Coffee production in Brazil

Map of coffee production zones in Brazil, shown in orange

Coffee production in Brazil is responsible for about a third of all coffee,^[1] making Brazil by far the world's largest producer, a position the country has held for the last 150 years.^[2] In 2007, 2,249,010 metric tonnes was produced,^[3] 80% of it was arabica(species of coffee).^[4] Although Brazil is the world's largest coffee producer, Brazilian firms do not dominate the international coffee industry. The country's domestic coffee market is dominated by two US coffee processors, Sara Lee and Kraft Foods.^[5]

History

Coffee seeds had to be planted in the country as the plant is not indigenous to the Americas. The first coffee bush was planted in Brazil in 1727 in the state of Pará. According to the legend, the government of Brazil was looking for a cut of the coffee market and sent Lt. Col. Francisco de Melo Palheta to smuggle coffee seeds from French Guiana, ostensibly to mediate a border dispute. Instead of turning to the fortress-like coffee farms, Palheta used his personal attractions to persuade the First Lady of French Guiana. Unable to resist his charms, she gave him a bouquet spiked with seedlings at a state farewell dinner before he left for Brazil.^[6][7][8]

The coffee industry was dependent on slaves, in the first half of the 19th century 1.5 million slaves were imported to Brazil to fill the needs of slave labor on the coffee plantation in the southeast. As the foreign slave trade was finally abolished in Brazil 1850, the plantation owners instead turned to European immigrants to meet the demand of labor.^[9]

1880s coffee cycle

Coffee being embarked in the Port of Santos, 1880

The coffee cycle that started in the 1880s ran for more than a century and contributed to the decline of slavery in favor of free labor, and unlike other exports such as brazilwood, sugar and gold, the coffee exports greatly contributed to the industrialization. The growing coffee industry attracted millions of immigrants to the southeast and transformed São Paulo from a small town to the largest industrial center in the developing world.^[10] The city had about 30,000 inhabitants in the 1850s, this number grew from 70,000 in 1890 to 240,000 in 1900. With one million inhabitants in the 1930s São Paulo surpassed Rio de Janeiro as the country's most populous city and most important industrial center.^[11]

1906 Valorization

The February 1906 "Valorization" is a clear example of the high influence on federal politics the state of São Paulo gained from the coffee production. The large supply of coffee had decreased the price of coffee on the international market and even less money came into the planters' hands. To protect the coffee industry—and the interests of the local coffee elite—^[12] the government established a mean for fixing the exchange rate and not allowing it to rise and was to buy abundant harvests and later sell it at the international market at a better opportunity.^[13] Once the price went over seven cents per pound, the state would begin to sell its surplus.^[14] The scheme sparked a temporary rise in the price and promoted the continued expansion of the coffee production.^[15] The valorization scheme was successful from the perspective of the planters and the Brazilian state,^[14] but led to a global oversupply and escalated the impact of the inevitable bust.^[15]

Decline in global market share

Revenues from the coffee industry drove the Brazilian economy until the Great Depression in the 1930s,^[16] when the price plummeted from 22.5 cents per pound in 1929 to 8 cents per pound in 1931.^[17] The tax revenues generated by tariffs provided the vast majority of the money used to build roads, ports and communication systems and allowed for Brazil to maintain a positive trade balance.^[9]

The southeast plateau between São Paulo and Rio de Janeiro is the site of the Paraíba Valley, the once prosperous but recently abandoned coffee lands.^[18] The soil there is red and highly productive, it would go on producing coffee for 30 years, while other soil did not last more than 25 years. It is called terra roxa in Portuguese (English: purple soil) because Brazilians heard Italians call it terra rossa (English: red soil).^[19]

In the 1920s Brazil was a nearly monopolist of the international coffee market^[6] and supplied 80% of the world's coffee.^[20] The country's market share has steadily declined since the 1950s as global production has risen.^[21] As late as 1960 coffee still accounted for 60% of Brazil's total exports and the country remained dependent on the single crop despite decades of industrialization with support from the government.^[22] This number was as high as 90% in some years of the 19th century.^[10]

1990s deregulations

Vertical coordination changed in the 1990s following the deregulation of the coffee market in 1990. Up to this point the industry had simply neglected quality control management because government regulations favored scale economies. As a result coffee processors begun exploring higher quality segments in contrast to the traditionally lower quality.^[23]

Today

Bags of coffee in São Paulo

Coffee plantations covers about 27,000 km² (10,000 sq mi) of the country; of the approximately six billion trees, 74% are arabica and 26% robusta.^[24] The states São Paulo, Minas Gerais and Paraná are the largest producers due to suitable landscapes, climate and rich soil.^[25] Most plantations are harvested in the dry seasons of June through September.^[26]

Like in other coffee-producing countries, Brazil has a large population involved in the crop. Some 3.5 million people are involved in the industry, mostly in rural areas, which generates seven million indirect and direct jobs.^[24] The industry is divided in two distinct groups, ground-roasted coffee and instant coffee, operating with different structures and competitive patterns.^[27] The ground coffee market is highly competitive with over 1000 firms in 2001. In contrast, the instant coffee market is highly concentrated with the four major firms accounting for 75% of the market.^[27] Brazil is the only high-volume producer subject to frost. Heavy frosts ruined large harvests in 1975 and 1994. The two 1994 frosts, as well as water shortages in 2001, raised worldwide prices.^[25][28] The Brazilian Coffee Institute controls the price of coffee by regulating the amount grown and sold on the world market.^[25]

Notable beans include Bahia and Bourbon Santos.^[28]

Although colombian coffee is maybe more famous, brazilian coffee is used in the blend of most notables coffee brands in the world. The italian brand Illy uses mostly brazilian coffee in its blend.^[29]

Tariffs

Tariffs on coffee exports are generally low, but higher on processed goods such as instant coffee. Brazil does not benefit from the preferential trade agreements that the most coffee trading is conducted through. For example, Brazilian exporters pay a tariff of 7.5% into the EU, compared to 2% for GSP countries and 0% for ACP countries. Exports into the United States are tariff-free, but the United States federal government does support Ecuadorian, Peruvian and Colombian farmers under the anti-drug initiative.^[21]

See also

• Agriculture in Brazil
• Café com leite, term referring to São Paulo's coffee interests (1889–1930)
• Economic history of Brazil
• Fazenda, Brazilian coffee plantations

References

1. ^ Morganelli 2008, p. ix
2. ^ Neilson & Pritchard 2009, p. 102
3. ^ "Food and Agricultural commodities production". Food and Agriculture Organization. http://faostat.fao.org/site/339/default.aspx. Retrieved 14 July 2010. 
4. ^ Brazilian "Coffee Beans: Brazilian Coffee History". Coffee Research. http://www.coffeeresearch.org/coffee/brazil.htm Brazilian. Retrieved 14 July 2010. 
5. ^ Furquim de Azevedo, Ribas Chaddad & Farina 2004, page 31
6. ^ ^{a b} Issamu Yamada, Jose. "Coffee and Brazil - How Coffee Molded the Culture of a Country". http://www.ineedcoffee.com/07/brazil-coffee/. Retrieved 14 July 2010. 
7. ^ "Coffee legends". National Geographic Society. http://www.nationalgeographic.com/coffee/legend6.html. Retrieved 14 July 2010. 
8. ^ Morganelli 2006, p. 218
9. ^ ^{a b} Eakin 1998, p. 33
10. ^ ^{a b} Eakin 1998, p. 214
11. ^ Eakin 1998, p. 218
12. ^ Fridell 2007, p. 118
13. ^ Fausto 1999, pp. 160–161
14. ^ ^{a b} Fridell 2007, p. 119
15. ^ ^{a b} Fridell 2007, p. 121
16. ^ Eakin 1998, p. 32
17. ^ Fridell 2007, p. 120
18. ^ Levine 2003, p. 115
19. ^ Fausto 1999, p. 115
20. ^ "Brazil: The High Cost of Coffee". Time. 28 August 1964. http://www.time.com/time/magazine/article/0,9171,876132,00.html. Retrieved 26 September 2010. 
21. ^ ^{a b} Mulder & Oliveira-Martins 2004, p. 180
22. ^ Eakin 1998, p. 216
23. ^ Furquim de Azevedo, Ribas Chaddad & Farina 2004, pp. 31–32
24. ^ ^{a b} Souza 2008, p. 225
25. ^ ^{a b c} Dicks 2005, p. 32
26. ^ Souza 2008, p. 13
27. ^ ^{a b} Furquim de Azevedo, Ribas Chaddad & Farina 2004, p. 31
28. ^ ^{a b} "Major coffee producers". National Geographic Society. http://www.nationalgeographic.com/coffee/map.html. Retrieved 14 July 2010. 
29. ^ http://revistagloborural.globo.com/Revista/Common/0,,EMI231722-18283,00.html

• Almeida, Jorge T. (2008), Brazil in focus: economic, political and social issues, Nova Publishers, ISBN 9781604561654, http://books.google.com/?id=0URLMk-U_soC. 
• Dicks, Brian (2005), Brazil, Evans Brothers, ISBN 9780237528041, http://books.google.com/?id=YMvWtOFb5rYC. 
• Eakin, Marshall C. (1998), Brazil: The Once and Future Country, Palgrave Macmillan, ISBN 9780312214456, http://books.google.com/?id=nFozTyIodkoC. 
• Fausto, Boris (1999), A concise history of Brazil, Cambridge University Press, ISBN 9780521565264, http://books.google.com/?id=HJdaM325m8IC. 
• Fridell, Gavin (2007), Fair trade coffee: the prospects and pitfalls of market-driven social justice, University of Toronto Press, ISBN 9780802092380, http://books.google.com/?id=TBrCVj_LTq0C. 
• Furquim de Azevedo, Paulo; Ribas Chaddad, Fabio M. M. Q.; Farina, Elizabeth (2004), The food industry in Brazil and the United States: the effects of the FTAA on trade and investment, BID-INTAL, ISBN 9789507381737, http://books.google.com/?id=v7VsNCLhHSwC. 
• Levine, Robert M. (2003), The history of Brazil, Palgrave Macmillan, ISBN 9781403962553, http://books.google.com/?id=Pi56Cw3yGfcC. 
• Morganelli, Morganelli (2006), The Biography of Coffee, Crabtree Publishing Company, ISBN 9780778724889, http://books.google.com/?id=h7jPZ_jUE8YC. 
• Mulder, Nanno; Oliveira-Martins, Joaquim (2004), Trade and competitiveness in Argentina, Brazil and Chile: not as easy as A-B-C., OECD Publishing, ISBN 9789264108714, http://books.google.com/?id=gnJYhKXDU0QC. 
• Neilson, Jeff; Pritchard, Bill (2009), Value chain struggles: institutions and governance in the plantation districts of South India, Wiley-Blackwell, ISBN 9781405173926, http://books.google.com/?id=-sCWby8NT24C. 
• Souza, Ricardo M (2008), Plant-Parasitic Nematodes of Coffee, シュプリンガー・ジャパン株式会社, ISBN 9781402087196, http://books.google.com/?id=wsX5i56JXI0C