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Brazil supports a new coffee agreement.

Brazil's president, Fernando Collor, in a press interview on March 26, announced that Brazil's position at the ICO meetings in London in early April would be to support a new agreement with economic clauses.

This change in policy was the result of earlier meetings of all segments of the Brazil trade with government officials to draft a position report for the president. Part of the trade, mainly the producers groups, proposed a renewal with export quotas while the exporters group (FEBEC) proposed an agreement with retention quotas based on a system of "buffer stocks".

The government officials, Dorothea Werneck, National Economy secretary and ambassador Clodoaldo Hugueney, International Assessor of the Economy Ministry, who are also the Brazilian Delegates to the ICO meetings, after studying the proposals of the trade, presented a ten point program to the president which was approved as the official position to be taken at the meetings. The principal points to be defended by Brazil are as follows:

* Brazil recognizes the necessity of negotiating a new agreement with economic clauses designed to stabilize world coffee prices and assure a valorization attends the real necessities of the market.

* The export quota system should be one and universal to avoid distortions of two-tear markets.

* Formulas for adjustment of quotas based on selectivity do not attend the objectives of a new agreement.

* Mechanisms should be established to rigorously control exports and imports.

* A realistic range of prices should be established to adequately compensate producers without stimulating excessive production.

* The allocation of quotas should reflect the real production capacity of each country to supply the market and maintain adequate stocks.

* Control mechanisms are necessary to monitor production policies to avoid uncontrolled expansion.

* Measures distorting commercialization of the product should be destimulated. (read Columbia deals).

* The new agreement should encourage means to increase consumption.

* The new agreement should consider long tern expectations of production and consumption and have a longer validity than the previous agreements.

It would appear that the new Brazil position via the ICO, not only externally but internally, contains many delicate and controversial items that will have to be discussed and resolved before a new agreement can be effectively negotiated.
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Author:Jones, Harry C.
Publication:Tea & Coffee Trade Journal
Date:May 1, 1992
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