The International Coffee Agreement: a Tax on Coffee Producers and Consumers?

Mary Bohman and Lovell Jarvis

No 190921, Working Papers from University of California, Davis, Department of Agricultural and Resource Economics

Abstract: The International Coffee Agreement (ICA) used export quotas to restrict coffee trade in order to increase and stabilize the international price. A model of domestic pricing policy is developed which shows that the producer price should have fallen in response to ICA quotas. Econometric analysis supports the hypothesis that use of quotas resulted in lower producer prices in most coffee producing countries. The income lost by producers was largely captured by governments and/or exporters to whom the governments assigned quota rights. Since coffee is produced by small farmers in most exporting countries, income distribution within those countries probably worsened.

Keywords: Consumer/Household Economics; Demand and Price Analysis; Political Economy (search for similar items in EconPapers)
Pages: 39
Date: 1999
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:ucdavw:190921

DOI: 10.22004/ag.econ.190921

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