Fair Trade Coffee Resource
Though activist efforts may seem a little extreme to some, their message is important. According to a report given by Frank Lee Deputy Administrator for Commodity and Marketing Program Foreign Agricultural Service U.S. Department of Agriculture before the Subcommittee on the Western Hemisphere House International Relations Committee, Washington D.C. production is going up and prices are decreasing for the coffee farmer. This makes for dire circumstances for the coffee growers.
The 2002-03 expected world coffee production was 122.1 million bags of coffee (each bag being 60 kilograms or 132.3 pounds)
Coffee productions is up in the following countries: Brazil, Mexico, Nicaragua, Thailand, Kenya, and Madagascar. The lowest increase is Thailand which is up 157,000 bags and the highest is Mexico which is up 500,000 bags.
Increased production leads to low prices for farmers. Consequently, some farmers have chosen to decrease tree maintenance in order to lower their production. Production decline is expected in Vietnam, Dominican Republic, Indonesia, Honduras, Costa Rica and Columbia. The highest rates of decline are expected in Indonesia and Dominican Republic: down 200,000 bags each.
Total global supplies which include carry-in stock in addition to current production, is anticipated to be 143.6 million bags. Coffee exports however, are only expected to be 92 million bags, a 4 per cent increase over last year. This increase will not translate into more profits for the farmers.
The price of coffee per pound was a very low 43 cents in June 2002. Continued low prices spell disaster for coffee farmers, as production costs more than the market value of the coffee. As a result farmers are decreasing production input. They are using less fertilizer and pesticides to save money. In some cases, farmers are selling their assets to generate working capital. Lee also reports that the farmers have a difficult obtaining credit and that the National Coffee Fund is drying up because farmers have nothing to add to it. In the very worst situations farmers are simply abandoning their farms.
The farmers aren't the only people who are affected by the low prices. For example, some African countries earn up to 70 per cent of their export income in the coffee industry.
Lee reports that the average annual world coffee consumption is 111 million bags per year.
Of that amount, the United States consumes about 18.5 million bags per year, most of which it purchases from Brazil, Colombia, and Vietnam.
Source: Testimony on Coffee
Copyright © Cherie Stull 2003