Coffee fungus threatens disaster for Central America's farmers A man holds a handful of unshelled coffee beans at a plantation in El Paraiso, Honduras Angel Molina is fighting to save his way of life. In the hills of Sierra de Montecillos in Honduras, his 15 hectare coffee plantation has been hit by a virulent coffee plant fungus, known as la roya, or leaf rust, with devastating effects. Mr Molina has been dealing with la roya by the most effective means: uprooting the bushes and planting new ones that will not yield coffee beans for at least three years. According to the Inter-American Development Bank, the Central American region is suffering the "severest outbreak" of the past 30 years. "It is a regional disaster," says Roberio Silva, head of the International Coffee Organisation. It is not just a coffee disease. La roya is an economic disease. The fungus has already spread across half of the growing areas of the region, destroying roughly 20 per cent of the 2012-13 crop. Although coffee is no longer the make-or-break commodity of the 1970s and 1980s in Central America, the crop losses, worth $600m according to the IDB, are significant for Nicaragua, Honduras, Guatemala, El Salvador and Costa Rica. Worse, coffee traders believe Central America will lose a much larger share of its crop of high quality arabica beans in 2013-14, when the true impact of the disease will become apparent. Lindsey Bolger, vice-president at US coffee group Green Mountain, says the 2013-14 harvest is going to be "especially dire." The economic consequences of such large crop losses could be devastating for the rural economy of Central America, just as overall growth slows in the region. Coffee farmers are having to deal with a double whammy of la roya damage and plunging coffee prices, which are now at multiyear lows. Central America is known for its high quality arabica bean, used in espressos and cappuccinos by retailers such as Starbucks. The region accounts for almost a fifth of the world's arabica bean production, estimated at 18m bags, each of 60kg. In the past, its large share in global production has meant that fungus outbreaks had a small impact because coffee prices rose as production fell, keeping revenues largely unchanged. But this time, Brazil is delivering a bumper crop for the second consecutive harvest, keeping the market oversupplied despite the losses in Central America. Arabica prices have fallen this month to a four-year low of $1.17 per pound, down more than 60 per cent from the 30-year high of $3.08 set in May 2011. "It is a terrible thing for the Honduran and El Salvador coffee farmers," says the head of one of the world's top-five coffee trading houses. Government officials and economists are particularly worried about job losses in rural areas. The coffee industry is one of the largest employers in the region, with more than 2m people. In 2012-13, some 400,000 jobs were already lost because of the rust, increasing migration pressure on the US as people leave their countries to find work, officials say. The job losses are set to increase in 2013-14. Edgar Carrillo, director of projects at the Caruchil co-operative through which Mr Molina sells his beans, says coffee farmers will search for jobs in cities, where unemployment is already high. There is a higher rate of migration - both within the country and internationally. People are going to the US. The spread of la roya in Central America appears to be related to climate change, according to many experts. The region has experienced several years of higher than normal rainfall and temperatures. The humidity and hot weather, coupled with aged plants and a lack of husbandry, has been a perfect cocktail for the fungus. Compared with the past outbreaks, however, the disease is reaching ever higher altitudes, hitting areas which have never experienced the problem. The experience of Colombia, the world's top producer of arabica coffee, shows that the fight against the disease will not be cheap or fast. Bogotá was hit five years ago by la roya, and production dropped to levels not seen since the early 1970s as farmers uprooted bushes. Colombian coffee output has started to come back only now after the country's coffee association, with support from the government, spent $1.4bn providing fungus resilient plants, fertilisers and education. Central American governments are unlikely to be able to finance a similar effort by themselves and smallholder farmers in the region lack access to finance to weather the gap between when they uproot the bushes and the first new crop. Maximo Tolero, chief economist at the Washington-based International Food Policy Research Institute, is concerned about the fallow years until output recovers. "The three year window could be very serious," he says. In Caruchil co-operative, Mr Molina and his colleagues reckon that the problem goes beyond their small plots of coffee bushes. "When there is a problem with coffee, it is a problem for the whole country," he says.