Coffee payment dilemma

This is a small coffee grower's account of experiences with local coffee buying entities. Derrick Simon is a coffee farmer of six years. He grows Blue Mountain coffee, and runs a company called Premier Coffee. The Coffee Industry Board's response will be run next week.

FARMERS IN the Blue Mountain coffee programme are now expecting, in the case of Mavis Bank Central Factory (MBCF), final payment for their coffee and an interim payment from the Coffee Industry Board Commercial Division for the 2000-2001 crop.

However, these farmers over the years, have become accustomed to not getting an exportable out-turn report from the coffee buying entities, prior to receiving payment.

In the absence of this out-turn report, coffee farmers have no means of reconciling the payments made by the purchasing entities, neither do they know the exchange rate employed in calculating prices. They also appear ignorant of the charges deducted for processing, handling and shipping.

Farmers are therefore unable to conduct proper business assessment in the absence of this critical information.

As a guide to farmers, and given the above, this is a proposed scenario, based on the average costs within the industry, of how their payments are calculated.

Each box of cherry coffee weighs 60 pounds (lbs). However, after pulping, drying, hulling, grading, and sorting, the box of coffee will yield 9.5 lbs of clean bean. In a so-called bad year of rampant berry borer damage, such as 2000-2001 is believed to be, the total average defects in all probability should amount to about 27 per cent.

The defect profile per box is expected to be: berry borer 10 per cent; light beans 5 per cent; stale beans 6 per cent; and green beans 6 per cent.

However, there is also a 12 per cent penalty for stripped beans ­ caused by improper removing of the protective mesocarp by maladjusted machines - and 10 per cent for paling off, a condition that occurs due to the time beans remain unprocessed in the factory.

Both the stripped beans and paling off defects occur after the coffee berries are delivered to the factory. The defects and penalties further reduce the weight to 6.9 lbs of exportable coffee.

The prices obtained overseas for the berries are US$10.66/lb for Grade 1 berries, which constitute about 25-30 per cent of the derived 6.9 lbs.

The remaining 75 per cent, or 5.2 lbs, comprises grades 2 and 3, Triage Pea Berry, which works out to an average of US$9.50/lb.

Therefore, using an exchange rate of J$44.00/US$, the estimated 1.7 lbs of grade 1 berries, and 5.2 lbs of the lower grade, would yield an income of J$2,982.60 per box.

The coffee farmers would like the relevant authorities to comment on the above calculations and perhaps furnish their own figures and method of calculating the price paid per box of coffee delivered to the factory.

Each payment cheque should be accompanied by a full statement outlining the various deductions.

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