Introduction
Brazil is one of the largest coffee producing countries in the world. Three kinds of coffee beans are produced by this country including; Arabica, Coffea and Robusta (Daviron & Ponte, 2005). Arabica is the main type of coffee beans produced in this country. About twenty five percent of the total coffee produced in the world comes from Brazil. According to research, about twenty five million people are employed in the coffee industry worldwide. Of these, five million constitute those in Brazil. Currently, it is estimated that around twenty seven thousand square kilometres are made of coffee plantations.
The success of coffee growing has been attributed to suitable climate, rich soils and suitable landscape. The availability of cheap labour from rural populations has also contributed largely to this issue (Daviron & Ponte, 2005). Most of the coffee produced is exported to other countries like Europe and the United States of America. Part of the processing is done in Brazil but finer refining is done in Brazil. Coffee remains to be one of the largest contributors of foreign revenue next to tourism in the country.
Brazil Coffee Production
An essential part of the Brazilian history is taken by coffee growing. The plant was first introduced in Brazil in the eighteenth century by a French man known as Fransisco de Mello (Almeida, 2008). The production of sugar gradually transformed to coffee which has been upheld to date. Consequently, Brazil is a monopoly market in the production of coffee until the twentieth century. Since the large production of coffee was adopted throughout Brazil, the country has been heavily dependent on the crop for most of its revenue. The various hurdles in the market have been surpassed and the country is still one of the largest producers of coffee in the world.
Coffee is produced in a total of thirteen large plantations. The largest coffee plantations of coffee are found majorly along the south eastern states where climate is conducive. Sao Paulo, Minas Gerais, Rio de Janeiro, Bahia, Goias and Parana are some of the largest producers in these states. Most of the harvesting occurs during the dry season (Mello, 2012). The coffee is processed into two stages before exporting. The coffee is produced in different grades with the highest one being exported (Pendergast, 2010). Other types of coffee produced include; green coffee, soluble coffee, coffee residues and concentrated extracts (Daviron & Ponte, 2005).
Trading of Coffee
Coffee has been one of the products that have maintained steadily growing value in the stock market throughout the years. In the year 2011 alone, coffee contributed 7,841 billion dollars of foreign revenue (Mello, 2012). This was a five percent increase from the previous year (Daviron & Ponte, 2005). The Brazilian population consumes about three percent of the total coffee produced. The population consumes the lowest grade of coffee. The best grades of coffee are usually for export.
The gourmet coffee is sold at a higher price in countries all over the world. The market is concentrated in developed countries with franchises with capability of machinery and advertising. Europe, Japan and the United States of America are the three largest markets. Most of the coffee is sold through the Brazilian Coffee Industry Association (ABIC). Exports of unprocessed coffee are not taxed. Exports of green and roasted coffee are usually taxed by about ten percent. This is probably because of the value added during refining. Exports of roasted coffee, processed coffee, decaffeinated coffee and instant coffee are taxed at around 7.5 percent to other countries apart from the United States of America (Daviron & Ponte, 2005).
Coffee is produced in surplus for purposes of exportation. The market has been faced by various problems including corruption. The market situation in Brazil affects the price of coffee all over the world. The quality of the coffee is assessed by the various boards in the export destinations. For instance; in America, it is assessed by the Specialty Coffee Association of America (SCAA). Corruption in some of these boards affects the pricing of coffee which is reflected in the prices of coffee worldwide (Pendergast, 2010).
Contribution of the Production of Coffee to the Economy of Brazil
Of all the exports in Brazil, coffee contributes the largest percentage. As such, the country is highly dependent on coffee. The coffee producing industry contributes a large percentage of the economy (Mello, 2012). Some of the economic contributions include; foreign revenue, provision of employment opportunities, rural development, fosters international relations, general development of infrastructure and growth of other subsidiary industries.
Foreign Revenue
Most of the coffee produced in Brazil is for export. This contributes a large percentage of the foreign revenue in the country (Fausto, 1999). The fact that unprocessed coffee is not taxed compounds to the amount of foreign revenue received by Brazil. The amount of revenue earned is used to develop different projects in the country.
Provision of Employment Opportunities
A substantial part of the Brazilian population is employed in the coffee industry. The coffee industry provides both skilled and unskilled jobs. Initially, slaves from continents like Africa were used to provide labour. This was repaid through the provision of basic needs like food and shelter (Almeida, 2008). With the abolition of slave trade, unskilled workers replaced them in the fields. At some point, child labour was also utilised.
Currently, most of the unskilled workers are found in the fields cultivating and harvesting the coffee. A small percentage of them are employed in the industries. The skilled workers are employed in the refining industries (Daviron & Ponte, 2005). Even the investors of the coffee industry are encouraged to employ a part of the local population as a way of corporate social responsibility.
A source of employment implies that there is a higher standard of living. The purchasing power of people is also increased. More importantly, the population is able to acquire other important physiological needs like education. In turn, the country continues developing.
Development of Infrastructure
Most of the coffee plantations are found in the interior rural areas. On the other hand, the industries are located near local markets. This requires a lot of transportation. Consequently, the government has developed the road system to encourage investors in the same field. The revenue earned has also been used to develop communication systems and other infrastructure in most of these coffee producing areas majorly as a way of attracting foreign investors (Daviron & Ponte, 2005).
Positive International Relations
As a way of ensuring that the country’s exports are accepted by other countries, Brazil has maintained positive relations with all of their international markets (Daviron & Ponte, 2005). Moreover, other countries strive to maintain positive relations with Brazil as a trading partner. A good example is Japan where Brazil imports automotive spare parts. Japan also consumes some percentage of the Brazilian coffee. Both countries have come to realise the importance of having proper international relations.
Several countries also come together to ensure that the Brazilian coffee is up to standard. They have created research centres that strive in finding ways of improving the Brazilian coffee. For instance; America has been on the forefront in researching on diseases affecting the coffee beans and how to alleviate them. The same nations realise that some of the farmers are too poor. They provide affordable loans to such farmers. This is what fosters positive international relations between Brazil and its trading partners. Economically, trade has become easier forcing general development of the country.
Rural Development
Most of the coffee is produced in rural Brazil. The industries are also based around the same areas (Daviron & Ponte, 2005). This has encouraged the development of infrastructure as a lot of people settle around the same area. The same population requires a lot of social amenities which the government is forced to establish. Small communities are developed into large towns as a result of this kind of growth (Fausto, 1999). This successful growth of towns is an implication of economic development.
Growth of other subsidiary industries
The subsidiary industries of coffee include; hotels, real estate and other forms of commerce. Most of the workers in the coffee industries require houses to live in. Some of the visiting expatriates require nearby hotels for the short time they visit some of the coffee producing areas. This leads to the growth of the real estate industry which in turn creates employment. The families of the workers require some amenities such as schooling and hospital. The development of these amenities directly employs people who contribute to the tax earned by Brazil. This money can be used in various forms of development (Mello, 2012).
Other Benefits of Coffee Trees
The production of coffee berries is not the only way to utilise the plant. The coffee tree has been used to produce high quality charcoal which is also sold to earn money. In fact, Almeida (2008) states that a lot of the population utilise the strong branches as firewood. This not only creates a sustainable environment, but it also contributes to Brazil’s economic development. Some of the leaves are also utilised as a form of traditional medicine (Fausto, 1999). This ensures that the people are healthy and they are productive.
Conclusion
The history of the production of coffee in Brazil can be dated back to the seventeenth century. Since then, the country rose to be one of the largest producers of coffee. Three types of coffee beans are produced with Arabica being the major one. The coffee is cultivated in large plantations found in the south eastern parts of the country. About 3% of the total coffee produced is consumed in Brazil while the rest is exported. Coffee contributes to the economy by providing a source of employment, fostering international relations, rural development, development of infrastructure and the growth of other subsidiary industries. The tree is also utilised in providing charcoal which can be sold. In this way, the country’s development progress keeps increasing.
References
Almeida, J, T. (2008). Brazil in focus: economic, political and social issues. New York: Nova Publishers.
Daviron, B., & Ponte, S. (2005). The Coffee Paradox: Global Markets, Commodity Trade and the Elusive Promise of Development. Chicago: Zed Books.
Fausto, B. (1999). A concise history of Brazil. London: Cambridge University Press.
Mello, J. (2012, September 14). Brazilian Coffee Industry - The Brazil Business. The Brazil Business | Brazilian Business for Foreigners. Retrieved May 10, 2013, from http://thebrazilbusiness.com/article/brazilian-coffee-industry
Pendergrast, M. (2010), Uncommon Grounds: The History of Coffee and How It Transformed Our World. Washington: Basic Books.
