Raising Agricultural Productivity and Improving Climate Resilience
Coffee is Central America’s leading export and in some countries coffee rust, or La Roya, has affected up to seventy percent of plantations. The disease attacks coffee leaves and chokes off nutrition to the coffee cherries that protect the beans. Many small-holder farmers are trying to fight La Roya by replacing aging trees or spraying fertilizer and fungicide. But income losses for farmers in Central America have been compounded by lower global coffee prices due to bumper crops in other regions, and the chronic lack of long-term financing is a constraint.
In this $30 million project, Atlantic will act as the agent and lender to farmers for the renovation of coffee plantations affected by La Roya. As new coffee trees require three to four years to become fully productive, GAFSP will provide first loss guarantee for up to 25% of the IFC and IDB loans.
The project is expected to renovate about 5,000 hectares affected by La Roya and to increase the average yield of around 10 quintals/ha by three times following renovation. The investment also addresses present climate risks by introducing best management practices and plantations of coffee rust resistant varieties.
This project is expected to finance about 500 farmers and to renovate about 5,000 hectares affected by La Roya.