Economic upheaval over coffee

While economists say coffee, like any other commodity, is simply subject to market swings that will be addressed by competition, development specialists, international rights activists, and environmentalists say measures are needed to help traditional coffee farmers.

For some, a return to an international accord that regulates price and production - something that existed until 1989 -- is the answer. Other ideas include:

• Getting multinational coffee marketers to share with farmers the windfall they've reaped from paying less for the beans, even as retail prices have remained steady.

• Offering more funds to help small farmers improve quality and enter the more lucrative specialty-coffee niche.

• Starting "fair trade" campaigns that encourage consumers to buy coffee grown without exploiting workers or the environment. Such coffees bring growers higher profits.

To shore up the coffee trade, some market specialists are even calling for campaigns to boost coffee consumption, which has fallen despite all those fancy lattes out there.

"People pay a lot for an espresso with a lot of milk mixed in," says Matthew Quinlan, director of coffee programs for Conservation International (CI) in Washington. "But compare that to the guy who used to sit at the diner counter and drink cup after cup of coffee, and you get an idea of why consumption is down."

Some development specialists have accused the the World Bank of instigating Vietnam's rise in the coffee market.

But bank officials reject those accusations. After "extensive research into [our] projects, we've found the complaint by NGOs and others of widespread lending for coffee production is unfounded," says Bryan Lewin, a bank development economist.

The bank did assist a rural financing project spearheaded by other international lenders, including European countries, which offered about $17 million for maintenance of existing coffee plantations. But that money was disbursed beginning in 1998, and could not have played a role in Vietnam's production jump, according to the bank's Vietnam rural sector coordinator, Christopher Gibbs.

Even some experts who wouldn't normally defend the bank say that in an atmosphere marked by antiglobalization rallies from Seattle to Genoa, Italy - the World Bank is simply an easy target. "Bank bashing has become a recreational pastime, and it has provided some financial aid that can be linked to increased production," says CI's Mr. Quinlan. "But, basically, this is the story of export tropical products. In this case you can blame Vietnam, but the fact is, there's always someone to come along and produce for less."

Both the World Bank and environmental groups are working on diversification projects that would make farmers less dependent on a single crop.

In Mexico, coffee grower and executive president of the National Coffee Council, Roberto Giesemann, says producers should focus on improving quality and raising domestic consumption. "What we in Mexico and Latin America should do is focus on diversifying our production" with more emphasis on specialty coffees such as environmentally certified or shade-grown products, "so we can command a higher price."

"Vietnam decided to become a major coffee producer, and did its work very well," he says. "We can't blame them for that."

Catherine Elton in Guatemala and MIke Crawley in Kenya contributed to this report.

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