Coffee Production, Processing, and Marketing in Myanmar Experience and Prospects for Organic/Specialty Coffee

By Gregory Love (Golden Triangle Eco-Resources) & U Okar Aung (MFE, Ministry of Agriculture, Myanmar)

Abstract: Myanmar today is poised to take its place as a leading producer of "Specialty Coffee's" in Southeast Asia. This is a result of the concerted educational efforts by elements of the private sector combined with, and supported by, The Myanmar Ministry of Agriculture and Myanmar Farm Enterprises. In our paper we will first present a brief history of coffee cultivation in Myanmar, along with facts regarding planted acreage, cultivars grown, and tons produced. Following this will be a description of the activities and experiences of my company, "Golden Triangle Eco-Resources", in establishing extensive training programs in coffee production for farmers in coffee growing regions throughout the country. We will look at the training format used and the results obtained. This paper will also discuss, our belief, in the importance of growing "Premium" vs "Commercial" coffee in today's market. History of Coffee in Myanmar: Roman Catholic missionaries, in the Mon and Thanintharyi Divisions established the first recorded coffee plantations in Myanmar in 1885. In 1930, a Mr. George Strand from Scotland established the first large-scale plantation, when he planted 350 acres of Arabica coffee in the Chaung Gwe area of the Northern Shan State. Almost all Arabica coffee presently grown throughout the country originated from coffee grown on this plantation. The first known and recorded varieties introduced were Bourbon varieties S-795 and Amerilla around 1935. In 1982 Red and Yellow Cattura was introduced into the Pyin Oo Lwin area, followed by Catymo in 1995. Until very recently, other then two formal government plantations, one in the Mandalay Division and the other in Northern Shan State, almost all coffee grown in Myanmar has been grown as a back yard crop with an average family having no more then 20 100 plants. The coffee is all grown in totally natural conditions under jungle cover without the benefit of fertilization, pest control, or pruning. Most of the Arabica coffee grown in Myanmar is grown at altitudes of over 3,000 ft. As such rust disease is not really a big problem.

Traditionally the farmers of Myanmar, at the time of the harvest, would go out and pick all the cherries on their bushes as soon as the first group of cherries would turn red. As a result they would only have one picking with, on average, 80% or more of the cherries being green. This problem with improper harvesting techniques would appear to be the result of a lack of education about coffee, exacerbated by the practice of the local brokers to encourage the farmers to pick and sell them the coffee at the earliest possible moment before another broker could buy the coffee. It must also be remembered that the vast majority of farmers in Myanmar have never drunk coffee, as it is a tea drinking culture, and as such have no concept of what makes good coffee. As far as processing was concerned, this was another area almost totally disregarded except for the most rudimentary forms of processing. The farmers had no idea about floating the cherries to remove diseased or bad ones, and would quite often store the wet cherries in piles in their houses or storage sheds for days until they could get around to drying them. They would then put the cherries on mats or just on the ground in front of their houses until dry, with no thought or very little, to turning them or bringing them in at night. After drying the cherries would be kept in piles on the floor, or in old bags, often for months or even years, until they could get around to crushing them or until they thought the price was right in the market. When they wished to sell some coffee they would crush the cherries by hand using a mortar and a pestle. This of course caused the green beans to be split, bruised, and crushed. As a result the coffee brought to market was of a very low quality. There was also nothing to encourage the farmers to improve the quality of their coffee, as the local brokers would pay the same price for good quality coffee as for bad. At this time, other then a small amount of coffee sent to Mandalay or Yangon for local roasting, all the coffee was sent to the borders as border trade items in exchange for other hard goods. As can be imagined the value given to the coffee was very low. In 1994 the govt. decided to promote the growing of coffee as an export crop. As part of this program they distributed prime coffee growing land amounting to 10,000 acres to date. Of this approx. 3,600 acres are presently planted. Coffee Production in Myanmar: At present coffee is produced in 12 different Divisions in Myanmar. Of these 6 are producing Arabica's on approx. 8,245 harvested acres with an estimated yield of approx. 1,400 tons in the 98-99 season. Robustas are produced in 7 Divisions with approx. 1,765 acreas harvested, and an approx yield of 430 tons in the 98-99 season. (MFE).

Golden Triangle Eco-Resources: In 1998 during a trip to Myanmar I was shown some superb coffee that so impressed me that I took some home to be evaluated by experts in the US and Europe. Their analyses was basically unanimous that the base Arabica coffee grown in Myanmar was of a truly "Premium Quality" if it could be properly processed. With this in mind, and a determination to produce a truly great and exotic coffee we began "Golden Triangle EcoResources". In the beginning we started working with local brokers to purchase the best quality market coffee and then to grade and sort it for export. We quickly realized that 1.) That due to improper harvesting, drying, crushing, and storage that the waste percentage was so high as to make it impossible to collect a sufficient quantity of coffee economically, and 2.) That the local brokers instead of working with us to improve the coffee, would do anything they could increase the volume they sold us, even going so far as to mix old, black, and bad beans with the coffee. We realized that the key to producing a superior coffee was to control the entire process from cherry right through to green beans, where possible, and then to establish a training program for farmers in more remote areas, without sufficient infrastructure, to enable us to establish our own processing centers. To date the company has established 16 drying centers, 11 of which were established under a "UNDP Community Development Program for Remote Border Regions", and 3 company owned processing centers, one each in Northern and Southern Shan States, and one in Chin State. During the harvest season coffee cherries are brought by the farmers & local village brokers directly to the drying centers, or collected by teams of buyers working directly with the farmers in their villages, and buying at local market days. All cherries brought to the drying centers are first floated to remove diseased and bad cherries, and then the really green cherries are separated from the red cherries before being placed in the sun to dry. The cherries are all dried on bamboo mats on the ground, or on specially constructed drying tables, with all cherries being turned a minimum of 4 times a day by hand. After drying for an average of two weeks in the sun, the cherries are transferred to one of the processing centers where they are crushed, polished, and graded mechanically. After which they are hand sorted by teams of women, working on trays, to remove all defective or broken beans remaining.

Golden Triangle Training Programs: The Golden Triangle Training Programs were established with three primary objectives in mind. The first was to teach the farmers correct methods for harvesting, processing, and storing their coffee. The second was to educate them as to the requirements and needs of the export buyers, so as by satisfying theses requirements they could get a higher price and derive a better income for their families. The third was to inform them of how the world market works, how the price for coffee is determined and the importance of quality, and what are the costs involved in processing, sorting, packing, and transporting coffee for export. In other words, what are the costs, other then coffee, that determine the FOB prices quoted on the world market. The purpose of this is so the farmers can understand and determine for themselves what is a fair and reasonable price for their coffee so they neither get cheated by the brokers or have such unrealistic expectations that they end up not being able to sell their coffee at the end of the season. When developing the training program we took a pragmatic rather then theoretical approach to the different subjects. We strove to show the farmers, for each topic, whether it would be the method of harvesting, or storage, or drying what would be the economic effect if it would not be done correctly. For example, rather then just tell them that they shouldn't pick green cherries or that you couldn't make good coffee from green cherries we showed them how they would get much more money if they picked red cherries. See, in Myanmar the farmers sell the cherries by a volume unit called a "Pyi". Now it takes 2,200 unripe small green cherries to make one Pyi, but it only takes 1,300 large red cherries to make one Pyi. When you consider the lower market price for green or mixed quality cherries combined with the greatly reduced number of Pyi they obtain if they pick green or mixed cherries they lose over 60% of their potential income. Another example would be that if it takes a women an hour to crush one Pyi by hand then it takes maybe 1 - 2 hours to crush and produce 1 Viss (Myanmar weight unit equaling 3.6 Lbs) of green beans, and when they crush by hand they end up splitting and crushing the green beans and then they get a lower price in the market. Well when the price for green beans is only a few kyats more then for the equivalent amount of cherries, then they are losing time and money by trying to crush themselves. We constantly try to teach them in the trainings, using charts, facts, and examples from their own life's, that if they will follow and adopt new methods they will both make more money, and have more time to pursue other income producing projects. Another important aspect of the trainings is to explain the workings of the worlds coffee markets and the needs and requirements of the exporters and roasters. We have found that the more the farmers truly understand the reasons why we tell them to pick one way or to process another way, and the more they understand the impact this will have on not just on today's price, but on the future price they will get for their coffee the more responsive they are.

In organizing the trainings we first met with the local village and community leaders to explain what we were trying to accomplish. By gaining their understanding and trust the trainings become more effective as these community leaders actually encourage the people to attend and really listen to us. We also work very closely with the monks in the village monasteries for the same reason, as the people look up to them as teachers and will listen to them. For the trainings to be truly effective we have found that they must be conducted on an ongoing basis. Each year you want to go back to the same villages to repeat the trainings. We have found that in subsequent training sessions we get many more farmers, as the ones attending the first sessions tend to tell their friends about them and thus attendance is better. Also in subsequent training sessions there are farmers who have attended the earlier sessions and who have adopted and had success with the systems and methods in which we have instructed them. We ask them to speak of their experiences and we have found that the success of their peers and fellow farmers have a large influence in getting other farmers to follow the suggested methods. Based on the reactions from farmers, and the changes we have witnessed in the market place, we believe that a proper educational program is, and will be, a key element for countries in South East Asia wishing to increase the quality and income generated from their coffee's. When we began the training programs, almost all coffee was processed by the farmers directly, and the wet cherries that were offered in the market were on average 70-80% green. Now in areas that where we have been conducting the trainings for a few years we are receiving on average 95% red cherries and even most of the market coffee produced by the farmers themselves has gone up greatly in quality. Quality: Before concluding I wish to touch on the subject of quality and the varieties of coffee produced. We all know that coffee prices are at or near an all time low, but why? Well the answer is really very simple. "The world is suffering from an enormous overproduction of cheap and very bad coffee" (Pierre Leblanche). Why is this? We at Golden Triangle Eco-Resources believe and agree, as do many other experts, with Timothy Castle who puts the blame on "The ongoing popularity of the catimor hybrids, which produce a coffee no experienced and discerning cupper would willingly drink". In today's coffee world it seems that almost everyone is looking for high yields and good disease resistance. While it is true that the catimor hybrids produce higher yield and are resistant to "rust" disease, what good are 10 15% higher yields when the coffee, as a commercial coffee gets a 25 50 % lower price then a Premium coffee. It is for this reason that we believe that it is imperative for the countries of Southeast Asia to focus on high value specialty or Premium coffee's