1.
Coffee is grdown mostly by small farmers as a cash crop, a crop that
they can sell to try to make a living. These farmers are poor, and they
do not have any reserves of money to support them when their crops fail
or when coffee prices are low. The small farmers take whatever price
the coffee buyers offer. The governments of many coffee-growing
countries have very large external debts. Therefore, the governments need
to export in order to repay the debts. The coffee-growing countries
are forced into competition with each other, each trying to get a bigger
share of the market. This means that they all produce more and more
coffee. As a result, the price falls, so their financial problems get worse. |