Agricultural Finance: From Crops to Land, Water and Infrastructure

Chapter 8Sugar, Cocoa, Coffee, and Tea

‘If this is coffee, please bring me some tea; but if this is tea, please bring me some tea.’

Abraham Lincoln, 1809–1865

Unlike the cereals market where growers are increasingly large and sophisticated businesses, many of the soft commodities rely on small-scale farms in developing countries.

8.1 Sugar

Sugar cane can be traced back to around the Southern Pacific Ocean approximately 8000 years ago. Most probably indigenous of New Guinea, sugar cane moved to Southeast Asia and India. In 100 BC, Chinese farmers were already cultivating and refining sugar cane and, by the sixth or seventh centuries, Persians traders were trading a sugar that was refined through a chemical process.

Sugar was discovered by Europeans at the very end of the 11th century. The Arabs had acquired the secret for the extraction of sugar from sugar cane after their invasion/conquest of Persia in 642. On the American continent, sugar cane was first introduced to the Caribbean during Christopher Columbus' second trip, in 1493. From the Caribbean, sugar rapidly expanded to the rest of the continent, due to the ease of its culture under this climate. Two thousand sugar mills were active in Brazil by 1540.

In the 17th century, the British began to grow sugar cane in Barbados, which by 1665 was exporting 7000 tons of sugar to England. In response to the English blockade of sugar from the Caribbean to France, Napoleon encouraged farmers to plant sugar beet and in a period of ...