La Montaña Tarrazú is a micro-mill and a farm located in the West of Costa Rica and founded by Jorge and Ivannia. La Montaña Tarrazú made it their mission to educate people on high-quality, clean, and produced coffee from Costa Rica on a global level. You may wonder why.
In 2009, Jorge and Ivannia decided to install their own micro-mill, following the micro-mill “revolution” in Tarrazú. The micro-mill revolution changed the work process of coffee producers in the Los Santos region. Instead of sending their coffee cherries to cooperative or private mills, coffee producers started investing in their own micro-mills to be able to process their products themselves.
La Montaña honours their great grandfather Papa Lucas – the pioneer of the coffee business in their family. 13 years later, Don Jorge is still running the farm with the help of his daughter Daniela. Together they are working on producing high-quality coffee beans every day at their 30-year-old farm, surrounded by the cooling shade of banana and poro trees.
The Tarrazú coffee region of Costa Rica is also known locally as “Los Santos” because of its cantons (similar to towns) that are named after various saints. About a two-hour drive from San Jose, Tarrazú is filled with roads and coffee plantations that fill the mountainsides. The climate of Tarrazú is split into two well-defined seasons, rainy and dry season. The rainy period lasts for seven months (May to November) during which the coffee plants are growing. Harvest time is the five month period from November to March that coincides nicely with the dry season. This well-defined climate pattern is ideal for growing coffee and results in high-quality coffee cherries that are uniform in ripeness.
The coffee plants from La Montaña grow at an altitude of 1600 masl. Their harvest season goes from December until February. But January is the best harvest time for the coffee plant at La Montaña.
Firstly, after their harvest, they leave the coffee cherries to rest at the mill for 12 hours. In the early morning hours of the next day, the coffee is being processed and the floating beans are being removed. Secondly, the depulper removes the red husk and the mucilage. Then, the freshly processed beans are put onto the African beds where they are moved every two hours. The whole drying process takes 10 days, after which the beans have reached their optimal point of humidity.
The fully washed, final coffee beans are characterised by a smooth, fruity, and sweet taste that is dominated by notes of mandarin and orange, as well as some sweet vanilla and floral notes.
The Coffee Quest builds transparent value chains linking growers and roasters. We supply only traceable and transparent high-quality coffee. In 2020, we dived into the economics behind the beans, in our Quest for radical price transparency. Our origin researcher, Marian Osinga, set out interviews with producers, millers and authorities, and led the way into how The Coffee Quest sees price transparency in Costa Rica.
Costa Rica has a “coffee law – law 2762”, which stands at the core of a unique governing system which provides price transparency and fair practice for all Costa Ricans. ICAFE is the sector organisation behind the law’s implementation, working as a development authority in the coffee sector. Through law 2762, ICAFE regulates transactions between farmers and millers, miller and exporters, and guarantees that the returns from coffee are fairly distributed between all stakeholders.
Fair distribution of coffee returns in Costa Rica starts with the export price. It is only when coffee is exported that all stakeholders in the chain know its final value. Then, they start counting backwards to determine what slice of the pie goes to whom. Click on read more to really dive into the topic.
The farmer is tied to the land and grows coffee. He sells his red coffee cherries to a miller and pays pickers and other staff that help him on his farm. When a farmer delivers cherries to a miller, the cherries are measured in “fanega”, which is a measurement of volume (opposite to for example kg, which is a measurement of weight). The farmer then gets an advance for the cherries delivered but has to wait for the closing of the export season to see what the value of his cherries was (after the miller has made them into green coffee and the exporter has found a buyer who wants to pay a particular price). Eventually, the farmer will get around 80% of the export price (FOB) of the coffee.
The Miller buys cherries from farmers and processes them into green coffee ready for export. The coffee is then exported or sold to an exporter for consolidation with other micro mill lots. All producers on our list fall into this last category. A miller registers amounts of cherry purchased and delivers a declaration of production costs and sales. Then, it’s the turn of exporters with ICAFE. A miller can make a maximum profit of 9%.
The exporter buys coffee from a miller and sells it to an importer like The Coffee Quest. The exporter consolidates shipments, does sampling & paperwork, and plans logistical movements. The exporter will have expenses to complete the export, and declare the export costs and revenues with ICAFE. Exporters can make a maximum 2,3% profit on the export price.
ICAFE’s role in the chain is very interwoven with all stakeholders. The organization helps the farmer on various developmental themes, like: Agricultural production, quality, sustainability and economics. In collaboration with the farmers, they do soil analysis, suggest fertilization schedules, help plant shade trees, and do research in new varieties and agricultural best practices. Through FONECAFE, it also maintains a security fund, in case coffee prices fall below the cost of production for individual farmers. In order to fund their activities, ICAFE charges a tax or contribution on coffee business, which amounts to 1,47% of the export price.
At the end of the season, ICAFE will calculate a “Final Liquidation Price” from the revenues of all Costa Rica coffee exports, and the costs declared to make that revenue. Thereby they determine nationwide, how large the coffee pie actually was this year. A financial settlement then takes place among all coffee chain stakeholders, including the producers.
The Coffee Quest’s perspective
Price transparency is a complex promise to uphold. The result depends heavily on the structure of the sector, the amount of data available and the amount of time a company has to research and provide in this. If you buy coffee from a producer, who also processes, mills and exports, it’s more straightforward, however, this isn’t always the case.
In the Costa Rica context, it’s easy to get a FOB price that is paid to the exporter, or maybe even to the exporting miller. But that still doesn’t say anything about the price the farmer who grows the cherry actually gets.
The cherry farmer delivering to one of our micro-mill suppliers, will get 1 average price for his cherry as a result of the whole coffee season. The FOB price, The Coffee Quest pays to the exporter, will negatively or positively affect this average. We set out transparency ambition high at The Coffee Quest, and therefore that is exactly what we aspire to know.
Transparency is regulated by law in Costa Rica, and all internal prices and volumes as well as export prices and the final liquidation price per miller are published on ICAFE’s website. This means that we have been able to set up a calculation that derives the contribution of The Coffee Quest purchases in Costa Rica, to the final liquidation price to the farmer delivering cherry to the micromill. Being able to share this makes us incredibly happy!
The method we use is based on data on our suppliers in ICAFE publications of coffee commercialization, which can be found here; ICAFE/coffee sector/final settlement benefit, and ICAFE/coffee sector/commercialization/sales per zone. The calculation results are validated, and costs are adapted according to interviews with millers and exporters. The result is a farm gate cherry price in Colones per Fanega, which we have translated for you into a price in Euro per kilo, in green coffee equivalent.
Costa Rican farmers are known for valuing the beauty of Costa Rican nature which is represented in their farming techniques and care for the environment. In combination with high-quality coffee, Costa Rican coffee beans are a desirable product which embeds the value of appreciating the planet and high-quality taste.
The family business La Montaña values high-quality coffee with their legacy. They value the quality of Costa Rican coffee which is embedded in the astonishing landscape of the Costa Rican flora and fauna.
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