Why did Brazil remain the leader of coffee producers for more than 150 years?

Coffee industry is on the rise again

From the 1880s to the 1930s, the coffee industry rose again, and the name of this period was also named after the two important agricultural products at that time. This period is known as the "caf é com leite" period because of the significant influence of coffee kings from Sao Paolo and dairy producers in the state of Minas Gerais. During this period, the Brazilian government began to implement price stabilization measures in order to protect and stabilize coffee prices. When market demand is low, the government will buy coffee from producers at a higher price and store coffee beans until the market price rises. For coffee tycoons, this means that coffee prices will remain stable and avoid falling coffee prices as a result of oversupply.

By the 1920s, Brazil had produced 80% of the world's coffee beans, and the coffee industry had helped the country build a lot of infrastructure. Such increased production eventually led to overproduction of coffee and exacerbated the damage done to Brazil during the Great Depression in the 1930s. The Brazilian government then had to burn 78 million bags of coffee, hoping to get coffee prices back to normal, but the effect was not obvious.

During World War II, the United States began to worry that falling coffee prices might prompt Central and South American countries to lean towards Nazis or Communists as European markets closed. In order to stabilize the price of coffee, countries agreed to adopt a coffee quota system and then signed an agreement. Such an agreement led to a rise in the price of coffee until it was stable in the 1950s. This further led to the International Coffee Agreement (Internaional Coffee Agreement,ICA) signed by 42 producing countries in 1962. The quota is determined according to the guiding price of coffee established by the International Coffee Organization (International Coffee Organization,ICO). If prices fall, quotas will fall; if they go up, quotas will increase.

Such an agreement was maintained until 1989, when Brazil refused to accept quota cuts, leading to the collapse of the agreement. Brazil considers itself an efficient producer and it would be more advantageous to operate outside the treaty. The result of the failure of the international coffee agreement was an unregulated market, and the price fell sharply in the following five years, leading to the coffee crisis and the rise of the fair trade movement in the coffee industry.

The commercial scale of coffee cultivation began in the Paraiba River near Rio de Janeiro. Here is very suitable for growing coffee, on the one hand, the geographical environment is ideal, on the other hand, because of its proximity to Rio de Janeiro, it is conducive to export. Unlike other small coffee farms in Central America, the original commercial coffee farms in Brazil were very large, with slave labor as the labor force. This form of industrial production is very rare in other countries and can be said to belong exclusively to Brazilian coffee production. This approach is extremely aggressive: the most powerful and persuasive may win property rights disputes with unclear boundaries. Each slave also had to take care of 4, 000 coffee trees. Once the soil is too depleted, the whole farm is moved to a new area to be replanted.

Coffee production began to flourish between 1820 and 1830, and production exceeded the needs of Brazil's domestic market and was able to supply foreign markets. The businessmen who control coffee production have become so rich and powerful that they are called "coffee lords" (coffee barons). Any of their needs will have a significant impact on government policy and its support for the coffee industry.

By 1830, Brazil produced 30% of the world's coffee, rising to 40% in 1840. Such a sharp rise has also led to a decline in global coffee prices. Until the mid-19th century, Brazil's coffee industry relied on slaves. More than 1.5 million slaves were brought to Brazil to work in coffee plantations. After the British government banned Brazil from importing African slaves in 1850, Brazil began to turn to immigrants or its own slave trade. When slavery was completely abolished in Brazil in 1888, it was feared that the coffee industry would collapse, but coffee harvesting continued smoothly that year and after.