Article Date: March 2014
Today the Coffee industry in Costa Rica is challenged by disease that, left unattended, could devastate all its coffee plantations. However, Coffee’s early introduction in Costa Rica laid the foundation for its economy. Here are dates and events that mark the coffee history.
1779 – The government imported Arabica coffee seedlings from Ethiopia and then established cultivations throughout the higher elevations in Costa Rica. The Costa Rican government encouraged coffee planting by providing ‘plots’ of land to peasant farmers for cultivation. Financing was made available to them by ‘low interest loans’, these were repayable after the sale of their crop. The coffee industry was rapidly established. It was illegal to plant anything but Arabica coffee in Costa Rica.
1800 – Coffee made up 95% of Costa Rica’s total exports, making it their largest foreign exchange earner. Importantly, the wealth earned from coffee has never gone to the ‘farmers’, instead the ‘Coffee Barons’ reaped great wealth from three primary areas in the industry:
(1) Banking- providing credit to ‘rural small farms’ and peasant farmers.
(2) Processing- the sorting, grading, and preparation of beans for export.
(3) Marketing – direct sales to and overseas trading of beans to buyers.
1830 – Costa Rica is still a part of the Federal Republic of Central America and exported their coffee to the Chile. The Chileans then sold the crop to the UK at a much higher price. Costa Rica’s full earning-potential is unrealized in this arrangement, until the 1850.
1850 – European buyers begin purchasing coffee directly from Costa Rica. Realizing the tremendous potential for profits, the Europeans make large investments into the establishment of additional Costa Rican coffee plantations. Industry sophistication led to the concentration of plantations at the higher elevations in the Meseta Central Plateau. Costa Rica capitalizes on her advantage as an Atlantic seaport, which facilitates shipping. The alternative shipping routes were extremely hazardous.
Locally, the transportation of beans was by ox-drawn cart until the arrival of the railway in the 1880s. The railway makes a very significant transformation in the movement of the beans from the plantations to the ports of export. Then, a significant spin-off of the coffee trade was the banana industry. Bananas will later become the number one export crop, surpassing incomes from coffee and other agricultural produce, but that is still in the distant fut
1870s – An American from Brooklyn named Minor Keith took the reins controlling a team that set out to construct a railway across the peninsula of Central America. His uncle, Henry Meiggs, started the railway project and pursued it until his death in 1877. Keith, then 23 years old, stepped up to the task and advanced the railroad through the country. As he cleared a path through the jungle from Nicaragua to Panama, he laid railroad tracks and then planted bananas in the arable soil on either side of the railroad track. The broad leaves of the banana tree retarded the re-growth of the forest by shading the area with its large leaves. It was also a clever method of recouping some of his investments. Keith eventually married a Costa Rican President’s niece, Cristina Castro Fernández, which cemented his position in Costa Rica. The relationship earned him vast land holdings at little cost. Keith’s exploits through the jungle cost many lives including those of his two brothers.
1899 – Minor Keith, compelled to refinance his operations due to indebtedness, joined forces with Andrew Preston of the Boston Fruit Company. Together, they formed the United Fruit Company, which became the largest banana company in the world. They had plantations in Costa Rica, Columbia, Nicaragua, Panama, Santo Domingo, Cuba, and Jamaica. The railroads provided links from the plantations to the seaports. The United Fruit Company owned a dozen ships and leased over 35 others to facilitate their worldwide banana exports.
1955 – The Government placed a tax on coffee exports, which lasted for 39 years. In 1994, the coffee export tax was rescinded. The revenues from that tax helped to bolster the social welfare programs of Costa Rica. Costa Rica still provides one of the best welfare programs in the world, promoting high levels of literacy and good health via medical care for everyone.
1963 – The joint countries, Costa Rica, Nicaragua, Guatemala, El Salvador, and Honduras come together as the International Coffee Organization (ICO). Their intention, to create a coffee retention plan, designed to stabilize world prices by controlling the supply of beans to the world. It works in much the same way as the Organization of Oil Producing Exporting Countries or OPEC and the oil producers. They absorb any overproduction in good years and uses their reserves to make-up for shortfalls in lean years.
1983 – The outbreak of a coffee disease called Hemileia vastatrix or ‘Coffee Rust’ begins to affect the plants in Costa Rica. The healthy green leaves of the coffee plant become yellowed (rust colored) and the disease saps nutrients from the tree. Many countries producing Arabica are suffering from this industry destructive disease. The world’s Arabica coffee faces obliteration in a few years if this disease is not stopped. Costa Rica’s coffee industry is built on the Arabica berry.
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