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Market Scene : Insects and Falling Prices Take Toll on Colombian Coffee : Farmers are not the only losers. Literacy, roads and utilities may suffer from the loss of revenue.


QUINDIO, Colombia — Coffee has always taken Arceseo Dominguez to higher places. Now it is dragging him down.

Born poor in the heart of Colombia's rich coffee zone, Dominguez inherited a scrap of land, hauled coffee sacks by donkey down from the mountains for other growers and then used whatever he made to establish himself as a middleman. Buying and selling coffee, he poured his profits into huge expanses of land throughout the central cordillera of the Colombian Andes.

Today at 77, Dominguez is rich and famous, a survivor of three kidnapings by bandits and guerrillas, and this state's largest coffee grower.

But as he walks down a patch bursting with full, green coffee bushes on one of his many mountain farms, Dominguez is grim about the future. "You take account of what you have," he says, rubbing a thick red coffee berry in his fingers, "and you turn around and bury your farm. The majority of farmers here are broke."

Dominguez's woes are common throughout Quindio state, where 83% of the population depends on coffee, and throughout the 15 states of Colombia's coffee zone. In all, more than 700 villages and 300,000 families are dedicated to the nation's most famous legal export.

During the last three years, the once invincible optimism of Colombian coffee growers has vanished with a 45% drop in coffee prices--a result of the collapse of the International Coffee Agreement, which aimed to stabilize coffee prices through a system of world export quotas. A plague of insects called the coffee borer, or broca, which arrived about a year ago, has delivered another, near knockout blow, destroying thousands of hectares of prime coffee land.

The twin calamities have deeply wounded the collective psyche.

Towns and municipalities accustomed to having roads, telephones and electricity unequaled in any other rural area of the country now foresee a long period of deterioration. People who are accustomed to the nation's highest indices of rural income distribution, literacy and access to services now fear for their futures.

"Thank God I haven't gotten the broca yet," says Luis Hernando Hoyes, as he sits on his terrace drinking a traditional mixture of sugar cane and coffee and gazing at the pigs he has bought to make ends meet.

"The costs of materials and labor have risen and prices are very low."

A large grower on 30 hectares (74 acres) here could earn $20,000 in the good years, travel abroad and hope to send his children to top universities. Many growers are now operating at a loss.

A small grower on three hectares (7.4 acres) had the unique privilege, for a farmer in Colombia, of working for himself, of even owning a car. Today many such farmers are hiring themselves out.

Meanwhile, thousands of migrant workers are being driven off the farms and into the cities as farmers cut back on every possible expense, including fertilizing, weeding and fumigating.

"You can see it in the streets," said Santiago Ospina, a farmer who sold his car, stopped fertilizing and eliminated half his labor force of 40 people."You can see it in the holdups and robberies of farms that unemployment is causing."

Most frightening for many farmers is the way their troubles seem to keep compounding. With fertilizer unaffordable and the broca wiping out huge tracts, Colombia's 1992 harvest of 18 million sacks of coffee is expected to drop to 14.3 million this year.

Historically, Colombia insulated farmers from such disaster.

Colombia's National Federation of Coffee Growers took obligatory contributions from coffee farmers in good times and accumulated a fund that it could use to help them out in hard times. The money not only maintained the internal price of coffee against the whims of the international market. It also built schools, hospitals and roads. And it provided farmers with low-interest loans.

But today, the fund is drying up. Low coffee prices mean greater demands on the fund even as they eat into the money available for new contributions. Money for infrastructure projects has vanished.

"The future is frightening," said John Marulanda, a member of the coffee federation's local committee in the nearby state of Risaralda. "Ten years ago we could supply all the municipal hospitals with X-ray equipment. Today we can't supply even a single machine. We haven't been able to invest in schools or in the training of teachers. . . . "

Coffee growers here heap much of the blame on the United States--the largest coffee consumer--and on a few big multinational buyers of coffee.

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