My first sip of coffee, as a teenager, was swill from our corner store in Kingston, Ontario. It came in a Styrofoam cup and was made palatable with cream and four spoonfuls of sugar.

Back then, around 1980, cappuccinos and mocha grandes were as rare as flamingos in most parts of Canada. It had been almost half a century since a world coffee crisis had made headlines, and no one thought much about the origins of their brew. The 1930s destruction of millions of bags of surplus Brazilian beans, splashed with crude oil and incinerated in dozens of “burning centres,” had faded from collective memory.

Amnesia lingers. Today, in a devastating failure of unregulated global markets, the world faces a coffee crisis of far greater proportions. Twelve Latin American heads of state, in a joint declaration, call it “the worst coffee crisis of the last 100 years.”

The cause, technically speaking, is a glut of coffee beans on the world market that has driven down prices. Export prices for coffee recently plunged to the lowest in more than a century, in constant U.S. dollars.

Coffee farmers, the majority of them poor shareholders, now sell their beans for much less than it costs to produce them. An Oxfam International report, Mugged: Poverty in Your Coffee Cup, warns that the livelihoods of twenty-five million small coffee producers are in jeopardy.

“Families dependent on money generated by coffee are pulling their children (particularly girls) out of schools, can no longer afford basic medicines, and are cutting back on food.”

Yet few people sipping lattes or espressos are even aware of the crisis. And how would we know? Whether we imbibe a cheap robusta blend at a doughnut store or a double-decaf white-chocolate mocha at Starbucks, little has changed in the consumer world. Prices for Maxwell House, Nescafé, Folgers and French roast have dropped only slightly, or not at all.

“The big transnationals are making a heap of money,” says Blanca Rosa Molina, a Nicaraguan coffee farmer brought to Canada by Oxfam. “But we are getting less than ever before.” Five years ago Molina’s coffee co-operative sold its organic coffee beans for $1.80 (U.S.) a pound. Now a pound of beans is worth only about fifty cents.

In northern Nicaragua’s Matagalpa region, where Molina lives, more than forty larger coffee farms have gone bankrupt or lie idle. An estimated 6,000 homeless coffee workers and their families camp in makeshift homes along roads and in municipal parks, begging for food and help from passersby. Almost a half of the region’s children, pregnant women and the elderly suffer from malnutrition.

Last August alone, twelve unemployed coffee workers and their family members died of hunger in the Matagalpa area, according to Reuters news agency. By the end of September, according to Molina, the death toll had reached 120.

“You see children dying of hunger along the side of the highways,” Molina says. “There are families who no longer cook because they have no fuel to burn. In the beginning of the crisis three years ago, they had chickens, so they ate their chickens. They had pigs, so they ate their pigs. Now they don’t have any animals or food.”

In Guatemala, the crisis has thrown 70,000 people out of work and boosted unemployment levels to forty per cent. Former coffee workers and their families have migrated to Guatemala City to shine shoes and beg. “They live in the street,” says Leocadio Juracán, a coffee farmer from Guatemala’s Lake Atitán region who was brought to B.C. for a speaking tour by the B.C. Central America Student Alliance. “At night, they sleep in the street&One of the strongest negative impacts of this immigration is the rupture of the culture and of the family structure that this crisis has caused.”

The coffee debacle has plunged the national economies of some of the already most impoverished nations into steep decline. Across Africa, countries pummelled by debt, drought and disease are teetering towards another disaster.

Developing countries received $10 billion for coffee exports just a few years ago. Now it is little more than half that, says Néstor Osorio, executive director of the International Coffee Organization (ICO). In Burundi, coffee accounts for almost eighty per cent of total exports; in Ethiopia it is almost half. Without money from coffee, there are fewer funds for debt repayment, AIDS strategies or schools.

“It’s a crisis with a social dimension that is politically explosive,” Osorio explains. On a recent trip to Colombia, for instance, Osorio says he saw aerial photographs of coffee farms planted with new coca crops.

Back when I had my first sip of corner-store robusta, world coffee trade was regulated by the International Coffee Agreement. The 1962 agreement set export quotas for producing nations and kept the price of coffee fairly stable. Then, a decade ago, the U.S., the world’s largest consumer of coffee, pulled out. The U.S. said the agreement, by keeping prices high, ran contrary to its interests. Canada withdrew at the same time.

Coffee quotas and price controls ended. Countries like Vietnam rushed to cash in on what it called the “dollar tree.” In just a decade, Vietnam has become the world’s second-largest coffee producer after Brazil. In the wake of the coffee agreement collapse, the World Bank and International Monetary Fund pressured African countries to liberalize their coffee industries and eliminate state agencies that bought beans for guaranteed prices. Farmers were assured of comfortable earnings. But globalization and liberalization have had opposite effects. “The law of supply and demand has operated to the detriment of African producers and to the benefit of worldwide speculation,” Togo Prime Minister Messan Agbeyone Kodjo told delegates to an ICO conference last May.

Most young African countries count on coffee for sixty to ninety per cent of their export earnings, and “millions” of Africans depend on coffee for all or part of their incomes, the prime minister explained. “At present, African coffee farmers are experiencing a sense of frustration and inner revolt. They feel helpless&Coffee prices fixed by international groups and the multinationals are completely beyond their control.”

It’s easy to see why farmers would feel this way. One decade ago, developing countries received thirty cents for every $1 spent on a cup of coffee; now Oxfam International calculates they get less than ten cents a cup. The unknown farmer who grew the beans for my foamy espresso, purchased at a café across the street from my office, got only two cents out of the $1.71 I paid, according to Oxfam.

Yet coffee remains a lucrative business for those at the industry’s apex.Five multinationals purchase almost one-half of the world’s coffee beans each year. Among them are Sara Lee Corp (makers of Hills Bros and Chock full o’ Nuts), Nestlé (maker of Nescafé) and tobacco giant Philip Morris, which owns Kraft Foods (Maxwell House and Nabob brands).Nestlé has made an estimated twenty-five-per profit margin on instant coffee, according to Oxfam. Profit margins at Sara Lee Corp are estimated to be about seventeen per cent.

In sharp contrast to the meagre income of coffee farmers, Sara Lee chairman and CEO Steven McMillan earned a whopping $5.56 million (U.S.) in “CEO compensation” last year. He placed 148th on the Forbes 2002 list of the best-paid Americans CEOs, up from 234th in 2001. Proctor & Gamble CEO Alan Lafley (Folgers coffee) pocketed $2.15 million (U.S.) in 2002 and came 335th on the list of the top 500 CEOs, ranked in terms of earnings.

The graph of corporate coffee profits shows a steady incline while the graph of coffee prices, wrote Uruguayan author Eduardo Galeano in Open Veins of Latin America, “has always resembled a clinical epilepsy chart.” Galeano lamented that coffee, the world’s most valuable commodity after oil, left so little in the hands of coffee farmers and so much in the coffers of middlemen and American corporations.

Globalization and deregulation have only exacerbated that discrepancy. As Galeano grimly concluded, “It is much more profitable to consume coffee than to produce it.”