The huge coffee industry in Brazil will not receive a great deal of space in this book for two reasons: the first is that the subject needs a special monograph to deal with it thoroughly, and there is an entire literature on the subject, especially excellent in French, Portuguese and Italian; the second reason is that coffee culture and marketing is so highly organized that there is little room for outside enterprise. Existing plantations are probably quite capable of taking care of what new planting may be required—and this likely to be in the immediate future: the drastic checks given to planting by the authorities after the terrible fright of the great over-production of 1906, that led to the much-discussed Valorization, have done their work so thoroughly that at the present, with the elimination of many thousands of trees owing to exhaustion, there is room for extended planting on São Paulo and Minas fazendas. Brazilians, to whom life on a fazenda is always pleasant, are large owners of coffee-producing lands, and are quite aware of economic conditions, as well as being experienced growers and exporters of coffee. I do not, therefore, advise any tyro to enter upon the business of a coffee fazenda; such plantations offer good opportunities for investment, but apart from that angle do not call for outside activity.
There are many foreigners in the coffee-producing business in Brazil, of course. Italians, besides supplying a very large percentage of the labour on the S. Paulo estates, are considerable owners of plantations; the Dumont Estates, English owned and operated, are world famous; and the greatest single owner of coffee trees in the world, possessor of thirteen million shrubs, is Francisco Schmidt, who began life in Brazil as a poor German immigrant.
The first coffee plants brought to Brazil were of the liberica variety and were planted in Pará at sea-level, a situation to which this kind is not averse. This was in 1727 and when in 1761 the Mother Country remitted taxes on coffee from her American possessions, cultivation was encouraged and spread south to Maranhão, Ceará, Espirito Santo, Minas and Rio, eventually reaching the red diabasic soils of São Paulo. The variety grown here is chiefly café arabica, preferring an upland habitat, but in the course of years Brazil has developed hardy hybrid varieties of her own.
A couple of sacks of coffee are said to have been sent out from the south early in the nineteenth century, but real business did not develop until after Dom João arrived and promulgated laws freeing Brazilian trade from its swaddling clothes. Between 1835 and 1840 export began in large quantities, the latter year recording 1,383,000 sacks sent abroad for sale; slave labour was used, and the interior was searched for the deepest blood-red lands, found in their richest belts in São Paulo State.
By the year 1870 Brazil was exporting three million sacks annually (of sixty kilos, or about one hundred and thirty pounds, each); before the end of the century the output was ten million sacks, but meanwhile Brazil passed through a severe labour crisis. Abolition of slavery in 1888 left the plantations without an adequate supply of workers: it was necessary to supplement the free negro element remaining at work with more “braços”—the eternal need of Brazil. Experiments had already been made in colonization by Dom Pedro, and these proved the excellence of the Italian labourer; prompt measures were taken by the State as well as by private fazendeiros to bring agricultural workers from North Italy, the breach was filled, and so successfully that today out of a population of three million people in S. Paulo State, one million are Italians. Disputes occurred in early years owing to the disparity of race, and partly the lack of experience of the planter in dealing with white labour, but the State Government took up the cudgels on the part of the immigrant, saw to it that he was paid justly and that his condition was economically sound—to the great advantage of coffee cultivation in Brazil. This was the work of the Patronato Agricola, a Brazilian invention which owes much to Dr. Sampaio Vidal; its successful operation was instrumental in contenting the immigrant who came to work on coffee plantations, and while it was at first regarded with suspicion by some fazendeiros, eventually received their cordial co-operation as a source of mutual benefit.
Not only São Paulo but the coffee-growing regions of interior Rio, Minas, and Espirito Santo, sought immigrants officially: in spite of efforts there was no section of Brazil so successful as the southern State. Colonos who were brought to Minas melted away to São Paulo, perhaps chiefly on account of the “sympathy of numbers.” São Paulo eventually remained the only State with an organized, active immigration system.
At the end of the nineteenth century big prices were paid for coffee: on a few occasions a sack fetched one hundred and thirty-five francs, and large quantities were sold at ninety-five and ninety-seven francs. Cost of production was about fifty francs, and sixty-six was considered a fair return on investment; the industry was greatly stimulated by these profits and planting began feverishly all along the lines of deposit of the richest red soils. These new plantations came into bearing four or five years later, and in the crop season of 1906–07 a staggering yield was ready for an overwhelmed market. The bounty of nature brought Brazil face to face with ruin.
São Paulo State harvested 15,392,000 bags; Rio de Janeiro State offered 4,245,000 bags; Espirito Santo and Bahia together had another half million. Altogether Brazil had over 20,000,000 bags of coffee for sale, to a world whose annual consumption was then not much more than 17,000,000 bags; and in addition to the new Brazilian crop there was a harvest from Mexico and Central America of 1,500,000 bags, from Colombia of 1,000,000, with another half million from the East and 400,000 from the West Indies—and the not to be ignored contribution of real Mocha coffee of 115,000 bags.
Nor was that all. There had been a big Brazilian crop in 1901–02, reaching the then unprecedented figure of 15,000,000 sacks, and with a world consumption at that time of only 13,000,000 there was a large surplus of this coffee left in hand, as well as stocks of other varieties. Prices went down, and the planter was only saved by the imminence of a fall in exchange which meant that although his coffee sold for less gold than normally, yet this gold brought so much more Brazilian paper when exchanged that he was able to pay operating expenses and still count a profit in national currency.
From a gloomy level of thirty francs a bag, coffee rose in 1904–05 to about forty and fifty francs; but the threatening feature of the situation was retention in world warehouses of a stock averaging 11,000,000 bags. When Brazil was confronted with 20,000,000 bags of the new 1906 crop she thus had to consider a market which already held seven-tenths of the coffee needed annually by the world, apart from other sources of new supply.