields. Continued to clean coffee during the Level of crisis Diversification yes no Total Little 15 4 19 Diversification 14 11 25 Medium Diversification 6 0 6 High Diversification Total 35 15 50

Table 6.9: G-Test of Levels of Diversification and Maintenance of Coffee Fields Degrees of Freedom 2 G-Test Statistic 7.23 Chi-Squared Statistic (x²) 5.63

Table 6.10: Percentage of Household Diversification Classification and Maintenance Coffee Fields Level of Continued to Did not Continue to Total Diversification Clean Clean Little Diversification 79% 21% 100% Medium 56% 44% 100% Diversification High Diversification 100% 0% 100%

58 Chapter 7: Discussion

7.1 Diversification without deforestation The research from this study indicates that Polo smallholder farmers were able to weather the coffee crisis without resorting to forest clearing. Household interviews, focus groups, key informants, and direct observation show no significant deforestation in Polo in the wake of the coffee crisis. These findings, in contrast to other studies, beg the question- why didn’t farmers in Polo resort to deforestation to weather the coffee crisis? Even with the substantial decrease in the price of coffee, farmers in Polo were able to live without cutting their coffee and shade trees above them to diversify their livelihoods. This may be largely due to the abundance of land in and around Polo, economic opportunities (both on and off-farm) and farmers’ commitment to coffee. The following section describes in fuller detail the coffee growers’ ability to diversify livelihoods without clearing forests.

Land Abundance Smallholder coffee farmers in Polo are not restricted by land availability. Forty of the 50 households sampled (80%) own land that was not forested. Though not all of the additional land is suitable for cultivating alternative crops, alternative agricultural strategies were available. Even coffee-dependent farmers with smaller land holdings were able to diversify livelihoods by planting short-cycle crops on squatted land, leaving their coffee farms intact. This land abundance in Polo is made up of abandoned pastures and clearings left behind by residents who have migrated to urban centers both domestically and internationally. To illustrate this phenomenon, the following is a look at a coffee- dependent smallholder household: 59 CASE STUDY – a snapshot of the coffee crisis in Polo Carlito is a producer in Polo who has approximately 2.5 hectares of land planted in coffee. Each year he estimates he gathers 400-450 latas of ripe coffee beans from his fields. In this first example, Carlito shares the specifics of production in his household in 2001, during the height of the coffee crisis. 2001 INCOME: Market price 40 pesos/lata 400 latas = 16,000 pesos EXPENSES: Paid 20 pesos/lata for the collection of ripe beans -8000 pesos Paid 2000 pesos/ hectare to weed the coffee plots 2.5 hectares -5000 pesos

At the end of the season, Carlito was left with 3000 Dominican pesos or less than $190 US dollars* with which to support his household of five. (Average Dominican GNI in 2001 was $2,230 USD) Carlito and his wife did not formally work outside the home and subsisted off the profits from their coffee farm and other fruits and vegetables grown with in the same plot of land. Since the onset of the coffee crisis and the reduction in household income, Carlito now sells lettuce and other market crops he cultivates on squatted land. His wife sells fried dough at the weekly market. He also reported that in the time of dire crisis, he did not have the money to pay day laborers to weed the coffee plots. * Exchange rate of 16.1 pesos/USD in 2001, (Federal Reserve Bank)

In this second example, Carlito shares the specifics of his household production in 2006, the most recent harvest at the time of data collection. 2006 INCOME: Market price 130 pesos/lata 400 latas= 52,000 pesos EXPENSES: Paid 50 pesos/lata for the collection of ripe beans -20,000 pesos Paid 2800 pesos/hectare to weed the coffee plots 2.5 ha -7,000 pesos 60 At the end of the season, Carlito was left with 25,000 Dominican pesos or about $750 US dollars* with which to support his household. (Average Dominican GNI in 2001 was $2,910 USD) Though prices had improved, the profits are not enough to sustain his household on the production of coffee alone. * Exchange rate of 33.5 pesos/USD in 2006, (Federal Reserve Bank) By cultivating on previously cleared and squatted land, Carlito was able to weather the crisis by growing lettuce and other market crops in addition to his coffee crop. This, along with his wife’s efforts, allowed Carlito and his family, historically a coffee-dependent household, to survive without cutting his coffee crops and shade forest canopy. He was able to use others’ land to satisfy his household needs.

Economic Opportunity Another advantage the Polo farmers had is a well-established, non-collateral credit system. This available credit helped the farmers avoid drastic responses to the coffee crisis. By providing the farmers with much-needed financial assistance, the credit system absorbed some of the financial pressure allowing the farmers to continue growing coffee as usual rather than deforesting. In the years 2000 and 2001, the height of the coffee crisis, a new market opened up for Polo farmers. Famosa, a Dominican agro-industry, began marketing canned pigeon peas to the United States and Puerto Rico. Pigeon peas, considered drought-resistant and grown on marginal arid land, are considered a non-competitor of land use to coffee farms. Though situated in the high altitude, forested mountains, Polo borders a vast savanna to the South, ideal for the cultivation of pigeon peas. Not under current ownership, most of the land is available for use. Twenty-eight of the households sampled (56%) took advantage of this growing market, which may have spared tree cover in the region. There are two additional economic forces that must be mentioned. Polo is a town with a growing number of off-farm economic opportunities. As these opportunities arise, coffee farmers have access to additional livelihood diversification options. Secondly, as more Poleros emigrate to urban areas, remittances from migrant family members increasingly offer farm households economic support. 61

Commitment to Coffee For more than a century farmers have been producing coffee in Polo. Associated with the long history is a strong tradition of coffee that has become ingrained farmers’ attitudes and perception of the resilience of coffee production. Many of the smallholder farmers in the study come from a long line of coffee farmers. Like generations before them, growing coffee is their culture and identity. During the focus groups coffee producers discussed the option of cutting their coffee farms to plant other crops in times of stress.

“No, no. You can’t cut coffee. Coffee is always true, even in times of drought, through hurricanes or in times without price, coffee will always be true”—Coffee farmer from a coffee-dependent farm.

“No, we don’t cut our coffee plants; we produce, we harvest, we sell. Low prices or high prices we keep on as always. There are always bad years, but soon enough come good years.”—Coffee farmer from a larger and more diverse farm.

The farmers reported that their fathers and some grandfathers have been producing coffee and that those generations too, had ups and downs in price. They believe the price will again rise to a profitable level as it has always done in the past. Consequently, there is a great resistance to the cessation of such a culturally-entrenched occupation. Knowledge of the ecological consequences is another significant factor in the Polo farmers’ disinclination to deforest. In focus groups, smallholder farmers demonstrated knowledge of increased erosion and nutrient depletion due to deforestation. Based upon generations of experiences, the Polo farmers know that although deforesting may provide a short-run solution to the economic crisis, it is not a positive long-term solution. This ecological knowledge is a result of extended experience in cultivation and environmental conservation seminars presented by CODOCAFE. 62 Lastly, there are legal issues associated with deforestation. Simply put, it is illegal to deforest in the area studied. Each sector of the Dominican Republic is monitored for deforestation by a vigilant forest observer employed by the Department of Forestry. The forestry employee assigned to Polo was unavailable for the duration of the 7 week data collection period. Although it may be argued that the legal prohibition alone may not deter deforestation, the potential fines and incarceration may dissuade farmers or factor into a decision not to cut forests.

7.2 Levels of Household Diversification and Opportunity Cost of Labor Household-level data collection in this study reveals diversity in strategies employed to cope with the coffee crisis. Generalizations are difficult to make given the amount of characteristic variations within individual households and the variation in responses to the coffee crisis of the individual households. The following trends can be surmised from the household-level analyses of this study. No overall statistical correlation was found between the level of diversity (i.e. wealth) and agricultural diversification through the cultivation of short-cycle crops using the statistical g-test. Regardless of household economic diversification, farmers planted alternative crops on their land or on squatted land when and where they could. The agricultural diversification was an ‘equal opportunity’ coping strategy available to farmers regardless of their level of economic diversification. Whether or not coffee producers chose to diversify incomes with the cultivation of alternative crops was not related to the amount of resources the households had with which to cope in Polo. This trend in Polo is possible because of the amount of land in the region available for cultivation. If Polo farmers were restricted to their own lands on which to expand agricultural activities, a different outcome may have resulted. Households with more land would have been more able to diversify cultivations whereas households with a restricted amount of land may have been forced to find alternative means with which to cope during the crisis. Though no relationship was detected when measuring the cultivation of alternative crops, a pattern was detected when examining the second land use change 63 variable in households sampled. The percentages of households in the three categories of classification show a pattern between levels of household diversity and the regular maintenance of coffee plots. The pattern was verified with the g-test statistical analysis which indicated a statistically significant relationship between household diversification levels and the routine maintenance of coffee farms. Households in the top and bottom levels of diversity were more likely to invest in the labor to clean, maintain, and harvest their coffee plots while households falling in the middle level of diversification were not. This is most likely due to the opportunity cost of labor. The least diverse households work the land with their own hands, weighing the proceeds from the coffee crop as more valuable than the time and effort invested in the work. The most diverse households also work the land; however they are able to pay hired labor to weed, maintain and harvest the crops. The households in the middle category were less likely than the other two categories to continue farm maintenance. It is speculated that fewer households in this category weeded, maintained and harvested with in-house labor, valuing their time more than the profits. These households may have spent time looking for off-farm opportunities to supplement their income instead of maintaining existing coffee fields. Also, households in this level of diversity did not have the resources to out-source the work to hired laborers. Without the resources to hire labor and without the same sense of necessity, the houses in the middle level of diversification were more likely to abandon their coffee fields or forego regular maintenance and reap what they could come harvest. Thus, the decision to diversify their income with the cultivation of short-cycle crops appeared to be based on labor.

64 Chapter 8: Conclusions Coffee growers worldwide have been forced to adapt to a drop in global coffee prices. This case study reveals the livelihood diversification practices in Polo in response to the crisis. A region abundant in land, economic opportunities and the region’s commitment to coffee allowed the smallholder coffee farmers to weather the crisis without deforestation of existing coffee farms. Polo coffee farmers were able to cope in a sustainable manner with minimal ecological destruction. The environmental impacts of this change are not consistent with studies elsewhere. The findings are distinct to the parallel studies by Blackman et al. (2007), in which tree cover loss in shade coffee growing areas in El Salvador ranged between 7-17%; research by Hauserman et al. (2008) which reported land use change resulting in deforestation in Veracruz, Mexico; and Eakin et al. (2006) in which forested areas were compromised in Mexico and Honduras due to the agricultural diversification of struggling coffee farmers. The results from the smallholder producers in Polo are more comparable to the findings of Sick (1997) studying the cultivation of coffee, however not in the context of the coffee crisis. Her research argues that the extended lifespan of a coffee plant makes the reversion of coffee farms to the cultivation of short-cycle subsistence crops not a likely response to market fluctuation. Though expecting to disclose deforestation and environmental degradation in response to the coffee crisis, the ‘non-finding’ of this research should not be overlooked. Coffee, in Polo, is a multi-generational crop and it is cultivated in a region with favorable conditions for good bean production. Cutting coffee forests in production is a risk that farmers are not willing to take, especially with alternative economic activities and available land in Polo with which to diversify incomes. It is not worth the risk or expense to farmers to cut down their trees in Polo. Coffee producers in Polo have progressed beyond peasant farmers and are better prepared to cope with economic crisis such as the drop in market price. Much like parallel studies, this study reveals disintensification and coffee farm abandonment among coffee-producing households. A corresponding decrease in output exists with this disintensification of inputs experienced in Polo. Coffee prices have been 65 rising slowly over the past six years, but the price has not yet recovered. Continued low prices and decreased yields will leave farmers struggling to profit from the production of coffee. Though Polo’s coffee farmers have a history of continuing to cultivate with low prices, their confidence that profits will return may fade with such an extended period of stress. Coffee forests in Polo will not be forever resilient. Another factor may test the resiliency of coffee farms in Polo. A good portion of farmers were able to cultivate alternative crops on squatted land. If the land owners return to Polo and evict squatter and their crops off the land, Polo may not be able to absorb an economic crisis in the same manner. Without previously cleared land to graze their livestock or grow alternative crops, coffee farmers may chose to convert coffee farms to other income-generating land use strategies, clearing the plants and ecologically valuable shade trees. This study draws attention to the value of household-level analysis revealing diverse strategies adopted by coffee-producing households of varying degrees of diversification or wealth. State and community-level studies allow a macro-level approach which may be blind to internal differences within a community and decision- making that occurs at the individual level. To fully understand and predict how individual households are responding to market fluctuations in the coffee sector in Polo and throughout Latin America, we must understand the individual characteristics of each household and the effects that each variable carries. The classic theories of agricultural decision-making help to model and predict farmers’ responses to the market, but the predictions still depend on further research of the effect of individual and varied household demographics. Lastly, this study contributes to a small but growing literature on agro-forestry decisions at a household. 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70 USAID (2002), Sourcebook of Index Prices. Retrieved May 2007 from http://www.usaid.gov. 71 Appendix A: Household Interview Guide

Nombre______Sector______

Tareas______Elevación______

Calidad de tierra (1=mala y 10=buenísima) ______

Edad y sexo de los de la casa______

______

______

Han migrado algunos en los últimos diez años?______

Quienes son, cuando y donde?______

Material de casa______Piso______Techo______

Tiene vehiculos/motores?______

Uso de casa o de servicio del transporte público?______

Quienes de la casa tienen trabajo afuera de la casa?______

______

La casa ha tenido algún crisis costosa?______

72 Tiene Ahorros?______

Tiene Deudas?______

Reciben remesas o mandos regulares?______

Total de tarea______Café______Otro producción______

Tierra Blanca______Disponible para la siembre______

Tierra pastoral______Ha comprado/vendido terreno (en 10 años)______

Tiene Animales para la venta______

Para el consumo______Para el trabajo______

Cuales son los cambios que han resultado de la crisis del café?

Ha realizado algunos de los siguimientos en el tiempo del precio malo?

Siembra de los cultivos alternativos en tierra propia Migración Siembra de los cultivos alternativos en tierra ajena (alquilada) Prestamos Pica el café para el tronco (Aserradero) o cultivos alternativos Trabajo alternativo Venta de tronco para aserradero