[Congressional Record (Bound Edition), Volume 149 (2003), Part 18]
[Senate]
[Pages 25642-25643]
[From the U.S. Government Publishing Office, www.gpo.gov]




                      INTERNATIONAL COFFEE CRISIS

  Mr. LEAHY. Mr. President, I rise today to speak about the 
international coffee crisis. With much of the world focused on Iraq and 
the Middle East, it is perhaps not surprising that a crisis affecting 
tens of millions people, on virtually every corner of the Earth, has 
received little attention.
  The worldwide price of coffee has plummeted almost 70 percent over 
the last several years. This has devastated the economies of poor 
countries in Asia, Africa, and Latin America; it has ruined the 
livelihoods of millions of people; and it has damaged our foreign aid 
and counter-narcotics efforts in these countries.
  For example, over the last few years, the United States has provided 
almost $3 billion to Colombia for counter-narcotics assistance. This 
has made Colombia the top recipient of U.S. assistance outside of the 
Middle East.
  Even though this is an extremely generous amount of aid, the goals 
and objectives are being undermined by the collapse of coffee prices. 
Last year, Colombia's President Alvaro Uribe wrote a letter to me, in 
which he stated:

       [T]he impact of the international coffee crisis on 
     Colombian coffee growers has been devastating. In Colombia, 
     more than 800,000 people are directly employed on coffee 
     farms and another three million are dependent on coffee for 
     their livelihood. Colombian coffee farmers are struggling to 
     cover their cost of production, and the problems of 
     oversupply and a decline in coffee prices has brought poverty 
     and uncertainty to Colombia's coffee-growing regions, which 
     were previously free of violence and narcotrafficking 
     activity. Additional support from the United States will help 
     improve this dire situation in Colombia and other developing 
     countries around the world which are also being impacted by 
     oversupply and falling prices.

  A range of humanitarian relief agencies, with operations around the 
world, further support President Uribe's views. For example, an Oxfam 
report on the topic found:

       The coffee crisis is becoming a development disaster whose 
     impact will be felt for a long time. Famlies dependent on 
     money generated by coffee are pulling their children, 
     particularly girls, out of school, can no longer afford basic 
     medicines, and are cutting back on food. Beyond farming 
     families, national economies are suffering. Coffee traders 
     are going out of business, some banks are in trouble, and 
     governments that rely on the export revenues that coffee 
     generates are faced with dramatically declining budgets for 
     education and health programs and little money for debt 
     repayment.

  The United States is, by far, the biggest importer of coffee. At the 
same time, we provide billions of dollars of foreign aid to nations 
impacted by the coffee crisis. It is common sense. The United States 
has a strong interest in finding a solution to this international 
problem.
  A couple of years ago, several of us in Congress started asking 
questions about what the administration is doing to address this issue. 
It is safe to say that we were disappointed with the answers.
  There are some good programs being run by different agencies within 
the Government. But, there are so many agencies involved--State, USAID, 
Agriculture, USTR, Treasury--and there are times when one hand does not 
seem to know what the other is doing. For example, USAID has programs 
in Latin America to help coffee farmers find alternative livelihoods, 
because of the overproduction that exists in the global market. At the 
same time, we found another program that was encouraging Bolivian 
farmers to get into coffee production. In other words, two steps 
forward, one step back.

[[Page 25643]]

  What is worse, the administration does not seem to have a 
comprehensive strategy across agencies to effectively address the 
international coffee crisis. Nothing to get everyone on the same page 
and working towards the same goal. Nothing that outlines a plan on how 
to deal with the crisis.
  This is not just my opinion, this is the bipartisan, bicameral view 
in Congress.
  To address these shortcomings, a number of us have come together 
across party lines and from different sides of the Capitol. We have 
pushed hard to move forward on this issue.
  During the final days of the 107th Congress, I along with Senators 
Specter, Dodd, and Feinstein, successfully sponsored S. Res. 368, which 
called attention to the coffee crisis and urged the administration to 
formulate a comprehensive, multilateral strategy to address the 
problem. Although this measure passed the Senate, the administration 
has been slow to respond, and, as a result, we were forced to include a 
provision in the Fiscal Year 2004 Foreign Operations bill that requires 
the Secretary of State to report to Congress on any progress made in 
formulating this strategy.
  To this day, the administration has not come forward with this 
strategy. While we should take care to make sure this strategy is done 
right, it has taken the administration too long. This is not a 
situation that will just go away. We have to act, and that makes coming 
forward with a strategy all that more important. I urge the 
administration to finish the job.
  Here in the Senate we are doing what we can to respond to the crisis. 
We were successful in getting the Senate to serve fair trade coffee. 
And, I am also pleased to report that we helped USAID and Green 
Mountain Coffee enter into a public-private partnership to implement 
development projects to address the crisis. These were smaller, but 
important accomplishments.
  Other accomplishments include working with the private sector, and 
encouraging major companies such as Procter and Gamble and Dunkin' 
Doughnuts to serve fair trade coffee.
  Much of the recent debate on the coffee crisis surrounds U.S. 
membership in the International Coffee Organization (ICO). As Chairman 
of the Foreign Operations Subcommittee, I included $500,000 in the 
Fiscal Year 2003 Foreign Operations bill for a U.S. contribution to the 
ICO, if the United States rejoined by June 1, 2003. This move was 
hailed by a diverse range of groups, including the National Coffee 
Association, Oxfam International, several Latin American governments, 
the Speciality Coffee Association of America, and the Colombian Coffee 
Federation.
  Unfortunately, this deadline has come and gone with no decision. 
However, it triggered a debate within the administration on the issue 
of ICO membership. That debate continues to this day.
  This is not an indictment on those working on this issue in the 
administration. To the contrary, those in the State Department, USAID, 
and other agencies working with Principal Deputy Assistant Secretary of 
State, Shaun Donnelly, are talented individuals. They have been 
responsive to concerns raised by Congress, and I know they are working 
hard to resolve this issue and find a solution to the coffee crisis.
  To ensure that these funds were not lost, the Commerce-State-Justice 
Subcommittee, under the leadership of Senators Gregg and Hollings, 
honored my request to include another $500,000 for a contribution to 
the ICO in the Fiscal Year 2004 CJS Appropriations bill. I applaud 
their leadership on this issue. Along with relentless pressure from 
Representatives Cass Ballenger and Sam Farr, the help of the Commerce-
State-Justice Subcommittee sent a clear signal to the administration: 
Congress is not going to go away on this issue.
  We were recently informed that the State Department supports the U.S. 
membership in the ICO. This is a positive step, but the administration 
as a whole has yet to endorse this view.
  What is the hold-up? This process has been dragging on for months. It 
should end, and the U.S. should rejoin the ICO. This is something that 
U.S. industry, humanitarian NGOs, key friends and allies, and a 
bipartisan group in Congress supports.
  Some may recall the way the ICO used to operate in the past, working 
as a cartel to stabilize coffee prices. But, nobody is talking about 
rejoining the ICO to establish a cartel over the coffee market. The ICO 
is a reformed organization and its chartering agreement has been 
substantially rewritten, specifically to get the ICO out of the 
business of price-fixing. The idea of a coffee cartel is an idea on the 
ash heap of history. I would not support it. I suspect no one in this 
Chamber would.
  I support U.S. membership in the ICO, but recognize that is by no 
means a silver bullet. Membership alone is not enough to solve the 
international coffee crisis. Rather, it is one arrow in the quiver, and 
it can be an effective tool, when used as an integral part of a 
comprehensive strategy that includes funding for alternative assistance 
for coffee farmers, working with friends and allies, and the deep 
involvement of other international organizations such as the World 
Bank. This is the appropriate role for the ICO.
  There are some compelling reasons for rejoining that have been put 
forward by experts who follow this issue closely. I want to briefly 
summarize a few of them:
  U.S. participation in the ICO would help strengthen the 
implementation of resolution 407, which establishes quality guidelines 
on coffee exports. Although not perfect, ICO resolution 407 is a 
serious, multilateral attempt to help address the international coffee 
crisis that a number of economists believe could have a meaningful 
impact. According to some industry leaders, it also enhances 
competition in the coffee industry.
  U.S. participation would help the ICO become more effective in 
addressing the coffee crisis. Many European nations have said they 
would be more willing to invest and commit additional resources to 
resolving this crisis through the ICO, if the U.S. were participating. 
The European Community (EC) recently called on the U.S. to rejoin. 
Because the U.S. and EC are not producing nations, this momentum would 
help the ICO pursue goals to more effectively address development 
issues associated with the coffee crisis, while helping the ICO 
continue to move away from discredited policies of the past.
  U.S. membership in the ICO would focus more senior level attention, 
and inter-agency cooperation, on this important foreign policy issue 
within the administration. This would go a long way in overcoming some 
the problems stemming from a lack of coordination between agencies that 
I mentioned earlier.
  The ICO engages in projects to help address the crisis: price risk 
management for Africa, disease control, and market development 
projects. Moreover, the ICO is also promoting diversification in 
cooperation with multilateral agencies such as the FAO, UNCTAD and the 
World Bank. These strategies could all be enhanced through U.S. 
membership in the ICO.
  ICO membership would send an important signal to the rest of the 
world that the United States is committed to working collaboratively on 
every possible solution to this problem. This would be an important 
diplomatic step on an issue that many of our friends and allies in the 
developing world care deeply about.
  Again, the ICO is not a perfect solution. But, if a $500,000 
contribution can help begin to solve a crisis that is undermining 
billions of dollars in U.S. foreign assistance, devastating the 
livelihood of millions of people around the word, and causing severe 
economic damage to key developing countries, I say its well worth the 
investment.

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