LATIN AMERICA COFFEE PRODUCERS TO URGE BRAZIL TO BACK QUOTAS

LATIN AMERICA COFFEE PRODUCERS TO URGE BRAZIL TO BACK QUOTAS

Coffee producers from Central America, Colombia and Mexico meet today in San Jose, Costa Rica, to discuss ways of persuading Brazil to agree to a return to export quotas under an International Coffee Agreement.

"We want to develop a common platform with Colombia and Mexico, and we will talk about our position for the ICO meeting, and then about Brazil's position," said Carlos Zuniga Fumagalli, president of the National Coffee Association of Guatemala.He was referring to the meeting in London in early April of the International Coffee Organization. "And we will discuss what options we have to stabilize prices," he said.

So far, Brazil is still debating whether or not to favor a price- bolstering mechanism.

Although Guatemala is not in favor of a quota system, the country has decided not to fight what has become a region-wide consensus.

"But we will ask that any new supply-control system take into account only new crops when trying to determine new quotas, like starting with 1992 and 1993 crops," Mr. Zuniga said. "We don't have old stocks, like some of the other countries, because we've been very aggressive sellers."

He said Guatemala still favors a free-market system, even though "there's not really a free market if El Salvador's government gives credit lines and Colombia's government gives price guarantees and we haven't been given anything to be competitive."

Coffee growers in Guatemala have asked for credit and a reduction in a 2 percent export tax to help an industry that employs, directly and indirectly, 2.7 million people.

Coffee producers in Costa Rica, El Salvador, Honduras and Nicaragua do not foresee a recovery in prices and decided at a meeting last week to support global export quotas.

Johanna Fiallos, general director of the Nicaraguan Association for Producers and Exporters of non-Traditional Products, said, "Quotas will help our producers. At least we will get a reasonable price again."

She said the country was receiving less than $60 a 100 pounds of coffee, instead of the more than $100 the country has received in years past.

In an effort to help coffee growers and other producers in Nicaragua, the government agreed on Saturday to eliminate the 2 percent export tax for coffee and cotton growers.

Ms. Fiallos said that political instability in the northern part of the country, where most of the coffee is grown, has made it difficult to produce the product.

"Because of the political instabilities of the last few years, people haven't taken care of their fields and the yield is quite low right now," she said.

Meanwhile, Costa Rican President Rafael Angel Calderon told reporters in Bogota late Monday he and his Colombian counterpart had agreed to form a common front "to convince Brazil and consumer countries" to support the negotiation of a new ICA, with quotas, at the April ICO meeting.

In a communique, Mr. Calderon and Colombian President Cesar Gaviria announced the commencement of "a joint industry and diplomatic offensive from now until the April meeting . . . to pave the way for the reinstatement of a quota agreement."

Mr. Gaviria said, "We have suffered the erosion of 40 percent of the value of our coffee crops since the cessation of the quota system in July of 1989. This situation cannot continue."

Mr. Calderon warned the continued decline of prices would bankrupt small and middle-level growers and cause the eventual degeneration of coffee groves.