Claims of illegal coffee pursued

Claims of 'illegal coffee' pursued
Food companies are working with conservationists to try to ensure that the beans they buy come from legitimate sources.
By John Aglionby and Jenny Wiggins, Financial Times
January 29, 2007

JAKARTA, INDONESIA — Some of the world's leading food companies faced embarrassment last week after it emerged that they could be buying coffee grown illegally in two national parks on Sumatra.

Tens of thousands of hectares of virgin rain forests in the Bukit Barisan Selatan and Kerinci Seblat national parks have been cleared and planted with robusta coffee plants, according to research by the World Wildlife Federation and Flora and Fauna International, environmental groups working in the parks on the world's sixth-largest island.

The coffee grown on this land is mixed with legally grown beans before being exported from Lampung, the southernmost province on Sumatra.

Jonathan Atwood, director of commodity sustainability at Northfield, Ill.-based Kraft Foods Inc., said the company was worried by coffee cultivation inside Indonesia's national parks and was working with the World Wildlife Federation to try to stop illegal coffee purchases. "It's an important issue," Atwood said.

More than 44,000 acres of Kerinci Seblat have been cleared for coffee plants, according to Debbie Martyr, a conservation expert with Flora and Fauna International working in the park.

"Coffee businessmen are bringing literally busloads of people from Lampung to clear the land and plant the coffee," she said. "It's causing more damage than the oil palm plantations because it is being done by small farmers, and the forestry department and police are unwilling to take action."

Martyr said local environmental groups suspected that at least one member of the Indonesian Coffee Exporters Assn. was involved in the illegal farming.

Rachim Kartabrata, the association's executive secretary, denied any knowledge of this. "We're an association of exporters, not growers or traders, so our members should not be involved at that stage of the process."

However, he acknowledged that it would be easy to mix illegally grown beans with legitimate crops. "The coffee is all collected in a few large warehouses and there are virtually no checks on where the beans have come from, so it's very hard to know if it's legal or not by the time it's ready for export."

Rachim blamed the crisis on local government for inadequate law enforcement, saying, "It's their job to enforce the land use regulations. Protected land should not be used for any large-scale agriculture."

One coffee expert based in Sumatra said it was not surprising that robusta coffee was becoming so popular.

"If you can't export marijuana, you've got to look for something else [to grow], and robusta prices have increased four times in the last year and a half, so it's very attractive," he said.

Multinational coffee buyers were also not doing enough to ensure that their stock came from legitimate sources, the expert said. "Everyone is now going into ethical coffee but the issue of traceability is proving very tricky because it's not as easy as they think."

Coffee companies argue that it is hard to track the exact origin of the coffee they buy because most of it is purchased from traders or cooperatives.

Swiss firm Nestle says that it gets 14% of its coffee directly from producers and that this makes it the world's largest direct coffee buyer.

Companies have stepped up efforts to track the origin of their coffee. About 2% of Kraft's coffee is certified by the Rainforest Alliance, a U.S. nonprofit group that sets environmental and social standards.

Chris Will, chief of sustainable agriculture at the Rainforest Alliance, said the group was seeing "phenomenal" interest in certified coffee from farmers, companies and consumers. Only about 5% of coffee purchased worldwide is certified.