The Coffee Crisis: Is Fair Trade The Solution?

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

Coffee is “a major cash crop of Chagga farmers” (p. xi) and a large portion of the economic profit, but what happens when drought and coffee berry disease hit the Chagga society. Environmental problems such as these became a large problem facing many people of the Chagga. Much of the rich farm land on Mt. Kilimanjaro inhabited coffee trees and therefore leaving less space for individual gardens. When coffee berry disease and drought affected the production of Tanzania’s major export, people such as the Chagga were left with a food shortage, therefore introducing another environmental problem: famine. Although families could maintain home gardens with the small amount of land available, it rarely was enough to satisfy the whole family. Yet Chagga farmers were not permitted to convert coffee farming land into land for personal farming. Another large cause of sickness came from the bacteria ridden water. Women did not boil the water upon giving it to their young. A lot of people have heard “don’t drink the water in Mexico”. Well this was a similar situation

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.

It is impossible to overestimate coffee’s global importance. Valued at over $100 billion, it is the second most sought-after commodity. Ponte, an expert on the coffee-trade, maintains that over two billion cups are consumed daily. The majority of consumption occurs in developed countries, whilst 90% of production takes place in developing countries. For many nations, coffee cultivation forms the backbone of their economy, an essential avenue for employment and revenue. In Brazil alone, the industry employs an astounding five million people. Seeing as millions depend on this commodity, I always felt good about buying my daily coffee– I was contributing to the economic enfranchisement of millions! However, recent readings have cast a doubt on my strategy.

The “Coffee Wars – The Big Three: Starbucks, McDonald’s and Dunkin’ Donuts” article focuses on the company analysis of the Starbucks brand and how its main competitors, McDonald’s and Dunkin Donuts, has affected their brand and driven competition higher. Even though there are many companies trying to enter the specialty coffee market, these three companies own the majority of the market share. With Starbucks’ top quality and above average prices they hold a different market than the fast coffee/food market of Dunkin’ Donuts and Starbucks; yet the competitive moves Dunkin’ Donuts has made over the years in order to compete with Starbucks and surpass McDonald’s has driven competition up between all three companies. The competition has stiffened ever more in the past ten years due to the changing economy. This led to “the big three” to come up with different techniques to gain competitive advantage over the other. Although the competition between these companies is to gain most of the market share, consumers are still loyal to a certain brand; this makes it difficult to gain each other’s clientele. McDonald’s continues to appeal to customers who want value and speed, Dunkin’ Donuts focuses on the middle-class, while Starbucks a customer who desires a higher quality product along with being recognized for using the brand.

In Columbia, there are numerous industries. Most of them are natural ones such a coffee growing or sugar cane. Columbia is developing new forms of sustainable growing practices for their primary crops, as it not only benefits the environment, but also the profits of the major agricultural companies. These are beneficial for the environment because instead of tearing down beautiful forests to put up a building, the sustainable farming methods are helping to preserve the forests while increasing the quantity of crops of coffee and sugar cane. While organizations are working to improve sustainability, an already existing issue exists, a lack of workers. Although Columbia may be facing challenges such as a lack of workers,

Perhaps if we open a direct line from the U.S to coffee producing farms, allowing the major companies here to choose which source they get their beans from and who produces them. Coffee is “the second largest world

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”.

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

A middle-aged man in Mirebelais, in the Central Plateau of Haiti, raises a tattered T-shirt to show a group of blans—the Creole word for foreigners, or whites—his thin stomach, how long it has been since he has eaten. In the sprawling hillside favela of Jacarezinho, overlooking Rio de Janeiro, a 31-year-old single mother with two small children describes how she struggles to get by on $40 a month from childcare work. And in the capital of the richest country in the world, in Washington DC, a homeless man in his late 50s—who is good-natured and suffers from no drug addiction, nor mental or physical disability— holds a cup to passersby each day for money.

Coffee is certainly not a drink. It is a global commodity. The coffee industry hires many people around the world for its growing, processing, and trading. The coffee trade is vital in economies in less developed countries and in more developed countries. Every single way the coffee trade works in is vital to economies; from farmers, to consumers.

One might ask themselves why a country like Guatemala continues to base its economy upon the production of coffee, if they only get about ten percent of global earnings back? At first it may not seem as if it is the best financial transaction for them, taking in such low profit margins, while still retaining much of the cost and risk involved in the crops creation. An easy answer to this is yes, their margins are often not great, but they produce enough volume to make it potentially very profitable. Because of the country’s huge commitment to coffee growth, coffee has had Guatemala see great economic reward from time to time. Like in the early 1970’s coffee was turning huge profits. “The economy boomed from 1971 thorough early 1974. Then, as a result of inflation (21.2% in 1973), the world energy crisis, and an annual population growth of 2.9%, the economic growth rate slowed from 7.6% for 1973 to 4.6% for 1974. During the second half of the 1970s, Guatemala's economic performance slowed further; during 1974–80, the average annual growth rate was 4.3%.” (Nations Encyclopedia)

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.

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