By Peter Blackburn

RIBEIRAO CLARO, Brazil, July 5 (Reuters) - Coffee farmers in the hills of northern Parana are buying hand-held harvesting machines to cut crippling labour costs and remain competitive.

Brazil's minimum wage has doubled over the past four year's under left-leaning President Luiz Inacio Lula da Silva. It is now 380 reais ($199) a month and labour represents 35 percent of harvesting costs.

"I've reduced the number of harvest workers, increased productivity and improved quality," said Fabio Scatolin, owner of the 40 hectares (100 acres) Vale das Palmeiras coffee farm in the Ribeirao Claro district.

Coffee farming is still important in northern Parana even though many producers migrated to milder Minas Gerais following a disastrous frost in 1975. Small farmers in Minas are already using the coffee strippers.

Scatolin, an associate economics professor at the federal university in the Parana state capital Curitiba, bought two of the coffee harvesting machines this year.

Weighing about seven kilos (15 lbs) and driven by a small gasoline engine, the machines look like hand-held grass trimmers.

Two vibrating plastic hands at the end of a pole shake the coffee cherries off tree branches on to tarpaulins on the ground. The cherries are then gathered manually.

The so-called coffee stripping machines cost about 1,800 reais, but are up to five times faster than hand pickers and reduce production cost by at least 10 percent, according to the government's agricultural research agency Embrapa.

"It means I can pay the machine operators 25 percent more and still reduce labour costs," said Scatolin, whose coffee has won state quality competitions.

Like other coffee farmers, Scatolin has difficulty finding harvest workers who are attracted to sugar cane and construction jobs, which pay at least double in wages.

"It's much quicker and softer on the hands. I also get paid more," said 33-year-old machine handler Benedito Elias da Silva.

The hand-held machines are affordable for small farmers, they do relatively no damage to the trees and can be used on hillsides inaccessible to tractor-driven machines.

Scatolin's farm, near the border with Sao Paulo state, is over 800 meters (2,620 feet) above sea level and harvesting is in full swing whereas it is already finished in many lower lying farms.

Larger farms are also using hand-held coffee harvesters.

"Even though the crop is smaller this year, I'm testing the machines because I can cut labour costs," said Guilherme Lange Goulart, who manages the 140 hectares Fazenda Regina Helena near Jacarezinho.

Goulart said that reducing labour costs was essential as current prices didn't compensate for an unfavourable exchange rate and higher fertilizer and fuel costs.

Benchmark Brazilian type 6 coffee prices are around 235 reais per 60-kg bag, or 65 reais below the producers' target of 300 reais.

AlertNet news is provided by