Jose de la Cruz (anaerobic) - Bañadeiros, Honduras
Jose de la Cruz (anaerobic) - Bañadeiros, Honduras
Jose de la Cruz (anaerobic) - Bañadeiros, Honduras
Jose de la Cruz (anaerobic) - Bañadeiros, Honduras
Jose de la Cruz (anaerobic) - Bañadeiros, Honduras
Jose de la Cruz (anaerobic) - Bañadeiros, Honduras

Jose de la Cruz (anaerobic) - Bañadeiros, Honduras

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Variety: IH90
Farm: La Anona
Farm size: 2.5 hectares
Location: Bañaderos, La Paz, Honduras
Altitude: 1800masl
Process: Anaerobic Washed
Processing details: Cherries are picked at peak ripenss and then are floated and
hand selected ro remove any damaged or underripe cherries. They are then placed
into sealed Grainpro bags where they’re left to ferment in shade for 48 hours. The
cherries are then depulped and the seeds undergo a dry ferment of 36 hours, again
in sealed Grainpro bags. The coffee is then rinsed and moved to a solar dryer where
the parchment is moved every 20 minutes over a 22 day period. The parchment is
measured for a moisture content of 10% and then stored in Grainpro and bag to
preserve it until deliver.

Below is more detailed information from our friends at Semilla Coffee, located in Canada. They have provided an impressive account of the production of this coffee and the broader sociopolitical context in Honduras.


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About Jose

Jose is a young grower who we had the pleasure of meeting this year for the first time. His story as an independent grower began in 2015 when he inherited his small parcel of land from his father. Like many smallholders we work with, Jose had to spend his days working away from the farm as a picker so that he could generate the savings necessary to plant his plot with fresh coffee.

Now, Jose and his family manage this small plot of two hectares and it serves as their sole means of income, meaning finding a profitable outlet for the sale of his coffee is imperative.
As we see so often in smallholder coffee growing, there is very little education around risk management in agriculture as producers are typically encouraged by the local coffee growing instutions to manage mono-crops and to plant as much as they can in order to generate income.

However, at the typical price available to growers like Jose, who sold exclusively cherry until this year, no matter what the harvest volume it’s not enough to cover their costs of production.

Despite that, Jose took on even more risk this year and stepped into processing his own coffee - building himself a solar dryer and installing a small depulper and fermentation tank. His daily work involves picking cherries with his extended family and carrying them down on muleback to his beneficio near his house where he oversees the processing.

It’s always our honour and privilege to be able to source the first microlot from producers making their steps into specilaty coffee production and we hope that we can continue to offer resilient support to Jose and his families in the years to come. With the sale of his lot, he’s stated that he hopes to be able to expand his farm, to plant other varieties, and to improve their family farm.

About Bañanderos
The Bañaderos hamlet sits approximately 10 kilometres up a bumpy road from the
town of Santiaga de Puringla, a major hub for coffee sales in the La Paz region. Over
the course of the last ten years, growers in Santiago proper have begun taking steps
towards processing their coffee to parchment and promoting it in areas like Cup of
Excellence, thereby bringing themselves the attention larger of the Asian market who
follows these comeptitions closely.

Still, up in the mountains, the vast majority of smallholders have continued the
conventional model of selling — harvesting their ripe cherries and selling them to
intermediaries or major wet mills who process the coffees for international sale,
typically on the commodity market.

We were able to be introduced to Cafe Raga’s affiliate smallholder growers in
Bañaderos this year due to the growth of their group and the reduction in harvest
which left us able to consider neighbouring smallholder communities to Selguapa and
Chaguite where we worked to begin with. For us, it was a pleasure to connect with
them as early members of this group, such as Alejandro Maldonado, were so keen to
be involved with processing their own coffee to parchment that they began by moving
their cherries to the nearby towns of Selguapa and Chaguite and thus were extended
members of these community groups.

As of 2021, the success stories of neighbouring growers and the experiences of local
community members like Alejandro spurred many more growers to join in, investing in
drying beds, solar dryers, depulpers and tiled fermentation tanks in order to achieve
quality coffee processed in their own homes. During our visit in early 2022, we met with Alejandro and other members of the group to learn about their experience of
this transition to international specialty sale, which is still ongoing for many.

Just as has been the case for growers across the region, the story has too often been
the same. Smallholders have spent years toiling in obscurity, despite living and
working in one of the most famed coffee growing regions of Honduras, and left with
virtually no outlet to sell their coffee beyond whatever local coyotes offer on the day
they pass through town.

If we trace back the practice of selling raw cherry to the late 90s and early 2000s, it
was at this time not a bad business for smallholders. Their labour costs and input costs
were signficantly lower than today, and their yields could reach up to 5 times what is
possible today in the new, climate change affected times we live in.
Now, with costs up and yields down, prices paid in cherry decided in line with the
New York Stock Exchange have been nothing but a pittance, leading many producers
to view coffee farming to be viewed as a hobby in which one works for the joy of it,
not for the profit.

In 2022, with crop downturn across Central America and inflation spurring the
commodity price for coffee, intermediaries finally came close to paying a price that
made some financial sense for producers but - as many in Bañaderos and the
surrounding communities shared - this tactic was recognized as not an altruistic, fair
business arrangement but rather part of a shocked market seeking to fulfill its
commitments in anyway necessary. As the commodity price has plummeted back to
early 2020 levels recently, the value of a stable relationship based on price
consensus and holistic buying across mutliple levels remains crystal clear - the
volatility of the market will continue, while the cost to produce a quintal of coffee
continues to go up.

Without strong, reliable relationships with buyers who respect the smallholder and
their livelihood, a future in which smallholder coffee growing simply makes no sense
can be seen taking form in the shadows of the current system. The struggle we wage
now isn’t simply one of paying a higher price then, it’s a struggle against outdated
global market mechanisms that threaten the very survival of the talented smallholders
whose generational knowledge makes all these impeccable coffees possible.
We have a long way to go, but we welcome you on this journey.

Honduras’ Migration Crisis

Just like our partners in the neighbouring Selguapa, prior to selling to the specialty
market, the national prices served to be completely demotivating to the whole
community. Multiple members of the community cite this low price point as a direct
reason for their involvement in the widespread pattern of migration that plagues
Honduras nationally.

In 2017, 18.8% of Honduras’ GDP came from remittances sent from the United States,
and members of the national Chamber of Commerce were quoted in major
newspapers stating that the Honduras economy would collapse without them. This
trend has become so profound that the Migration Policy Institute wrote in a recent
report it was creating a “new social order” in which “markets of status such as land
ownership and advanced age were being replaced by knowledge of how to
immigrate to the United States.

The result of this incredible migration pattern is a loss of young, able bodied
community members and a development of a knowledge base that prioritizes
migration as the main way to pursue economic stability for families. Obviously, this is
a highly complex economic issue, but Semilla believes in the value of investing in
Chaguite and Selguapa with solid prices can help to stem the tide of migration, and
thereby keep families together, and inspired by their work.

Canadian Foreign Policy in Honduras
Semilla operates on the belief that transparency and traceability in coffee sourcing
should encompass not only the individuals we purchase coffee from but also the local
context that effects theirs daily lives. One particularly important aspect of this is
understanding how both the Canadian public and private sectors operate in these
regions. Over the last 15 years, the Canadian government has impacted the
trajectory of Honduran democracy for the purposes of creating favourable conditions
for Canadian corporations within the country, often to the detriment of the Honduran
people.

We can trace this implication back to 2009 when the democratically elected President
of Honduras, Manual Zelaya, was ousted in a coup d’etat. He was exiled in the
middle of the night to Costa Rica, leaving a military-backed dictatorship in his place.

Professors Jeffrey Webber and Todd Gordon explain that while Canada was not
behind this coup attempt, the government had a vested interest in determining
Honduran political leadership:

“Canada’s intervention has been marked...by the bold promotion of the interests of
Canadian capital operating in Honduras, as part of a wider geopolitical concern of
the Canadian state to reproduce a political environment in Latin America amenable to
the interests of Canadian investors.”

In short, Canada used this abrupt change in leadership - only the second successful
coup d’etat since 1992 in the Americas - to begin investing significantly into the
country. Prior to the coup, in 2007, Canada invested $105m in the country. In August
2011, this figure was at $750m. The prevailing narrative of such a skyrocketing investment, put forth by Stephen Harper’s Conservative, is that Canada was only seeking to positively impact a Central American trade partner.

The reality, of course, has much more to do with the Canadian government clearing the way for Canadian
corporations in international jurisdictions that offer lowered costs of labour and
goods, as well as a weak regulatory regime with few mechanisms to hold companies
accountable. The result - massive profit margins, totally impossible to achieve on
domestic soil.

Under the regimes put forth by the International Monetary Fund and the World Bank,
it’s common to see Global South nations adapt structural adjustment programs or
policies (SAP) in order to receive investment or loans from the IMF and World Bank,
and Global North nations. These structural adjustments follow neoliberal ideologies -
such as cutting public sector employment, privatizing state owned business, and
easing regulations to incentivize foreign direct investment - and are believed to
increase the economic performance of the country who enacts them.

Honduras had committed to multiple SAP throughout the 1990s and as a result,
attracted huge increases in foreign direct investment (FDI). By 2007, FDI had broken
records but even despite this, Honduras would leave the 90s in a period of negative
growth . While all of Latin America would pass through a period of massive economic
growth from 2003-2007, by 2011, 75% of the Honduran population lived below the
global poverty line.

In the midst of this, was Canada’s enthusiastic support for the installation of new
President Proforio “Pepe” Lobo. After being exiled, Zelaya did return to the country as overtures were made that he would be allowed to continue to rule as a figurehead, while a new government took over. After interim president Robert Michelleti refused even the illusion of power, the accord that would make his ouster “legal” was never signed. Regardless, elections continued unabated despite a lack of observers and
without international approval.

In the wake of the election in which Canada’s candidate Lobo went on to win,
Foreign Affairs Minister, Peter Kent, released a statement saying the election was a
success (despite many claims of fraud locally) and pledged full support to Lobo. In
the first seven month’s of Lobo’s regime, Kent visited twice for the clear purpose of
supporting “Canadian capital’s push for greater access to the Honduran market.”
Fast forward to today and Lobo now figures on a list of more than 50 names of
corrupt officials released by the United States State Department. In specific, the
Department charges Lobo for having taken bribes from drug cartels when in office,
while his wife was involved in fraud and the misappropriation of funds. Beyond that,
Lobo was also associated with extreme repression within Honduras. The human rights
organization, Committee of Family Members of the Disappeared of Honduras
reported 250 human rights violations in the first three months of his presidency
alone.

In short, Canada has long been involved in supporting corrupt and repressive
regimes within Honduras for the purposes of creating profit for Canadian companies
that will repatriate those earnings back home. While on paper, it can appear that
Canada is a benevolent nation investing in poorer Global South trade partners, the
reality is that little of this investment stays in the country. Rather, it is used to develop
infrastructure for private businesses who then make massive profits and take the
money back out of the country. The Economic Commission for Latin America and the
Caribbean, in a 2011 report, found that in the Caribbean, outflows of FDI income
back to Canada amounted to 92% of the original investment.

Canadian Direct Investment and Its Impacts
The manufacturing sector in Honduras has expanded massively in the era of SAP and
FDI and one Canadian company who directly profited from the 2009 coup was Montreal’s Gildan. One of the biggest private employers in all of Honduras, it has
come under repeated fire for its workplace practices in both Honduras and Haiti with
allegations of 69 hour work weeks without air conditioning or breaks and a
breakneck pace of production that leaves workers with permanent skeletal damage.10
Despite this, it continues to operate without paying taxes and claimed at gross profit
of $705,000,000USD in 2019.

Mining is the other major sector of the economy where Canadian corporations have
brought in major profits while leaving a trail of damage in their wake. In fact, mining
interests draw the closest connection to the actions of the Canadian state in the coup.
While Zelaya and the Honduras Supreme Court moved towards banning open pit
mining prior to the coup, Canada was looking to change mining laws to be more
favourable to Canadian companies like Goldcorp, already operating in the country.

Lobo was seen as one who would be amenable to such changes, a revelation that
came about via meetings between Canada’s Minister of International Cooperation
Bev Oda and Yamana Gold. As soon as Lobo was elected, the Canadian government
played matchmaker, with even the Ambassador to Honduras connecting officials in
the Lobo regime with Canadian mining representatives. The results were the adoption
of a congressional commission to implement new national mining law that “establishes
an extremely favourable environment for Canadian and other international capital.”
It was adopted in 2012. Since then, the myriad of abuses inflicted on the Honduran people by mining
companies Goldcorp and Aura Minerals.

Goldcorp’s San Martin mine was accused of deforestation and overuse of scarce
water resources, as well as releasing heavy metals like arsenic and lead into the local
environment in such quantity that 62 people tested were found to have elevated
levels in their blood stream. Not only did Goldcorp deny culpability, there is evidence
that the Honduras government and Goldcorp worked to cover up this fact since 2007.

Aura Minerals was accused of two cyanide spills in La Union that led to the relocation
of community members who were offered compensation for this forced move, but
never received it. More recently, in 2016, Aura’s open pit gold mine in Copan came 13
under fire when they went out of the realm of their concession and in the process, exhumed bodies from a 200 year old cemetery. This led to an occupation of the 14 mine site by locals who demanded they cease all activities. To our knowledge, no one was held accountable for this as Aura Minerals claims this land is within their allotted concession.

Doing Direct Investment Differently
While this information may seem excessive or not important to the subject of specialty
coffee, we see a direct linkage in that manufacturing, mining, and coffee all function
as forms of extractive economies.

In coffee, even when we seek to do right by producers, we benefit from low labour
and production costs that allow for us to pay well and still receive coffees at
$4-5USD/lb into Canada.

Knowing how our own nation is using direct investment to support the elite interests of
governments and corporations both at home and abroad motivates us to think about
how our work can push back against this. In the prevailing model of Canadian direct
investment, major corporations rely on inter-governmental agreements to receive
beneficial conditions that allow them to gross massive profits and virtually none of this
profit makes it to the local worker. In a what we hope can be a positive model of
Canadian direct investment, Semilla connects directly with communities of Honduran
coffee growers like those in Selguapa and Chaguite and pays them directly at 5-6
times the going local rate. We then seek to expand our purchasing power within
these communities until as many growers as possible are receiving this price, thereby
injecting large capital sums directly into remote rural coffee growing communities.

In the process, we ensure that there are no unnecessary intermediaries such as co-
operatives, coyotes, or agents. Rather, the only excess costs come in paying for dry milling and in a flat fee paid to our on the ground support network, Cafe Raga.

In addition to this, we run our ongoing micro-financing programs in which from our
own profits and from the donations of roasters, baristas, or coffee drinkers, we send
funds directly to the personal bank accounts of the Honduran growers we work with
so that they can invest these funds where they see fit.
We firmly believe that by focusing our efforts in true community level sourcing, in
which the end goal is the purchase of an entire community’s annual production, we
can use direct investment in a way that beneficially impacts the lives of those who are
typically used up in the process of capital accumulation and profit generation.

Works Cited
1. Gordon, Todd, and Jeffery R. Webber. Blood of Extraction: Canadian Imperialism
in Latin America. Fernwood, 2016.
2. Honduras: The Perils of Remittance Dependence and Clandestine Migration:
Migration Policy Institute April 11 2013.

https://www.migrationpolicy.org/article/honduras-perils-remittance-dependence-and-
clandestine-migration. Accessed July 2020.

3. Gordon, Todd, and Jeffery R. Webber. “Canadian Geopolitics in Post-Coup
Honduras.” Critical Sociology, vol. 40, no. 4, 2013, pp. 601–620.,
doi:10.1177/0896920513482149.
4. US state department names more than 50 corrupt officials in Central America: The
Guardian July 1 2021

https://www.theguardian.com/us-news/2021/jul/01/us-state-department-central-
america-corrupt-officials-list Accessed July 2 2021.

5. Gildan Annual Shareholder Report: Gildan March 20 2020
https://gildancorp.com/media/uploads/reports/
b2019_annual_report_final_en_final-ap-letter.pdf Accessed August 5 2021.
6. Honduran Village Resists Forced Relocation and Exhumations by Canadian Mining
Company: MiningWatch Canada June 29 2016

https://miningwatch.ca/news/2016/6/29/honduran-village-resists-forced-relocation-
and-exhumations-canadian-mining-company. Accessed August 1 2021.
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