DOWN TO THE LAST DROP

September 25, 2007

COCAINE IS NOT THE ONLY DRUG COLOMBIA exports. Its principal legal source of foreign exchange is coffee. More than 300,000 farmers cultivate the crop, with an additional 2 million people directly employed by the in- dustry. Colombia's slice of the world coffee trade has been about 15% in recent years, second only to Brazil; Colombia is the largest exporter of the mild arabicas which are increas- ingly replacing robustas as the drink of choice. Colombian coffee growers owe a debt of gratitude to the Cuban Revolution for 27 years of relative stability in world prices. The Kennedy administration, determined to stem the tide of Third World revolution with a program of capitalist social reform and development, initiated the International Coffee Agreement in 1962. Signed by 74 producer and con- sumer nations, the accord established a quota system based on annual estimates of demand. Latin America contributed 70% of global coffee production under the accord. Since 1980 the price has ranged between $1.20 and $1.40 per pound. As the price moved up or down, quotas were eased or tightened. Last September 30 the 27-year-old accord expired and the price of Colombian coffee plummeted nearly 50%. The United States is demanding an overhaul of the quota system in favor of the arabicas and an end to the cut- rate sale of surpluses to Eastern Europe. Although talks are scheduled for this spring, U.S. demands have already met strong opposition, particularly from Brazil, which concen- trates production on standard robustas. Until recently, the Colombian National Federation of Coffee Growers had been funding a project encouraging coca farmers to switch to coffee. Ironically, as the price of coffee continues its nose dive, out-of-work pickers are taking jobs harvesting and processing coca. The United States is the world's largest consumer of both cocaine and coffee.

Tags: Colombia, coffee, free trade, price quotas


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