A Broken Coffee Market: Why Specialty Farmers Are Going Bankrupt

Murray Cooper was one of the most famous specialty coffee farmers in Ecuador. I’m using the past tense because he’s now bankrupt. 

Murray did specialty coffee by the book: his farm was ecologically focused, he financially empowered the local community, the Barista Champion of Ecuador used Murray’s coffee at the World Barista Championships. 

And he failed.

What went wrong? And what could you personally do to help prevent this happening to other producers like Murray – whether you’re a coffee-loving café-goer, a barista, or a roaster?

You might also like: Why Some Farmers Struggle to Produce Specialty Coffee

The view from the patio of the farmhouse towards the Los Cedros rainforest. Credit: murraycooperphoto

Conservation Hero to Coffee Farmer

Born in South Africa, Murray leaves in his twenties. He volunteers in the middle of Ecuador’s Los Cedros rainforest for over a decade, managing a science base. “It was rough,” he says. “I didn’t have power or anything… No music, no lights. Candles for 11 years.”

Murray is sorely needed: since 1990, Ecuador has lost over 20,000 square kilometres of forest, 14% of its total. Mining is a major concern because of its heavy impact on the entire ecosystem. 

While in the jungle, he takes photographs to help the Los Cedros reserve’s fundraising efforts. “People could see I had a bit of an eye… People often say, ‘Wow, how do you do it?’ And I say, ‘If you spent five years sitting in the jungle trying to get the picture, you’d probably be getting the picture too.’”

Murray goes on to become one of South America’s most famous bird photographers, with his stunning shots appearing in National Geographic. 

He also finds love. He meets Patricia, an Ecuadorian, and she moves in with Murray in his rainforest shack. “I fell in love with the jungle…” Patricia reminisces. “You feel like you’re going back many, many years.” 

But finally, they decide to have children and so move out of the jungle to a 27-hectare farm.

Various different bird nests are found in Murray’s coffee plantation. Credit: murraycooperphoto

Specialty Coffee Farming: A Doomed Career?

In 2011, Murray makes a mistake: he plants his first coffee tree. 

Ecuador is expensive for coffee producers. And it’s great for farm workers.

Ecuador has high labour costs compared to its neighbours, Colombia and Peru. This is partly due to a 2015 government initiative to raise minimum wages and provide social security. 35% of rural workers still live below the national poverty line, but things are improving for farm workers.

“Some of these people can even buy a car from the money they make harvesting coffee, which is a very different situation to other countries,” Juan Carlos Vega, Senior Technical Coffee Consultant, tells me. 

Murray goes even further for his local community. “I paid above the standard wage, always, like US $100 more,” he says. “That was another reason I was more expensive, but that was part of my mission… 

“There was a family that started working with me and their kids weren’t even in school, in government school, which costs US $30 a semester or something. But they just had no money, there were no jobs here. Now the whole family has a motorbike, they’ve fixed their farm up and fixed their house up.”

And higher labour costs are helping Ecuador overtake Colombia in secondary school enrolment. In 2012, they were tied at 79%. Now, Ecuador has reached 88% while Colombia sits at 78%.

As for the environment, Murray was a conservation activist and found a healthy balance between ecology and productivity. “We haven’t to date used insecticide,” he tells me. And they used equipment to cut down grass rather than herbicides such as Agent Orange.

Murray’s farm was exactly what specialty coffee roasters talk so often about: socially and ecologically forward-thinking. On top of it all, the coffee was excellent. Murray was featured by the most prominent specialty coffee roasters across the world, culminating in his coffee representing Ecuador at the World Barista Championships.

And this is where the problems begin.

Gladys rakes the drying beds every two hours. Credit: murraycooperphoto

Cash Shortages Strangle Coffee Farms

Murray is in a cash crisis. 

He didn’t expect to be, because he had a big safety net: photography. But the net broke. “The whole photography market crashed locally and the Ecuadorian market was going down, so there was less business for me.”

There are few other options for him. Getting a bank loan for a coffee farm is notoriously hard in Ecuador – it ranks in the bottom third in international “ease of access to loans” rankings.

But wait a second: Murray’s selling world-class coffee to prestigious roasters around the world. Where’s the cash from selling his coffee?

Zoom halfway across the world, and roasters have just received their green samples from their specialty importers. The options on the table: an 86-point Ecuadorian from Murray and, right next to it and for half the price, an 86-point Colombian. 

“For the same quality, [Ecuadorian] coffee is more expensive, so obviously buyers will say, ‘no, I cannot buy your coffee’,” one specialty green buyer tells me. 

In turn, the traders feel the squeeze. “[In Ecuador,] we are paying some high and crazy prices, to be honest. That’s very risky for us,” discloses another specialty green buyer.

To survive his cash crisis, Murray needs to receive high prices – and quickly. The intermediaries do buy his coffee but, because they’re squeezed, they can either pay him well or fast. Not both. 

Murray is now bankrupt. 

Caturra variety cherries almost ready for harvest. Credit: murraycooperphoto

How Much Responsibility Lies in The Roastery?

As Murray puts his farm up for sale, his coffee is turned from green to brown in roasteries across the world. It is being sold to coffee shops and consumers for profit. It is being ground, brewed, and enjoyed.

Did roasters know the truth?

Did they know that Murray’s higher wages were helping his workers send their children to school?

Were they aware that planting coffee in Ecuador supports biodiversity while mining interests continue to destroy rainforests? (Even Los Cedros is, once again, under threat). 

If they didn’t know all this, why not? Some of them even visited the farm.

If they did know this, why couldn’t they support him by paying high prices quickly and pass on the positive message to their customers?

Other bankruptcies may follow. “We’re seeing the same issue with other producers who are very desanimados… bummed out…” confides a green buyer. “They came into the business thinking they’d get into high prices and maybe they didn’t realise how high the costs were going to be.”

I ask one producer what will happen if he continues to receive the same prices. “I will have to close my farm…” he sighs. “The people who work for me, I’ll have to fire, legally or whatever. And especially for women who work in the area, they’re going to lose some extra income.”

Can these bankruptcies be avoided? What can be changed so that other specialty producers aren’t in the same situation as Murray?

Uniform and perfectly harvested cherries from Murray’s farm. Credit: murraycooperphoto

How to Support Ecuadorian Producers

If you want to promote coffees from farmers such as Murray and empower rural Ecuadorians, here are seven starting points:

• If you’re a café owner or coffee drinker, ask your roaster to pay more for Ecuadorian coffee and be prepared to pay more yourself. 

• Google the farmer’s name (many larger farmers are active on social media) and reach out. Ask for their opinion on coffee prices. Are they sufficient? Do producers get paid enough on the specialty market?
• If you’re a roaster, don’t assume Ecuadorian farmers are getting paid well just because their coffees are expensive. 

• If you’re a roaster or café owner, pay more for Ecuadorian coffee – and explain why to your customers.
• Tell your producers what you paid for their coffee and how much of a premium the specialty green bean merchant took. Information is power.

• Share the risk with producers by working with alternative sourcing companies. Look for shorter supply chains and greater transparency.  

• Commit to buying from the same Ecuadorian farm every year, through thick and thin.

If you believe you have a producer’s interests at heart, you need to act now. 

You might also like Green Bean Pricing Transparency Is Critical (And Complicated)

Written by James Harper of coffee podcast Filter Stories. You can hear more of Murray’s story in Episode 2: Firefly.

The views within this opinion piece belong to the guest writer. Perfect Daily Grind believes in furthering debate over topical issues within the industry and so seeks to represent the views of all sides.

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