BRICS

Brazilians Coffee
Riss Alexandre Montois Odran Lagrange Franois Bobichon Damien
Sion Antoine

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I. Overview
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A) General presentation

B) Population figures

Additionals numbers :

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- Density : 25 Inhabitants/km
- Area : 8,515,770 km
- Total population : 207,847,528
- Natural Increase: 0,9%
- HDI: 0.755/1
- HDI (world rank): 75/188

I)

Overview of the country concerning economy, politics and environment

A) Economy
a) General economic figures :

b)

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Economic situation

Brazil's economic progress between 2003 and 2014 lifted 29 million people out of poverty
and inequality dropped significantly (the Gini coefficient fell by 11% in the same period, down
to 0.515).
The income level of the poorest 40% of the population rose, on average, 7.1% between 2003
and 2014. It can be compared to the 4.4% income growth for the population. However, the
rate of poverty and inequality reduction has been showing signs of stagnation since 2015.
Brazil is currently going through a deep recession. The country's growth rate has decelerated
since 2000, from an average annual growth of 4.5% between 2006 and 2010 to 2.1%
between 2011 and 2014.
According to the World Economic Forum, Brazil was the top country in upward evolution of
competitiveness in 2009, gaining eight positions among other countries, overcoming Russia
for the first time.
The graphics below show the distribution of jobs and the main industries and business
services.

By 2010, the GDP

was split in the
following ways over
the various main
industry sectors:
Agriculture: 5.5% (the main products comprise coffee, rice, corn, soybeans, sugarcane,
cocoa, various citrus fruits and beef)
Industry: 28.7% (the main industries within the sector include automobiles, petrochemicals,
machinery, electronics, cement, textiles, food, mining and tourism)
Services: 65.8% (e.g. telecommunications, internet, insurance and so on)
The labour force comprises about 1.4 million people
and is distributed as follows:
Agriculture: 20%
Industry: 14%
Services: 66%

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Brazil exports many of its goods; mainly to countries like China, the United States of
America, Argentina, the Netherlands and Germany.
B) Politics
a) Operation :
Brazil enjoys the political rule of a democratic government. This type of rulership means that
those in power are elected by the residents of the country, who will vote in elections for one
among differents parties.
At present, voting is compulsory for all Brazilian residents that are literate and between the
ages of 18 and 69 years. Anyone that is 16, 17 or over 69 years of age, or is illiterate can
choose to vote, but is not under obligation to do so.
The government of Brazil is divided into the 1) executive branch, 2) legislative branch and 3)
judicial branch. There are 27 states and more than 5 500 individual municipalities, each of
which is run by a mayor.
Executive Branch

The president is elected via ballot and he or she will hold executive power. The presidents
term is four years.
Legislative Branch

The National Congress holds legislative power and is made up of:

- The Federal Senate (81 members)
- Chamber of Deputies (513 members)
Each state in Brazil is assigned a governor and an elected legislature.
Judicial Branch

The Supreme Federal Tribunal exercises the ultimate judicial power. Each of its judges is
elected by the tribunal members and their term is life-long. The judicial system is responsible
for contesting and supporting any decisions made by the government that will affect the
rights of Brazils individual residents. This gives the judicial system a huge amount of power
within the legal system of Brazil.

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b) Social issues:
Poverty

The richest 10% of people in Brazil have access to over 40% of the countrys income. On the
other hand, the poorest 10% receive about 1% of the income. The big contrast between the
rich and the poor is made even clearer by the fact that these ones live alongside one
another. The slums in the metropolitan, known as favelas, are common, while the remote
areas upcountry are also clearly financially strained. There are several programs and
community initiatives in place to assist the hungry and the homeless.
Crime

Although all major cities and countries in the world experience some form of crime, Brazil is
particularly susceptible to this major social issue. The most common forms of crime in this
country include mugging, robbing, kidnapping and gang violence. In addition to the crime
within the community, there is also a problem with corruption and violence being inflicted by
the police themselves. This discourages the community to report incidents of violence.
Therefore, the Ministry of Justice created the National Public Security Force to handle major
emergencies and crises instead of the local police force.
Lack of Education

Brazil children have access to free public education at all levels. Education at a Primary level
is compulsory, and most of the Primary schools are maintained by the municipalities or the
states that they occupy. This means that wealthier cities or states have better schools than
their poorer counterparts, and the children suffer because of a lack of adequate amenities
and resources. This means that poorer children receive a lower level of education.
Many children do not attend school because of malnutrition, as this makes them unable to
develop intellectually and to adjust to the social environment of a school. Child labor amongst
poorer children is also an enormous problem, despite its being illegal to employ a child less
than 16 years of age. Poor families generally prefer for their children to start working as soon
as possible, so that they may bring in an income.

c) Foreign policy

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Brazil has strong foreign relations policies and is well recognized by political, commercial and
financial entities around the world.
Brazils foreign policy is, in most cases, based upon:
1. Multilateralism Brazil is committed to helping or contributing to a particular cause in
cooperation with other countries. It does not act alone (which would align it with one
particular country or cause), but promotes the idea of working together.
2. The peaceful resolution of disputes rather than resorting to violence.
3. Keeping clear of the political and economic problems of other countries, effectively
remaining neutral.
4. The official Constitution, which states that Brazil must seek the overall integration of all
South American countries before the advantage of itself as an individual entity.
As Brazil continues to improve in its economic status, part of its foreign relations initiatives
include the provision of financial aid to others.

C) Environment
Brazil has one of the most complete environmental legislations in the world. However, the
laws in this legislation havent been adequately enforced in the past, compromising their
effectiveness towards protecting the natural environment in this nation with a
rich biodiversity of fauna and flora.

a) Environment policy
The tumultuous political situation in Brazil carries risks for the environment in the most
biologically diverse country in the world, home to the world's largest tropical forests and
rivers.
Environmental licensing is a legal obligation before any potentially damaging and polluting
activities take place in any part of Brazils territory. A framework has been created by the
federal government called the National Environment System (SISNAMA), which includes
local state government environment agencies, the National Environmental
Council (CONAMA) and the Brazilian Institute of Environment and Renewable Natural
Resources(IBAMA), in order to facilitate the licensing process.

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b) Environment issues

Deforestation
Because Brazil is home of the Amazon Rainforest and the basin it occupies, deforestation
has become a major cause for concern in this area. Every minute, vast proportions of these
forests, dubbed the Lungs of the World for the Oxygen that they produce, are being torn
down for timber, development and agriculture. When a tree is cut down, it releases the
Carbon Dioxide (which it has been storing) as a greenhouse gas, which increases the risk of
climate change.
Acid Rain
When the levels of Sulphur Dioxide or Nitrogen Oxide rise in the atmosphere, the result is
rain and precipitation that is high in these gases, which are harmful to the soil and delicate
ecosystems on which they settle. In fact, acid rain can kill freshwater fish as well as the
plants and animals. When an area is subject to ongoing acid rain, the natural pH of its soil
and water changes, which limits the plants and animals that can thrive there.
Endangered Species
Due to the fertile conditions of Brazil, it has always been the home of an array of animal and
plant species. However, due to hunting, the destruction of habitat and the introduction of
foreign, competitive species. Brazils natural fauna has experienced a huge decline in
numbers. At the moment, there are hundreds of species under threat of extinction. Some of
them include the jaguar, sea turtle, spiny rice rat, bushy-tailed opossum, black-faced lion
tamarin

Waste Disposal
Like most major countries in the world, Brazil produces enormous amounts of solid waste, or
garbage. This has to be taken away from occupied areas and destroyed or disposed of.
However, such waste poisons the soil, air and water, creating the dilemma of what to do with
it. Currently, Brazil produces more than 161 000 tons of solid waste every day. Almost twothirds of Brazilian municipalities use landfills to dispose of such waste. As landfills become
larger, natural areas have to be reduced and the soil in and around the landfills becomes
toxic, or unable to sustain life. The solution includes the use of recycled and recyclable

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goods, as well as a major education campaign that assists with the responsible use and
disposal of various items, both in the home and workplace.

II. Impact of Brazilian

Coffee in Brazil
Brazil and coffee.
Introduce in brazil in 1727, caf gradually conquered many soils in the mist of the states of
the federation. In 2011, production reached 43.484 million bags (one bag is 60 kg), according
to statistics from the International Coffee Organization (ICO). Nearly a third of world output
(138.6 million bags). In recent decades, the production volumes increased significantly.
Indeed, despite the slowdown in recent months in the Brazilian economy, the country has
experienced a growth rate of between 5 and 10% between 1980 and 2000, hoisting the
country at the 7th world for the GDP.
EIGHT MILLION JOBS
Today, coffee in Brazil is 2,442 million hectares planted in thirteen different states and 1800
Common States. Nearly 274,000 farmers contribute to national output, and eight million jobs
direct generate are growing by this.
However, in the heart of Sao Paulo, the former scholarship Where coffee prices were
determined according merchants see the requests face supply wholesalers and growers
increase. The railway lines who linked the ports of Rio and Santos (via So Paulo) to the
producing regions are abandoned today.

A falling out of coffee?

Not in local consumption between 1990 and 2012, volumes for the domestic market
increased from 8.2 million bags to 20.3 million. In addition, a network of cooperatives, trading

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companies and producer groups was introduced. The sector is structured over 1000 labels
are present on the market, according to figures from Interagricola.
And on the slopes of hills and mountains of Minas Gerais or the state of Sao Paulo, new
coffee plants are planted regularly.
However, Brazil is now less dependent on coffee and its courses. Fluctuations in product
prices and volumes have sometimes been devastating in the past. Thus, in 1932, when the
economic crisis linked to the Wall Street crash devastates the world, coffee overproduction
sees the authorities repurchase inventories to compact brick grains to be used as fuel for
locomotives. The second most traded commodity in the world after oil is subject to
fluctuations linked in particular to intense speculation on exchanges in London robusta and
Arabica in New York.

ENVIRONNEMENT
In Brazil, environmental concerns are growing because of the negative impacts of
accelerated agricultural growth on the environment and natural resources. Against this
background, the environmental certification of various products resulting from the use of
agricultural and forest land increases. This compares the case of wood from community
exploitation in the Amazon and organic coffee. The implementation of these certifications
were created to reconcile economic efficiency, social equity and environmental sustainability.
The comparison between these two cases is to highlight the positive and negative impacts of
the various institutions that interact in these processes.

CONSOMMATION in Brazil

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The structure of the domestic industry is quite diverse, characterized by a large number (not
less than 1 400) of small and medium- sized roasters. However, the concentration is an
ongoing process. The five largest roasters are, in order of importance: Sara Lee, Santa
Clara, Marata, Melitta and Damasco.

Domestic consumption in Brazil in 2009 is estimated by ABIC (Associao Brasileira da

Indstria de Caf) to about 5.81 kg for one person which is considerably higher than in the
US. doubling its lowest level recorded in 1985 when she was decrease to 2.3 kg per capita.
The consumption stagnated at this level until 1989 when measures were taken to improve
the quality of coffee available on the domestic market. The industry has in particular
introduced what became known as the purity Bucket which, together with an active marketing
campaign, aimed at encouraging consumption by providing more information about the
product, and was the basis for a fruitful impetus for increasing consumption. To carry the Seal
of Purity, the coffee products must meet certain basic requirements. In addition, ABIC
continues with its program on coffee quality, designed to educate consumers about the
aroma, body, flavour, degree of roasting and grinding. Adherents roasters display quality seal
on the packaging of their product to retail. ABIC also launched a national program certifying
coffee shops, hotels and restaurants that use good quality beans and helping to promote
coffee cultivation in Brazil. Finally, the promotion of sustainability in the coffee chain is
actively pursued.

PRODUCTION OF CAFE IN THE WORLD

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The largest producer by far is Brazil, especially the state of Sao Paulo Where is the first
located coffee port in the world: the port of Santos, followed by Vietnam (the producer of
Robusta important asset) and Colombia.

UNEMPLOYMENT RATE

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Brazil is one of the countries or the unemployment rate is the lowest (5%) as Switzerland and
Iceland and just after Korea, Japan and Norway that they have an unemployment rate (4%).
Comparing with countries such as the United States, the United Kingdom and France. We
can see that the rate is higher with (7%) for the USA and the UK and just over 10 % for
France. The average unemployment rate for the OECD is it to 8 %, which shows that Brazil is
below the average.
Nearly 200 million people, 60 million are directly or indirectly affected by the production,
industry, the plantation, import or export of coffee in Brazil. Coffee is the largest source of
employment and income in Brazil

III. Impact of Brazilian

Coffee in Latin America
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At the dawning of the twentieth century, the coffee sector played an important role for the
economic and social modernization of Latin America.
It was the main dynamic factor for the economies of many countries and a pivotal element of
social transformation.
It was, perhaps, the principal element behind the end of slavery in many Latin American
countries.
Today, at the beginning of a new century, the coffee sector continues to play an important
role in the social and economic environment of the region.
I will begin by briefly reviewing the historical role of coffee in Latin America.

(The main Latin American coffee exporters)

The Historical Role of Coffee: Economic and Social Transformations:

The beginning of coffee production in Latin America coincides with the regions first

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experience of economic liberalism, characterized by open economies, flexible exchange

rates and an attempt at strengthening domestic markets.
During this period, the coffee sector played an important role in many countries such as
Brazil, Colombia, Costa Rica, and a bit later and to a lesser degree in other countries in
South and Central America.
To be sure, the coffee sector grew during that period to become a catalyst for the economic
and social modernization in those countries.
On the economic side, coffee was one of the most important export items, generating
hard currency and having a major impact on the gross domestic product. The coffee sector
was one of the pillars of the economy. For example, around 1925, coffee represented around
seventy percent of Brazils total exports and around eighty percent of Colombias total
exports.
Coffee had many secondary effects on the economy such as employment of free immigrant
labor, foreign investment in infrastructure, capital accumulation of coffee growers, and the
derived growth of industry.
Additionally, the demand for free labor led many coffee producers in Brazil to join the
campaign for the abolition of slavery.

Similarly, the economic relevance of coffee was not limited to its impact on growth via
increased exports.
Coffee had a clear link with the development of other sectors and with the overall
development process of Colombia.

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Among other impacts we can point out the links between coffee production with employment
and the social situation given the activitys high demand for labor, its relation with public
finances, its impact on industrial, regional, and institutional development and its role in
national politics.
It is clear that coffee is on the base of the economic and social development in many
areas of our region. At its peak, the coffee sector generated thousands of jobs and allowed
for some social mobility of people involved in the activity.
Jobs, wages, freedom, migration, and social mobility were the elements of the coffee
economy in such countries as Brazil, Colombia, El Salvador, and Guatemala.
Coffee production also stimulated the insertion of Latin American economies in the
world trade. In this period, given its high level of dependence on external markets, the price
of coffee was the principal factor in guaranteeing equilibrium in the balance of payments so
that guarantee macroeconomic stability and economic growth.
Income generated by coffee production and exports created domestic demand in the
industrial sector in many countries in south America, allowing for the diversification of their
economies.
In other words, social development was highly dependent on the jobs created and sustained
by the production and export of coffee.
There is no doubt that coffee was a dynamic factor in many countries of Latin America in the
early twentieth century.
There is no doubt that Latin America has advanced dramatically in the last century,
especially in the last forty years.
Unfortunately, the fast economic growth registered in the 1960s and 70s decreased
substantially in the 1980s and 90s. The real GDP average annual growth rate declined from
above five percent in the 1970s to a meager 1.1 percent in the 1980s, and remained below
three percent in the 1990s.

It is clear that, given the size of the population and current income levels, Latin America
needs to grow at least twice as fast as the rates observed in the recent past if it is to reduce
the high levels of open unemployment and underemployment in the region.
First of all, one of the most important problems, if not the most important one, faced by the

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sector throughout its history remains present today, namely the variability of international
prices.
More recently, this issue has become even more complicated as new producers enter the
market, increasing supply and reducing the market power of all producers. In the absence of
fast growth in demand, producers will continue to face lower prices, and unless production
costs decline or governmental subsidies increase, lower profitability and difficult times are
likely to remain on the horizon.
In summary, the word code is competitiveness.
The market structure of the coffee sector globally is another factor contributing to lower rates
of profitability and large differences between prices paid to coffee producers and prices
paid by final consumers. Similar to a pyramid, the global coffee market structure has many
producers at the base facing high levels of competition and much lower numbers of
intermediate agents, exporters, processors and importers who face less competition, and
thus, more market power.
Theoretically, an agreement between producers with established production and export
quotas could be used as a tool to increase market power at the base level.
However, economic theory tells us that these types of agreements are very difficult to
implement and enforce, especially when their successes result in higher prices, creating
incentives to members to increase future production.
Given these constraints, one should ask what could be done to stabilize prices and to assure
the long-run feasibility of coffee production in Latin America?
In summary, coffee production has been and will continue to be for a long time an
important economic sector in Latin America. The history of this sector is intimately linked
with the regions economic and social development.
Despite current problems, the sector can and should consolidate its position as a major
player in the region. The Inter-American Development Bank, as in the past, continues to
support programs and projects that advance the pursuit of economic and social development
in the region.

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IV. Impact of Brazilian

Coffee in European
Union
The Consumption
Every day, the Europeans drink more than 700 million cups of coffee.
We know today with different sources that Brazil is the largest coffee importer in the
European Union.
The 3 main coffee exporters for the European Union are:
-Brazil
-Vietnam
-Colombia

This document shows us the highest coffee production

countries, and we can see that the highest coffee
countries are also the 3 main coffee exporters for the
European Union.
And the 3 main coffee importers in the European Union
are:
-France
-Germany
-United Kingdom

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Its because These 3 countries have large populations, in facts If we look at the highest
coffee consumption.
We can see that in Europe the biggest consumer of coffee are the Nordic countries.
Consumptions varies from around 10 kg per capita per year. Even if its coffees are lighter
than in southern Europe.
With for example:
-

Finland
Norway
Denmark

This document shows the Annual consumption of coffee in kg per capita.

This graph shows the proportion of all coffee worldwide that is consumed in that territory.

We notice that the Europeans countries represent 36% of the world coffee consumption.
Example of French Coffees:

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Coffee stimulates the French economy

In France, 70,000 coffees welcome 5 million people daily. The annual coffee consumption
reached 400 000 tones and increases of 5% per year.

These numbers show us the coffee impact on the French economy

In facts we can say that The coffees in France take an important part in a tourism economy.
Even if we can drink coffee at home or choose another drink at the coffee, the coffees are the
moment to take a break between activities for example. This is for the tourist but more
generally we can speak of economy of leisure or entertainment. This economy is growing
increasingly, also coffees will become even more important.
Behind appearances
Behind beautiful appearances of European coffees.
Working conditions are often difficult and we see that in reality the concept of fair trade ,
called Commerce quitable in France, is not actually fulfilled.
Most of the coffee imported into Europe is paid at a price that perpetuates poverty in coffee
producing countries.
Generally, this payment does not even reach 2 cents per cup, which is less than 1% of what
you pay in most coffees, restaurants and hotels in Europe. In a cup of Starbucks coffee
paying coffee growers is about 2% of the price per cup.

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In fact, the coffee value chain benefits large multinationals such as Nestl Nespresso and
who make significant profits when coffee producers receive almost nothing.
The International Coffee Agreement
Between 1963 and 1989, an international agreement signed between many producers and
consumers has set both a price ceiling and export quotas. The objective of this agreement
was to regulate the futures market to ensure remunerative returns to producers countries
while ensuring the level of exports to consumer countries. In addition, this agreement allowed
the European economy to preserve their former colonies. After many disagreements between
the signatory countries, the agreement ended in 1989 giving way to free trade.
These low payments do not contribute to give a good image of Europe in coffee producing
countries.

More than 250 million people depend directly or indirectly from coffee production.

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V. Impact of Brazilian
Coffee in the world

Coffee is the commercial culture of choice: it is produced exclusively in the South but mainly
uses the North. Industrialized countries consume about 70% of the coffee produced in the
world. The United States are the largest consumers, but Europe consumption per capita
higher: up to 10 kg per inhabitant per year in Scandinavia

NUMBERS ON GLOBAL CONSUMPTION

Finland is the country where most coffee is consumed per capita.
Finnish drinks an average of 5 cups of coffee per day.
Sweden in second place
Denmark consumes as much coffee as Norway respectively with 10 kilos of coffee per year
per capita.
The fifth country where the more coffee you consume is the Netherlands with 8 kilos per year
per capita.
Germany comes in 7th place with 7 kilos of coffee per year per capita.
In France, just behind with 6.5 kilos of coffee per year per capita.

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EXPORTATION / IMPORTATION
The coffee is the raw material most commercialized in the world after oil.
The main export markets are the United States, Italy, Argentina, Uruguay and Chile
World coffee trade represents between 10 and 15 billion dollars by year.

The players in the coffee industry up to the fact that China, Example of Japan, may start to
consume coffee. In 2005, imports amounted to 7 million bags while China still prevails in 250
000. The Brazilian unions have signed agreements with Chinese roaster to install coffee
house chains in China.

A CRISIS UPCOMING
The picture is much darker for producers: in Brazil, the largest producer, excessive rain
raised fears of damage while the British planters fear, them, rising costs and a spread of
diseases due to lack of 'water.
And the El Nio phenomenon, which results in a warming of the waters of the equatorial
Pacific Ocean and can cause heavy rainfall in some areas and droughts in others, could
affect still strongly coffee crops.
"The rains in Brazil are of concern because it can cause problems in terms of coffee supply
because there will be less production, less grain, and
it will create an impression of shortage in the
international market"

CONCLUSION
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To conclude, we can say that Brazil is an emerging country, developing voice whose GDP is
less than in developed countries. However, Brazil has strong economic growth, due to its
participation in globalization, including through exchanges with other countries of the world
thanks to agriculture and especially the coffee market.
Today, Brazil is the 8th economy in the world.

SOURCES :
http://www.usinenouvelle.com
http://www.bilan.ch
http://www.worldmapper.org/posters/worldmapper_1038_coffee_consumption_ver2.pdf
http://www.worldmapper.org/posters/worldmapper_1037_coffee_production_ver5.pdf
http://www.huffingtonpost.fr/-fernando-moralesde-la-cruz/cafe-commerceequitable_b_7863816.html

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http://www.leguideducafe.org/guide-du-cafe/les-marches-des-cafes/LUnion-Europeenne
%E2%80%93Quelques-chiffres/?menuID=2418
https://data.oecd.org/unemp/unemployment-rate.htm
https://fr.wikipedia.org/wiki/%C3%89conomie_du_caf%C3%A9#cite_note-prod-1
http://www.leguideducafe.org/guide-du-cafe/les-marches-des-cafes/bresil/
https://economierurale.revues.org/674
http://www.bilan.ch/economie-plus-de-redaction/cafe-devenu-un-symbole-bresil
The Brazilian Economy : Growth and Development, Werner Baer
Produccin de Caf en Colombia, Roberto Junguito & Diego Pizano
The Inter-American Development Bank and Poverty Reduction, An
Overview, Ruthann Deutsch

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