Friday, February 21, 2003


no longer a voice in the wilderness. . .

so, long-time readers, how long have i been annoying everyone here by nattering endlessly on about the coffee crisis? nearly 3 years now?

at one time, we here at bccy were certainly just about the only people aware of the world-price depression we call the coffee crisis. except the longer it goes on, the less it seems like a temporary market phenomenon and more like a permanent structural change in the market -- for the worse.

coffee is the world's second largest traded commodity after oil, and as with oil, the global economy and a large part of the world's social stability relies on the price of coffee.

whereas once i would have to write long articles myself on this subject, not a day now goes by it seems when a variety of news outlets moves this sad story forward. take this bit of boosterism from a san diego paper highlighting an upcoming coffee industry confab. even it discusses the coffee crisis and the once-exotic concept of relationship coffee by mentioning the arrangements peets now has with costa rica.

a more serious story covers the amazing differential between what farmers earn and what us coffee-lovers in developed countries pay the chains for our style-y lattes, while yet another piece reveals the intense suffering in matagalpa, nicaragua.

i feel finally like the word is getting out. but now that the story is more widely known, the question arises, what to do about it? various organizations, like usaid, offer some help to coffee-producing countries. and others, like coffeecorps and coffeekids, help the farmers and the people.

but none of these have the ability to change the global market trends. perhaps only one thing now can do that: the controversial possibility of the u.s.a. re-entering the i.c.o. coffee cartel. before the fall of the berlin wall in 1989, the u.s.a. supported the coffee cartel, which basically regulated coffee prices.

we were pleased to do this because we realized that coffee was important to our latin american neighbors. a series of american administrations felt that we needed social and economic stability there to prevent communism from taking root. and so we supported a high price for coffee to aid the economies of our latin american allies.

but once the wall fell, we lost interest in the threat of communism, and cheaper coffee for american consumers became the new goal. ronald reagan took us out of the i.c.o. agreement. but perhaps the time has come for the u.s.a. to reconsider the extremely sensitive step of re-joining the cartel and once again supporting coffee prices?

the scaa, a coffee trade group, has already urged the u.s. government to consider this move and delegates from the i.c.o. were here in december to discuss the idea. . .the u.s.a. consumes 25 percent of the world's coffee. what we choose to do now will make an enormous difference.

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