Europe

Crisis in a Coffee Cup

The Battle for Real Coffee

A woman brews coffee in Belgrade
A Belgrade woman brews coffee early in the morning with the help of a camping stove on May 24, 1999, after NATO air strikes cut most of the country's electricity and water supplies (Photo: AFP).

All of us have heard the stories about bad capitalism in which surplus coffee beans are being burned, just as smuggled cigarettes are in our country, so that real and irreplaceable morning coffee can maintain its price. Coffee, according to experts, is a cyclical crop, whose price is most subject to the law of supply and demand. But at the heart of this new story is a mystery: There is raw coffee in abundance in the world market, while the price of espresso in a café with colorful parasols persistently and irritatingly increases.

New notions have been created. There is “pure” coffee, “politically correct,” “organic,” “price-worthy,” “sustainable,” “ecological,” “protected,” and even “shade-grown” coffee. In the United States, where coffee magnates are the most powerful, clever politicians demand that well-known mixtures of famous companies get their trademarks. A suggestion has come from Africa that various beans get legal appellations, just as famous wine grapes do. Planters in Latin America are focusing on the best sorts of arabica beans and are ceasing production of lower quality robusta, while some farmers are switching to other, more profitable crops.

The latest phenomenon will affect our coffee fun in a strange way. People here [in Yugoslavia] mostly drink Brazilian [Sabor de] Minas, which is, for example, of lower quality than Santos, but is irreplaceable for making the Turkish-style coffee that we are used to. But in the Brazilian state of Minas Gerais, farmers are turning to hog raising, with their state’s support, because their coffee has not sold well for decades.

Bearing in mind that coffee, from an unprocessed green bean on a plantation to a jar or can of instant coffee in a supermarket, goes through a chain of go-betweens that is longer than for any other product of the food industry, it is clear that the producer earns the least. Income of coffee growers on average has been reduced by 50 to 60 percent compared with the 1990s. Some of them are forced to accept a purchase price that is lower than the cost of production.

On the other hand, in a chain of go-betweens, the price is being built in an almost indecent way. While everyone in the chain has cartels to protect his interests, coffee producers seem to be the least in agreement in protection of their rights. The Association of Coffee Producing Countries, whose members provided two-thirds of the world production of unprocessed coffee, reached in 1989 an accord on export quotas, taking oil exporters as a model. However, not all of them have stuck to the deal, because unlike oil producers who are rich, many one-crop economies in Africa and Latin America are poor and live almost exclusively on sale and export of coffee.

Therefore, there is more coffee than needed in the market, and the price is falling. Some countries outside the association, such as Vietnam, [and some inside, such as] Indonesia and India, have contributed to that as well. They were not concerned with somebody else’s deal. Vietnam became the second world producer of cheap coffee, right after Brazil. But then it was also affected by the crisis.

What producers can do now if they do not want to burn this year’s harvest is to stick to the deal on production and export quotas and to grow better-quality coffee. It is interesting that international financial organizations, such as the International Monetary Fund and the World Bank, in an absurd way have contributed to coffee’s hyper-production: They approved loans that could not be paid back because producers could not sell their merchandise.

So now everyone except producers is making their price. And here business and politics begin to mix. In the same way that business works on the popularization of special mixtures of coffee, suggesting “aroma and taste” to consumers, politicians can make the product more attractive by emphasizing its allegedly noncommercial value. If politicians advocate, for example, “sustainable,” “ecological,” “protected,” or “shade-grown” coffee, that is supposed to mean that they care for people’s health and the subordination of production and consumption to a reasonable ecological policy—that is, coffee grown without pesticides, in the shadow of a tree where it grows the best, in the place where the natural habitat of the plant and the biological balance have been preserved, and not in a clearing in the jungle, where primordial pure nature has been destroyed.

Both in business and politics there have always been lies. This is one of those that has been shrewdly thought out and that has a chance to be maintained probably for a long time, to the great regret of coffee producers.

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