This paper analyzes the proposals for reform to the 1983 International Coffee Agreement that were destined to eliminate exports to nonmember countries at discounted prices. Disagreement over such proposals led to the breakdown in July 1989 of negotiations for a new International Coffee Agreement. A model of the world coffee market is developed to illustrate the welfare effects of sales to the nonmarkets. Welfare calculations show that numerous exporters should oppose the allocation of quotas for the nonmember market unless they receive a large share of this market. Continuation of International Coffee Agreement export quotas probably depends on acceptance of price discounting. Copyright 1990 by Oxford University Press.
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Article provided by Oxford University Press for the Foundation for the European Review of Agricultural Economics in its journal European Review of Agricultural Economics.
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