International Coffee Organization Agreement
The International Coffee Organization was established in 1963 to manage the terms of the agreement and monitor the established mechanisms. Until 1986, the Coffee Council, the decision-making body of the ICO, approved export quotas. [1] The 1976 International Coffee Convention was negotiated in 1975 in the context of a market situation radically different from that prevailing during the negotiations on the 1962 and 1968 agreements, when the supply of coffee exceeding consumer needs tends to lower prices. Until 1975, mainly following a severe freeze in Brazil, the world`s largest producer, doubts about the adequacy of supply for the immediate future were reflected in a sharp rise in prices. These considerations prompted members, during the negotiations on the 1976 Convention, to introduce a series of new provisions aimed at strengthening and improving the functioning of the Organization and maintaining many of the provisions that had proved effective in previous agreements. The OIC is the only international commodity organization for coffee and a respected intergovernmental organization that, in consultation with the private sector, speaks on behalf of producers and consumers, the OIC plays a central role in channeling the international cooperation of nearly 80 governments and in developing effective policy and coffee policy solutions. Its exporting members account for more than 98% of world coffee production and its importing members account for about 83% of coffee consumption in importing countries. Support for quality coffee: Quality coffee is indispensable to the global coffee industry and is widely seen as an important way to increase global coffee consumption. The ICO Coffee Quality-Improvement program sets target standards for exportable coffee such as maximum moisture content and plays an important role in improving the quality of coffee in the global market for the benefit of producers and consumers. The consumer benefits from higher overall quality standards for coffee blends and producing countries benefit from the reduction of the current surplus by eliminating poor quality coffee from the market and the increase in the prices of better quality coffee. OIC membership allows countries to contribute to efforts to improve the quality of coffee, which is in the long-term interest of their coffee sectors. The Organization has also used the remaining funds from the Support Fund established under the 1976 and 1983 agreements to launch a programme of support in new markets, notably China and Russia, which have considerable potential to increase consumption.
The ICA of 1983 was due to end on 1 October 1989, but since the Coffee Council (the highest organ of the OIC) acknowledged that it would be impossible to conclude a new agreement before the date of denunciation, it decided on 4 July 1989 to suspend export quotas. [14] In the absence of a protracted agreement, the producing countries have lost most of their influence on the international market. [16] The average price of the ICO indicator for the last five years prior to the end of the regime increased from $1.34 per pound to $0.77 $US the pound for the first five years after the following five years. [16] A streamlined decision-making structure and a low annual cost of membership allow governments to contribute to the development of strategies on global issues affecting their coffee industry, from sustainability and food security to coffee quality and market transparency. . . .