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Puerto Rico Coffee Cooperatives and Economics

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Puerto Rican coffee costs more to produce than coffee from almost anywhere else that grows it. This article explains why, sets out what the island's cooperative movement did and what became of it, and names the source for every figure. Where the record disagrees with itself, both versions are given.

The Cooperativa de Cafeteros de Puerto Rico

A tin-roofed house on a forested tropical hillside under cloud, with one distant figure on a path. No coffee plant is identifiable, and nothing in the frame places it in Puerto Rico. This image does not show the subject of this section and is queued for replacement.

A tin-roofed house on a forested tropical hillside under cloud, with one distant figure on a path. No coffee plant is identifiable, and nothing in the frame places it in Puerto Rico. Photo: Frank_am_Main / Wikimedia Commons, CC BY-SA 2.0.

The Cooperativa de Cafeteros de Puerto Rico was the first agricultural cooperative union on the island, founded to protect an industry that was then one of Puerto Rico's most important exports. Its first administrator was Ramiro L. Colón, who joined at the age of 21.

The founding date is not settled, and this encyclopedia previously gave one version as fact. Reference sources give 11 June 1924 for the cooperative's founding. Another account of Colón's career gives 1925 as the year he joined and the year it was founded. A third account separates the two entities entirely: the Café Rico brand founded in 1924 by Ramón S. Torres Vélez, and the brand acquired by the cooperative in 1935. This encyclopedia previously wrote that the cooperative "registered the Café Rico brand in 1924", which merges three accounts into one sentence and resolves a conflict the record does not resolve.

What is not in dispute is the shape of it: a growers' cooperative became the island's principal aggregator, processor and exporter for small farmers through much of the twentieth century, and the Café Rico brand became attached to it.

What the Cooperative Actually Did

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The mechanism mattered more than the brand. A smallholder with a few cuerdas of coffee cannot reach an export market alone. The cooperative took delivery of growers' coffee, processed it, graded it, and sold it — so that a farmer's access to market did not depend on the size of the farm.

This encyclopedia previously described the cooperative's coffee as considered the best in Puerto Rico and, in its golden era, among the best in the world, and stated that it maintained the only certified coffee taster in the archipelago. Both statements trace to the company's own marketing material. This encyclopedia's source hierarchy admits trade material only to establish what a company claims, never as evidence that the claim is true. Both have been removed and are recorded at the end as claims made by the business about itself.

The Vatican Purchases

A 1941 photograph by Jack Delano for the United States Farm Security Administration, showing the slum area of Yauco, a coffee town in south-western Puerto Rico: close-set wooden houses along an unpaved street.

A 1941 photograph by Jack Delano for the United States Farm Security Administration, showing the slum area of Yauco, a coffee town in south-western Puerto Rico: close-set wooden houses along an unpaved street.

One claim about this coffee is documented and this encyclopedia treats it carefully.

Through the 1950s and 1960s the Holy See purchased approximately 15,000 quintales of Puerto Rican coffee a year. The shipping was handled by Sobrino de Mayol Hnos of Ponce. The figure and the chain are recorded in Pumarada O'Neill's history of the Puerto Rican coffee industry.

What that does not establish is an endorsement. A purchasing decision by a household, however famous, is a purchase. This encyclopedia does not describe it as a papal endorsement, and readers should be wary of packaging that does.

The 2008 Sale

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In 2008 the Cooperativa de Cafeteros was acquired by a commercial roasting company. The Café Rico brand and the cooperative's assets passed into corporate ownership, and the island's coffee market moved from a structure led by a growers' cooperative to one led by private companies.

That structural change is the fact worth recording. This encyclopedia does not name the acquiring company or its corporate parent, and it previously did both, alongside an unsourced claim that the acquirer holds about 80 per cent of the island's torrefacto roasting. That figure had no citation and has been removed.

Why Puerto Rican Coffee Costs More

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This is the strongest economic argument on the page and it survives intact.

Puerto Rico is a United States territory, so federal minimum wage law applies. Coffee picking is hand labour on steep ground, and it is the single largest cost in producing the crop. A Puerto Rican farm pays a legally mandated wage that farms in most coffee-producing countries do not.

The consequence follows directly. Puerto Rico cannot compete on price in the commodity market, because the commodity price is set by producers with far lower labour costs. It can only compete on quality, at a price that reflects what the coffee cost to pick. Specialty is not an ambition for Puerto Rican coffee; it is the only viable position.

The binding constraint today is not wage rates but people. The Department of Agriculture estimated in 2021 that the harvest requires roughly 7,000 pickers.

Farm Size, and What a Cuerda Is

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A cuerda is not an acre. One cuerda is 0.9712 acre — about 3,930 square metres. This encyclopedia previously wrote "5 to 25 cuerdas (5 to 25 acres)", silently equating the two, in both the body and the Key Facts. The unit is Puerto Rico's own and predates the American period; getting it wrong on a Puerto Rican encyclopedia is worse than getting it wrong elsewhere.

The 2022 Census of Agriculture recorded 2,983 farms growing coffee on 18,961 cuerdas. The 2018 census had recorded 2,292 farms on 13,283 cuerdas, so both farm count and planted area rose between the two.

Dividing those figures gives an average of roughly 6.4 cuerdas per farm in 2022. This encyclopedia previously gave a typical range of 5 to 25 cuerdas with no source; the census average is given here instead, and it sits at the bottom of that range.

What the Island Produces

An 1899 halftone plate printed with the caption "COFFEE-DRYING PLOT NEAR MAYAGUEZ.", from Margherita Arlina Hamm's account of Puerto Rico, showing coffee spread to dry on an open drying floor.

An 1899 halftone plate printed with the caption "COFFEE-DRYING PLOT NEAR MAYAGUEZ.", from Margherita Arlina Hamm's account of Puerto Rico, showing coffee spread to dry on an open drying floor. Photo: Margherita Arlina Hamm / Wikimedia Commons, public domain.

Two current measurements exist and they do not agree, so both are given.

  • The 2022 Census of Agriculture recorded 53,940 hundredweight of coffee produced.
  • The Puerto Rico Department of Agriculture has given production in the range of 32,000 to 34,000 quintales.

For scale: exports peaked at 579,613 quintales in 1896, when coffee was the island's principal export. The present industry is a fraction of one per cent of that.

This encyclopedia previously gave green coffee prices of $2 to $4 per pound for commodity grade and $10 to $20 for premium specialty, and elsewhere on the same page gave $2 to $3 per pound to an aggregator. Neither figure carried a source and the two did not agree. Both have been removed.

Government Support

The Puerto Rico Department of Agriculture building in Santurce, San Juan, an art-deco façade with "DEPARTAMENTO DE AGRICULTURA" legible above the door, photographed from the street behind railings.

The Puerto Rico Department of Agriculture building in Santurce, San Juan, an art-deco façade with "DEPARTAMENTO DE AGRICULTURA" legible above the door, photographed from the street behind railings. Photo: The Eloquent Peasant / Wikimedia Commons, CC BY-SA 4.0.

Ley 78 de 27 de julio de 2019 created the Oficina de Cafés de Puerto Rico and named 28 municipalities as the island's zona cafetalera. Under that statute, price-setting authority remains with DACO, the Department of Consumer Affairs; the Oficina studies costs and makes recommendations.

Ley 232 de 22 de diciembre de 2015 created a denomination of origin for Puerto Rican coffee, with the stated purpose of protecting its prestige and supporting export.

This encyclopedia previously stated that the USDA Natural Resources Conservation Service Caribbean Area has been particularly active in funding shade-tree planting, and that without such support Hurricane María's damage alone would likely have ended commercial coffee farming on the island. The first is plausible but was given without a citation; the second is speculation. Both have been removed.

Watch: El Motor: Coffee and the Heart of Puerto Rico — Library of Congress. A general film about Puerto Rican coffee culture; it does not address cooperative economics.

Cooperatives Today

The cooperative model has not disappeared from Puerto Rican coffee, but it no longer sits at the centre of the market the way it did for most of the twentieth century. Certification schemes — Rainforest Alliance, Bird Friendly, denomination of origin — now perform some of the market-access function that aggregation once did, by letting a small farm carry a mark a buyer recognises.

Key Facts

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  • The Cooperativa de Cafeteros de Puerto Rico was the island's first agricultural cooperative union. Sources give its founding as 1924 and as 1925.
  • Its first administrator was Ramiro L. Colón.
  • The Café Rico brand is attributed to Ramón S. Torres Vélez, founded 1924; one account has the cooperative acquiring it in 1935.
  • The Holy See purchased about 15,000 quintales a year in the 1950s and 1960s, shipped by Sobrino de Mayol Hnos of Ponce.
  • The cooperative was acquired by a commercial roasting company in 2008.
  • One cuerda = 0.9712 acre.
  • 2022 Census: 2,983 coffee farms on 18,961 cuerdas, 53,940 hundredweight produced.
  • 2018 Census: 2,292 farms on 13,283 cuerdas.
  • Department of Agriculture production figure: 32,000 to 34,000 quintales.
  • Peak exports: 579,613 quintales, 1896.
  • Federal minimum wage applies in Puerto Rico; roughly 7,000 pickers are needed for the harvest.
  • Ley 78-2019 created the Oficina de Cafés; DACO retains price authority.
  • Ley 232-2015 created a denomination of origin for Puerto Rican coffee.

Frequently Asked Questions

What did Puerto Rico's coffee cooperative do? It aggregated, processed, graded and sold the coffee of small farmers who could not reach export markets alone. It was the island's first agricultural cooperative union.

When was it founded? Sources give 1924 and 1925. This encyclopedia reports both rather than choosing.

What happened to it? It was acquired by a commercial roasting company in 2008, and the island's coffee market moved from cooperative-led to company-led.

Why is Puerto Rican coffee expensive? Federal minimum wage law applies, and picking is hand labour. Puerto Rico cannot compete on commodity price and can only compete on quality.

Is a cuerda the same as an acre? No. One cuerda is 0.9712 acre.

Did the Pope endorse Puerto Rican coffee? No source supports an endorsement. What is documented is that the Holy See purchased roughly 15,000 quintales a year in the 1950s and 1960s.

Sources

  • Pumarada O'Neill, history of the Puerto Rican coffee industry — the Holy See's purchases of approximately 15,000 quintales a year in the 1950s and 1960s, shipped by Sobrino de Mayol Hnos of Ponce; and the 1896 export peak of 579,613 quintales.
  • Reference accounts of the Cooperativa de Cafeteros de Puerto Rico — the founding dates of 11 June 1924 and of 1925; Ramiro L. Colón as first administrator, joining at 21; the cooperative as the first agricultural cooperative union in Puerto Rico; and its purpose of protecting the coffee industry.
  • Accounts of the Café Rico brand — its attribution to Ramón S. Torres Vélez in 1924, and the account giving the cooperative's acquisition of the brand in 1935.
  • United States Department of Agriculture, 2022 Census of Agriculture, Puerto Rico — 2,983 farms on 18,961 cuerdas producing 53,940 hundredweight, against 2,292 farms on 13,283 cuerdas in 2018.
  • Puerto Rico Department of Agriculture — production in the range of 32,000 to 34,000 quintales, and the 2021 estimate of roughly 7,000 pickers required for the harvest.
  • Ley 78 de 27 de julio de 2019, Ley de la Oficina de Cafés de Puerto Rico, 5 L.P.R.A. § 323 et seq. — the creation of the Oficina, the 28 municipalities of the zona cafetalera, and price authority remaining with DACO.
  • Ley 232 de 22 de diciembre de 2015, Ley de Denominación de Origen del Café Puertorriqueño — the creation of the denomination of origin and its stated purpose.
  • Company marketing material for the Café Rico brand — cited only to establish what the business claims about itself, not as evidence: that its coffee is Puerto Rico's best, and that it holds the island's only certified taster and cupping laboratory.

Claims this encyclopedia could not source

  • A single founding year for the Cooperativa de Cafeteros. Sources give 1924 and 1925, and a third account separates the brand's 1924 founding from the cooperative's 1935 acquisition of it.
  • That the cooperative's coffee was the best in Puerto Rico, or among the best in the world. A claim the business makes about itself. No independent assessment located.
  • That the company maintained the only certified coffee taster in the archipelago. The same company material states this in the present tense; no certifying body is named and no period is given. No independent confirmation located.
  • That the acquiring company holds about 80 per cent of the island's torrefacto roasting. No source located for this market-share figure.
  • A typical farm size of 5 to 25 cuerdas. No source located. The census average is given instead.
  • Production of 20 to 200 quintales per farm per year. No source located.
  • Green coffee prices of $2 to $4 per pound commodity and $10 to $20 specialty. No source located, and inconsistent with a second price figure on the same page.
  • That USDA NRCS Caribbean Area funding has been particularly active in shade-tree planting. Plausible; no citation located.
  • That without conservation funding, Hurricane María would likely have ended commercial coffee farming on the island. Speculation, not a sourced projection.
  • That coffee is the world's second most traded commodity. This is a widely repeated statistic with no basis, and it appears in the preamble of Ley 232-2015 itself. A claim's presence in a statute establishes that the legislature wrote it down, not that it is true.

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