Coffee merchandising

Leaves and beans are the vegetable sources of the world’s three great non-alcoholic beverages,—tea, coffee, and cocoa. Of the three, tea leaves lead in total amount consumed, coffee beans are second, and cacao beans are a distant third, although advancing.

But in international commerce coffee beans occupy a far more important position than either of the others, being imported into non-producing countries to twice the extent of the tea leaves. All three enjoy world-wide consumption, although this consumption does not extend to every nation. Where either coffee beans or tea leaves have thoroughly established themselves in a given country, the other two of the beverages receive comparatively little attention, and usually have a good deal of difficulty in making any appreciable advance. Cacao beans, on the other hand, have not risen to the position of popular favorite in any important consuming country, and so have not aroused the opposition of their two important rivals.

These three beverages dominate the world’s breakfast, dinner, and supper tables, and have no serious competitor except in one or two restricted localities. Down in South America, millions of people drink yerba maté in preference to any other beverage, whether containing alcohol or not, but efforts to push it on the markets of the United States and Europe have met with only limited success.

During the war, many substitutes for the three standard beverages were concocted, and on account of high prices some of them may still be used here and there, but none of them offers any serious competition to the regular trade. The world seems pretty well satisfied with the beverages it has tried out for so many centuries, and any new table drink that comes along will have to be meritorious indeed to take its place alongside them.

Of the three, the oldest dominates the most territory, and the youngest in point of world-wide reputation covers the least.

The beginnings of tea drinking are lost in the vista of Chinese history; but, whatever its age, it is today in very vigorous commercial health. Tea is the favorite drink of what a few years ago were the three greatest empires, geographically speaking, of the world,—the Chinese, Russian, and British Empires. It is estimated that the Chinese alone consume some 2,000,000,000 pounds of tea a year, thus elevating it to first place in amount used, although much more coffee than tea passes from producing to consuming countries.

Coffee reigns over the United States and western continental Europe, particularly France, Belgium, Netherlands, Germany, Switzerland, and Scandinavia, as well as South Africa, Cuba, and southern South America.

With regard to cocoa, the trade figures do not tell so distinct a story, as the raw material from which the cocoa powder is made, the cacao beans and nibs, is also used so extensively in the making of chocolate and chocolate products. But the annual trade in cacao beans is so large in several countries that cocoa as a beverage probably takes second place among the three.

Where Coffee Rules

In its 300 years of acquaintance with civilized countries, coffee has planted itself firmly in North and South America, Australasia, and western Europe, but in that vast stretch of territory beginning with western Russia and extending over almost the whole of Asia it is little known.

Among the western nations the United Kingdom stands out as a conspicuous example of countries that refuse to be conquered by coffee, and the dominions, with one exception, have followed the taste of the mother country. The exception is the Union of South Africa, where the settlers have shown the same adherence to the habits of the country from which they came as the settlers of English-speaking dependencies, as the large coffee consumption is due to the presence of the Boers, descendants of the coffee-drinking Hollanders.

Among southern countries Argentina is the chief coffee buyer, with Chile second; but the island of Cuba passes both in individual consumption, ranking alongside the United States in that respect.

Percapita Coffee Consumption

The following table gives the percapita consumption of coffee in the last year before the war and in a recent year since the war, for the important coffee-drinking countries of the world. The figures are based entirely on statistics of imports and exports, and do not take into account any stocks that may have been held over:

On account of the wide fluctuations in imports during the war and the period following the war, percapita figures have naturally changed radically during recent years; but, for the most part, the trade in coffee has about swung back to normal, and the percapita figures since the war, as given, are fairly close to prewar figures. As percapita calculations must take into account population as well as amounts of coffee consumed, and as population figures are usually estimates, the results arrived at by different authorities are likely to vary slightly, although usually they are not far apart.

Coffee in the United States

The rise of the United States as a coffee consumer during the last century and a quarter has been marked not only by steadily increased imports, but also by a steady growth in percapita consumption. Today it is close to its highest point, the 12.45 pounds being enough to supply each man, woman, and child with some 500 cups a year. This is four times as much as it was 100 years ago, and more than twice as much as in the years immediately following the Civil War. Since about 1897, the average consumption percapita has increased some 50 percent. Net imports in the year ended December 31, 1923, covering only continental United States, were 1,407,855,966 pounds.

The United Kingdom

Coffee drinking has never become popular in the British Isles, and there is no sign that the English taste is changing. Present consumption percapita, in fact, is lower than it was 40 years ago. Consumption and percapita figures for the last six years and for 1913 are as follows:

This low consumption is because tea is the universal beverage in the United Kingdom.

The Two Countries Compared

The following comparison of the growth of percapita consumption of tea and coffee in the United Kingdom and the United States will show that the attitude of the public toward the two beverages has been directly opposite for 58 years:

In France

Second only to the United States in the total of coffee consumed is France, although that country before the war occupied third place, being surpassed by Germany. Havre is one of the great coffee ports of Europe, and has a coffee exchange; organized in 1882, only a short time after the exchange in New York began operations.

France draws on all the large producing regions for her coffee, but is especially prominent in the trade in the West Indies and the countries around the Caribbean Sea. Imports in 1922 amounted to 385,475,860 pounds, exports to 445,940 pounds, and net consumption to 385,029,920 pounds.

In Germany

Hamburg is one of the world’s important coffee ports, and in normal times coffee is brought there in vast amounts, not only for shipment into the interior of Germany, but also for transhipment to Scandinavia, Finland, and Russia. Up to the outbreak of the war, Germany was the chief coffee-drinking country of Europe. While the blockade lasted and coffee imports were quite shut off, the Germans resorted to substitutes, and after the war, because of high prices, there was still much consumption of them.

Percapita consumption in Germany is still somewhat low in comparison with prewar consumption. In 1920 only 90,602,000 pounds were imported. In 1921 net imports were 228,687,567 pounds, but in 1922 they fell off to 80,992,595 pounds. This of course is not comparable with prewar consumption, as Germany’s territory and population are considerably smaller than before the war. In 1913, the country as then constituted imported 371,130,520 pounds and exported 1,783,521 pounds, leaving a net consumption of 369,346,999 pounds.

Netherlands

Netherlands is one of the oldest coffee countries of Europe, and for centuries has been a great transhipping agent, distributing coffee from her East Indian possessions and from America among her northern neighbors. Before sending these coffee shipments along, however, she kept back enough to supply her own people most plentifully, so that for many years before the war she led the world in percapita consumption. As far back as 1867-76, coffee consumption was averaging over 13 pounds percapita; in the year before the war, it was 18.8 pounds.

The blockade and other abnormal conditions during the war threw the trade off, and it is not yet normal. Consumption in 1920 was 96,197,000 pounds, or about 14 pounds percapita. However, preliminary figures for 1921 showed a much heavier reexportation than in 1920, and a consequent drop in consumption. Imports in 1921 were 136,566,943 pounds and exports 66,567,702, leaving 69,999,241 pounds for consumption. This drop in consumption is probably more apparent than real, as exports in 1921 doubtless included much coffee held over from the year before. Net imports for 1922 were 73,203,743 pounds, or 10.49 pounds percapita. Eighty percent of the Netherlands coffee trade is handled through Amsterdam.

Coffee in Other Countries

Denmark, Norway, and Sweden are all heavy coffee drinkers. In 1921, Sweden had the highest percapita consumption in the world, 15.25 pounds. Before the war these three countries each consumed about as much percapita as the United States does today,—amounting to 11 to 13 pounds a year.

The 1922 net imports for consumption were as follows: Denmark, 50,906,680 pounds; Norway, 39,015,680 pounds; Sweden, 77,343,640 pounds.

Austria-Hungary was formerly an important buyer of coffee, large quantities coming into the country yearly through Triest. Imports in 1913 totaled 130,951,000 pounds, and 124,527,000 pounds in 1912. In 1917, the war cut down the total to 17,910,000 pounds net consumption. Imports for consumption in 1922 were 9,588,260 pounds.

Finland shares with her neighbors of the Baltic a strong taste for coffee, importing 30,459,880 pounds in 1922.

In the same year Belgium had a net import of 82,324,000 pounds and Spain of 41,131,640 pounds. Portugal, in 1919, imported 6,926,575 pounds and exported 1,258,271 pounds, leaving 5,668,304 pounds for home consumption. Coffee is not especially popular in the Balkan States and Italy, importations into the last-named country in 1922 amounting to 103,961,000 pounds net. Switzerland is a steady coffee drinker, consuming 29,182,560 pounds in 1922.

Russia was never fond of coffee, and her total imports in 1917, according to Soviet figures, were only 4,464,000 pounds.

The Union of South Africa in 1922 imported 8,991,400 pounds net. Cuba purchased 66,342,540 pounds in the fiscal year 1922, Argentina 38,727,040 pounds in 1920, and Chile 10,252,220 pounds in 1922. Australia, in the year 1921-22, imported 3,100,120 pounds, and New Zealand in 1921 imported 250,580 pounds.

Coffee Consumption of Brazil

In considering the world consumption of coffee, usually only importing countries are taken into account; but there is, of course, considerable consumption in countries where the coffee is grown. In the largest of these, Brazil, there is a population loosely estimated at 20,000,000 to 30,000,000, and the habit of coffee drinking is widespread, although not by any means universal. Just how much coffee is consumed annually is difficult to determine. There are no figures of actual production, the crop of any given year when coffee moves normally being given usually in terms of exports.

Estimates of annual coffee consumption in Brazil by persons familiar with the country vary widely. One authority, for instance, places the figure at more than 200,000,000 pounds, and says that Brazil ranks about seventh in percapita consumption, while another gives less than one-tenth that amount. It is generally agreed that coffee consumption is much less than might be expected, seeing that Brazil supplies the world with so large a proportion of its total coffee.

One reason, perhaps the chief one, is that in the southern part of the country many millions of the working class drink the distinctive South American beverage maté in place of coffee. In the northern and western regions, moreover, coffee production is of no importance, and overland transportation facilities from the coffee-raising states are very poor; so the natives have not become accustomed to the use of the chief product of their country and drink more spirituous liquors instead. The German colony in Rio Grande do Sul consumes considerable coffee, and its population probably forms the largest coffee-drinking group of the whole country; but the number of people in that section is not large, compared with the total population.

The Trade in 1923

If one more shipload of coffee had reached a United States port in time to be counted in the 1923 imports, our incoming coffee trade that year would have been higher in point of volume than in any previous fiscal or calendar year of our history. As it was, the total of 1,407,855,966 pounds that we purchased fell a little short of the record figure, which was 1,414,228,163 pounds in the fiscal year 1920; but the 1923 figure was higher than that of any previous calendar year. In point of value, imports in 1923 were less than in the calendar years 1920 and 1921, but they exceeded those of any other year.

The quantity and value of coffee imports for each calendar year since 1913 are shown in the following table:

The features of the year’s trade were big gains in imports from Brazil, Colombia, and Central America, and a considerable falling off in these from Venezuela, and especially the Dutch East Indies. From Mexico, the West Indies, and Aden there were considerably increased shipments, but no startling gains over the preceding year.

Brazil’s Banner Year

The year 1923 was a banner one for Brazil in her coffee trade with this country. She shipped more hither last year than in any previous year of her history, and after many years again reached the point where she furnishes us with two-thirds of all our coffee imports. Her total shipments to us, 934,758,879 pounds valued at $115,881,226, represented a big gain over those of 1922, when the total was 802,546,870 pounds having a value of $98,932,292, as well as the 1921 total of 839,212,388 pounds valued at $77,186,271. If the gain is maintained at the same rate during the present year, 1924 shipments will pass the 1,000,000,000-pound mark for the first time, with 50,000,000 or 100,000,000 pounds to spare.

It is interesting to note how Brazil has gradually come back in the proportion of our total coffee imports that she supplies. The shipping and other disarrangements caused by the war reduced Brazil’s share in our purchases from 74 percent in the year before the outbreak of the war in Europe to 57 percent in 1918. Since the close of the war, there has been a slow but steady gain. In 1919 the proportion was 59 percent, in 1920 60.5 percent, in 1921 62.5 percent, in 1922 64.3 percent, and last year, 1923, it reached 66.4 percent, or practically two-thirds.

The average price of Brazil coffee, as shown by the import statistics, remained almost exactly the same in 1923 as in 1922, being 12.39 cents as compared with 12.32 cents in the year before. This compares with a slight advance in the average pound price of our total coffee imports, and also of our total imports from other countries than Brazil. The price of total imports from all countries in 1923 was 13.5 cents, which compares with 12.9 cents in 1922, while that of coffee imported from non-Brazilian sources was 15.6 cents in 1923 and 13.9 cents in 1922.

Coffee from Other Countries

Colombia’s shipments to this country in 1923 showed a marked increase over 1922, indicating that the slump last year was only temporary. The 1923 total of 221,720,899 pounds valued at $37,324,925 compared with 191,848,984 pounds valued at $29,568,471 in 1922, and registered the second largest coffee year that the trade between the two countries has enjoyed, having been surpassed only by the 249,000,000 pounds valued at $37,000,000 of 1921. The average price increased with the volume, having been 16.8 cents in 1923 as compared with 15.5 cents in 1922.

Central American coffee picked up in 1923, jumping from 99,173,458 pounds valued at $11,779,387 in 1922 to 118,286,003 pounds valued at $15,819,156 in 1923. This is a considerable gain, although the total imports are far below the high marks reached during and immediately following the war, when in one year almost 200,000,000 pounds were shipped.

West Indian coffee also registered an increase, amounting to about 20 percent in volume and 30 percent in value, but did not approach the high figures of recent years. Shipments in 1923 amounted to 8,273,127 pounds having a value of $1,207,664, as compared with 6,919,437 pounds valued at $920,036 in 1922.

The other neighboring source of coffee imports, Mexico, a little more than held her own, sending us 38,933,431 pounds valued at $6,176,548, as against 37,800,973 pounds valued at $5,130,167 in the year before. This may be considered as about normal for Mexico under present conditions, although it is still below the average shipments of 15 or 20 years ago.

Venezuela registered a considerable decrease in exports to the United States, sending us only 53,587,162 pounds having a value of $8,539,038, as compared with 66,644,133 pounds valued at $9,417,446 in 1922. While this is less than half the high figure of 109,000,000 pounds reached in 1919, it probably represents a fair average for a trade that fluctuates in volume rather widely from year to year.

The figures for the Dutch East Indies indicate that the high total for 1922, which was 32,097,648 pounds having a value of $3,759,174, was probably abnormal. The 1923 shipments, amounting to 11,757,923 pounds valued at $2,008,800, were about the same as those for 1921 and were higher than the usual figures reached before and during the war. Since the war, this trade has fluctuated uncertainly, reaching a high mark of 56,000,000 pounds in 1919. Last year’s imports were the lowest since 1918.

From Aden there was an increased importation of about 18 percent over 1922, the figures for last year having been 2,239,015 pounds valued at $406,069 as compared with 1,901,013 pounds valued at $332,741 in 1922.

Coffee Exports and Percapita

Coffee exports, including green coffee, roasted coffee, and coffee extracts and substitutes, were practically the same in 1923 as in the year before. Green-coffee exports, mostly from Porto Rico to foreign countries, amounted to 24,714,418 pounds valued at $4,801,728 in 1923 as compared with 25,493,085 pounds valued at $4,818,780 in 1922. Roasted coffee was sent abroad to the amount of 1,652,355 pounds valued at $429,194 as against 1922 shipments of 1,256,971 pounds valued at $327,744. Reexports of coffee again fell off, amounting to 22,021,984 pounds valued at $3,345,609 as compared with 26,012,894 pounds valued at $3,358,952 in 1922.

Cuba was a heavy purchaser, taking over 9,000,000 pounds, and Mexico followed with 2,300,000 pounds. Most of the rest went to Europe, Germany having been the chief destination and taking 2,000,000 pounds valued at $361,000.

Our trade with our own coffee producers, Hawaii and Porto Rico, fell off last year, Hawaii sending us only 2,170,334 pounds valued at $407,535 and Porto Rico 308,103 pounds valued at $67,351.

Taking into account the trade with the island possessions, the percapita coffee consumption of continental United States in 1923 was 12.45 pounds. This is a substantial gain, the figure having been 11.1 pounds in 1922, 12.09 pounds in 1921, and 11.7 pounds in 1920.

The following shows United States coffee imports by sources for the last three years:

• A = Quantity
• B = Value
• C = Percentage of Increase (+) or Decrease (-) of 1923 Imports Compared with

Brazil’s Coffee Valorization

Because of the effect which it is likely to have on production and consumption figures, the following statement concerning Brazil’s coffee valorization by W. L. Schurz, United States commercial attaché at Rio de Janeiro, is given here for the benefit of those who wish to be fully posted concerning the plan and its operation:

Object of Valorization

The immediate object of the government is to acquire enough of the current crop to enable it to dominate the world market, and, when stocks in the consuming countries are sufficiently depleted, to force buying at prices that are considered remunerative to Brazilian growers. An expedient of this kind is made possible by Brazil’s extraordinary position in the coffee industry of the world, and demands, moreover, for its complete success a combination of other factors, such as a sustained demand and buying capacity in the consuming markets and the curtailment of the crop by unforeseen frosts. It was probably the latter circumstance that saved the government from a disastrous loss in connection with the valorization of 1918.

The resort to such an apparently hazardous measure is justifiable only by the fact that coffee still constitutes the very basis of the general economy of Brazil. Its failure to yield an adequate profit to the producers is little short of a calamity, not only to this class, but to the federal government and the governments of the coffee-producing states, particularly Sao Paulo. Coffee normally represents from 50 to 60 percent of the total value of the exports of the country, and the duties directly paid by coffee constitute about 40 percent of the total ordinary revenues of the state of Sao Paulo. Even these figures do not represent the entire importance of the position held by coffee in the general business and financial system of Brazil.

Reason for Present Valorization

The present valorization was provoked by the abrupt fall early in 1921 of the price of coffee abroad, in common with prices of other lines of goods, following the inflated postwar conditions. This fall coincided with the inability of Germany and other countries to buy anything approaching their former purchases. Due to blockade and to restrictions on imports by belligerent nations, the first three years of the war were a time of great depression for Brazilian coffee, the price in New York varying from six to 10 cents. However, the crop failure of 1918, due to general devastating frosts of that year, created an unheard-of shortage in the consuming markets and put Brazil into position to dictate the price of coffee, which rose in New York to 25 cents. Prices gradually scaled down during 1918-19 and 1919-20 crop years to a general level of 18 cents.

During 1920, however, several European governments, disturbed by a continued unfavorable balance of trade, began to place severe restrictions upon the importation of coffee, though the unfavorable effect of this on Brazil’s interests was partly counterbalanced by another short crop, thereby serving to maintain prices at a satisfactory level. The resumption of anything approaching normal buying by European markets began in 1921, but this increased demand coincided with a large crop, amounting to 14,490,000 bags. Prices fell rapidly, the decline in Rio 7s in the New York market for the 12 months ending in September amounting to over 50 percent, with the price reaching a low level of five cents.

In view of the prospective size of the crop, the dominant elements in the federal government, headed by the president and strongly urged by the state government of Sao Paulo, decided on recourse to valorization as the only measure capable of saving the country from the consequences of a low price of coffee. The state government of Sao Paulo had already entered the market before the end of 1920 with the purchase of 300,000 bags. The purpose of the administration was announced in March, 1921, and the government began buying at about that time.

For some time the valorization operations were conducted on behalf of the Brazilian government by the Cia. Mechanica & Importadora de Sao Paulo, a very important firm of the country. Later the work of valorization was shared with the Brazilian Warrant Company, an English concern, which announced its profits for 1921 at £105,000.

After placing a loan of £9,000,000 in May, 1922, a committee was formed, composed of Brazilian and British representatives of the bankers instrumental in floating the loan, to assume charge of subsequent valorization operations, at least in so far as they relate to the utilization of the proceeds of the loan and the liquidation of the government stock abroad.

Financing of Valorization

The financing of an undertaking of this magnitude presented a very difficult problem, as it required the carrying by the government of several million bags of coffee until such time as it could be liquidated at a profit. The balance of opinion was opposed to the usual resort to an issue of paper money. Instead, the government made use of the notes of the newly created rediscount section of the Bank of Brazil. Though the volume of these notes was limited, and the time in which they might continue to circulate was fixed, both limits are said to have been exceeded during the course of the valorization.

According to a formal agreement made between the federal government and the governments of the principal coffee-producing states, the latter were to contribute a certain quota toward the expenses of valorization. Four of the principal clauses in the contract made between the federal and state governments read as follows:

“Profits and losses resulting from these deals shall be distributed in proportion to amounts invested by the national treasury and states entering the agreement, it being clearly understood that any losses that may eventually be incurred shall in no circumstance, in so far as Sao Paulo is concerned, exceed 15,000 contos, the limit of that state’s contribution.

“The buying and selling of coffee in Santos and Rio, proportionately to the amount exported from each of these ports, shall be directed exclusively by the federal government.

“All coffee purchased in either Santos or Rio shall be deposited in warehouses and insured against all risks.

“Operations resulting from this agreement shall be finally liquidated on the sale of the total amount of coffee bought by the government, at which time the national treasury shall present accounts to the state of Sao Paulo.”

During the period under consideration there have been frequent rumors of loans floated in Europe for the purpose of refunding the short-time rediscount notes, but no loan was actually placed for this purpose until the joint British-American loan for £9,000,000 in May, 1922. This was floated in London by Rothschild’s, Baring Brothers, and Schroder, and in New York by Dillon, Read & Company. The American quota of the loan was £2,000,000. The loan was offered at 97, with interest at 7.5 percent, and amortization in 30 years. A first mortgage on the government stock of coffee, amounting at that time to 4,534,000 bags, held in Santos, Rio, Victoria, London, and New York, was given as security. This coffee represented then a value of about £13,000,000.

Factors Affecting Valorization

Various conditions affect valorization, one of most importance being the size of the coffee crop. Total exports from Brazil for the crop year 1921-22 amounted to 12,632,634 bags. Available figures indicate that the total Brazilian production for the year was 12,862,000 bags. Though the long drought of the past summer undoubtedly reduced the crop to some extent, the desired frost did not materialize, and the diminution in the crop was not heavy enough to affect appreciably the course of the valorization operations. The Santos share of the 1922-23 crop has been estimated at 6,875,509 bags. The Department of Agriculture of Sao Paulo has estimated the crop for that state at 5,990,000 bags, as against 6,290,338 bags, the estimate made by a bank in that state.

As usual for several years, the shortage of labor in the coffee districts has constituted one of the most serious problems of the industry. In spite of considerable immigration, especially from Italy, the supply of laborers for the fazendas has continued far below the demand. Moreover, the tendency of the laborers after the expiration of their term of service in the fazenda is to drift into Sao Paulo or the larger towns, where they seek work in the factories or engage in small businesses on their own account. The laborers are also constantly more exigent in the matter of accommodations and wages, and are accustomed to demand permission to plant corn or beans between the rows of coffee trees, a practice that naturally reduces the productivity of the trees. An increasing number of laborers are also desirous of acquiring tracts of land for their own use.

Competition of Other Countries

Many Brazilians have been greatly concerned over the growing production of coffee in the Caribbean countries, particularly in Colombia. One anonymous writer in an influential newspaper, the Estado de Sao Paulo, in a series of articles, has emphasized the menace to Brazil from that area. However, one of the leading Brazilian authorities on valorization declared in the same paper, “It is evident that Colombia is not a formidable competitor, in spite of the fact that she is the strongest of our rivals.” The development of coffee production in the lake region of East Africa has also not escaped the attention of those responsible for the prosperity of the Brazilian industry.

The greatest anxiety has been felt for the American market, on which in last resort the prosperity of the Brazilian coffee industry depends. Efforts have been made to stimulate the consumption of coffee in America, and much has been hoped for through an increase in coffee consumption that was expected would follow national prohibition in the United States. Not only is the state of the American coffee trade followed with the closest attention in Brazil, but the statistics of the origin of American coffee imports are watched carefully. Quoting from The Tea & Coffee Trade Journal, to the effect that the most important development in the coffee trade during 1921 was the increase in shipments from Colombia to the United States, a Brazil trade weekly recently published the following statistics of imports into the United States for 1920 and 1921:

The total exports of coffee from Colombia during 1919, 1920, and 1921 were 1,600,000, 1,400,000, and 2,250,000 bags, respectively.

Project for Permanent Valorization

Though many responsible persons, even in the state of Sao Paulo, have opposed the principle of valorization, the government of that state, as well as of Minas Geraes, and the federal government, has been overwhelmingly committed to it. President Pessoa declared his support of that policy in his messages and in numerous speeches. In August, 1921, he said in Sao Paulo, “The valorization of coffee must continue. The federal government will do this, whatever the cost, confident that the ultimate results will be of incalculable benefit to the country.”

A project for that purpose was introduced into the federal Congress in October, 1921, by a deputy of Brazil, and its passage recommended in a special message from President Pessoa on October 17. Though the measure was discussed at length at that time, it was not incorporated into law until June 19, 1922, when it was included in a general law for the promotion and protection of national production. (Decree No. 4548, published in the Diario Official of June 22, 1922.)

The text of the part of section 2 of the decree that applies to coffee follows: