Deregulation of the coffee industry and overproduction have left 25 million coffee farmers struggling to survive. In more than 50 countries around the world coffee farmers and their families face deep poverty due to a drastic fall in world coffee prices to the lowest in 30 years. The crisis has precipitated from a worldwide oversupply of coffee in conjunction with decreased consumption in the countries that historically buy the most coffee, driving raw coffee bean prices below the cost of production.
Internationally and domestically, coffee is one of the most heavily traded commodities. The collapse of the industry and the absence of an dramatic international recovery effort is a result of the vast separation between small coffee farmers and their market — face it, as far as most people are concerned, coffee is created at the coffee shop.
Coffee farmers are also largely independent of the distributors that sell coffee throughout the world. This means that inernational processed foods distributors such as Kraft and Nestlé take no responsibility for the living conditions of their suppliers. As market prices for coffee have fallen, these companies are reaping the profits of cheap supply.
The industry needs to be restructured, but without any significant guiding forces working to secure the needs of coffee farmers, millions will starve and whole countries economies could collapse. Farmers need education to shift to other agricultural outputs and affordable credit to invest their efforts into new industries. Meanwhile, the economic effects of the coffee crisis must be distributed more evenly across the production chain.
Updated on 2/4/2003, a Tuesday
