The Coffee Crisis

Continuous war in combination with rampant drug trafficking has caused the coffee industry in Colombia to struggle for many years, though Colombia’s long history with coffee predates that struggle. The coffee plant first reached Colombia sometime in the late 1700s (Encyclopedia of World Trade: From Ancient Times to the Present) and Colombia entered the coffee trade in the 1830s (Wikipedia, Coffee Production in Colombia). The geography of Colombia lends itself well to coffee production. Located in southern South America, Colombia is home to the Andes Mountains, which provides an optimal altitude for coffee (and coca) to grow. The Andes have three sets of mountain ranges, the Western Cordillera, the Central Cordillera, and the Eastern Cordillera. The majority of the coffee plantations in Colombia are on the western side of the Eastern Cordillera (Philip’s World Factbook 2008-2009).

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.

Coffee is then sent to roasting facilities where it is blended. By “manipulating the composition of the blend, roasters

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.

​Over time, the tradition of taking the highly lucrative cash crop of coffee has become universal to the extent that its production is marred with interference from political, social, economic, and scientific concepts that affect its production. In Central America, the major countries that produce coffee include Costa Rica, El Salvador, Guatemala, Honduras, Mexico and Nicaragua. In these countries, coffee is among the largest traded commodities. Normally, this production takes place through small-scale farmers who are largely dependent on larger corporations to bridge the gap between them and the consumers. Coffee production in Central America is affected by social, economic, globalization and political factors that

Nicaragua is one of the poorest countries in Latin America. Coffee was introduced to Nicaragua in the mid 1800’s. Since then it has played a crucial role to both Nicaragua’s economy and its environment. It is currently the nation’s primary sources of foreign exchange. Coffee plantations are the economic backbone for thousands of rural communities. Today coffee also supports the 45,334 families that own and operate small farm. In the late 1990s, coffee annually contributed US$140 million to the national economy and provided the equivalent of 280,000 permanent agricultural jobs. Also, the rural communities who cultivate this golden bean are inadvertently helping in preserving Nicaragua’s precious forests and its threatened biodiversity. However,

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

Throughout the Civil War, coffee was as prevalent on the battlefields as it is in offices today. In fact, the Union army was fueled by coffee. When soldiers did not have time to boil water they would chew on whole beans as they marched. Every night, Union campsites had tiny fires, to be able to boil pots of coffee (Norris). Soldiers preferred coffee over everything else because coffee, was almost always fresh due to the simple fact that it was delivered whole, because coffee was sold in bean form it made it a lot more difficult the supplier to try to minimize on the quality of the product. But this did not stop the dishonest suppliers to try to sell less for more money. Officials began to ask for coffee as whole beans because of some of the suppliers and contractors who tried to get more money per pound by putting sand and dirt into packages of ground coffee (Norris). Coffee was loved among soldiers but it was convenient to find easier ways to make

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

As far back as 1860, coffee had become the major export in Colombia (Equal Exchange). By the 1920s, however, the coffee industry in the country was undergoing difficult times as a result of unstable international market forces. Thus, coffee growers were not guaranteed a steady income. Out of these circumstances arose an

The roasting process can affect the flavor of the final product. More importantly, the flavor variations come from chemical changes that occur to the active ingredients in the coffee beans when roasted. Both

First of all, people in local communities suffer from poverty because of imbalanced trade and payment to the commodity that they grow. Their lives depend a great deal on so-called global commodities such as coffee, cacao, and tea, which can be available to citizens in developed countries at a low price. Therefore the demand of these commodities has increased in the last few decades. According to Ambinakudige (2009), coffee that is one of the most traded commodities in the world is the main means of small farmers’ lives in developing countries. He examined how people in developing worlds are influenced by volatile global markets, especially focused on small farmers in the Kodagu district of India. In 1998, the amount of coffee export reached to US$469 million. However, after the International Coffee Agreement collapsed, known as the coffee crisis, which deregulated the international coffee supply, the labour force in coffee sector decreased in India, and 150,000 jobs were lost between 2000 and 2002 (Oxfam, cited in Ambinakudige 2009). People cannot manage their coffee plants and yield, earn enough money to return a loan on time, and get the loan the following year, which results in less investment in coffee. That cycle makes their lives worse and makes people stay in the cycle of poverty (Ambinakudige 2009 p.562).

When you go to use your Keurig machine in the morning, chances are that you have some pods filled with grounds that were grown in Colombia. Their highly coveted coffee bean is sought after by coffee enthusiasts and in turn the work force is willingly to harvest and process the bean. Next to Brazil and Vietnam, Colombia is the third highest producer of coffee in the world. Since this commodity is popular, Colombia takes advantage of the global commodity and its demand for what they have to sell. We also are going to take on the county of Vietnam Both and Brazil are the top profomers in. As of 2014, Columbia is the third highest producer of coffee only matched by Vietnam and Brazil at #1.

It is common in Central and South America, particularly in Brazil as well as in Africa, especially in Rwanda. Coffee farmers in Rwanda plant the exceptional variety of coffee collectively. It is also very common in Brazil. As the coffee leaves the farm, it can either be sold to processors or marketers. For instance in 1999, Starbucks put 1000 bags of Ipanema bourbon coffee on its shop as a trial. We find that the coffee beans were given a commodity status before leaving the farmers’ stores. This is because we can see value being attached to them. The cost for the over-the-counter bourbon coffee in the Starbucks shops was thrice as high as it was for the local buyers in Brazil (Colitt, 2001). Thus, the Bourbon coffee attains the status of a commodity at the first instance when the farmers sell it to the market. In the case of Starbucks in 1999, the coffee was sold at an estimated $4.00 per pound. The fact that it is made with the aim of the market in mind is what makes a good a commodity. Therefore, without the market, the good would not qualify as a commodity (Wood, 1993). The coffee beans can be described as a commodity from the onset of joining the market.

Coffee farming is crucial as the source of income for smallholders farmer in most of developing countries. Although, the number of private plantation is quite small, they might have the possibility to break the boundary and an access broader market channel. However, small-scale farmers might have several constraints that prevent them from reaching the market. The demand for high quality products and consistent volumes is one of the possible constraints that they might face. Several studies have been drawn the important barrier encountered by developing country producers regarding institutional and infrastructural support (Trienekens, 2011:52). To some extent, smallholders also faced a various disadvantage