CABEI and Taiwan-ICDF promote sustainable practices for coffee production in Central America
Through a Memorandum of Understanding, both institutions look to ease the problems caused by the Coffee Leaf Rust, known as Roya in Spanish, in Central America and to promote best practices for sustainable coffee production.
Tegucigalpa, 5th of November, 2013.- The Central American Bank for Economic Integration (CABEI) and the Taiwan International Cooperation and Development Fund (Taiwan-ICDF) strengthened their collaboration through a Memorandum of Understanding, that will provide the framework to attend the effects of the Coffee Leaf Rust plague, known as Roya in Spanish, that has affected Central American coffee producers.
The agreement establishes the foundations to implement a first intervention of more than 80 million dollars in the region.
This memorandum of understanding was signed taking into account the Republic of China's (Taiwan) history of successful cooperation in promoting the economic and social development of the Central American region. CABEI, through the cooperation provided by Taiwan-ICDF seeks to address the repercussions on the economy of its member countries in the short and medium term as a result of this plague.
In Central America, coffee industry is one of the main sources of income of its population, generating an estimate of 4.8 million temporary and permanent jobs per year. According to the International Coffee Organization (ICO), Guatemala, Honduras, El Salvador, Nicaragua and Costa Rica represent 9% of the worldwide production of coffee through the cultivation of approximately 925 thousand hectares of coffee that produces an annual average of 13 million quintals of coffee exclusively for exports.
At the end of the 2012-2013 coffee cycle, the economic impact of the Coffee Leaf Rust plague in the Central American and Caribbean region, will cause losses of 16.4% in production.
The estimated affected area amounts to 593,037 hectares (54.8% of the total); the displaced working force is calculated at 373,584 people (17.2% of the total), crop losses are at 3.5 million 60-Kilograms sacks (19% of the total) and losses in perceived income of $499 million (16% of the total).
In countries such as Guatemala and Honduras the effects will have a negative impact on their GDPs as it accounts for 15% of the country's GDP in the first case and to about 30% of its GDP in the foremost. To address this situation, CABEI presented Taiwan-ICDF a proposal named "Pilot Program to respond to the emergency of the population affected by the coffee plagues and promotion of sustainable practices for coffee production in Central America".
This initiative will be implemented through CABEI's Special Fund for the Social Transformation of Central America (FETS in Spanish), benefiting around 6 thousand families living in areas where coffee production is the main source of income.
It is in the best interest for this intervention to foster a dialogue that will address the problems coffee producers are facing, as well as to develop and execute programs that allow both institutions to achieve their institutional goals.
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