The coffee industry is not heavily regulated, but there are some regulations that must be followed. For example, iCafe wants to make sure that only arabica coffee is being grown in Costa Rica, because it's a higher quality than robusta. While Costa Rica's government is pushing to neutralize their carbon footprint, there aren't any real regulations that enforce this for coffee; it's more or less a strong suggestion. When it comes to coffee exportation, the government's largest role appears to be in dealing with the FDA and or other country's regulatory agency.
When exporting coffee, there are a few issues that the coffee producer must confront.
- They often have to deal with a different currency. From an economic standpoint, the could potentially make or lose money depending on which currency (assuming there are two different currencies being used in the transaction) is valued higher (or devalued, for that matter).
- They may encounter tariffs (taxes on imported goods). This would make the product more expensive and therefore less attractive to consumers.
- They may also encounter trade agreements. Hypothetically, if the trade agreement is between the US and Europe, that's great for them, but doesn't really help Costa Rica. It would make it more difficult for Costa Rica to trade with these countries.
- Taxes also make it more expensive for the coffee producer to generate a profit.
If there was a decrease in government regulation, I don't think there would be a substantial effect on the coffee industry. The only thing that could change would be the introduction of robusta coffee, but since arabica is better quality anyways, it wouldn't make sense to switch. Since there are so many different varieties of arabica coffee and so many producers, roasters, etc., monopolies aren't a concern.
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