Colomba, Guatemala, Jan 23 - Rising prices have helped Guatemalan coffee farmers drag themselves from the verge of ruin after a long slump, but debt loads are still heavy and many are still reeling from the devastation of 2005's Hurricane Stan.
With the average price for mild Arabicas like those grown in Guatemala at $1.28 a lb in December according to the International Coffee Organization (ICO), the nation's stronger farms are feeling cautiously optimistic.
"These high prices of course have lowered the levels of debt for coffee producers," said Edgar Figueroa, who owns a large farm in the Santa Rosa region south of Guatemala City.
"That doesn't mean that we are completely out of trouble but we are on the way to recovery."
Exporters who pay in advance for predicted crop yields have traditionally financed coffee producers in Guatemala. The exporters, in turn, borrow from local and international banks.
But the system broke down in 1999 when prices plummeted to around 50 cents a lb, leaving growers unable to cover production costs of about 90 cents a lb and creating a debt spiral that put pressure on the whole system.
Dozens of farms went belly up or abandoned a century-long tradition of coffee growing and planted fruit or palm trees instead.
The ones that stuck it out are finally seeing a payoff but worry that if prices dip even slightly again they will have difficulty staying afloat.
"In order to truly come out of the crisis we need a couple more years of prices the way they are right now," one coffee exporter told Reuters. "If it drops below a dollar, then I think we will see people getting into trouble again."
WASHED OUT
The Blanca Flor coffee farm, tucked high up a cobbled road in the jungly foothills along Guatemala's Pacific coast, is owned by a cooperative of former coffee pickers.
These farmers saw a chance to escape their $2 a day salaries and bought an abandoned farm with a $425,000 loan and government help in the middle of the crisis, gambling that prices would one day recover.
They were right, but they didn't account for Mother Nature.
The farmers were still operating at a loss after rebuilding crumbling infrastructure and pruning overgrown coffee trees when Hurricane Stan hit in 2005.
The storm devastated much of the Guatemalan countryside, and pounded Blanca Flor's fragile recovery by washing out coffee crops and access roads.
The group was forced to take out new loans to cover their outstanding interest payments.
Now the cooperative -- whose coffee plants are close enough to active volcano Santiaguito to be sprinkled with a thin layer of chalkish-white ash -- is just barely scraping by, with the jump in coffee prices doing little to make a dent in their crushing annual payments.
This year they are due to pay about $50,000 to service their debt. The sale of the 300 quintales (230 60-kg sacks) of coffee they expect to harvest this year will cover only half that at current market prices.
"We don't want to loose this land we fought so long and hard for," said community member Alvaro Melchor as he pointed out a wet coffee processing plant with a caved-in tin roof and rusted out machinery he cannot afford to repair.
"If we don't get out of this debt the bank is going to take away our farm."