In the upland city of Manizales, coffee capital of Colombia, new-car sales are booming, and supermarkets stock imported pâté de foie gras. In the Mexican highlands, dirt-poor Indian farmers eat meat with their rice and beans. In Guatemala, small planters who 18 months ago could barely afford bicycles splurge on motorcycles, TV sets and modern farm equipment. “I now own a Datsun truck, and my son is studying engineering,” says one. “Enough of eating crud with the chickens.”
While U.S. coffee drinkers are paying the highest prices ever for their morning caffeine—General Foods Corp., the largest U.S. coffee marketer, last week raised the wholesale price of its ground coffee by 50¢, to a record $4.21 per Ib.—the coffee-growing regions of Central and South America are enjoying a new-found prosperity. Growers in Brazil, for example, were getting $2.33 per Ib. last week for prime coffee beans, four times last year’s price. Brazilian officials predict that export earnings from coffee will reach $4.3 billion this year, enough to take the sting out of the country’s ruinous bill for imported oil.
Much of the profit is going to Latin America’s already café-riche class of exporters, brokers and large plantation owners. But in some countries, coffee is also grown by peasants who farm minuscule plots. Since a frost in 1975 shriveled more than half the coffee trees in Brazil, buyers have been bidding for extra beans at prices that have raised some farmers above the subsistence level for the first time in their lives. In Haiti, where malnutrition is as common as sunshine, the peasants scratch out a hardscrabble living raising coffee in tiny backyard jardins, drying the beans on the ground in front of their thatch-roofed mud houses and selling to journeyman brokers. Now that el Exigente will buy anything he can find, they are getting as much as $1.25 per Ib.—unheard-of riches for these people. In Guatemala, Indian laborers who usually are taken from their mountain homes to coffee plantations in open trucks designed to carry cattle have taken advantage of a labor shortage to demand, and get, bus transportation.
Plantation Profits. There are some very big exceptions. In Colombia, surging coffee revenues have been accompanied by a riptide of 26% inflation. There, the oligarchic semiofficial Fedecafe sets coffee policies and controls 42% of the trade, while 28 private exporting companies dominate the rest of the market in high-quality beans. The nation’s 130,000 backlot growers cannot afford soaring prices for fertilizers, fungicides and equipment. Except in Central America and Mexico, where the coffee pickers are in short supply, the lot of the hired worker has not improved. In Brazil, laborers known as bóias frias (literal translation: cold grub) still get less than $2.73 for a full day of picking coffee berries, no more than before prices rose—though some have made enough profit to retire for the rest of their lives.
No one is sure how long the coffee boom will last. Some savvy coffee growers in southern Brazil are replanting in soybeans, wheat and sugar cane. They fear that the current coffee shortage will lead other farmers to overplant, thereby producing a future surplus and a resulting collapse in the coffee market. There is also a threat of further devastation from coffee leaf rust, a fungus disease that was swept by the trade winds from West Africa to Brazil. About 400 acres of coffee trees in Nicaragua’s Carazo province have already been razed in an attempt to stop the rust, and throughout Central America spraying stations have been set up, where cars, tires and sometimes footwear of all travelers passing from one area to another are doused with fungicide.
Keeping Tab. U.S. consumers, faced with up to $3.49-per-lb. price tags, have cut coffee drinking by some 20% over the past year. In Washington, the Commerce and Agriculture departments have taken steps to restrain price rises, present and future. Commerce plans to monitor domestic roasting and production costs monthly rather than quarterly. To forestall possible collusion on the part of producing countries to jack up prices, U.S. embassy Agriculture attaches will keep tab on coffee inventories throughout the world. The U.S. Government is considering the creation of a buffer stock of 20 million 132-lb. bags, starting its buying as soon as prices fall. Says House Agriculture Subcommittee Chairman Fred Richmond, a New York Democrat: “We are paying $7.5 billion for green coffee beans [this year], when we paid $1.5 billion for the same amount last year. That means the American consumer is increasing foreign aid to coffee-producing countries by $6 billion—without congressional approval.” Perhaps—but says Fausto Cantù Peña, director of the Mexican Coffee Institute: “The increase in coffee prices may do more for the peasants of Latin America than the entire Alliance for Progress.”
