Vice Squad
Tuesday, May 18, 2004
 
Supply-Side Substitutions: Turning Coffee Into Qat


One of the most vexing problems in thinking about desirable vice policies concerns possibilities for substitutions. It might be the case that making marijuana less accessible leads to increased use of alcohol or other drugs, possibly with worse social outcomes. So even a drug prohibition that "works" in terms of reducing prevalence might be a policy mistake, due to undesirable substitutions (and perhaps one hundred other reasons). (Here is one recent sad story along these lines, and a Vice Squad post from early May that touched on this theme.)

Most discussion of substitutions deals with the demand side, though occasionally supply-side substitutions enter the picture: crack down on alcohol, and there will be a shift from beer to spirits, and crack down on marijuana smuggling, and there might be a shift to cocaine. There is an interesting substitution currently underway in Ethiopia and some other African countries: low coffee prices are inducing a substitution by farmers to the growing of qat (or "khat"). Here's an excerpt from the linked Reuters article:
"No one tends coffee plants any more because they are not worth the effort. We prefer to look after our qat crops which generate good income for us," said one farmer in Kaffa.

Ethiopia exports qat across the Horn of Africa, counting the crop as its second biggest foreign exchange earner. Ethiopia is the largest coffee producer in Africa with annual production estimated between 250,000 and 300,000 tonnes, most of which is consumed locally.

Addendum: Here's a recent news story that provides some information about the consumption of qat.

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