Coffee producers in Brazil - the world's largest producer of coffee - are seeing their livelihoods squeezed by falling coffee prices.

Local economies reliant on coffee production have been hit hard, with a drought early in the season adding to their problems.

With a bumper Brazilian harvest forecast for next year and no sign of a pick up in demand, some say that many small farmers will go bust.

Vietnam's rise to be the world's second-largest coffee exporter is one of the reasons there is a glut of coffee.

Although it produces robusta - rather than the stronger flavoured Arabica coffee grown in Brazil - prices have fallen to record lows.

Production cut?

Even as producers suffer from this glut of coffee, there appears to be little prospect of an agreement between worldwide coffee producers to limit production.

P&A Marketing's Carlos Brando - who sells Brazilian coffee around the world - doesn't see any near-term solution.

"I think in the past it was easier, there were fewer producers and they shared common values and a common culture. Now some of the main growers are not prepared to sit around a table and talk and so we have a different situation than we had ever before," he told the BBC's World Business Report.

Brazilian coffee farmer Alexander Husemann da Silva blamed the shortsighted approach taken by coffee producers for their current problems.

He told the BBC's World Business Report: "Paradoxically all the advances that we have made in the last 10 years increasing the productivity per area has acted like a double-edged sword.

"Production went up too much and there is now too much coffee. While we invested in productivity we didn't invest in propagating the idea of coffee to increase consumption."

He predicts that many of his colleagues will go out of business before things get better.

Local economy

The falling price is already hitting the local economies - reliant on coffee dollars - hard.

P&A Marketing's Carlos Brando has seen the effects of falling demand for coffee in his local town.

"You just have to go to the main street here and ask at the shops. Sales are terribly down.

"The local car dealerships are not selling as much as they used to sell and the price of real estate [is falling]," he said.

"We know this from the past - when [coffee] prices are bad, the prices of real estate fall dramatically. But this time they have fallen even further," he added.

Some argue that one solution for some Brazilian producers is the specialty coffee market, where producers enjoy better relationships with their customers and often have long term contracts at fixed prices.