According to legend, Ethiopian goatherd discovered coffee. It started as food and drink for African tribesmen. From there, it became a worldwide popular drink. Coffee is important among the natural commodities and it is a major source of income among the exporting countries. Many people depended on coffee for their livelihood and drink a lot of coffee. There was a frost in 1975 where almost half the country’s coffee trees were damaged and prices fell to a huge extend. In 1979, a frost hit Brazil again. The income loss could last for three to five years for a single tree and the loss for 15 millions trees was huge. Thus, Brazil stopped all shipments. Farmer planted a lot when prices rose. The prices fell when there was overproduction. Thus, farmers planted other crops. The only solution to this was to limit output, have a reserve and to sell at reasonable prices.

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