Labor Shortages in Latin America Present a Growing Risk for the Coffee Industry

[Editor’s note: This is Part 3 of an ongoing editorial series led by Verité exploring labor issues affecting the global coffee sector through its U.S. Department of Labor-funded Cooperation On Fair, Free, Equitable Employment (COFFEE Project). See more of Verité’s work on coffee here. Daily Coffee News does not engage in sponsored content of any kind and all views or opinions expressed in this piece are those of the author/s.]

There has been a worrying increase in labor shortages among coffee farms in Latin America in recent years. These shortages can result in reductions in the amount of coffee harvested, as well as a potential increase in labor rights risks.

Labor shortages can be attributed to several factors, especially poor pay and working conditions, which along with outward migration from coffee-producing regions makes it difficult to attract or retain a new generation of workers. 

A lack of local workers fosters an increased need for migrant laborers, which may require the use of labor brokers to recruit coffee harvesters from faraway communities. While the use of labor brokers can bring tangible benefits to coffee farmers and workers alike, it can also increase the risk of labor rights violations if proper controls are not put in place. 

Through a combination of field research in Brazil, Colombia, Guatemala and Mexico, along with a grievance mechanism in Guatemala, Verité collected information on recruitment and working conditions from more than 2,000 farmworkers employed on coffee farms. 

Information collected from worker interviews and grievances was triangulated with desk research and expert consultations in these and other Latin American countries. This research suggests that shortages of local workers result in increased labor migration, which is linked to unscrupulous recruitment and hiring practices that contribute to labor risks throughout the Latin American coffee sector. 

Examples of Labor Shortages in the Latin American Coffee Sector

In Colombia, severe labor shortages have been documented in the coffee sector. In some cases, the shortages can be attributed to the aging out of older workers — the average age of coffee harvesters is 54 — along with the migration of young people to urban areas. The younger generation has expressed a general resistance to working in a sector that is seen as offering poor pay, poor working conditions and few opportunities for advancement.

Meanwhile, recent growth in coffee production has required an estimated 20-40 percent increase in the number of workers.

The lack of younger workers combined with the increased need for workers has led to reports of severe labor shortages, especially in the “Eje Cafetero” (Coffee Axis).  These labor shortages have been temporarily eased over the past few years by an influx of Venezuelan refugees, but if it had not been for these refugees, the sector would be in serious trouble.

In Honduras, labor shortages are caused by the large increase in coffee production in recent years, with coffee farmers needing 600,000 workers a year. This is combined with increased migration of Hondurans to the United States to escape poverty, a lack of decent work, violence, and severe weather and crop failures related to climate change.

To cope with these labor shortages, Honduran coffee farms employ a large and growing number of temporary migrant workers from Guatemala and Nicaragua, primarily during the harvest season, which lasts from October to May (although this year the harvest is expected to begin and end much earlier).

In January 2020, approximately 100,000 Guatemalan temporary coffee harvesters were employed on coffee farms in the department of Copán alone, along with many more employed in other departments of western Honduras. Coffee farms were reportedly actively recruiting Nicaraguan workers, primarily in southern Honduras, specifically the department of El Paraíso, where the number of Nicaraguan coffee pickers increased by 15 percent between 2018 and 2019.

Coffee and Migrant Workers

Migrant workers — especially indigenous workers, women and landless migrants — are at a higher risk of labor abuses on coffee farms. The greater the distance workers migrate from their home communities, the more vulnerable they become, especially if they cross international borders. 

Verité research shows a recent surge in cross-border migration into the coffee sector in countries that have not traditionally been destinations for international migrants. This phenomenon has been observed across Latin American countries such as Brazil, Mexico, Honduras and Colombia.

Verité’s experience conducting research on vulnerable migrant populations in Latin America suggests that migrant workers are extremely vulnerable to labor exploitation.

Many of these migrants are fleeing situations of poverty and violence. In the case of Honduras, Guatemalan and Nicaraguan workers are migrating to a country with even higher rates of poverty and violence. Migrant workers often migrate informally and temporarily, and are generally at higher risk of exploitation on coffee farms

Labor Brokers – Solution or Risk?

The labor brokers who often facilitate labor migration can help perform a valuable function: supporting farmers in hiring the large number of temporary workers needed during the harvest season. 

However, if left unmonitored, labor brokers may engage in practices that not only affect coffee production and quality but also increase the risk of human and labor rights violations.  

Labor brokers are commonly paid according to the number of workers recruited or, in some cases, are paid a percentage of workers’ earnings. This incentivizes recruiters to find as many workers as possible, rather than recruiting experienced, skilled workers. 

Untrained and inexperienced workers may pick unripe or defective coffee cherries, which later need to be sorted out, a labor-intensive process that can increase costs for farmers and lead to coffee quality issues and lower prices.

A 2017 report from Colombia indicated that a specific group of workers who had migrated from an urban area of Venezuela were collecting significantly less coffee than experienced Colombian coffee workers, due to their lack of experience. As result, the Venezuelan workers were making as little as one third of the amount that experienced Colombian harvesters made, as they were paid according to the amount of coffee harvested. 

Disaggregation of Verité worker interview data shows that coffee harvesters hired by labor brokers typically receive lower pay and report a higher incidence of indicators of forced labor than workers directly recruited by farms. Verité research has found that brokers paid for each worker they recruit may deceive prospective recruits about the conditions of work on farms to recruit as many workers as possible. Brokers may also engage in unethical and/or illegal practices such as document retention, physical or sexual harassment and abuse, charging of recruitment fees, and/or making illegal deductions from workers’ pay.

A Win-Win Alternative: Improving Hiring Practices in Coffee Farming

We believe that collective, coordinated action across multiple stakeholders can reverse the cycle of labor shortages, labor migration, unscrupulous recruitment practices and other labor risks.

Farmers and coffee companies have significant incentives to implement hiring practices that improve coffee production and quality, while at the same time reducing labor risks.

Verité’s U.S Department of Labor-funded Cooperation On Fair, Free, Equitable Employment (COFFEE) Project is piloting ethical recruitment practices and five open-source recruitment-focused tools on Brazilian coffee farms. These tools include a primer on recruitment-related risks in the Latin American coffee sector, a self-assessment questionnaire for labor brokers, guidance on screening and evaluating labor brokers, a labor broker monitoring tool and a recruitment-focused worker interview questionnaire. 

The implementation of alternative and ethical recruitment practices such as direct recruitment, hiring workers permanently, and profit sharing have the potential to result in cost savings, improvements to the quality of coffee harvested and increased rates of worker satisfaction and retention, in addition to reducing the risk of labor violations. 

Coffee companies can support farmers in implementing ethical recruitment practices that are aligned with the realities and needs of each farm. Labor brokers can still play a role in supporting farmers and workers, but to reduce the risk of unethical recruitment practices, there is a need to better screen, select and monitor labor brokers. 

Companies, governments and civil society organizations must work together to support farmers in the implementation of ethical recruitment practices in the coffee sector. 

Retailers, roasters and traders should develop and implement robust human rights due diligence systems that incorporate grievance mechanisms as well as corrective and preventative action plans.

Coffee buyers, cooperatives and farmers should develop policies on recruitment and hiring, carry out risk and supply chain mapping, and conduct ongoing monitoring of recruitment and labor practices at the farm level. 

Governments should also build labor inspectorates’ capacity to ensure that labor brokers are registered and effectively monitored in practice. 

Read more from this Labor in Coffee Series here.