In a functioning market economy, the value of a good is determined by the willingness-to-pay of the consumer. The price, as opposed to the value of the good overall, is determined by the collective and complex interactions of buyers and sellers and it really only measures the value of marginal coffee.
Anyways, if sellers don't like the price they are getting in a market economy, they can leave the market and try their hand at something else. But when government officials have a hand at setting prices, sellers can go complain to them. That's where the fun begins. To wit:
An attempt by Venezuela's leftwing president, Hugo Chávez, to double the price that coffee producers pay farmers for a sack of beans has led to empty shelves in supermarkets throughout the country and fears of shortages of other basic foodstuffs.
President Chávez, who maintains price controls on basic foodstuffs, raised the price of coffee beans by 100% last month after weeks of protests by coffee farmers.
Now that coffee beans' price has been jacked up artificially by Chavez, coffee already bought by roasters would have higher resale value.
But most of the country's coffee producers, who buy, roast and grind the beans, refused to sell on the coffee yesterday, claiming their margins had been cut, and began hoarding thousands of sacks of unprocessed beans.
But hey! That's not playing by the director's rules!
Mr Chávez said he would not tolerate the situation. "I've instructed the National Guard to look for the missing coffee and to find every single kilogram of it," he said in his weekly TV and radio show, Hello Mr President. "The army has the permission to seize the coffee with the power of attorneys and judges. We will sell the coffee at prices set by us."
You can sell it at any price you want, but you can't make people buy it at any price you want. In other words, demand curves have negative slopes. That's one of the checks inherent in the market.
But, dadgummit, if you can't beat it, nationalize it!
In response, President Chávez has said that he might be forced to nationalise the coffee industry.