The coffee industry in Costa Rica is facing significant challenges due to rising labor costs and decreasing profits for producers. This alarming situation was highlighted by experts from the Economic Commission for Latin America and the Caribbean (ECLAC) during a recent discussion at the National University’s School of Economics (UNA).
A major concern is that most of the revenue generated by the coffee industry does not make its way back to the producers. New regulations, potential increases in operational costs, and non-tariff barriers affecting coffee bean exports are all putting pressure on the sector’s short-term viability.
So Jeong Lee, an expert in the field, emphasized the gravity of the situation: “Only a small percentage of the added value from coffee production reaches the producer, and this share is very limited. With rising costs, it’s becoming more likely that producers will lose the motivation to continue their work. If this trend continues, we could find ourselves without a viable coffee industry in the near future.”
Currently, producers receive only about 20% of the total added value from coffee sold at retail. This figure can vary between 5% and 20%. While they can capture an additional 10% through processing and up to 20% more through roasting, much of this value is concentrated among a few large companies. For instance, during the 2022-2023 production cycle, just 211 small processors managed to handle only 3% of the coffee, while six major companies accounted for a staggering 44%.
The study conducted by ECLAC examined various risks and market conditions affecting coffee production, outlining both challenges and opportunities for improvement within the sector.
Key risk factors identified include climate change, aging coffee plantations, increasing debts faced by producers trying to keep their businesses afloat, labor shortages, and threats from pests and diseases.
For Costa Rica’s coffee industry to thrive and grow, it is essential that costs are shared fairly among producers, processors, roasters, and consumers. Supporting small producers and fostering collaboration within the industry—and across borders—is crucial for overcoming these challenges.
For those of us living in Costa Rica and enjoying our morning of Costa Rican coffee, it’s important to recognize these issues facing local producers. By understanding these dynamics, we can appreciate the hard work that goes into every cup and support efforts aimed at sustaining this vital part of Costa Rica’s economy.
