Spotlight on: Costa Rica

How coffee shaped the nation

Coffee has played a central role in Costa Rica’s economy since the late 1700s, when it was introduced by Spanish colonists. Early government incentives – such as free plants, tax exemptions, and land ownership rights – encouraged rapid growth of the sector. By the mid-1800s, coffee exports funded major infrastructure projects, including roads and railways.

To protect smallholder farmers, the Institute for Costa Rican Coffee (IDE Cafe, now ICAFE) was established in 1933. Cooperatives formed in the 1960s helped farmers secure fairer prices, while advances in processing and fertilisation increased production. 

In 1988, Costa Rica legally restricted coffee cultivation to Arabica varieties only.
Today, ICAFE represents 92% of Costa Rica’s coffee farmers, regulating prices, ensuring transparency, and guaranteeing that farmers receive at least 80% of the FOB export price. ICAFE also funds research, provides standardised measurement systems, and offers accessible agricultural data to farmers nationwide.

Coffee picking is largely done by migrant workers, who are paid a government-set minimum wage. Mills and cooperatives publish daily advance prices, with final payments made at the end of harvest under ICAFE oversight.

Sustainability, stability, and the future of coffee

Costa Rica is one of the most politically stable countries in the region, with high life expectancy, no standing military since 1948, and a global reputation for sustainability. In 2015, the country ran on 100% renewable electricity for 285 consecutive days and has pledged to reach net-zero emissions by 2050 – something coffee cooperative Co-Op Dota achieved back in 2011.

So what does this mean for coffee?

As the country develops, costs are rising, and younger generations are increasingly choosing city life over farming, contributing to declining production. In response, cooperatives are investing in education and creating pathways into a wider range of coffee-related careers. In regions like Tarrazú, where coffee is central to daily life, production remains strong.

Coffee has been fundamental to Costa Rica’s development and remains a tightly regulated, transparent, and farmer-focused industry,  and Costa Rica is certainly leading the way in showing how coffee can continue to bring prosperity to its people. 

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