June 22, 2007, Newsletter Issue #114: Coffee Nations Still In Crisis

Tip of the Week

In 2001, coffee prices hit a 30-year low in 2001, affecting tens of millions of small-holder farmers and farm workers around the developing world. The crash of 2001 was part of a long trend in which coffee farmers, workers and coffee-exporting countries have seen the value of coffee diminish. It forced many farmers to lose their farms and move to cities or other countries.

In Colombia, some farmers who once could make a good living harvesting coffee turned to growing coca, the base ingredient for cocaine, to support themselves and adding to the illegal drug problem.

Market volatility and declining terms of trade were part of the problem. According to the International Coffee Organization, coffee production was increasing an average of 3.6 percent per year as of 2002, while coffee consumption was growing only 1.5 percent.

Another part was lack of resources, marketing expertise, technical knowledge and access to money, making it difficult for farmer to compete in the global market and earn a sustainable livelihood.

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