JUAN VALDEZ, STARBUCKS, AND THE WAR ON DRUGS

Falling prices gutted coffee's profitability, forcing many Third World
coffee growers to raise more lucrative illegal drug crops instead. Price
controls on coffee could change their minds, and in turn crimp the drug market.

As we mull over whether to switch from latte to Frappuccino, we would do
well to ponder a more daunting dilemma receiving little attention among
coffee consumers: The price of coffee has reached its lowest level in 30 years.

No, this is not a typo. Millions of people whose lives depend on the crop
are facing hunger, unemployment and worse because of a free fall that has
cut 80 percent from the price of their product. Even as the number of
people willing to pay upwards of $3 for a cup of coffee has grown
exponentially, millions of coffee farmers now face grinding poverty. That's
because no matter how much we pay for a grande latte or some other beverage
with a faux-Italian name concocted by marketing gurus, the price received
by growers in the Third World - now a little more than 50 cents per pound -
is set by the harsh laws of supply and demand in the volatile coffee markets.

One of the ironies of the coffee crisis is that, at a time when the Bush
administration is spending billions to eradicate the illegal drug crops
that finance Colombia's civil war, the crash in the price of coffee makes
coca farming increasingly attractive. With coffee selling at little more
than 50 cents per pound, it barely covers the cost of production. The price
for coca leaf, on the other hand, has steadily increased, pressured by the
success of coca eradication programs.

A few years ago, NBC's "Saturday Night Live" satirized Juan Valdez, the
mythical coffee grower created by Colombia's Coffee Federation. In the
sketch, Valdez, over a touching melody of Andean rhythms, explained how
miserable his life was, doing backbreaking work in poverty so that
Americans could have their nice cup of coffee: Colombian coffee, the
richest, smoothest coffee in the world.

Now, real-life Juan Valdezes throughout the coffee-growing nations of the
Third World face stark choices. The situation is so dire that the World
Bank and the International Coffee Organization called a meeting in London
last week to develop an emergency strategy. Unfortunately for the 125
million people in Latin America, Africa and Asia whose lives are being
devastated by the crisis, the gathering offered no dramatic new ideas.
Officials of the ICO urged developed countries to end the agricultural
subsidies and tariffs that make it impossible for poor farmers to diversify
and enter new markets. They proposed to do away with low quality coffees
that flood the market, and they urged the G-8, the group of rich nations
scheduled to hold a summit next month, to address their concerns.

A more suitable response would target the imbalances in the market. The
four companies that buy most of the coffee in the world - Kraft, Nestle,
Proctor & Gamble and Sara Lee - should work with agricultural officials of
the main producing and consuming countries to quickly provide a floor for
coffee prices.

The United States and other developed nations have long tampered with
agricultural supplies to protect the livelihood of their farmers. A similar
system should be developed for coffee, at least until truly free markets
are a reality. A fraction of the amount spent on combating the drug trade
could be spent to stabilize coffee prices. That, in turn, would make coca
and poppies, the precursor of heroin, much less attractive to impoverished
growers.

Consumers are not receiving the benefits of low coffee prices. Only a
couple of cents from each cup ends up going to the farmer. The rest goes to
the bottom line of enormous corporations. The most visible of them,
Starbucks, sold more than $3 billion last year - all the while professing
deep concern for the well-being of farmers and rainforests and other
politically correct matters, easing the worries of their socially-conscious
customers.

Those socially conscious consumers, however, should not take them at their
word. The people who harvested the beans for that tall latte cannot feed
their families. It's time to help them.