Chapter Notes

Chapter 21: Coffee in Crisis


Stock Traders

The industrialisation of coffee had implications about the way it was produced, the consequences of which were not always in the interests of the growers or consumers. High finance always had its own agenda of maximising profit and made demands accordingly. Rationalising production as a requirement for further loans hardly ever benefited small and medium-size farmers.

Brazil Coffee Crisis

The question of 'free trade' as opposed to structured markets – or, in the parlance of the consuming nations, 'protectionism' – came to a head as the 19th century turned into the 20th. A series of bumper harvests in Brazil caused a coffee glut that threatened to impoverish the coffee growers by dint of plummeting prices for beans that were becoming more expensive to harvest than could be recouped through sales.

Brazil Coffee Crisis

With the onset of the Great Depression, coffee producers found themselves facing a dramatic fall in international prices, precipitating a economic crisis that had been brewing since early in the century. As a consequence of Brazil's price protection program, overproduction continued unabated as growers were still compensated for coffee left unsold. In the end, millions of tons of coffee were set ablaze in ceremonial bonfires; millions more were dumped dramatically into the ocean.

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