Brazilian coffee production, while heterogeneous, has achieved increases in quality even while adapting to structural transformations resulting from the dismantling of government intervention in the sector. The struggle of small-scale coffee farmers is not news to anyone in the industry. Citation: Volsi B, Telles TS, Caldarelli CE, Camara MRGd (2019) The dynamics of coffee production in Brazil. These productivity gains are the result of technological improvements adopted by producers since 1984, increases in plants per hectare, increased use of agricultural machinery, the development of new varieties [18], and the adoption of irrigation techniques [19]. Therefore, it is important to analyze the dynamics of Brazilian coffee production since 1990 in order to verify which regions now constitute the principal centers of production of this commodity, and to examine the public and private actions that support its evolving value chain. The state of Espírito Santo is the largest producer of this species, accounting for 54.2% of all conilon-specialized micro-regions in Brazil. This group is dominated by micro-regions specialized in arabica production, which exhibit low use of rural credit programs, indicating the predominance of commercial agriculture. Writing – review & editing, Affiliation Watts, C. (2016). The present study thus seeks to respond to the following questions: how has the configuration of coffee production in Brazil changed since the reduction in government intervention in the coffee market? “Brazil produces nearly a third of the world’s coffee, with its farmers responding to changing demand. According to [28], Espírito Santo stands out for its ideal temperature conditions–nearly the entire territory of the state is amenable to conilon coffee cultivation. The IBC functioned by acquiring and stockpiling coffee beans produced in Brazil with the aim of regulating supply and demand and moderating price fluctuations. Since coffee production occurs over the course of biennia, each two-year grouping (low year and high year) is averaged for all calculations in order to minimize potential variation. Based on degree of similarity across covariates, four clusters were identified. For more information about PLOS Subject Areas, click Once Brazilian micro-regions are categorized according to specialization in coffee production, principal-component analysis (PCA) is applied for the 2014/15 biennial. Child and forced labor— The Human Cost of Coffee (Photo: The Weather Channel‏)An in-depth investigation of the world’s largest c o ffee-growing nation, Brazil, discovered children and adults working under “conditions analogous to slavery” in some coffee farms. Significantly, Brazil is also the second-largest producer of soybeans on the planet. The state of Minas Gerais exhibited the largest number of micro-regions specialized in arabica (60%), and arabica coffee accounted for 75.4% of total coffee production, and 81.4% of GVP from coffee production in this state. Project administration, The majority of the micro-regions in Minas Gerais, as well as some in São Paulo and Espírito Santo, are strongly associated with variables related to arabica (concentration of area, production, and GVP), while the micro-regions of Espírito Santo and Rondônia are more strongly associated with variables related to conilon (concentration of area, production, and GVP). Coffee cultivation has evolved in significant ways throughout the course of Brazil’s historical and economic development, especially in terms of location of production. No, Is the Subject Area "Coffee" applicable to this article? Coffee producers are increasingly focused on satisfying evolving consumer preferences, seeking certifications, geographical differentiation, and quality seals for their products. Discover a faster, simpler path to publishing in a high-quality journal. In recent years, world coffee production faced the impact of higher temperatures and rain levels, that influenced coffee yield and quality, as well as an increase in pests and diseases in many producing countries, especially […] Tweet on Twitter. https://doi.org/10.1371/journal.pone.0219742.g001. No, Is the Subject Area "Principal component analysis" applicable to this article? The group includes diverse micro-regions from the south of Minas Gerais and the Mogiana Paulista region. A quick Google search of the term "coffee farmers" yields pages of results with various iterations of the same message - coffee farmers are barely breaking even. Analysis of Brazil’s agricultural development over the course of the 20th and 21st Centuries reveals that the country transitioned from traditional agriculture, characterized by low capital-intensity, to more highly-developed, technology intensive production [30]. The LQ is computed as the ratio of GVP from coffee over GVP from agriculture, according to Eq 3 [12]: São Paulo is one of Brazil’s historical coffee-growing states. coffee farmers to join the Rainforest Alliance certifi-cation program, once in the program farmers valued other gains much more. Coffee production systems were modernized and began to adopt increasingly innovative production techniques in the race to improve competitivity through differentiation in product quality [5], cost reductions, and even the creation of internal management mechanisms within firms, all with the goal of achieving client satisfaction and confidence [6]. As a result, the availability of coffee in external markets decreases and this will have an upward effect on prices. These regions are among the best in the world in terms of product quality, which may be attributed to a favorable climate and modern techniques of cultivation and administration, which enable the harvest of a refined product favorably differentiated from that produced in other regions of the country [32]. Through this method, averages from 1984/85, 1994/95, 2004/05, and 2014/15 are generated. It is noteworthy that coffee exhibits seasonal variation, with years of high production followed by years of low production and vice versa. Yes 0. This broader process of development has been driven by transformations along diverse agricultural production chains, including that of coffee. COFFEE has many devoted drinkers. Source: Created based on data from the Center for Advanced Studies in Applied Economics (CEPEA) of the University of São Paulo (USP). “Roasted coffee has been getting more expensive over the last 10 to 15 years. Carlos - February 20, 2017. Writing – original draft, Affiliation Yet a Fairtrade International and True Price pilot study across Asia and Africa found that only in Indonesia did coffee provide a sustainable income for a family. In so doing, the study aims to identify defining economic characteristics of primary coffee-producing regions. While coffee originates from the humid, tropical forests in southern Ethiopia and South Sudan and around the globe is largely grown in many former forest landscapes – some of which located in biodiversity hotspots or protected areas such as the Mata Atlântica and the Cerrado region in Brazil, the Mesoamerican Forests in Central America and the Eastern Afromontane Forests hosting the … A storm in a teacup it ain't. With the end of large-scale government intervention in the Brazilian coffee market, the sector was forced to reinvent itself. A Brewing Storm: The climate change risks to coffee. As a whole, the dynamics of coffee production in Brazil have included significant shifts in the spatial distribution of specialized coffee-producing micro-regions as a response to an unregulated market and a new price dynamics post-1990, as well as evolution and variation in coffee production systems and species. Furthermore, producers sought to insert themselves into specific consumer markets and to increase the value-added of their product by producing specialty coffees with seals of quality and geographical certifications [8]. It’s an Arabica blend reflecting the heart of Brazilian coffee. In contrast, Component 2 explains 35.53% of the variation in the data and is positively correlated with variables related to conilon coffee and rural credit. The reason is that production of coffee, and of cheaper robusta beans in particular, is booming. Based on PCA, cluster analysis of micro-regions is undertaken based on Ward’s Method, which considers the degree of similarity between units. Causality, as defined by Granger [10], is inferred when lagged values of an independent variable, Xt, have the power to explain the regression of a dependent variable, Yt, on lagged values of Yt and Xt. Fig 5 presents results from PCA along with micro-regions specialized in coffee production for the 2014/15 biennium. August 9, 2016. https://doi.org/10.1371/journal.pone.0219742.t002. Brazilian coffee production has experienced important changes driven by new consumer markets that are increasingly focused on production processes and product quality. Brazil is the world’s largest exporter of coffee (pdf), accounting for about one-third of the global market. Vietnam has gone from growing almost nothing a decade ago to producing 25m bags of robusta beans a year today. Brazilian growers are decreasing coffee production. These regions specialize in conilon cultivation and exhibit high levels of production and use of rural credit programs, indicating the predominance of family agriculture. Click through the PLOS taxonomy to find articles in your field. These numbers reveal the important role played by coffee production in Rondônia’s rural economy. Writing – review & editing, Affiliation This divergence indicates an increase in average land productivity of 33.4% between 1984 and 2016. To improve the quality, yield, and resilience of the coffee crop, agronomists… We are familiar with the statistic that coffee farmers typically earn less than 10 percent per pound of the retail value for their coffee. Conceptualization, Farmers in Colombia and Ethiopia, who also produce arabica beans, are suffering too. Over 5,000 Brazilians have received hygiene supplies to keep them safe during the busy coffee harvest season. Table 3 presents coefficients of linear combinations from PCA. Overall, coffee produced in Brazil improved in quality and value-added over this period. These beans and their derivatives are used extensively all over the world. After exporting cheap commodity coffee beans for centuries, young Brazilian farmers are finding new techniques to more than double the value of their crop. All rights reserved. Farmers who grow arabica beans tend to be specialists, and do not plant other sorts of crops (which is the usual way for farmers to insulate themselves from volatile prices for a particular crop). The company is considered one of the biggest exporters of arabica coffee in green beans in Brazil in the “Superior” and “Comercial” lines. Brazilian farmers saw an extraordinary bumper crop. Micro-regions specialized in conilon coffee are primarily concentrated in the states of Espírito Santo and Rondônia. This hurts producers of arabica in particular, for several reasons. Based on the composition of these clusters, it is evident that the state of Minas Gerais is the principal coffee-producing area in Brazil. Its most significant products in this sphere are coffee, soybeans, wheat, rice, corn, sugarcane, cocoa, citrus and beef (in order of importance). That is why Brazil's farmers are striking, and are demanding more protection, in the form of fatter subsidies, from the state. Is the Subject Area "Brazil" applicable to this article? Department of Economics, Universidade Estadual de Londrina, Londrina, Paraná, Brazil, Roles In relation to coffee production in Rondônia, it has consistently been the state’s most important perennial crop (in terms of cultivated area) since early settlement of the region [29]. With this deregulation, the Brazilian coffee sector has since been fully exposed to the free market and the coffee growers experienced a long period of crisis and low levels of prices. We spent 3 days exploring what can Brazilian coffee really taste like at Daterra Coffee with our partners and coffee importers from DRWakefield, London. Methodology, The Cerrado region of Minas Gerais has become one of the most advanced and productive coffee-producing regions in the country, exhibiting extensive adoption of innovative technologies [30], that is, with intensive use of agricultural tools and modern management techniques [31]. https://doi.org/10.1371/journal.pone.0219742.g004. Throughout this expansionary period, the Brazilian economy as a whole was tightly coupled with the coffee economy, and the coffee market was highly regulated by the Brazilian federal government until the mid-1990s. The majority of the micro-regions in Group 1 are located in the Brazilian Cerrado and part of the state of Rondônia (the Madeira-Guaporé meso-region). These regions host modern, high-productivity coffee production, favorable landscapes, and extensive use of irrigation and mechanization [19]. Initially, Pearson’s correlation coefficient–pair of variables–was applied to analyze the correlation among coffee production in Brazil (t), planted area (hectare), productivity (t/hectare) [1] and the international prices (US$) [9] for the period 1984 to 2016. Oversupply has depressed prices, for arabica beans in particular. Farmers may not be paid a fair wage for their product and have to endure poor working conditions. The variables selected for the PCA were those that have traditionally been used in studies that deal with the dynamics, specialization and spatialization of agricultural production [14]. Yet despite the strong demand for coffee, some suppliers are unhappy. All monetary values are in December, 2017 US dollars. Formal analysis, Brazil is the world’s largest coffee producer, responsible for one-third of the world’s beans.But farm owners have always depended upon cheap labor, … But most of the coffee is grown in the southeastern region of the country comprising five states – Bahia, Espírito Santo, Minas Gerais, Paraná, and São Paulo. This distinction is possible from the year 2012 onwards, when the IBGE began to publish information on variety. Context and contingency: the coffee crisis for conventional small ‐ scale coffee farmers in Brazil. Thus, the strategies of governance of the value chain were very important, and in the case of Brazil the low cost of production and economies of scale were the main element of competitiveness. The problem here was a lack of rainfall mixed with higher than normal temperatures. For the purposes of this study, this parameter is employed to evaluate specialization in coffee production in Brazilian micro-regions, based on average gross value of production (GVP) for each biennial period included in the analysis. Coffee production in Brazil was forecast to reach more than 61.6 million 60-kilogram bags in 2020, up from 49.3 million bags a year earlier. The plant, originally from Etiopia, was first brought to Brazil by some French settlers who established in the state of Pará in the early 18th century. In the winter of 1975 a frost, later to be known as The Black Frost of 1975 hit the country and destroyed 76% of the crops due to be harvested during summer of 1976/1977. Competing interests: The authors have declared that no competing interests exist. Yes But there is no back end justification for it. Group 2 is composed of 29 micro-regions distributed across the states of Bahia (2), Espírito Santo (2), Minas Gerais (21), Rio de Janeiro (1), and São Paulo (3). Funding: The authors received no specific funding for this work. This fundamental step was crucial to establish the quality culture on the coffee regions in Brazil and also to generate value for the farmers. Why are coffee-growers feeling the strain? Even within the state of Minas Gerais, substantial diversity in technological advancement and farm ownership structure persists. Marcia Regina Gabardo da Camara, Roles FUNCAFÉ–regulated by law decree no. Which regions are currently specialized in coffee production? In sum, cluster analysis reduces and clusters principal variables into homogenous groups [17]. Many Brazilian and Colombian farmers invested to boost production of arabica in response to the high prices of 2011, which has added to the oversupply and further depressed prices. The stronger real makes coffee less valuable and that gives traders in Brazil an incentive to sell less in international markets in anticipation of higher prices. The location quotient (LQ) is a measure of relative regional specialization, which is computed from a basic aggregate in order to compare determined activities across locations [11]. The micro-regions specialized in arabica production are predominantly concentrated in the Cerrado region of the Southeast and the state of Bahia. Credit: CeCafe. The null hypothesis is that X does not Granger-cause Y. PLoS ONE 14(7): 1840. Coffee took an essential part of the Brazilian history. First, consumption in the developed world—American, European and Japanese drinkers consume more than half the world's coffee—is flat, and the recession has squeezed the profits of big food companies such as Nestlé and Kraft. https://doi.org/10.1371/journal.pone.0219742, Editor: Stephen P. Aldrich, Indiana State University, UNITED STATES, Received: September 4, 2018; Accepted: July 1, 2019; Published: July 23, 2019. Likewise, coffee that is sold without accompanying geographic labeling tends to be considered of inferior quality in the market, while products that offer greater information are considered to be of higher quality. Nevertheless, some decades after the disruptive strategy created and managed by Illy to supply quality coffee for his company, new current and future challenges are on the horizon, leading to reflections on the next steps the company will take in Brazil. Group 2 is also formed by micro-regions specialized in arabica production, but in contrast to Group 1, Group 2 is characterized by high levels of access to rural credit programs. So even while arabica beans fetch low prices on commodity markets, the price of the fanciest beans is going up. Formal analysis, Brazilian coffee farmers sold 64% of the 2020 crop by Oct. 13, more than at this time last year and exceeding the five-year average for the period, consultancy Safras & Mercado said on Thursday. Brazil, the top coffee exporter, faced some of the coldest weather in six years in major arabica-bean areas. Share With Friends This is an open access article distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited. Indeed, discerning coffee drinkers are also feeling the pinch, because the Central American countries where the finest coffee is grown, including Guatemala, Nicaragua and El Salvador, have been hit by leaf rust, which could wipe out 30% of this year's crop. ) the dynamics of coffee with the UTZ logo on its website of all conilon-specialized micro-regions in Brazil players! That of coffee production chain in Brazil importance for Brazilian agrobusiness Colombia on Sept. 24 Mantiqueira! 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Brazil over the 1984–2016 period exhibits strong correlation with variables measuring rural credit: PRONAF and FUNCAFÉ,... Only 3 micro-regions from the state of Espírito Santo ( Linhares, Colatina, and together about. Pam by IBGE and from the Central Bank of Brazil through this method, from. Produced arabica coffee acquiring and stockpiling coffee beans make up this NESCAFÉ ® farmers Origins capsule is represented as:... The crop by mid-October result, the farm had a sack of coffee with the aim regulating... Changes occurred in coffee production in Rondônia ’ s rural economy from the IBGE and from the North of ’! 1984/85, 1994/95, 2004/05, and 11 in both Created based on analysis!