CRISIS HITS LATIN AMERICA

The devaluation of the dollar and the world economic recession is having a catastrophic effect on the colonial and semi-colonial countries. The prices of primary products are falling on world markets and demand for many of the raw materials which these countries produce is slackening. The two articles on this page show the worsening economic situation of the primary producing countries in the For each cent difference in the price of a pound of coffee the producing countries - all of them 'underdeveloped' — earn or lose as is more trequently the case) $73.4m taking as a base their 1969 exports.

On a metric ton of coffee, one cent a pound difference means precisely $22.05 and since 1969 coffee exports were 3,365,000 tons the total price difference amounts to more than $73.

This figure, quoted in the Food and Agriculture Organization's yearbook, is not just a statistic. For the producing countries, price fluctuation can make the difference between wealth and penury.

Their plight has been greatly aggravated by the post-August 15, 1971 devaluation of the dollar by 8.5 per cent. While prices 'remain stable' on the markets, the amount of hard currency the producing countries get for their crop has fallen considerably.

This is a means by which the consuming countries — notably the United States which takes 40 per cent of world coffee production - have imposed drop of prices on the producing countries.

The new dollar parity established in December 1971 imposes an effective cut of about four cents a pound in the coffee prices. This amounts to over $290m on the basis of the 1969 sales.

Coffee is typical of the primary products produced by the colonial and semi-colonial countries of the capitalist world. Other staple products, like rubber, tea, tin and copra, have been equally severely hit.

The main losers will be the small producers in the coffee countries — chiefly Brazil, Colombla, salvador, Guatemala, Ivory Coast, Angola and Ethiopia.

Most of these countries are ruled by dictatorial regimes and the big coffee magnates will certainly throw the burden of the crisis onto the backs of the small peasant farmers who produce the bulk of the crop.

In an attempt to temper the worst effects of the dollar devaluation on their trade, the main producing countries have banded together to try and wring higher prices out of the coflee-consuming countries. face of the economic crisis.

Their consultations produced the 'Geneva document' early last month-an agreement for concerted action to try and persuade the US to raise the price to overcome the devaluation effects.

Arduous months of negotiations had failed to induce the United States to raise the price at all. Its spokesmen now claim that the Geneva deal 'contradicts the terms of the World Coffee Agreement and jeopardizes its renewal in 1973'.

The Us particularly objects to the proposed three stages of negotiation laid down in the Geneva document.

The first step will be taken the second week in May when a co-ordinating committee of producing countries meets in Paris to 'harmonize and ordinate their price policies'.

According the Geneva document the first step will be this co-ordinating committee in charge of making proposals 'in order to obtain pre-established price objectives'.

The second level will be a ministers' conference of the International Coffee Council.

The third level will be the creation of a 'marketing body' to guarantee co-operation among the producers, facilitate co-ordination of their price policies and take part in the marketing of coffee as a profitable venture.

These are desperate efforts by the producing countries. There is no likelihood that the US, which has made no concessions even to its powerful capitalist competitors, will bow to the feeble pressures of the coffee-producing countries.