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Oxfam: International Commodity Research – Coffee
Confidential: Not for distribution or publication

The Coffee Market – a Background Study

Oxfam: International Commodity Research – Coffee
Confidential: Not for distribution or publication
Acknowledgements

This background study was written by Oliver Brown, Celine Charveriat and Dominic
Eagleton. The authors want to thank the following persons for their useful comments:
Mehmet Arda, Maria Jose Barney, Bart Ensing, Penny Fowler, Brian Lewin, Lamon Rutten,
Denis Seudieu, Robert Simmons, Marcelle Strazer, Kevin Watkins, Michael Wheeler and
Pete Williams.

i

Oxfam: International Commodity Research – Coffee
Confidential: Not for distribution or publication
EXECUTIVE SUMMARY
'[When prices are low] , we sacrifice a lot in the way of clothing, tools and food. We can’t afford meat, we had to buy other parts of the animal which were inferior. We can’t eat eggs, or drink milk...When the children get ill we don’t have the money to take them to the doctor… One always lives with uncertainty, always in debt; it's always borrow here, borrow there; we live dependent on credit... Of course, there is no peace living with such uncertainty. You don't know whether to take out a loan or not because you could lose the money you've invested.’
Vitelio Menza, small coffee producer in Colombia1
Providing livelihoods to farmers in developing countries is a crucial challenge for reducing world poverty. When fairly priced, export crops, such as coffee or cocoa, can help millions of farmers and their families to lift themselves out of poverty.
In the case of coffee, 70% of the world’s supply is provided by smallholders cultivating less than 10 hectares in 80 countries in Africa, Asia and Latin America. However, the extreme volatility and longterm decline in coffee prices on international markets endangers the

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