Falling coffee prices in Latin America could result in an increase in migration

The collapse of international coffee prices, which is the second largest agricultural product in the world with a commercial volume of 15 billion dollars annually and which in 2019 recorded the lowest sales and purchase values ​​since 2006, will have a strong impact on millions of dollars. of Latin American and Caribbean families, and will generate greater flows of irregular migrants from the south to the north of America.

Manuel Otero, IICA's director general, pointed out that millions of coffee producing families fail to cover production costs, pay debts, maintain employment ranges and tend to crops.
Manuel Otero, IICA's director general, pointed out that millions of coffee producing families fail to cover production costs, pay debts, maintain employment ranges and tend to crops.
Image by Christoph from Pixabay

The warning was raised by the Inter-American Institute for Cooperation on Agriculture (IICA), based in Costa Rica and linked to the system of the Organization of American States (OAS).

It is a scenario in which no agricultural activity is profitable. Millions of coffee-producing families fail to cover production costs, pay off debts, sustain employment ranks and tend crops with minimal investments in agricultural management. The price crisis is pressing and is out of the control of the producers.

The panorama does not allow to assure the sustainable production of coffee. It causes greater indebtedness of producers and generates a high flow of migrants from rural areas to urban centers and to other countries in search of better opportunities.

The low international prices hit particularly Mexico, Guatemala, Honduras, El Salvador, Nicaragua, Costa Rica, Panama, Colombia, Peru, Ecuador, Bolivia, the Dominican Republic, Jamaica, and Brazil, where there are about 14 million people linked to the production and grain marketing.

The average price in 2018 of a pound of arabica coffee, the highest quality, was one dollar with one cent and fell to less than 95 cents in April 2019, in what IICA showed as the lowest average since July 2006. Coffee exports from the 14 countries totaled 117 billion 499 million dollars, according to official data.

Impact on exports

In this regard, negative economic, social and productive consequences due to the decline, the impact is severe in countries where coffee is a relevant crop because of its effect on exports and employment generation.

Coffee accounts for more than a third of exports from Colombia and Honduras, so the fall in prices has a great impact on employment, income and the phenomenon of internal and external migration of countries.

Producers from 35 nations in Latin America, the Caribbean and Africa urged the industry to raise prices to avoid a humanitarian crisis and suggested promoting coordinated international action to stop the fall.

by Agency

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