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Shade Coffee at the Altar of Sacrifice

by Dr. Anand Titus and Geeta N. Pereira

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Dr. Anand is a Technical Consultant for Canara Bank (A Govt. of India Enterprise).

Agriculture is the life blood of most developing countries. In India the backbone of the nation is dependent on agriculture. In fact, the gross domestic product (GDP) which is an International barometer indicating the health of the economy directly depends on agriculture. Looking back in time, Shade grown Coffee Plantations have played a significant role in contributing to the GDP of the Country and more importantly, providing much needed foreign exchange during the early part of this century. Today, the situation is very different. The global crisis of plummeting price realizations below the average cost of production, over the last four years has taken coffee growers to the brink of disaster. Costs had been cut to the bone, but the future is bleak. Consecutive droughts, high pest and disease incidence, and non-availability of credit flow has forced traditional coffee farmers to abandon their estates and in many cases sell their farms at a distress price. Poverty is strewn across the length and breadth of the coffee country, with no hope of recovery. Nobody could comprehend alternate businesses or sources of revenue. We do not know if this is the beginning or end for coffee farmers’ world wide. The survival of the eco-friendly plantations is hanging on a knife’s edge. The coffee crisis has been a worldwide phenomenon and the United Nations has declared coffee as a disaster crop. In spite of the Government announcing a slew of measures to restore self confidence among the farming community, nothing tangible was achieved. The twin objectives of this article are first and foremost to salute the coffee farmers’ world wide for the unending sacrifices they make in conserving ecology and secondly to stir up the moral conscience of the world of coffee lovers to the inequalities we face. We strongly urge Governments, Roasters and Grinders that there should be a economic basis for what we are doing.

Coffee and the World Market

The procurement prices for both export and domestic traders are fixed on the basis of the London terminal market for Robusta Coffee & New York terminal market for Arabica Coffee. Basically, these terminals are operated by fund operators who at times breathe fire on the market or look for windfall profits and disappear. Five years back the global demand and supply was evenly balanced but in recent years new entrants like Vietnam (NON TRADITIONAL COFFEE GROWING COUNTRY) has flooded the market with cheap quality Robusta beans. The excess glut in the market has depressed the prices.

World Production

World Production of Coffee (in million Bags)
YearQuantity
2000-01114.80
2001-02112.36
2002-03109.36
2003-04120.92

Zonal World Production of Coffee

Coffee growing regions can be categorized under four major zones, namely North and Central America, South America, Africa, and Asia / Oceania. In recent years, the production of coffee has declined in all zones except the Asia / Oceania zone.

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ZONAL World Production 2003-04 ( in millions bags)
Sl. NoCountryProduction
INorth America
1Honduras2.91
2EL Salvador1.25
3Costa Rica 2.12
4Guatemala3.00
5Mexico 4.55
IISouthAmerica
1Columbia 11.75
2Brazil28.82
IIIAfricia
1Kenya 1.00
2Ethiopia 4.33
3Uganda 3.10
IVAsia
1Thailand 9.97
2India4.50
3Vietnam11.25
4Indonesia6.01

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