The History of The Green Coffee Association
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| Despite rising consumption in the USA from 2.38 cups per day in 1950 to 2.94 cups in 1959, as well as a steady increase in coffee consumption in Europe, production worldwide was expanding even more rapidly. As prices to the producers continued to slide, the leading Latin American countries began to put together an organization to control Coffee exports in the hope of raising prices. As this effort failed to produce the desired result, an ambitious plan was put forward to form an International Coffee Organization, including consumer nations. The GCA, led by Baerwald, of H.F. Baerwald, McEvoy of J.
Aron, and Leon Israel Jr. of Leon Israel participated in discussion with the State and Commerce Departments as to the practicality of such an agreement.
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Licensed Graders and Testers of the New York Coffee and Sugar Exchange
Circa: 1952
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The leaders and the membership feared that such an Organization could result in various Governments taking over the export of coffee, and the elimination of traditional sales by exporters to private importing companies.
As a result of the consultations, a clause was included in the International Coffee Agreement that "Established Channels of Trade must be respected".
The International Coffee Agreement of the International Coffee Organization came into being in 1962, and was ratified by 41 Producing Members and 25 Importing Members by 1963. They represented 99.7% of the World Coffee Exports, and 96.2% of the Imports. The US Senate ratified the Treaty for a five year period, with the active support of the State Department. Quotas were established for each exporting country, and in 1965 an Index Price System was introduced to adjust the quotas if the price fell below .38/pound ex-dock NY or went above .44/pound. More and more price and quota adjustments were added to the original concept including separate price ranges for each growth, weighted averages, European Spot prices etc.
Regrettably, the fears of the members of the GCA soon turned out to be correct. As each added control was placed on the export of Coffee, the various government agencies in the producing country became more and more powerful.
Within a few years, monopoly coffee boards were established in Uganda, Ivory Coast, Cameroon and others; the Instituto Brasileiro do Cafe controlled the export permits and ICO certificates needed by the export firms in Brazil, as did the various "Institutos" and government "Companias" in their respective countries, and the "Established Channels of Trade" clause of the ICA was soon forgotten.
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