Coffee Glut Brews Crisis For Farmers, Wildlife

By John Roach
for National Geographic News
April 24, 2003

For many people a coffee crisis occurs when there are no beans left in the kitchen to brew a pot of the morning elixir, forcing a half-awake stumble to the nearest coffee shop on a quest for a jolt of caffeine.

On a global scale the crisis is the opposite: There are too many beans.

The glut is causing unemployment and economic jitters among coffee farmers, and increased threats to the land and wildlife where coffee is grown, according to conservationists and industry analysts.

"Most attribute the coffee crisis to a rapid expansion of production worldwide, but especially in Vietnam and Indonesia during the 1990s," said Tim O'Brien, a researcher with the New York-based Wildlife Conservation Society who is currently working in Bogor, Indonesia.

The coffee industry employs an estimated 25 million people worldwide and coffee is the world's second most valuable commodity behind petroleum.

In the United States, the world's leading coffee importer, per capita consumption is 9 pounds (4.2 kilograms) each year, according to the International Coffee Organization (ICO), a London-based regulatory group.

Coffee Crisis

Since the 1990s, global coffee production has been rising at an average annual rate of 3.6 percent but consumption has only increased at 1.5 percent, according to the ICO. As a result, wholesale coffee prices are at their lowest levels in 100 years. In the 1980s, a pound of standard-grade coffee sold for around US $1.20. Today a pound sells for about $0.50, which is not enough to cover the costs of production in much of the world.

"With low prices, farmers tend to reduce inputs and take less care of the trees. In some cases this means that it is easier to cut down forest for plantations rather than care for existing ones. Nevertheless, I consider that in most countries low prices discourage new plantings," said Néstor Osorio, executive director of the ICO.

The long term impact of the current imbalance in supply and demand on the coffee industry is of particular concern to Robert Nelson, president of the National Coffee Association of USA, an industry trade group based in New York.

"We are absolutely suffering from an imbalance of supply and demand which has lasted for several years. There is economic suffering and social dislocation and in some cases environmental degradation in producing countries," he said. "As result this particular situation lasting for a few years, there is now a threat to the supply of coffee to consuming nations."

Nelson says that if the supply and demand imbalance is not remedied, obtaining the amounts of coffees in the range of qualities and varieties consumers demand will become more difficult, because many of the producers will go out of business, causing their fields to degrade to a point where it is difficult to get them back to production.

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