RISE AND FALL

Agriculture policy failures more damaging than graft

In Summary

• Kenyan coffee growers prospered in the late 1970s because an unseasonal frost destroyed much of the Brazilian coffee crop

• Now Brazilian coffee production is in overdrive; Kenya simply cannot compete with Brazil

The biannual meeting of the International Coffee Organization, held in Nairobi late last month, provides an opportunity for reflection on Kenya’s failures in matters of agriculture policy.

The coffee sub-sector is particularly suitable as an example in this regard, as it has experienced the most epic “rise and fall” of all our cash crops.

We had the “coffee boom” years (mid-1970s to early 1980s) when coffee was fondly referred to as “black gold”. But today you might find farmers uprooting viable coffee trees to burn as firewood.

 

The coffee sub-sector illustrates the extent to which our livelihoods are often governed by external factors well beyond the control of our politicians and bureaucrats.

In this case, the “external factors” can be summarised in a single word: Brazil. As a Reuters report on the recent ICO meeting noted, the market for coffee has been “weighed down by excess supplies, particularly from Brazil, the world’s biggest and most efficient producer of arabica coffee. The country last year produced a near record arabica crop…and is widely expected to produce another huge crop in the 2019-20 harvest year”.

The direct consequence of this is that “Global coffee growers are being forced into poverty” with coffee trading at prices “far below the cost of production in most countries”.

What this report underlines is this basic fact: that although corruption is indeed the source of many negative and devastating economic impacts in this country, policy failures often cause even greater devastation.

we should long have had policies implemented which weaned our desperate and impoverished coffee growers from the pathetically delusional hope that – sooner or later – there would be a return to those golden years

Small-scale coffee growers here in Kenya may devoutly believe that it is corrupt politicians and greedy cooperative society officials who are responsible for their poverty. And that in the absence of such evil scoundrels, coffee-driven prosperity would instantly be restored.

But the facts and figures attest that coffee growers in countries as far flung as Columbia, India and Vietnam, as much as Kenya, Uganda and Tanzania, are facing the same dire prospects. And not primarily because of corrupt elected officials, but because of the record coffee production of Brazil.

There is a reason why this delusion of the intrinsic high value of coffee beans, has such a grip on the minds of many Kenyans.

Kenyan coffee growers prospered mightily in the late 1970s because an unseasonal frost destroyed much of the Brazilian coffee crop, and it took several years for coffee production to recover. This is how it was reported after the disaster:

“…1975 brought snow to Paraná for the first time, and the ripples from this freak weather system would affect the global coffee industry for years. Hitting on July 17 and 18, it was by far the worst frost of the century, virtually destroying the Paraná coffee lands, while it inflicted terrible damage in São Paulo and elsewhere. Viewed from the air, the area looked burned over; thus the event was named the Black Frost. One and a half billion trees, well over half of Brazil’s total growth, were killed.

This frost in Brazil was by far the biggest factor behind this unprecedented prosperity in Kenya and other coffee exporting nations, as the resultant shortage of coffee beans led directly to a huge price increase.

Indeed, of all the cash crops which our farmers – the bulk of our Kenyan population – rely on for their livelihood, coffee is the only export crop the price of which depends largely on the production of just one country.

In everything else – from tea to flowers to avocado to fresh fruits and vegetables – our farmers are not really at the mercy of just a single large producer.

Well, now Brazilian coffee production is in overdrive; and the plain fact which should long have been communicated to our farmers in plain words, and as a matter of government policy, is that – as in football, so too in coffee growing – Kenya simply cannot compete with Brazil.

And subsequent to this, we should long have had policies implemented which weaned our desperate and impoverished coffee growers from the pathetically delusional hope that – sooner or later – there would be a return to those golden years when any Kenyan with five acres of coffee trees was guaranteed a middle-class lifestyle and income.