Coffee Commodity Chain And Its Effects On The Global South

The inoculate Fair Trade coffee beans which satiate consumers ' morning desire for a pick-me-up as well as bettering the lives of the growers begin their journey in the Northern highlands of Sumatra in the Indonesian Island chain. Trader Joe’s Fair Trade Organic Sumatra Coffee beans are grown on the small Indonesian island of Sumatra in the tropical South Pacific. Rather than being produced on large Multinational Corporation owned-and-operated plantation style coffee farms, this global commodity begins its journey from creation to consumption on small, several acre large plots owned, operated, and harvested by small-scale farmers in the

From the New York Times the article: “Coffee’s Economics, Rewritten by Farmers”, illustrates how Kenneth Lander, a lawyer in Monroe, moved with his family to a coffee farm in San Rafael de Abangares, Costa Rica. Mr. Lander was looking for a more balanced life between work and his lifestyle. Mr. Lander started growing his own coffee from 12 acres of land that yielded 6,000 pounds of specialty-grade coffee beans a year. But in 2008, his financials started to dwindle, and he quickly struggled to support his family. Farmers in his similar financial situation usually turned to organizations like Fairtrade International who typically bailed them out, but for Mr. Lander, he sought out innovative ideas. He began to roast his own beans and sell them

Coffee is not just a drink. It’s a global commodity. Multinational coffee companies now dominate the industry worth over $80 billion, making coffee the most valuable trading commodity in the world after oil. While we continue to pay for our lattes and cappuccinos, the price paid to coffee farmers remains so low that many have been forced to abandon their coffee fields. This conundrum is most evident in no place other than Ethiopia, the birthplace of coffee.

Coffee had lots of demand, but little supply. The country that could grow and export the most coffee had a substantial economic advantage over other countries in terms of commerce.

Ever since the first coffee bean tree was discovered in Ethiopia, the bean became a pleasurable commodity that spread quickly to Yemen and other Asian countries. It wasn’t long before it came to Brazil, becoming one of the largest coffee producing countries in the world today. Throughout time, people came up with brewing systems and coffee-making machines that made it easy to manufacture coffee but it wasn’t like that in the early 1800’s. Slaves came into Brazil and were forced to work in difficult labor conditions to collect and roast coffee beans.

1. Coffee growers in poor rural areas are paid very little for their crop. What strategies are proposed in this clip for changing that situation?

Finally, global economic issues have an immense influence on the world of coffee. Throughout history there has been a pattern that coffee producing countries are economically worse off than those that are consuming the coffee. Pendergrast mentions that “in 1950 the average income in consuming countries was three times that of coffee-growing nations. By the late 1960s it was five times great” (270). With that said, many producing coffee countries were facing endemics and malnourished peoples because workers were receiving absurdly low wages thus placing them into poverty and human suffering (271). Specifically, although 90 percent of El Salvador’s exports consisted of coffee in the 1930s, they agonized from “‘low wages, incredible filth…[under] conditions in fact not far removed from slavery’” (168). Global economic issues of these producing countries lead to dictators easily gaining power such as those in Guatemala, Nicaragua, and Honduras (170). Not only was politics a matter that resulted from global economic issues, “the high interest rates from financial institutions and price [squeezes]” lead to the economic struggle of farmers like those from Colombia due to

We can understand the relation between commodity and trade development through the study of coffee and it’s origins. Over about 90% of coffee is produced in the South, and consumed in the North. Or a long time Latin America has provided most of the world’s coffee. Coffee comes from a cherry produced by a tree that requires a warm climate without any sudden temperature shifts or frost and it needs plenty of rain. This climate is ideal for coffee between the tropics of Cancer and Capricorn. During the movement of coffee from harvest to export the first step is to separate the coffee bean from the skin and the pulp of the cherry, this results in what is called “green” coffee. Before it is exported the coffee is cleaned and sorted into lots that have different quality attributes, something like the grain elevators. The lots vary as they go from country to country based on the size, the shape shape and the deficiencies it might have or the way it is processed. At this point in the process the coffee still has it’s individual quality and value.

In the movie “Black Gold”, the Ethiopian coffee farmers were getting a low cost for their harvested Ethiopian coffee. Farmers were forced to live a living standard below the average norm because of the unfair compensation. Despite the fact that more than two billion cups of coffee were getting consumed every day(“Black Gold”) and coffee’s retail sales have increased from $30 billion to $80 billion every year since 1990 (“Black Gold”), the farmers were still not getting enough to establish the lives that they deserve. The primary cause of this unfortunate occurrence was the fact that the four major companies (Kraft General Foods, Nestle, Proctor & Gamble, and Sara Lee) that hold the majority of the market shares of coffee controls the international price of coffee due to the lack of international regulation(“Black Gold”). Also, the

The documentary Black Gold, is about the world coffee market and an Ethiopian fair trade cooperative. Ethiopia being the birthplace of coffee is the largest producer of coffee in the world, producing some of the highest quality of coffee beans in the world, like Harar, Yuban and Sidamo types of coffee. The significant problems pointed out in this documentary show what is wrong in the global trading system. Mainly, while most of us continue have our lattes and specialty coffees, the amount paid to the Ethiopian coffee farmers is so low that a lot of them have been forced to chop down some of their coffee fields and rely on other crops to help them survive. The Ethiopian people are malnourished; they have no clean water, no healthcare, and no schools for their families. As quoted in the film, “They are living hand to mouth”.

The popularity of coffee began with its introduction to Europe in the 17th century, a time when colonialism had brought many resources to countries like France and Britain. In Europe, coffee was a delicious beverage, and was very inexpensive due to the monopoly of coffee imports from colonized to colonizer. But while tea was still the preferred choice in North America, an increasingly higher tax on America’s favorite beverage led to the Boston Tea Party. Tea forever came to be known for the British oppressor, and coffee became as popular in the U.S. as it was in Europe. The popularity of coffee remained because the colonies in Africa were required to export all precious resources to Europe. Despite the history of exploitation of resources in many African countries, the coffee industry in Ethiopia has thrived, taking a product that is in high demand and creating a stable economy, leading to the improvement of its citizen’s economic prosperity. This is because Ethiopia was one of the few areas not colonized by European powers, letting it avoid the consequences of colonialism and focus on the development of a country.

The price of commercial coffee is controlled by the New York and London exchange markets where they decide the prices of coffee(Francis, 2006). Most of the buyers and seller that deal in the trading of coffee usually look at the New York market to make their decisions on the prices. Also the World Trade Organization is involved in controlling trade of commercial coffee, but these decisions and the way stuff is traded is controlled by developed nation and small undeveloped countries in Africa have to say or voice in

The film highlights the fact that coffee is the most valued word commodity, second to oil. The beginning of the film shows the process in which coffee is made- from bean harvesting by workers in Ethiopia who make next to nothing, through several intermediated stages, and into the market. Although we spend countless amounts of money on coffee without thinking twice, the price that coffee farmers who produce this commodity are getting paid, is disgustingly low. Some of them have even been forced to walk away from their fields. There is no better place to see this

The coffee-growing countries are forced into competition with each other, each trying to get a bigger share of the market. This means that they all produce more and more coffee. As a result, there is too much coffee on the world market and the price falls, so each country has to try to sell more coffee to make the same amount of money chart: coffee consuming countries Most of the world's coffee is bought by just a few countries, and most of the world's coffer market is controlled by a very few companies. Just nine countries in the North import over 70% of the coffee on the world market.

Costa Rica now provided raw material for Starbucks which accounted for about 15 percent of the total coffee beans Starbucks needed every year. Costa Rica as one of the raw material suppliers plays an important role in global value chain. Coffee has played a pivotal role in the development of Costa Rica. It has shaped social, cultural and political institutions and is still one of country’s major agricultural exports. (Anywhere, 2016) The global value chain in this coffee industry can be described that Starbucks, the centre in this coffee global value chain, purchasing raw materials (coffee beans) from coffee farms in Costa Rica, reprocessing and reproducing in retail shops, selling the finished products (various kinds of coffee) to customers in the world.