The Economic Impact of Brazilian Coffee on America

 For Brazilian agrobusiness, coffee is a very important crop. There is proof that both the types of coffee grown and the places where they are grown have changed over time in Brazil. It also looks like these changes are linked to structural changes that happened because the government stopped meddling in the coffee market and its effects on prices. This has set up a new way of producing coffee in the country. In this situation, the study's goal is to look at how coffee production changes over time in Brazil, find the micro-regions in Brazil that are best at coffee-related activities, and see how the locations of these micro-regions have changed over time. In this way, the study hopes to find out what economic factors make main coffee-producing regions unique. The study uses data from the Brazilian Institute of Geography and Statistics and various statistical methods like Pearson correlation, Granger causality test, location quotient, principal components, and clustering analyses to look into how the distribution of coffee-growing regions changed over the years 1984–2015. 

States like Paraná and São Paulo, which used to produce a lot of coffee

Have become less important, leaving only a few small areas in these states that specialize in coffee production. During the 2014–15 biennium, most of the micro-regions that were focused on coffee were in the states of Minas Gerais, Bahia, Rondônia, and Espírito Santo. Rondônia was best known for its conilon (robusta) coffee, while Minas Gerais and Bahia were known for their arabica coffee. Overall, the quality and value-added of coffee grown in Brazil got better during this time. Brazil grows and sells more coffee than any other country in the world. Based on information from the Municipal Agricultural Survey (PAM) and the Brazilian Institute of Geography and Statistics (IBGE), about 50.3 million sixty-kilogram bags of coffee were picked in Brazil during the 2016 harvest. Of these bags, 42.5 million contained arabica coffee and 7.8 million contained conilon (robusta) coffee. According to the Ministry of Industry, International Commerce, and Services, coffee exports brought in US$ 4.84 billion in 2016. The main countries that bought coffee from other countries were Germany, the US, Italy, and Japan. Over the course of Brazil's history and economic growth, coffee farming has changed a lot, especially when it comes to where the coffee is grown. In the 18th century, coffee farming in Brazil started in the northern region, in the state of Pará. Later, it moved to the states of Rio de Janeiro and São Paulo, along the Vale do Paraíba. Around 1850, farming quickly spread to the Serra da Mantiqueira and Santos. Later, in the 20th century, coffee farming continued to grow in São Paulo, southern Minas Gerais, Espírito Santo, Paraná, and even in the northern part of Brazil, in the state of Rondônia. During this time of growth, the Brazilian economy as a whole was closely linked to the coffee industry. Until the mid-1990s, the Brazilian federal government had a lot of control over the coffee market.

From 1952 to 1989, the Brazilian Coffee Institute (IBC)

Which was part of the Ministry of Industry, International Commerce, and Services, was in charge of regulating, controlling, and coordinating the whole coffee value chain, from production to selling coffee in Brazil and around the world. This included setting policies to encourage producers to keep their extra coffee and making sure that coffee beans would always be sold at the same price. The International Coffee Board (IBC) bought and stored Brazilian coffee beans to keep prices from going up and down too much through supply and demand. The IBC gave cheaper, lower-quality coffee beans to roasters so they could sell them in Brazil, and they helped higher-quality beans get sent abroad. When the international coffee deal fell apart in 1989 and the IBC was broken up in 1990, these rules and regulations came to an end. Since this deregulation, the Brazilian coffee industry has been fully open to the free market. As a result, coffee growers have been through a long time of crisis and low prices. The coffee industry in Brazil had to start over when the government stopped meddling in the market on a big scale. Modernization of coffee production systems and the use of more and more new production methods were done to make businesses more competitive by improving product quality, lowering costs, and even setting up internal management systems within companies, all with the goal of making customers happy and gaining their trust. Also, coffee farmers started growing their crops in places where the weather was better for it. For example, coffee producers tried to get into certain customer markets and make their products more valuable by making specialty coffees with quality seals and geographical certifications.

In Brazil's past, coffee has been one of the most important crops

However, recently, other crops, mostly grains, have become more important than coffee. Because of this, it is important to look at how Brazilian coffee production has changed since 1990 to find out which areas are now the main places where this product is grown and to see what public and private actions are helping the value chain change. In this way, the study aims to answer the following questions: What changes have happened to the way coffee is grown in Brazil since the government stopped meddling in the coffee market? What changes did coffee supply go through from 1984/85 to 2014/15? Which parts of the world are currently experts at growing coffee? In what places has coffee expertise gone down? What kinds of coffee are most common in each of these areas? The main goal of this study is to look at how coffee production changes over time in Brazil. This includes finding the micro-regions in Brazil that are best at coffee-related activities, checking how the distribution of productive activities changes over time, and judging the economic features of the main coffee-producing regions.