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SCMP Reporter

FEW PEOPLE  are aware that the taste that gives coffee its distinctive edge - the bitterness - is not naturally present in the beans when they are plucked from the bushes.

The favoured tang comes from the roasting, a delicate process which converts some of the crop's oils into the sought-after flavour.

In East Timor, however, the bitterness of the current harvest is found not only in the sacks of produce being shipped out of the United Nations-administered territory.

Some of the many farmers and labourers across the half-island are said to be up in arms about the low prices being offered by the middlemen who get the beans to international markets.

There are also darker allegations that one of the trade's more prominent foreign supporters, the Washington-based National Co-operative Business Association (NCBA), a non-profit group which advises the Co-operativa Cafe Timor (CCT), is employing underhand tactics to keep out rivals.

'It would be more than fair and gentle not to put weights on the other [traders] who want to buy,' the Coffee Farmers Forum of Ermera District said in a written appeal to the UN circulating in Dili, the ramshackle capital.

'If the urge is not heeded and any attention is [not] given to this regard, the impatient coffee farmers will go down to the streets in a massive demonstration.'

Despite the strong language, Dili remained calm this week, with its dusty thoroughfares dominated by fleets of white UN four-wheel drives and gangs of under-employed Timorese youths.

But the issues causing the ill-feeling - pay rates and access rights, together with the industry's direction as a whole - are critical to the future of thousands of local families.

UN staff, development experts and Timorese citizens all agree that coffee cultivation is one of the few bright spots in a shaky, aid-reliant economy which has yet to recover from the violence unleashed by the pro-Jakarta militias in 1999.

The disruption that year followed the UN-organised popular vote for full statehood, ending more than two decades of occupation by neighbouring Indonesia and centuries of Portuguese rule. Formal independence should come early next year.

In impoverished rural areas, coffee-harvesting is the only significant cash-generating enterprise available to many.

The World Bank, which is co-ordinating reconstruction efforts, says the beans represent the 'single significant export'.

While the commodity's current importance and great potential are recognised, myriad problems remain. Most significantly, Timorese production - estimated at 30,000 tonnes of unprocessed cherries this year - is recovering as international prices languish at historic lows.

Oxfam, the international relief and development organisation, says global benchmark prices for fully processed beans have halved over the past three years.

'Coffee production is consistently outstripping consumption, with the result that excess stocks are driving down prices,' the charity says.

In the hills around Dili, which have been used for coffee cultivation for almost 200 years, small-holders are being offered a farm-gate price of 11 US cents a kilo for cherries - the pre-processed, pre-roasted product fresh off the bushes.

The payments compare with US$1 a kilo half a dozen years ago.

The impact of the price slump is compounded by local obstacles.

The handling of the beans, which largely determines their quality and pricing power, is often poor because of ill-supported, badly exercised harvesting.

CCT, which buys about 35 per cent of the total Timor crop, takes only cherries so that it can control the processing into green beans and, ultimately, roasted coffee.

Other, mostly ethnic Chinese traders, deal in lower-quality beans partly processed by the farmers themselves.

Their shipments leave Timor for Indonesia for further conversion into drinkable form. Production costs on labour-rich Java are much lower.

Experts add that although the local variety, Timorese Coffea arabica Hybrido de Timor, may attract buyers because of its strong organic credentials, production is hampered by poor infrastructure, sparse banking and credit facilities and a shortage of trucks.

'There is only one rural economy and that's coffee,' says David Boyce, an agribusiness adviser to the NCBA, which channels US-funded support to the territory-wide CCT, a federation of local co-operatives.

Mr Boyce dismisses the allegations from Ermera, saying that they have been put about by disgruntled students, not the farmers.

'People can choose to sell to whomever they wish,' he says of the growers. 'We can sell all the beans that we can buy.'



Bitter aftertaste in the coffee economy of a new nation