The Overflowing Cup

Way down among Brazilians, Coffee beans grow by the billions So they've got to find those extra cups to fill They've got an awful lot of coffee in Brazil.

--The Coffee Song

They sure do. Piled in warehouses throughout Brazil are 52 million bags of coffee--nearly enough to meet world demand for a full year. Trouble is, 40-odd other countries are also growing--and stockpiling--coffee. Last week, faced with yet another surplus crop year, representatives of 67 nations, including all the major coffee producers and consumers, met at the U.N. in an effort to restore order to the glutted world coffee market.

Vicious Cycle. The present surplus began brewing in the years just after World War II, when increased U.S. and European demands lifted coffee prices as high as $102 a bag. Latin Americans expanded their plantations, and for the first time there was a large-scale planting of coffee trees in Africa.

The new trees, coming into full production in the mid-50s overloaded the market, and coffee fell to $75 a bag in 1955. Coffee-producing nations, most of which depend almost entirely on coffee exports to earn foreign exchange, tried to offset the price drop by increasing production. The result was even further drops in price.

Bulldozing. In 1958 the U.S. tried to stave off the coffee chaos by helping to set up a Coffee Study Group among all major coffee-producing countries; the effort failed because the Study Group's export quotas were not made binding. Delegates to the current U.N. conference all want a tougher international control system. The most promising plan calls for a five-year stabilization of coffee prices at the present level, or slightly higher.

Under the proposed plan, coffee exports would be tightly controlled by a national quota system, which would also bar the consuming nations from shopping around. Producing countries would use their profits during this price freeze to diversify their economies--an effort that some are now making. In Brazil last week bulldozers began bowling over the first of two billion coffee trees slated for destruction under a $70 million government plan to diversify Brazilian agriculture. Part of President Kennedy's recent $20 million loan to Mexico will be used to convert coffee acreage to other crops.

Trade Not Aid. The chief argument at the U.N. conference is over whose quota should be cut most. As longtime producers, the Latin Americans want the quotas reckoned on output over an extended period; the Africans, who in a decade have doubled their sales to 12 million bags a year, want quotas set according to current export rankings.

Knowing that they cannot afford to fail, the conferees will probably reach an agreement. They have been helped by a decision of the Common Market nations, which originally planned to admit coffee from France's former African colonies virtually free of tariff while slapping stiff duties on Latin American coffee. Now the Common Marketeers have agreed to slash their general coffee tariff by 40%, giving Latin American nations a chance to compete too, so that these hard-pressed nations will not require so much foreign aid. Explains Franc,oise Gavoty, France's delegate to the coffee conference: "We would rather pay higher prices for commodities than just give money away."

This file is automatically generated by a robot program, so reader's discretion is required.