Peru is the largest exporter of organic Arabica coffee. Though coffee arrived in Peru in the 1700s, very few beans were exported until the late 1800s. Until that point, most coffee produced in Peru was consumed locally. Because the late 1800s brought coffee leaf rust to Indonesia, a country central to European coffee imports, Europeans began searching elsewhere for their fix, and discovered, among others, Peru.
Between the late 1800s and the first World War, European interests invested heavily in coffee production in Peru. England also gained control of over 2 million hectares of coffee growing land as payment for a defaulted loan and created coffee plantations on that land. But, with the occurrence of the two World Wars, England and other European powers became weakened and less outright colonialist, selling off lands in other countries and removing economic investments in many places. The 2 million hectares once controlled by England were purchased back by Peru and distributed to thousands of local coffee farmers. Following the wars, coffee farmers had much more independence and autonomy but the coffee industry became more disconnected and less structured, leaving coffee farmers often on their own in regards to processing and selling their coffees.
Farmers in Peru wet process their beans themselves and then carry their processed beans to a nearby town to sell to middlemen. Frequently, only one buyer arrives at the town on market day, drastically lowering prices for farmers who, without reliable storage or transport home, have little choice but to accept lower prices for their beans. Between 15 and 25% of smallholders belong to cooperatives that help them overcome the exploitative practices faced by individual farmers.
The remoteness and small size of most farms–necessitating middlemen or cooperatives—has made it harder to delineate and market micro-lots than in other countries.
One trouble faced by Peruvian coffee farmers is coffee leaf rust, which peaked in 2014 and affected nearly half of all farms in Peru. Farmers are now facing the decision of whether to replant acres of coffee trees and brave low C market prices and high prevalence of disease like coffee leaf rust and coffee borer beetle or to turn to another crop. One particular concern is that farmers struggling to make ends meet with coffee production are abandoning coffee farming for the highly lucrative but illegal coca farming.
Another significant problem faced by coffee farmers is the low yield of organic coffee compared to non-organic production. Whereas conventional fields produce 45 to 50 100-pound bags (about 45 kg) per hectare, organic fields produce only 12 to 15 100-pound bags per hectare. While organic coffee does receive a premium, the premium, about 35€ per 100-pound bag, does not fully compensate for low productivity. Further, organic producers face bigger threats from leaf rust and coffee borer beetle because they cannot use fungicides or insecticides, so they stand to lose their entire crop to such infestations.