NEW YORK/SAO PAULO (Reuters) – Coffee growers in parts of Brazil are grappling with the worst beetle infestation in recent memory as a ban on a pesticide used for 40 years has helped the destructive insect flourish, threatening bean quality and yields.

The damage from the beetle – until 2013 controlled by the pesticide endosulfan – is compounding a smaller biennial production year for Brazil’s producers, who are already struggling with the impact of poor weather in some areas as well as plant fatigue after a big harvest. The government expected the annual crop to be down 11 percent on the year even before the beetle problem emerged.

The incidence of the beetle, known as “broca,” has surged in an area that grows roughly 40 percent of Brazil’s crop, with estimated damage to green coffee ranging from 5 percent to 30 percent after females burrowed into beans to lay their eggs.

That will affect the quality of arabica beans sold from the region to companies such as Starbucks Corp and Nestlé SA, said Thomas Hojo, owner of Grupo Hojo, whose family farms 1,300 hectares (3,200 acres) of coffee and owns one roasting plant.

“The amount of low grade (coffee) is going to be higher this year compared with years past,” a large U.S. importer said.

This year, broca infestations rose from 3 percent of beans in the Cerrado and Sul de Minas regions during January and February – when spraying of a non-endosulfan pesticide occurs – to 30 percent at the harvesting period, said Julio Cesar de Souza, entomologist at Epamig, the Minas Gerais state government agricultural research agency. Infestations in Sul de Minas are rare, he said.

“This will result in losses to the processed coffee,” he said, adding the infestation was the most serious since endosulfan was banned by Brazil’s federal health agency in 2013.

Epamig is researching ways to deal with the infestation, Souza said.

Minas Gerais’s last infestation of the berry borer beetle was in 2010 due to rains in the interhavest period. That was controlled by using endosulfan, Souza said.

Climate factors contributed to a dramatic fall in production this year, but the broca issue is no less important, Hojo said.

“Broca is difficult to control …, its proliferation can cause incalculable losses,” he said. The alternatives to endosulfan are expensive and farmers’ costs are rising, he added.

Available pesticides have not been effective and farmers appear to have lost control of the beetle, one Brazilian exporter said.

“It was a problem that basically had disappeared from Brazil. From everything we have received so far, we have seen 5 percent of brocado beans on average,” the exporter said.

Farmers whose crops have high levels of infestation may have difficulty finding buyers. ABIC, Brazil’s coffee roasters association, recommends processors check green coffee to ensure they do not buy any shipments with more than 5 percent of beans damaged by the beetle.

The beetle population has also had ideal conditions to multiply this year, the U.S. importer said.

The prior harvest was large and many beans were left on the ground by unskilled workers, enabling the borer beetle to thrive, said the sources.

This was aggravated by rains in early Minas Gerais harvesting, favoring an increase of the broca population because of higher levels of humidity of the un-picked berries, Souza said.

Some producers and the government now predict a 35 percent to 40 percent crop failure in the Cerrado region, where arabica coffee is grown. Irregular rains, plant fatigue and broca are factors, Hojo said.

The crisis comes at a time that Brazil harvests its biennial off-cycle crop, which is naturally smaller than the prior crop, and after a drought caused the country’s stocks to dwindle.

Brazil’s food supply agency, Conab, has estimated private stocks in March were 27 percent lower than the year prior.

Categorized as a persistent organic polluter, endosulfan is on a list of 12 chemicals known as the “dirty dozen” that cause adverse effects on humans and the ecosystem.

Endosulfan can be carried over large distances by wind and water, says Brazil’s Environment Ministry, contaminating the environment and the food chain by passing through plants and animals.