My beloved readers and students:

This episode is about the history of coffee plantations in Brazil. The coffee plant was brought to the territory during the 18th century. Still, it wasn´t until the period of João VI, king of Portugal, that coffee began to be considered an export crop. The Portuguese royal family took refuge in Colonial Brazil because, in Europe, things were turbulent due to the French Napoleonic Wars. Yet, we believe the Portuguese Family traveled to Rio de Janeiro because Colonial Brazil was more important to protect than Portugal, not just in size, but also in resources. In consequence, our saga specifically begins when King João VI Braganza-Habsburg/Braganza-Bourbon decided to appoint his son, Dom Pedro I Braganza-Bourbon, to be the regent of Brazil in 1821.

How did everything begin? We want to acknowledge the political-economic history of Brazil from 1821 to the 1960s. This is the period in which Brazil’s GDP emerged through coffee exports. We will share the main troubles and conflicts involved in the process. Our goal is to comprehend what actions Brazil took from the origin of planting coffee to convert itself into one of the leading coffee-producing nations on earth. Without reckoning with the documented slavery files, constant revolts, and the Paraguayan Holocaust War of the 19th century, our discussion is about how the coffee economy was established. This matters because many tropical nations are now in a situation similar to Brazil in the 19th century. Under different circumstances, but sharing similar patterns of anomalous fiscal deficits, negative trade balances, and high levels of indebtedness or abnormal inflation. Similar parallels. Probably some planters from tropical nations want to give up on harvesting coffee because it is not profitable, because of painful labor complexities, despair, or because they believe that coffee is not going anywhere. The situation was the same in Brazil before the Great Depression of 1929-32. But Brazilians did not give up.

Find your reference material for your analysis and study over the weekend. Feel free to share it with family and friends. We encourage you to print it and keep it in a file for your future consideration. Let´s read!

We kindly ask that you return next Monday, the 14th of September, to review our strategic reflections on this chapter.
We encourage our readers to familiarize themselves with our Friday master class by reviewing the slides over the weekend. We expect you to create ideas that are or are not strategic reflections. Every Monday, we upload our strategic inferences below. These will be discussed in the next paragraph. Only then will you be able to compare your own reflections with our introspection. We always give our students a couple of days to prepare well before our final reflection.

Strategic reflections on this episode.
These will be in the section below next Monday, the 14th of September.

Cacao and Coffee 101. Success Strategies for Small Farm Holders. Episode 14. Competitiveness, Innovation and Research: Brazilian Coffee

Assessing the History of the Brazilian Coffee Industry.
The story of coffee in Brazil started well before the arrival of King João VI Braganza-Habsburg/Braganza-Bourbon (1767-1826). King João VI was married to a Bourbon of pure strain, Queen Carlota Joaquina Bourbon-Wettin/Bourbon-Bourbon (1755-1830). This marriage was arranged by proxy, and it was consummated only when João VI was in his 20s. The prominence of this union can´t be taken lightly. It happened after three astonishing events: the expulsion of the Jesuits from all Bourbon colonial territories (1759), their subsequent global suppression (1773), and the French Revolution, which began in 1789.

The Jesuit province of Paraquarie was formed and organized by the Society of Jesus between 1609 and 1767. It was a huge territory that was built with the model of utopian communitarian societies, which proved to be successfully sustainable and economically self-sufficient. The Jesuits were able to prove that the aboriginal tribes found in the territory merited not only to be considered humans, but they were able to learn to do everything: music, math, entrepreneurship, languages, and perform as any European of high caliber.  However, the Royal Crown of Portugal, and most of the Bourbons, considered it too much land to leave under the Jesuits’ supervision, and they thought it was better to remove them and proceed to take over. Why? Because that territory was a fluid access to the silver mines of Potosí. The Viceroyalty of Rio de la Plata coincides with the territory of the Paraquarie. This Viceroyalty was only established by the Bourbons in 1776 (when the Jesuit global order was suppressed), and it included all the northern part of Argentina (including Tucumán), vast parts of Brazil, Uruguay, and Bolivia. See the maps below.

Sources of the maps are referenced below (1). We encourage our readers to visit each map website to zoom in on the image and see the details described; all these maps are authentic.

When the French Revolution disrupted Europe, the Braganza Bourbons’ utmost monarchical strategy was not only to protect colonial Brazil, but to try to control the Paraquarie region (former Jesuit province). It took them several attempts: a secession of the part of what is now Uruguay (1825) with its independence from Spain, the independence of what is now Bolivia and Argentina (which integrated Tucuman and some parts of Paraquarie), and a staggering Triple Alliance War against Paraguay in 1864 to dismantle it. The Paraquarie territory of the Jesuits protégées was finally demolished by the Paraguayan War. The Guarani population that the Jesuits guarded for more than 200 years was almost wiped out during this war, and it is estimated that between 150,000 and 400,000 inhabitants died, particularly in the specific zone of the Jesuit Missions. Brazil expanded after the war into the territories that you can observe in the maps above.

It is in this tumultuous context that the Braganza-Bourbons from Portugal anchored and lived in Brazil. To save its core empire, we suggest that the Portuguese royal family auto-triggered the Independence from Portugal through an auto-coup d´etat. The same son of King João VI provoked it. Pedro I Braganza-Bourbon took the baton of Imperial Brazil in 1822.

From slides 5 to 18, we not only describe and analyze the different periods between 1822 to 1960s, but we have connected the evolution of the coffee industry plantations in that narrative. We didn´t want to make this chapter a historiography or a simple chronology of events. We have put on top of each period how coffee was transformed into the most relevant source of income for Brazil, and how the different governments protected it. We believe that all the slides are more than self-explanatory. The reason why we show you the roots of the coffee economy in Brazil is that many coffee nations of the tropical belt are experiencing similar situations today. However, there are some fascinating patterns that we would like to highlight for you today:

1. Imperial dynasties protecting their historical domains. In the case of Brazil, the Imperial Braganza-Bourbons were at the service of the coffee planters’ class, who were also tied to their families. During the Period of Imperial Brazil (between 1822 and 1889), the Braganza-Bourbon emperors looked as if they were hired, or they were playing a specific mandate dictated by the coffee planters’ class to facilitate and protect the foundation of the coffee export economy.  As with other plantations existing in Spanish America, there were three aspects required for them to flourish: Easy access to credit, slave labor, and land availability. Access to credit was facilitated by the connections of the coffee traders; these intermediaries were exporting coffee to Britain and the USA, and through them, the coffee planters´ class was able to attract British financial firms, not just to invest in railways, but also in other government projects. During the period of Imperial Brazil, and although slavery was formally abolished during the interregnum period by the liberals, the traffic of slaves (illegally) continued until Dom Pedro II was exiled to France in 1889. See slide 8. More than 35,000 slaves per year were bought for sugar, coffee, rubber, cattle ranch operations, and construction of the railroads (2). Land was available for those who were formerly granted by the Imperial Crown, and it was also available with every new expansion of the nation. It was the southeast part of the nation where the ruling leadership was taking place (Río de Janeiro-São Paulo), and it coincided with the epicenter of the coffee production zones, which were in the phase of expansion and establishment. Both emperors, Dom Pedro I Braganza/Bourbon (1798-1834) and Dom Pedro II Braganza/Habsburg Lorraine (1825-1891), were inserted into a liberal constitutional monarchy at the service of the coffee planters. They were also aligned with the financial interests and import needs of Britain. The top 5 companies exporting coffee (in green bean sacks) from Rio de Janeiro in the period between 1827 and 1840 were the American James Birckhead & Co., the American Maxwell-Wright and Co., the British George Hudson & Co., the British Henry Miller & Co., and the German firm, F. Schott. Most of these firms exported more than half of all coffee shipments to New York, Baltimore, Trieste, Hamburg, Guernsey, or  Antwerp (3).  Britain was one of the main active partners in trade and commerce with Brazil during the first half of the 19th century, and later it was the USA.
2. The Revolts or Rebellions have always halted the liberal plans in Spanish America.  In the case of Brazil, this occurred during the Interregnum Liberal period (1831-40): These rebellions occurred during the time in which Pedro II Braganza-Habsburg was a little child. Every two years, a new round of violence occurred in different parts of Brazil: Pará, Northern Brazil (1833); Rio Grande Do Sul, Southern Brazil (1835); Bahia, Eastern Coast Brazil (1837); Maranhão, Northern Brazil (1836); and another synchronized uprising, when the teenage emperor was recently crowned, in three simultaneous locations: Minas Gerais, Rio, and São Paulo (1842). See slide 7.  The plans of the liberals against the conservative monarchy oscillated between radical liberals and moderate liberals. In Brazil, the moderate liberals were fortunately joined by the Restorationists; and that is how Dom Pedro II could access power. The violent mess that was occurring with all these rebellions was not only affecting the populations, but it was impossible to do business as usual for any landowner. And that is how Brazilian planters got united and opted for the “regresso” of the Brazilian-born prince Pedro II in 1840. Yet, the moderate liberals during this period were able to decentralize the authority structure of the justice system. Here we have explored the phenomenon of nativism, which is similar to the caudillismo or caciquism that we explored in Central America last year. See slides 6, 7, and 8.
3. The economy can prosper only when there is peace between the political forces of a nation and when there is a centralization of power. Slides 8 to 15.
   The reaccommodation of the government structure under Emperor Pedro II was to re-centralize power again. Brazilian political class was suffering from resipiscence because the liberal decentralization didn´t work; however, Pedro II kept certain liberal measures. It was during the period of Pedro II that coffee was chosen as the motto productive project for Brazil. On slide 9, we can observe the growth of Brazilian coffee exports from 1821-50. Every year, Brazil was inundating Europe with coffee, expanding export production and its revenues.  The demand was growing because the working class was being caffeinated in major European industrial cities located in Germany and Britain. Additionally, demand for coffee in the USA was also growing because of the huge wave of migration of Europeans to North America.  It was in this period that Pedro II motivated the planters to invest in railways and certain manufacturing projects to substitute for import needs from Britain. Pedro II was also topped with the brand of the railway emperor. Under his leadership, the railroads built expanded to more than 6000 kilometers. See slides 10 and 11.  Some of the investors in railways were Antonio and Martinho Da Silva Prado, Percival Farquhar, Irineu de Sousa, and Francisco de Paula Mayrink. A fascinating fact is to mention that Dom Pedro II granted 255 concessions to build railroads to private entities, when the Brazilian Parliament guaranteed the minimum dividend at first priority to those owners involved. The debt was mainly offered by British banks or investors tied to the export houses pulling coffee out of Brazil. For example, the London & Brazilian Bank was formed in 1862 and taken over by Lloyds Bank in 1923. This British entity had connections with slavery before it was abolished in Brazil in 1888. This included financing coffee plantations. Mortgages on these plantations were sometimes secured using the monetary value of enslaved people as collateral (4). Let´s visit slides 12 and 13, please.
4. The military coup d´état (Elite Army Force coup) as a way to change power. Pedro II was removed from power by the military through a coup d´état. This is a practice that has existed during the whole Bourbonic liberal regimes that followed the French Revolution. In 1889, this also occurred in Brazil when slavery was finally eliminated by the daughter of Pedro II,  Princess Isabel Braganza-Habsburg Lorraine/Bourbon-Bourbon. She signed the Golden Law outlawing slavery. Since most planters had collateral arrangements with enslaved people, you can imagine the general discontent against the Emperor.  Additionally, the image of Imperial Brazil was so negative internationally that there was no other choice for this nation but to stop slavery. However, the planters knew this was going to happen in advance, so they took measures to attract immigrants to work in their fazendas (large coffee estates).
5. Immigration from Europeans to Spanish America. In the case of Brazil, 20 years before the departure of Pedro II, numerous Italians, Portuguese, Germans, Spanish, and other Europeans traveled to settle in South America. The influx of immigrants as a source of labor was beyond the need for people to work in coffee or other plantations. It was a whitening opportunity for the population. Between 1870 and 1910, on average, 80,000 immigrants arrived in Brazil per year; most of them came from Italy. Between 1908 and 1941, another wave of 189,000 Japanese immigrants joined Brazil to work on the plantations (5).
6. Republican Governments of the 19^th century were driven by the motto of “Order and Progress”. The first republic of Brazil (1889-1930). See slides 13-17.
   When the former Portuguese colony of Brazil transitioned to a republic, the core economic interest was to protect the coffee plantations and São Paulo. Without slaves, the premises of the industry and agriculture changed, but all the presidents of this period were tied organically to the coffee planter class. Either they were part of the planters or were married to the daughters of the landowners of coffee fazendas. The priority was to keep the economy producing exports to fill the international demand. Brazil was a case of a monopsony during this period, because the USA was buying most of the coffee then.  We prepared a table of the main characteristics of these governments on social, economic, and political grounds, while observing that the coffee sector was not only protected by the governments, but it was also defended with devotion and supportive policy measures.  See slides 14 and 15, please. The priority during this period was to beautify Rio de Janeiro, convert it into a modern capital, with the Parisian Haussmann architecture. The investments were focused on creating an allure of a prodigious, prosperous Brazil. The symbols of riches were the Biblioteca Nacional, the Municipal Theater, and the complete rebuilding of Río de Janeiro downtown. Certain attention was given to schools and health campaigns. This period includes the First World War years; consequently, numerous Europeans were forced to choose between the USA, Argentina, or Brazil. The beautification of Río was a prerequisite to attract foreign capital and investments.  The investments of the government in these projects created a fiscal deficit that you can observe in slide 16.
7. The coffee sector triggered the establishment of the Agronomic Institute of Campiñas (IAC). During the period of Dom Pedro II, the IAC was founded, but the coffee planter class did not adopt it as their own initiative to facilitate their work. Research was not considered important for them, despite the fact that some Paulista government officers tried to build it with the help of the Austrian-Prussian Franz Wilhelm Daefert.  It took more than 50 years for the coffee planter class to acknowledge that they needed scientific help. Initially, the planters wanted to increase the productivity of the plantations (more bags per hectare) to recover the capital they invested in slaves and other projects. But they learned that it was better to implement the “valorization” of coffee, which is nothing other than keeping coffee in warehouses when the price is low and selling it when the price increases. See slide 17. Since Colombia and Brazil were together the producers of most of the coffee in the world (both nations totaled 80-90% of total coffee exports) during the first quarter of the 20^th century, it was easier to establish a cartel then. However, the formula of Brazilian coffee was low-cost, low-quality then. The concept of specialty coffee was not yet developed.
8. Finally, our analysis of historical Brazil ends with the Getúlio Vargas period (1930-54). Getúlio Vargas was the first president who cemented the foundations of social welfare, industrialization, and coffee research. See slide 18. The two periods of Vargas were important not just for innovation, competitiveness, and research in the coffee sector, but also in other crops. It is in this period that Brazil mono-culture for coffee started to change the roots of its further diversification into other basic crops, such as soybeans and corn. Cattle ranching continued to expand. See slide 18. This slide shows you all the initiatives in agriculture for Brazil. This nation evolved into a robust agricultural economy because the government of Getúlio Vargas took agricultural research seriously. Vargas is seen as a dictator by some, but as an idol by others. Whatever the allure that you wish to opt for, we can´t ignore his contributions in the field of agriculture, including coffee.

The agricultural ecosystem of Brazil today.
Brazil benefited from sending professionals to study in foreign lands. As you can observe, it was Cornell University, the main specialization center then. Carlos Krug got a Guggenheim scholarship to study genetics, cytogenetics, and improvement of the coffee crops at Cornell.  He shook the mentality of the coffee growers with the concept of high-yielding genetic crop research. Then Alcides de Carvalho tripled the contribution of what Krug began (see slide 19). The impact of Krug and Carvalho was so important, but it took several decades to be replicated by the descendants of the coffee landowners. As of the 1990s, in Brazilian society, numerous professionals in agriculture and agronomy started to travel abroad to specialize not just at Cornell but at other top universities, and returned to help in the development of the agricultural ecosystem that is now in place. However, this system has not been automatic for Brazil. Nor democratic either. It took them more than 150 years to arrive at it. Most of the Brazilian policies and measures have been developed through trial and error, learning from mistakes of different governments and regimes. Brazilian forests have been degraded in the process. Competitiveness of Brazil has been the result of research and innovation (6). Numerous professionals who have been trained in the top agricultural research institutions have returned to fix, build, modify, reconstruct, and evolve with this ecosystem that you see in slide 19. The next challenge for Brazil: Overcome climate change.

Currently, agribusiness in Brazil accounts for around 20% of Brazil’s GDP and more than 1/3 of exports. But the development of agricultural crops has also committed the sin of cutting down a colossal amount of virgin forests in the nation since the 1950s. According to several specialists, basic agricultural crops have severely damaged Brazil’s native vegetation, and coffee is no longer the main driver of deforestation. Between 1.93 and 2.25 million hectares are used to cultivate coffee (data from CONAB and FAOSTAT for years 2024/25 and 2025/26). The main causes of land deforestation are agriculture of other staple crops (soybeans for example) and urbanization. Is Brazil ready to regenerate its forests to overcome climate change? That is their next research frontier…

Announcement.
Our next episode is about the interesting aspects of financing and access to capital. We will travel to the beautiful Colombian zonas cafeteras. We are so pleased to share the case of Colombian coffee. Colombia holds a magnificent historical overview of its coffee industry, sources of funds, and how it was able to attract and diversify investors in times of heavy political distress.

Musical Section.
This saga is committed to raising the traditional musical instruments and their respective musicians over the digitally produced sounds. This saga is dedicated to the chamber orchestras. Our selection for today is: the Helsinki Chamber Orchestra of Finland. https://www.helsinkichamberorchestra.com/

Enjoy!

Thank you for reading http://www.eleonoraescalantestrategy.com. It is a privilege to learn. Blessings.

Sources of reference and bibliography utilized for today´s inferences. The bibliography is listed on the last slide of the reference reading material. Click the respective URL to trace them.

Bibliography in this post: This will be added accordingly with the strategic reflections.

1. The four maps referenced can be found here:
   https://raremaps.com/gallery/detail/65481/recens-elaborata-mappa-geographica-regni-brasiliae-in-america-meridionali-maxime-celebris-accurate-delineata Map of Brazil until 1757. You can observe the limit boundaries with the original Paraquarie zone of the Jesuits.
   https://www.loc.gov/resource/g5200.ct001120/?r=-0.33,-0.031,1.582,0.964,0 This is the total area of the Paraquarie under the province of the Jesuit territory of 1733.
   https://www.geographicus.com/P/AntiqueMap/paraguay-seutter-1730 This map of Paraquarie from 1722, published in 1735, shows the different departments of the Paraquarie, including the main Jesuit missions destroyed by the “barbarians” (Missio à Barbaris destr.). Brazilian Barbaros destroyed settlements, labeled with an X, and these Paraguayan areas are marked on the map to refer to the devastating slave raids mounted by the Bandeirantes, or Paulistas of Brazil.
   https://www.ospreypublishing.com/ca/paraguayan-war-186470-9781472834430/ This book shows the last territories that Brazil, Argentina, and Uruguay took from Paraguay after the War of the Triple Alliance (1864-70)
2. https://www.sup.org/books/history/economic-and-demographic-history-sao-paulo-1850-1950/excerpt/excerpt-chapter-1
3. Absell, C. The rise of Coffee in the Brazilian south east: tariffs, and foreign market potential. 1827-1840.The Economic History Review 73, no. 4 (2020): 964–90. https://www.jstor.org/stable/48597390.
4. https://www.lloydsbankinggroup.com/who-we-are/our-heritage/lloyds-bank.html
5. https://library.brown.edu/create/fivecenturiesofchange/chapters/chapter-4/immigration/
6. Reifscneider, F. et Al. New Perspectives on the History of Brazilian Agriculture. Embrapa 2012. https://www.alice.cnptia.embrapa.br/alice/bitstream/doc/1045358/1/NewPerspectivesFinal.pdf

Disclaimer: Eleonora Escalante paints Illustrations in Watercolor. Other types of illustrations or videos (which are not mine) are used for educational purposes ONLY. All are used as Illustrative and non-commercial images. Utilized only informatively for the public good. Unless otherwise stated, I do not own any of the lovely photos or images.