World Coffee Prices

This is the VOA Special English AGRICULTURE REPORT.

World coffee prices have dropped by almost fifty percent over the last three years. They are at their lowest level in thirty years. Low prices are affecting about twenty-five-million coffee growers. Most of them have small farms.

Coffee is an important crop for the developing economies of Latin America, central Africa and southeast Asia. However, the international aid organization Oxfam says that coffee growers are getting less for their crop even as the world market has grown. Oxfam says producers receive less than ten percent of the income created in the world coffee market.

World coffee production has grown by about two-hundred percent since nineteen-fifty. New growing methods have caused part of this increase. Farmers have traditionally grown coffee under the cover of trees, often fruit trees. Trees protect the coffee plants from too much sun and provide fertilizer. Fruit trees also can provide another crop for coffee farms.

However, the introduction of chemical fertilizers and more productive kinds of coffee plants have changed the traditional methods. Now, many coffee farmers grow their crop in full sun and use man-made fertilizers. The result is a larger crop and what appears to be too much coffee on the world market.

The World Bank has suggested that farmers use traditional methods of growing coffee. It has also studied production methods that permit better prices and continued development. It calls this "sustainable coffee." The World Bank says that sustainable coffee requires more investment in coffee production methods.

In October, the World Bank announced the first international price insurance for small coffee producers. Price insurance is financial protection that farmers buy. It protects them from losing money on insured crops. The insurance will help two-hundred-fifty coffee growers in Matagalpa, Nicaragua. Nicaragua, and companies from Sweden and Switzerland provided support for the project.

The World Bank also says that people in rich countries should be willing to buy what is called "fair trade coffee." That is coffee sold by growers who observe rules on record-keeping, growing methods and safe working conditions. These coffees cost more, but may help protect coffee growers in developing economies.

This VOA Special English AGRICULTURE REPORT was written by Mario Ritter.

Voice of America Special English

Source: AGRICULTURE REPORT — January 14, 2003: World Coffee Prices
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