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ARE
THE
COUNTRIES
THAT
RELY
ON
As highlighted above, the main producers and exporters of coffee are developing countries, Brazil being one
of the emerging economies striving for the economic recovery. Different from exporters, the top importers
are developed economies and this is the main reason why we can assume a higher value for this commodity,
converting it into a luxury good. Brazil is the major supplier of coffee for US, Germany and Italy (Graph 3,
Graph 4, Graph 5), and this is not only owed to the quantity this country is able to provide, but also to the
quality and the historical label that it possesses. Staying consistent with this idea, Table 2 marks the stable
position of developed countries as main coffee consumers, dependent on big amounts to be delivered from
Brazil in 2010 the US was the biggest importer (the value of the imports was $4 121 228), followed by
Germany ($3 344 098) and Italy ($1 382 895).
When the prices are high, the propensity is to increase the production capacity, fact that will further
lead to oversupply. In order to adapt to market conditions, the prices will be balanced toward lower ones, the
production will drop, and the consumers will face the under-supply situation. Farmers will choose make
significant investments during low prices period, instead of switching towards new crops and when the
prices will be high again, they will have to expect 4-5 years, duration necessary for a plantation to reach
complete capacity.
COFFEE PRODUCTION, CHILD LABOR AND SCHOOL ENROLMENT A
CYCLICAL PATH
Coffee is a labor intensive crop and this is why it is regarded as a valuable generator of jobs. In
Brazil it received the label of estate crop due to the huge number of people working in coffee cultivation and
this is why it has strong implications for living standards and education enrolments. As mentioned before,
the path of production is not an established one, being strongly dependent on climate changes and prices
oscillations. This cyclical path has additional implications, influencing the decisions of farmers and workers
when striving to pick the daily quota. They choose to rely on their families labor and bring their children in
the coffee fields to help them reach the daily target. The situation is even more alarming, because they arent
actually employed and hence they have to support the consequences of the deprivation of labor protection
measures. Paying a living wage meant to assure the purchase of the typical consumer basket food
necessities, health insurances and education services should be enough to prevent child labor, but the
households decision regarding the enrolment of their child into workforce is mostly influenced by the
economic environment.
Empirical evidence reveals how in Brazils coffee producing areas parents decide to take advantage
of better economic conditions by supplementing the labor force with the help of their own children. To be
more precisely I will evaluate the data provided in Table 4, separately for boys and girls for a more accurate
validation of the cyclical path formed between the production and the school enrolment. When the value of
production increases by 10%, the employment rate of middle income boys and also girls increases by 4%,
proving that girls respond similarly to boys when production capacity changes. Birth order, race and location
represent also important driving forces for the decision taken by households, in the sense that younger boys
and girls living in rural areas are more likely to work than those white children, with younger siblings, living
in urban areas. In those regions in Brazil where coffee production accounts for 5% of the GDP, the same
increase of 10% reduces the middle-income boys schooling rate by 4% and 3%, acknowledging the
increasing labor demand when improvement in the production chain are made.
Future inferences shouldnt be overlooked because when a child displaces school, his future income
would be later on affected and reduced, this situation being regarded by Diana I. Kruger as a poverty trap
farmers in Brazil involve their children in the workforce, they impede them to benefit from education
opportunities and the likelihood of obtaining a high-wage job in the future is notably diminished..
CONCLUSIONS
The statistical analysis and the information exposed previously confirm the validity of the impacts
that oscillations in coffee production in Brazil would have on the quantity desired by top importers, on the
quality they require and, very important, on the labor force and school enrolments among children. Since
Brazil is the major exporter at the global level of high quality coffee Arabica, the impact on the trade
balance has to be taken into consideration, especially by large exporters who encounter challenges in
providing this commodity at expected standards. Coffee cycle is characterized by long term perspective,
affecting the decisions taken by suppliers, when they choose to rely also on child labor, worsening the
education outcomes (Duryea and Arends-Kuenning,2003). No one can question the conveniences of
production positive shocks, but the matter of children not being subject to appropriate labor conditions
should raise a big question mark, because countries cannot be defined as developed ones since they lack the
means to fight poverty and economic instability.
REFERENCES
Global coffee industry, Duke University, Markets and Management Studies, 2007
Kruger, D. (2007). Coffee production effects on child labor and schooling in rural Brazil, Journal of
Development Economics, pp. 448-463
Lovasy, G. (1962). The international coffee market: a Note, Staff Papers International Monetary Fund,
9(2), pp. 226-242
Opportunities and challenges for the world coffee sector, Multi-Stakeholder Consultation on Coffee of
the Secretary-General of UNCTAD, 2009
Recent trends on the world coffee market, United Nations Conference on Trade and Development, 1995
APPENDIX
Crop year
Apr Mar
Oct Sep
Apr Mar
Oct Sep
2009
39 470
17 825
11 380
8 098
2010
48 095
19 467
9 129
8 523
2011
43 484
22 289
7 287
7 653
2012
50 826
22 000
12 730
10 000
http://www.ico.org/prices/po.htm
TABLE 2 - Top Coffee Importing Countries in the World 2010 having Brazil as main supplier
Country
United States of America
Imports in US $
4 121 228
Germany
Italy
France
Japan
3 344 098
1 382 895
1 381 309
1 272 614
Kruger, D. (2007). Coffee production effects on child labor and schooling in rural Brazil, Journal of
Development Economics, pp. 448-463
TABLE 3 Coffee frost and drought history
Date
1902 (Late July/early August)
1918 (June 24-26)
1942 (Late June/early July)
1943
1953 (July 4-5)
1955 (July 30-August 1)
1957
1962 (July 25-26)
1963 (August 5-6)
1965
1966 (August 6)
1967 (June 8)
1969 (July 9-10)
1972 (July 8-9)
1975 (July 17-19)
1978 (August 13-16)
1979 (June 1)
1981 (July 20-22)
1984 (August 25)
1985 (August-November)
1988
1994 (June 25-26 and July 9-
Severity (Damage)
Devastating
Severe
Severe
Moderate
Severe
Severe
Severe
Minor
Moderate
Minor
Severe
Minor
Moderate
Moderate
Very Severe
Moderate
Moderate
Severe
Minor
Minor
Minor
Severe/Very Severe
Coffee Frost or
Drought
F*
F*
F*
F*
F*
slight F
F*
F*
F and D
F*
slight F
F*
F*
F*
F*
F*
F*
F*
F*
D
F*
F and D
10)
1999 (August to November)
2000 (July 17)
http://www.coffeeresearch.org/market/frosthistory.htm
Kruger, D. (2007). Coffee production effects on child labor and schooling in rural Brazil, Journal of
Development Economics, pp. 448-463
TABLE 4 Effect of value of county coffee production on employment and schooling
* Significant at 10%.
** Significant at 1%.
*** Significant at 5%.
Kruger, D. (2007). Coffee production effects on child labor and schooling in rural Brazil, Journal of
Development Economics, pp. 448-463