Case Study : Starbucks And Second Cup

Coffee has not only impacted the world socially, but it provides financial means for many countries who export their coffee beans.

I watched the video “The Coffee Go-Round” which talks about how the cost of coffee seems to be dropping and as a result this has a negative impact on coffee producing countries. One of the strategies mentioned in the video is to grow different crops, this strategy isn’t so great since many of these farmers don’t have enough money to grow different crops. Another strategy mentioned is to move out of the land and go into the city, this is a good and bad option. It’s a good option since in cities there are more jobs being offered. However, it’s not such a great option because many of these farmers have lived their whole lives on their land, and moving to the city is a drastic change especially if they have a family. Lastly, another option is fair

Sometimes they only pack one tortilla for lunch because that’s all they can afford. One of the men in the film took ten years to pay back the loan he received to purchase the land. Guatemala farmers work really hard and sometimes, they are paid whatever the buyer wants to give them for it. Their children has to work after school to help out, they live in poverty, and they don’t rest until the end of the work day at 10 or 11 at night. I never knew that buying one cup of coffee has this effect on the farmers. This is common with globalization because, “for instance, multinational corporations sometimes continue to invest only enough in poorer countries to efficiently extract the resources they produce or to benefit from the low costs of labor obtained there” (Chapter 10.5, para. 5).

2. Most successful companies like Starbucks have started programs to oversee and make sure their farmers are treated well. C.A.F.E.( Starbucks ' program) is Coffee and Farmer Equality this program ensures the farmers safety and the quality if the product. This program has shown to boost productivity between the company and the grower and between the workers and the owners of the plantations. Even though this program is in place the workers are still paid poorly. An expert picket can collect about 6-7 baskets of coffee berries a day, yet they are paid very little. 71% of farms in Brazil are less than 10 lectares, 25% of them are less than 50 lectares and 4% are more than 50 lectares.*

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.

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”.

It is a globalised world. Being a part of this progressive society, growth is a key indicator of success. Global Trade is one such benchmark that differentiate nations and economies. Every nation has some policies to promote the strengths of their trade globally. Likewise, Colombia has been known to be the third-largest producer of coffee after Brazil and Vietnam (in terms of volumes produced) from a long-time. Coffee is the world’s most traded commodity and most of it is produced by the small-scale farmers. Hence, globalisation has had a great impact on its production as well as trade. Therefore, Colombia’s strength lies in the production of coffee but also promoting their strengths and honing them globally to their benefit. Coffee is not just a cash crop for the Colombians but it’s a way of life for them. The farmers associated with the credulous society of small scale coffee growers called National Federation of Coffee Growers of Colombia (NFC) (1) was founded in the year 1927.

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?

These factors contributed to economic, social and natural bases degradation of the country (pg 1).” According to authors McDaniel, Byrne and Byrne, Nicaragua is one of the poorest countries where the people make a living by fishing and agriculture. However, “Agriculture plays a significant role in the country’s economy accounting for 21.5% of value added GDP and employs nearly 47% of the country’s population (10). Also not only climate change threatens agriculture, but negatively impacts rural households (11). Many About Nicaragua’s economy, Climate Change, Agriculture and Food Security (CCAFS) reports that the country is one the “poorest” countries of Central America. Coffee beans are mainly Central America’s backbone of the Central Americans. For Nicaragua, it brings “fifth to a quarter of export revenues.” However due to climate change, it can worse affect coffee growing due to its sensitivity that can cause a heavy economic loss. In order for the country to adapt to this climate change, the government launched a National Adaptation Plan that will help coffee farmers adapt to climate change and to “diversify coffee based incomes. Also, CCAFS reports that the International Fund for Agricultural Development (IFAD) provided $24 million to assist the coffee farmers by providing technology to help poor famers adapt, improve, and increase incentives for

With no choice families have to work in labour to pay off debts or to support life in a family. An example is Mohammed Ali Indris, 36 year old Ethiopian coffee farmer who has 12 children. Mohammed's year profit of selling coffee beans decreased from US$320 to US$60. He stated "I had to sell my oxen this year to pay for the loan I took out for fertiliser and pesticides that I needed. If I couldn't pay the loan I would have gone to prison." This evidence shows how socioeconomic conditions of the farmers are the factors of citizens in developing countries growing coffee beans. Poverty must be considered one of the primary causes contributing to the linear global spatial pattern of this topic. However, the coffee producing countries form a linear pattern around the equator line, with a large quantity of the countries being part of South America. Regions

The coffee industry has proven there is a never-ending shift of global power through the global economy. Thus, through the history of coffee, it is apparent that factors involving the globalization process such as absolute advantage and comparative advantage have had an impact

Unshaded monoculture systems dominate many coffee farms in Puebla and Chiapas. This system removes canopies and deprives coffee plants of natural barriers that tall trees provide. A major disadvantage of this method is that coffee plants are more vulnerable to pests and diseases. Therefore, more chemicals are used in order to minimize plant stresses. Particles from pesticides can travel far and contaminate soil and water or contribute to global warming. Removal of canopies also reduces biodiversity because of a decrease in habitat space. A major advantage of this system is that it is high-yield because the coffee plants have full exposure to the sun. So, more individuals are needed to work on the fields. I think that this specific consequence

Threats • • • • Customers demanding fair-trade and organic coffee. Big chain coffee shops dominating the market. Economic issues and crisis Lack of ownership of primary resources e.g. Coffee farming.

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