|
Brazil - The Coffee Economy, 1840-1930
The Coffee Economy, 1840-1930
The impact of coffee on the Brazilian economy was much stronger
than that of sugar
and gold.
When the coffee surge began, Brazil was already free from the limitations
of colonialism. Moreover, the substitution of wage labor for slave
labor after 1870 meant an increase in efficiency and the formation
of a domestic market for wage goods. Finally, the greater complexity
of coffee production and trade established important sectorial linkages
within the Brazilian economy.
Coffee was introduced in Brazil early in the eighteenth century,
but initially it was planted only for domestic use. It took the
high world prices of the late 1820s and early 1830s to turn coffee
into a major export item. During the initial phase, production was
concentrated in the mountainous region near Rio de Janeiro. This
area was highly suitable for coffee cultivation, and it had access
to fairly abundant slave labor. Moreover, the coffee could be transported
easily on mule trains or on animal-drawn carts over short distances
to the ports.
An entrepreneurial class established in Rio
de Janeiro during the mining surge was able to induce the government
to help create basic conditions for the expansion of coffee, such
as removing transportation and labor bottlenecks. From the area
near Rio de Janeiro, coffee production moved along the Paraíba
Valley toward São
Paulo State, which later became Brazil's largest exporting region.
Coffee was cultivated with primitive techniques and with no regard
to land conservation. Land was abundant, and production could expand
easily through the incorporation of new areas. However, it soon
became necessary to ease two basic constraints: the lack of transportation
and the shortage of labor.
The cultivation of coffee farther away from ports required the
construction of railroads, first around Rio de Janeiro and into
the Paraíba Valley, and later into the fertile highlands
of São Paulo. In 1860 Brazil had only 223 kilometers of railroads;
by 1885 this total had increased to 6,930 kilometers. The main rail
link between São Paulo's eastern highlands and the ocean
port of Santos allowed for a rapid expansion of coffee into the
center and northwest of the state.
After the initial coffee expansion, the availability of slaves
dwindled, and further cultivation required additional slaves. However,
by 1840 Brazil was already under pressure to abolish slavery, and
a series of decrees were introduced, making it increasingly difficult
to supply the new coffee areas with servile labor. In the 1870s,
the shortage of labor became critical, leading to the gradual incorporation
of free immigrant labor. The coffee expansion in the west-northwest
of São Paulo State after 1880 was made possible largely by
immigrant labor. In 1880 São Paulo produced 1.2 million 60-kilogram
coffee bags, or 25 percent of Brazil's total; by 1888 this proportion
had jumped to 40 percent (2.6 million bags); and by 1902, to 60
percent (8 million bags). In turn, between 1884 and 1890 some 201,000
immigrants had entered São Paulo State, and this total jumped
to more than 733,000 between 1891 and 1900. Slavery was abolished
in 1888.
The Brazilian economy grew considerably in the second half of the
nineteenth century. Coffee was the mainstay of the economy, accounting
for 63 percent of the country's exports in 1891. However, sugar,
cotton, tobacco, cocoa, and, at the turn of the century, rubber
were also important. During the first three decades of the twentieth
century, the Brazilian economy went through periods of growth but
also difficulties caused in part by World War I, the Great Depression,
and an increasing trend toward coffee overproduction. The four-year
gap between the time a coffee tree is planted and the time of the
first harvest magnified cyclical fluctuations in coffee prices,
which in turn led to the increasing use of government price supports
during periods of excess production. The price supports induced
an exaggerated expansion of coffee cultivation in São Paulo,
culminating in the huge overproduction of the early 1930s.
The 1840 to 1930 period also saw an appreciable but irregular expansion
of light industries, notably textiles, clothing, food products,
beverages, and tobacco. This expansion was induced by the growth
in income, by the availability of foreign exchange, by fiscal policies,
and by external events, such as World War I. Other important factors
were the expansion of transportation, the installed capacity of
electric energy, increased urbanization, and the formation of a
dynamic entrepreneurial class. However, the manufacturing growth
of the period did not generate significant structural transformations.
Economic
growth in the nineteenth century was not shared equally by the
regions. Development and growth were concentrated in the Southeast.
The South Region also achieved considerable development based on
coffee and other agricultural products. The Amazon Basin experienced
a meteoric rise and fall of incomes from rubber exports. The Northeast
continued to stagnate, with its population living close to the subsistence
level.
Data as of April 1997
|
|
