Coffee woes, Congress rescue: the recent resolution by the US Congress to salvage the plummeting price of coffee may have come as a godsend for East Africa.

Author:Manda, Gilbert
Position:Around Africa: East Africa - Brief Article

The falling world market price of coffee has hit hard the economies of African producers dependent on the crop, especially those in East Africa and Central Africa -- Burundi for example where coffee accounts for approximately 80% of export revenues. Other producers hit hard are Ethiopia (54% of export revenues), Uganda (34%) and Rwanda (31%). Lack of diversification has made these countries prone to the volatility in primary commodity prices, and coffee has been the most affected with its value slumping by 70% in recent months, affecting economies in 50 developing countries.

Commodity prices have generally been falling. Between 1997 and 2002, copper prices fell by 27%, cotton by 39%, while coffee has now hit rock bottom. The United Nations estimates that more than one billion people across the world depend on commodity production for their livelihood.

According to a UN report, many are smallholder farmers, with women occupying a central role. "For the people who produce the commodities in which the traders deal, changes in international markets determine their quality of life." Surfeit and global economic slowdown have been ascribed to the plummeting commodity prices, leaving multinationals as the only winners in a global coffee price sweepstake.

Senator Patrick Leahy who announced the resolution in Congress urged the private sector and other coffee roasters to work with the US to find a solution to the crisis. Both Congress and the...

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