TRADE: Coffee Crisis a Forgotten Issue on Global Agenda

By Mario Osava Reprint | | Print |

Mario Osava

SAO PAULO, Jun 17 2004 (IPS) - In Haiti a woman must work three days harvesting coffee in order to earn the three dollars Europeans spend on an espresso, says Luc Saintville, a technician with the humanitarian watchdog Oxfam International who is assisting coffee growers in his Caribbean country.

Saintville and other activists, including coffee growers from Brazil, Haiti and Honduras staged a protest – complete with the standard 100-pound bags (46 kilos) of coffee beans and donkeys carrying more sacks – at one of the entrances to Anhembi Park, where the eleventh sessions of the United Nations Conference on Trade and Development (UNCTAD XI) are taking place this week.

They demanded a solution to ”the worse coffee crisis ever – an issue that has been forgotten in the international agenda,” Spaniard Gonzalo Fajul, spokesman for Oxfam which is promoting the ”trade with justice” movement, explained to IPS.

”It is an unprecedented scandal” what is happening with coffee, because of the 75 billion dollars generated by sales of the final coffee products, the coffee growers see just five or six billion dollars, said UNCTAD Secretary-General Rubens Ricupero as he met with the protesters and expressed solidarity with their cause.

In better years, in the 1980s, the portion of overall revenues going to coffee producers reached 11 to 12 billion dollars.

Four transnational corporations control 76 percent of the world coffee market, hoarding the profits, according to Oxfam. Since 1997 prices have plummeted to half what they were, hitting their lowest level in coffee history and driving the 25 million families that depend on the crop into poverty.

The final consumers in rich countries are not benefiting from the collapse in the commodity price either, given the hefty profits going to the corporations, noted Ricupero.

But he said there is some hope on the horizon that the situation will improve because the United States has decided to return to the International Coffee Agreement.

It was the U.S. withdrawal that precipitated the 1989 collapse of the agreement, ”which wasn’t perfect, but ensured farmers conditions incomparably better than they are today," said the UNCTAD chief.

A new policy is urgently needed to reorganise the coffee market and to provide financial compensation for the losses suffered, he said.

With the U.S. return to the fold, other major coffee-importing nations, like Australia and Canada may well follow suit, paving the way for negotiations to recuperate and stabilise prices, said Francisco Garcez Ourique, Ricupero’s adviser for UNCTAD XI and representative of the exporting countries in the International Coffee Organisation.

The coffee processing industry, concentrated in the North, has great interest in an agreement that would improve quality and provide guarantees of a stable supply, according to Ourique.

Coffee is a unique product, one that nearly all producing countries export as raw beans. Not even the initial stages of processing – roasting and grinding – take place in the coffee growing countries. Indeed, Germany is the world’s leading exporter of ground-roasted coffee.

Even Brazil, which is more advanced in coffee industrialisation than the other exporters, was only able to put a tiny portion of its roasted coffee on the international market. But efforts are under way to boost roasted coffee exports to 10 percent of the country’s annual harvest.

A ”global initiative” is urgently needed to regulate the coffee market, through controls in production or supply, improved quality and greater industrialisation in the coffee growing countries, summarised the Oxfam spokesman for IPS.

Oxfam is promoting a worldwide campaign known as "Big Noise”, a global petition for fair trade to benefit small producers. The effort already has collected five million signatures.

In Haiti, the recent political crisis has aggravated the social problems associated with low coffee prices. Transportation of the harvested beans along highways has come under threat from armed gangs, and credits are difficult to come by, forcing many to renegotiate their sales contracts, Saintville told IPS.

The Caribbean nation exports relatively little coffee because it consumes 70 percent of the 350,000 bags produced annually. But 200,000 people and an estimated one million of their dependents rely on coffee production for their livelihood.

As the market stands today, the selling price does not even cover production costs, according to Saintville.

The 115,000 coffee growers in Honduras were able to maintain output at three to 3.2 million 46-kilo bags in the midst of the crisis because 85 percent are small farmers and use family labour, said Nelson Guerra, a coffee farmer himself and leader of the Honduran Union of Coffee Cooperatives.

Brazil – the world’s leading coffee producer and exporter – has the luck of massive domestic consumption of coffee beverages. Of the more than 30 million bags of coffee beans harvested each year, 14 million go to the Brazilian market, said Geronimo Brumatti, a grower from the state of Espiritu Santo who was present for Thursday’s demonstration.

But the crisis is hurting Brazil’s estimated 350,000 coffee growers nonetheless. Some 250,000 are family farmers.

Many have abandoned the crop and even left the land, which has fed unemployment in the sector, which otherwise maintained a million workers, said Brumatti.

The entire chain of coffee production employs eight million people in this country of 178 million, he said.