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Coffee, Congress and the drug war.

Coffee, Congress and the drug war

How can we ask farmers in South America to grow coffee instead of coca leaves for cocaine, when the price they are getting for their coffee has been slashed in half over the past year?" asked Senator Joseph Biden (D-DE), Chairman of the Senate Judiciary Committee, before a special congressional hearing on U.S. drug policy and the Andean Nations. "How can we tell the American people," the Senator declared, "that this disastrous policy is justified when the price they are paying for coffee has barely dropped at all over the same period?"

These questions were part of the senator's opening statement on March 27, 1990 during a joint hearing before the Senate Judiciary Committee and the Caucus on International Narcotics Control. Sen. Biden co-chairs the Caucus with Sen. Alfonse D'Amato (R-NY) and includes Senate members such as Sen. Dennis DeConcini (D-AZ), Alan Dixon (D-IL), Bob Graham (D-FL), Frank Murkowski (R-AK), and Pete Wilson (R-CA). The Caucus, formed in 1985, reviews issues in the Congress affecting international drug problems.

The congressional hearings reviewed the complex balance between drug policy and economic policy that affects U.S. activities in Bolivia, Peru and Colombia. The Senator went on to say that: "In January, this committee heard testimony from the Colombian Ambassador, stating that the Andean nations had lost almost $750 million in revenue due to last July's collapse of the coffee agreement.

"Like many Americans, I found this testimony to be strange, because I had not noticed any drop in the price of coffee in the grocery store.

"After some investigation, our staff has made some interesting, initial findings - and I emphasize that they are initial findings only. These conclusions are illustrated by two charts that I want to show now.

"This first chart indicates what has happened to coffee prices since last July. It shows that the price that growers are getting for their coffee now is about one-half of what it was in July - down from about $1.20 a pound to 65 cents a pound.

"But the price that U.S. roasters are charging retailers has dropped only about six percent over this period of time - scarcely moving at all.

"More outrageous still, I woke up Saturday morning to read in the newspaper this incredible headline: `A cup of coffee will cost more.'

"This is what the New York Times reported on Saturday, based on statements by the nation's largest roasters.

"That's right: Americans are going to be asked to pay more for coffee, while our drug fighting allies in Colombia are being asked to live on less for their crops."

George Boecklin, president of the National Coffee Association (NCA) and chairman of the association's foreign affairs committee, testified that the Association's position was the same as the Administration's in negotiating a new International Coffee Agreement. "U.S. participation," he pointed out, "in an extended or renegotiated ICA must address the sale of coffee to nonmembers of the Agreement, outside the export quotes, at prices substantially discounted from what members pay; and the rigidity of the quota system in meeting market needs in terms of coffee origin or types."

James M. Murphy, Jr., Assistant U.S. Trade Representative for Latin America, the Caribbean and Africa, also testified at the hearings and said the U.S. had renewed its support for a new International Coffee Agreement (ICA) in the Andean Trade Initiative. He indicated: "We were convinced that key provisions of the 1983 ICA had to be changed if the coffee agreement was going to survive in the long term. In particular, the quota allocation needed to be adjusted in accordance with market realities, and the new ICA had to impose quotas on exports to all destinations - members and nonmembers - in the same manner.

"The Council decided to suspend the ICA's export quota provision from July 4, 1989 until September 30, 1991. In September, President Barco of Colombia sent President Bush a letter seeking his support for a new ICA. President Bush responded that the U.S. was prepared anytime to resume negotiations and that he hoped a lasting solution to the two problems could be found.

"Since that exchange of letters, the U.S. has been second to none in attempting to establish a new ICA."

He did conclude that if market prices remain strong over the next few months, prospects for an ICA in 1990 "will continue to fade."

PHOTO : Senator Joseph Biden, Jr.

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Title Annotation:Senator Biden's position on replacing coca crops with coffee in Columbia
Author:Chwat, John
Publication:Tea & Coffee Trade Journal
Date:Jun 1, 1990
Previous Article:India: tea promising, coffee not.
Next Article:Argentina's tea production up.

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