Varginha, July 7 - Brazil's government should sell out within a year hundreds of thousands of bags of coffee harvested as long ago as 1982 and warehoused during a bygone era when the state bought supplies to keep prices firm.
The long-defunct Brazilian Coffee Institute (IBC), overseen by the government, bought the coffee from farmers in the world's No. 1 grower between 1987 and 1990, stocking it in upcountry warehouses.
Government agronomist Antonio Ernesto said the IBC had amassed 17 million to 18 million bags of coffee by the time President Fernando Collor's government did away with the Institute in 1990. Around 718,000 of those 60-kg bags remain.
"In 1989 the coffee was almost touching the roof," said Ernesto, casting his eye over a spacious 16,000-square-meter warehouse in the town of Varginha in Brazil's main coffee state Minas Gerais.
Some of the remaining bags of arabica beans lay piled atop wooden pallets in the parti-colored store with a corrugated roof that once was filled with 630,000 bags. Only 15,000 remain, trickling on to the local market at periodic auctions.
The IBC imposed a quota on exports in Brazil at a time when the International Coffee Organization for producing nations was trying to smooth out disruptive swings in coffee prices and production.
The government-owned coffee stayed in storage after the IBC's demise until the state began to sell it off from 1992 onward, Ernesto said.
He said sales were restricted to avoid influencing the world price and farmers' incomes. But the older coffee lost its appeal to foreign buyers.
"This coffee is now used more on the local market ... After more than four years coffee loses its taste," he said, adding it was used to blend with other coffees.
"It can calm a strong taste from the new harvest. When it was just four or five years old it was excellent," he said.
COBWEBS
The government owns the warehouses, so the years of storing the beans have been inexpensive. Private coffee traders waiting to ship their own beans have rented space in the warehouses.
The warehouse in Varginha looked spartan and clean-swept. Cobwebs cast just a thin veil over some sacks, but these serve a purpose, Ernesto said, helping keep bugs away from the stocks on which the use of pesticides is prohibited.
"Cobwebs provided a defense against insects. It was biological (pest) control," he said.
Though the IBC was scrapped nearly two decades ago, Ernesto said high production costs for coffee farmers, particularly fertilizer and labor, had roused some nostalgia.
"Farmers only saw how efficient it was once it was gone. They were richer and made more profit," he said. However, he conceded that such intervention, which critics said left little incentive to produce good quality beans, would be unlikely to work today.
The government still has some influence over prices paid to growers, even though it no longer handles physical supplies. Its "Pepro" scheme subsidizes growers when their coffee is sold within a certain price range, encouraging them to hold out for more when offers fall below this level.