Read the full article on SCA News and 25.
Professors CARLOS CARPIO, PhD and LUIS SANDOVAL, PhD worked with BRENDA MAMANI, MSc to ask: what are the living wages in El Salvador and Honduras, and how would current total costs and profitability of coffee production be affected if farmworkers were paid living wages?
Read MoreRead the full article in the Journal of the American Society for Horticultural Science.
In Honduras and El Salvador, coffee (Coffea arabica) is one of the leading agricultural exports, and the share of specialty coffee is growing each year. However, despite the importance of specialty coffee production and exports, there is a knowledge gap regarding its cost structure and profitability, particularly those associated with labor costs. The specific objectives of the study were to determine the cost structure of specialty coffee in Honduras and El Salvador and to estimate the costs and profitability of producing specialty coffee in these countries. A semi-structured survey instrument was administered to 14 farmers in Honduras and El Salvador selected as a convenience sample to represent different farm sizes, regions, and specialty-conventional and organic production systems. Specialty-conventional refers to high-quality coffee with or without certifications. Then,cost-profitability models were developed using an economic cost approach, which considered cash, noncash cost, and the opportunity costs of inputs. The results showed that although both countries are neighbors and economically and culturally similar, the cost structure of producing specialty coffee differed significantly. Costs were lower and profits were higher in Honduras than in El Salvador, and the specialty-conventional coffee production system was more profitable than the organic production system.
Read More
