Nevertheless, the story of the current coffee glut is at bottom a story of falling costs and productivity improvements on both the supply and demand sides. In particular, prices have fallen so low primarily because of dramatically expanded production by low-cost suppliers in Brazil and Vietnam. And those low prices are a signal to high-cost producers – for example, in Central America – to supply a higher-value product or exit the market.
However well-intentioned, interventionist schemes to lift prices above market levels ignore those market realities. Accordingly, they are doomed to end in failure – or to offer cures that are worse than the disease.

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posted by Pretty_Generic at 11:08 AM on May 17, 2003