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How did coffee help to tear down the Berlin wall?

How did coffee influence German history?

“No other product, shaped and influenced German history and politics than coffee. A staple product so important, it triggered policy changes and demonstrations that made the GDR crumble.”

A couple of weeks ago we discussed how persistent low coffee market prices have affected the lives of coffee farmers and economy of producing nations worldwide. Interestingly, due to its volatile nature, the market coffee price have also triggered major historic events when it has reached record high prices as well.

SEE ALSO: Why is the coffee market price so low?

Between 1973 and 1977 the coffee market price rose 400%, reaching a top price of $3.39 per pound on April, 1977; the highest coffee market price ever recorded in history. (Compare that to $1.07 per pound today).

An Antarctic cold front swept Brazil from the south plunging temperatures to their lowest levels in 53 years. In the countryside, coffee growers tried, often in vain, to keep their vulnerable trees safe from the penetrating cold by using nebulizers and fire pots. About 1 billion coffee trees, or one third of the total Brazilian coffee tree population was affected. Hardest hit was the state of Minas Gerais, where 50% of the trees were damaged. To top it off, Brazil coffee industry was recently recovering from the worst frost ever registered in history (Known as the “Black Frost” of July 1975) where 90% of coffee trees nationwide were lost.

During the 70’s the cold war was at its peak and the German Democratic Republic (GDR) had accumulated a significant foreign debt, close to 15 billion dollars by 1981 to be exact. Coffee have been a staple drink for the German population for decades, a symbol of modernity and well-being. Life without coffee was considered demining; a cruel remainder of the excruciating second world war. Times of scarcity, misery and death, most people wanted to forget. Coffee was so important for the everyday life at GDR that people used to spend more money on coffee than on clothing.

Due to the raising market price and to satisfy public demand the GDR needed to spend an increasing amount of its limited foreign currency reserves on purchasing coffee. In 1977, it got unmanageable and the GDR decided to replace all coffee with a poorly adulterated mix, which caused widespread discontent. The citizens of East Germany, overwhelmingly rejected the coffee mix and saw the coffee shortage as an attack on a major consumer need that was a main priority to them. The coffee mix also damaged some coffee machines, as the mixture contained substitute ingredients such as pea flour, which contains proteins that swell under heat and pressure, clogging the filters. This led to numerous complaints and outraged reactions and protests disorder on levels not seen since the People’s Uprising in East Germany on 1953, considered the worst in GDR’s history; subsequently, coffee became a “political issue of the highest level “and  it became obvious for the population, that a legitimate crisis was unfolding.

Until then the GDR supported by Russia, was considered an exemplary and active model of the international community of world socialisms. The GDR professed that its economic relations with Africa, Latin America and Asia were completely different from those of capitalist countries. It was not a system based on profits and gains it was more an anti-imperialist front of solidarity where socialist countries support each other through exchange, ideology and mutual assistance.

The huge accumulated debt by the GDR together with the political crisis triggered by coffee, radically changed this idealistic view of foreign policy to a more rational economic pragmatic one. Since the coffee crisis started, the GDR decided to reorient their economy focusing exclusively on eliminating debt by incentivizing local exports and cutting costs. The solidarity and mutual assistant expressed in the constitution was suddenly switched to asymmetric deals that clearly benefited the GDR economy, over other nation’s interests.

Therefore, the domestic liberalization the GDR experienced during the late 70’s was a key factor for the fall of the Berlin wall in 1989, that extended up to the collapse of the whole communist bloc in Eastern Europe by 1991. Although identifying the German coffee crisis as the main cause of the Iron Curtain downfall is debatable; It’s undeniable it marked an indelible historic milestone as the beginning of the end for East Germany.

Surprisingly, the GDR coffee crisis had unexpected ramified consequences for the global coffee economy as well. During the mid-70’s, the GDR needed coffee desperately, so they decided to join forces with Vietnam, by signing an agreement, whereby East Germany committed to provide the necessary equipment: trucks, machinery, irrigation systems and a 20 million USD hydropower plant as well as training in cultivation techniques for the production of Robusta coffee.

SEE ALSO: How can we help smallholder coffee farmers?

Together the two nations created the largest coffee farm in Vietnam named Kaffee Kombinat Viet-Duc, which started with 600 hectares in 1975 and ended up with 8600 hectares by 1989. East Germany also built housing, hospitals, and shops for the 10,000 people who were relocated to the area for coffee production. As compensation for this investment, East Germany was scheduled to receive half of the coffee production at the farm for the next 20 years.

Fortunately, the GDR dissolved in 1989 and hardly saw any benefit from their huge investment in Vietnam. However, Vietnam was quickly able to establish themselves after 1990 as the second-largest coffee producer in the world, only second to Brazil and the world’s first producer of Robusta coffee worldwide. Although East Germany disappeared, the good relationships with the unified Germany continued steady for the years to come; today, almost 30 years after the fall of the Berlin Wall, Germany is still considered the largest importer of Vietnamese Robusta coffee in the world.

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