The Roots of the Coffee Crisis
The Roots of the Coffee Crisis
This chapter details the reasons for the coffee crisis, which include supply and demand disequilibrium and market structure changes. Factors including managed market breakdown, introduction of new coffee producing entrants, and slack demand—thought to be responsible for misaligned demand and supply for coffee—are also explored. The challenges that small-scale coffee farmers face, such as an uncertain international price standard, a low retail price, the problem of acquiring farm credit, and alternative economic opportunities, are discussed, along with issues such as the profit made by the coffee roasting companies and marketers exporting the coffee. The importance of specialty coffee segment and proper management of farmers’ organizations for the well being of coffee farmers are also discussed.
Keywords: coffee crisis, supply and demand, market structure, managed market breakdown, coffee farmers, specialty coffee, international price standard, farm credit, alternative economic opportunities
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