144 Scarcity and Surfeitsome areas, for example in Ngozi, where farmers are increasingly becoming
aware of the prices offered in the international market. This is responsible for
the increased agitation by farmers for greater control of the resource.133
The location of the SODECO processing plants is a source of conflict at
three levels. On one hand, a majority of the employees in the plants (and
those of the SOGETALs), who earn ridiculously high salaries, are not native
to the local coffee-producing areas and are in most cases from the country's
south. This has bred resentment among locals and partly contributed to the
violence in 1988 in Ntega and Ma~angara.'~~
Secondly, the costs associated with transporting coffee to the processing
plants is passed on to the farmer by middlemen. These middlemen, who are
Tutsis, have access to financial credit from hanks countrywide unlike the
farmers, (many of whom are Hutns) and are able to bear the costs.
Liberalisation of the subsector, although moving slowly, has produced a
pattern of "alien and elite ownership". Farmers have not been granted the
necessary financial resources nor the opportunity to co-own the processing
plants, despite the fact that some farmers are able to purchase shares in the
companies, which sell at about US$ 150 per unit.135 These structural
inequities leave the primary producer at the mercy of the middleman.
International Economic Environment and Domestic Political
DevelopmentsThe Burundi economy and thus the country's coffee producers' welfare are
inextricably intertwined with the international prices of coffee. Because of
the country's over-reliance on coffee receipts for foreign exchange, the econ-
omy is susceptible to price fluctuations in the international market. This is
aggravated by the fact that the country is a comparatively small producer
compared to giants like Colombia and Brazil, which respectively are the lead-
ing producers of arabica and robusta. Because of its minimal production vol-
umes, Burundi cannot therefore influence the direction of prices at the world
market the way, for example, changes in global political dynamics and the
weather in Brazil can.
The collapse of the International Coffee Agreement in 1989 rendered small
producers, including Burundi, vulnerable to the vagaries of adverse coffee
price changes in the world market. The International Coffee Agreement
(ICA), the longest-established international commodity-regulating organisa-
tion, was formed in 1940 to stem price volatility arising from speculation and
sales volume in the world market. It brought together both producers and
consumers (the major producers being Brazil and Colombia and the major
consumers the United States and European countries) and worked out pro-
duction and sales quotas for the producing countries.
The gradual disintegration and eventual collapse of this organisation was
partly responsible for the collapse of world coffee prices in the mid-1980s.