Farmer: Jose Ebis
Farm: El Plan
Price we paid Semilla for the landed coffee in our Montreal warehouse: 5.60USD/lb (+0.30$lb in shipping)
FOB price: 3.75USD/lb
This is the price up to when the coffee is safely in a container, ready for export. Freight cost, insurance and financing not included in that price.
Farmgate price: 7000 Lempira / quintal (100lbs) of green coffee. This translate to around $3USD/lb in Jose's pocket. This is way higher than the average local price and higher than what the average specialty import company would pay.
An interesting note about buying coffee in parchment is that some beans, due to size or defect, don't make it in the final lot (around 5-10%). Agreeing on the price of the coffee after milling is done not only gives the farmer more transparecy, but he also has the option to take the smaller (and defective) beans back to sell those on the local market for extra income.
Coffee farming is no easy enterprise. It's mostly exploitative and so many farmers don't get to export their delicious crop and are often forced to sell on the local market for very little.
Jose is one of those who decided to stick to farming despite the challenges. Migration is a huge problem in Honduras, with people abandoning their crops and families being separated in the hopes of a better future in the city or abroad.
Paying higher prices for coffee can literally help families stay together and help them see a viable future in their home country.
Semilla paid 15% more than last year in those unprecedented times where production was down by as much as 50%, and some costs like fertilizers up by 300%.
The commodity price was at a high point during last harvest, and local buyers (who are often offering little money) started offering staggeringly high price to some farmers in the Semilla network, prices that Semilla was unlikely to match.
Thankfully, all these producers see the value in a long term relationship that pays well, and held on to their coffee rather than see it swept away for a single purchase without any guarantees.
Many growers said: ''they (the local buyers) are here now, but where were they in the past?
Farmers need to get paid more for their crop, that is a fact. But they also need stability and steady buyer, something that we, just like Semilla, are trying to incorporate in every facet of our green buying operation.