Coffee: Black Apron is good equity too!
By Wondwossen
June 3, 2006
Ethiopia, the birthplace of coffee, has been growing the crop for over 3000 years, and continues to cultivate some of the world’s super premium quality coffees. Over 700,000 households depend on coffee for their livelihoods and millions more for part of their income. Paradoxically enough, in that land, millions are dying, most deprived of food and the basic human necessities. Many farmers have begun planting narcotics instead of coffee.
The latest statistics I have suggests that Ethiopian farmers produce as little as 5 quintals (220.46 lb) of coffee per hectare (0.2471 acre). This is significantly low compared to the productivity of similar family size small scale farmers in other countries that stands at 15 quintal per hectare or more. Fair Trade certified coffee guarantees a minimum price of $1.20 a pound - a price that is widely believed to equate the average cost of production. Even at this price, Ethiopian farmers sell their coffee at a loss. To its credit, the price guarantees the least possible loss to these farmers who were hit severely by the coffee crisis during year 2000.
In Ethiopia, farmers’ labor is never considered to be a factor in a cost structure hence, cost of production as we know it comprises anything but costs for health care, education, nutrition, drinking water. Families strive to survive if anything else, to stay on their land. Coffee farmers in Ethiopia are grateful for fair trade coffee because they are able to feed their families twice a day! The irony here is that the second plate of food a day is considered the profit. This is the reality and heartbreakingly accepted by each family as a given. The sense of dependency is so deep rooted and any change is beyond imagination that farmers’ cooperatives themselves are only dreaming of. The official website for Yirgacheffe Coffee Farmers Cooperative Union (YCFCU) sums it all:
Vision: “To see farmer members out of poverty and dependency.”
Mission: “To increase the incomes of farmer members from their agricultural products.”
It would be a grave mistake to attempt to compare YCFCU’s statements of vision and mission with that of, say Starbucks, because it will be a gross violation of economic principles. On the other hand, failure to acknowledge the mutual co-existence on this planet of the rich and the poor will equally be unfair. In fact, Starbucks’ Mission Statement is not even close to being irresistible for YCFCU. One of the guiding principles of Starbucks reads, for example, “Recognize that profitability is essential to our future success.” This is beyond the vision of the people at Yirgachefe but accepted.
According to the Seattle PI’s report - Coffee tasting, but not judging - “Starbucks believes that if farmers go out of business as a result of poor sales, its coffee supplies are compromised.”
Starbucks is the pillar of our local economy here in Seattle. Thousands of Seattleites, including myself, cherish the company for its entrepreneurial success and its contributions to communities. As natural as it goes, I have always wished success for Starbucks so that it gives back more to communities. Perhaps this is the main reason why my friends and I am following with interest the negotiation between Starbucks and Tadesse Meskela of the Oromia Coffee Growers Co-operative Union representative. I see the negotiation mainly through Starbucks’ commitment for social responsibility than its merits for business as usual.
The Oromia Coffee Growers Co-operative Union consisting of 70,000 poor farmers understandably expect less than they deserve for their produce. Unlike consumers and businesses, coffee farmers in Ethiopia and all over the world are in the market to earn a second plate of food on their tables. For millions, coffee comes before their meal – the vice versa is simply a leisure. The Oromia farmers will be pleased if they won the prestigious Starbucks Black Apron that comes with an award worth $15,000 in community projects, for their coffees. But their mere survival depends on the extra few cents that enables them to serve one additional meal a day.
Coffee farmers are caught in an endless vicious cycle of poverty, at best. Severe famine, high death rate, illiteracy, lack of capital and low productivity are the major stops along a perfect cycle of poverty. These small household farms produce the best quality shade grown organic coffee in part because of the scarcity of chemicals and artificial fertilizers. It is not because they are mindful of the risk of farming in a manner that is destructive to the environment. Not even out of fear that they may be forced out of business if consumers in the West do not purchase their coffees. This does not, in any way, imply to the level of farmers’ awareness of the impact of different farming practices on the environment. Rather, it indicates opportunities for intervention and the delicate balance therein.
The theory of poverty reduction through a measured dose of periodic aid and “economic” assistance has obscured potential development resources for years. Unfortunately, humanitarian aid is still needed in most parts of the world and definitely, again, in Ethiopia. The extreme level of dependence, for instance, has drained the peoples’ courage to ask for equitable trading. Democratization has long been an export-import commodity. Health care, education, potable water and food are always tied to commerce and donors’ economic interests rather than their humanitarian values.
Farm workers turn sun-dried coffee beans at the Ferro cooperative in southern Ethiopia (Photo: Shayna Harris/Oxfam America)
I believe the lasting solution to famine, poverty and war, lies in an equitable trading of goods and services with mutual respect and for benefit of all parties. The buzz word “empowerment” comes into play here. Historically, most self sustainable communities have proved their strengths by refusing to repression.
Equity, not to confuse with charity, is a human right; at least that is it was meant to be.
A fair price for their produces puts additional money into the hands of farmers. “Fair price,” now we learn in the corporate world, means a price which does not only cover the cost of production but also earns the producer a reasonable profit margin. Mind you “reasonable” applies only when the market is a “buyers market” where the producer is left with no more option than taking what the buyer offered. In essence, a price offered for a pound of coffee produced in Africa, for example, may not be a fair price for those farmers who produced the same commodity in, say, Central America. As a matter of fact, it is not practical to come up with one universal fair price for a commodity produced across the globe. If this were the case, the negotiation between a producer/seller and buyer should be limited to the profit margin only, and not on the cost of production.
It only takes a simple pencil-pushing mathematics, in a hypothetical market environment, to see the impact of a fair trade in a community like Oromia Coffee Farmers Cooperative Union. If the sophomore economic theory still holds true, “saving” is the difference between “income” and “consumption”; so, a fair price may be a source of savings for coffee farmers who are currently suffering from famine. Guaranteed trade agreements coupled with access to credit and democratic community governance help jump-start local economies through investment. So on.
If this combination of factors does not brake the cycle of poverty in developing countries including Ethiopia, nothing will. With flourishing business in sight, farmers undoubtedly strive to preserve their God-given natural resources thereby protecting the environment. Sustainability of the environment and human wellbeing is the challenge of the century. Companies, such as Starbucks, can play a meaningful role as development partners but only when they gauge their business strategies and success in terms of equity.
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© COPYRIGHT 20001-2006ETHIOMEDIA.COM. EMAIL: webmaster@ethiomedia.com
June 3, 2006
Ethiopia, the birthplace of coffee, has been growing the crop for over 3000 years, and continues to cultivate some of the world’s super premium quality coffees. Over 700,000 households depend on coffee for their livelihoods and millions more for part of their income. Paradoxically enough, in that land, millions are dying, most deprived of food and the basic human necessities. Many farmers have begun planting narcotics instead of coffee.
In Ethiopia, farmers’ labor is never considered to be a factor in a cost structure hence, cost of production as we know it comprises anything but costs for health care, education, nutrition, drinking water. Families strive to survive if anything else, to stay on their land. Coffee farmers in Ethiopia are grateful for fair trade coffee because they are able to feed their families twice a day! The irony here is that the second plate of food a day is considered the profit. This is the reality and heartbreakingly accepted by each family as a given. The sense of dependency is so deep rooted and any change is beyond imagination that farmers’ cooperatives themselves are only dreaming of. The official website for Yirgacheffe Coffee Farmers Cooperative Union (YCFCU) sums it all:
Vision: “To see farmer members out of poverty and dependency.”
Mission: “To increase the incomes of farmer members from their agricultural products.”
It would be a grave mistake to attempt to compare YCFCU’s statements of vision and mission with that of, say Starbucks, because it will be a gross violation of economic principles. On the other hand, failure to acknowledge the mutual co-existence on this planet of the rich and the poor will equally be unfair. In fact, Starbucks’ Mission Statement is not even close to being irresistible for YCFCU. One of the guiding principles of Starbucks reads, for example, “Recognize that profitability is essential to our future success.” This is beyond the vision of the people at Yirgachefe but accepted.
According to the Seattle PI’s report - Coffee tasting, but not judging - “Starbucks believes that if farmers go out of business as a result of poor sales, its coffee supplies are compromised.”
Starbucks is the pillar of our local economy here in Seattle. Thousands of Seattleites, including myself, cherish the company for its entrepreneurial success and its contributions to communities. As natural as it goes, I have always wished success for Starbucks so that it gives back more to communities. Perhaps this is the main reason why my friends and I am following with interest the negotiation between Starbucks and Tadesse Meskela of the Oromia Coffee Growers Co-operative Union representative. I see the negotiation mainly through Starbucks’ commitment for social responsibility than its merits for business as usual.
The Oromia Coffee Growers Co-operative Union consisting of 70,000 poor farmers understandably expect less than they deserve for their produce. Unlike consumers and businesses, coffee farmers in Ethiopia and all over the world are in the market to earn a second plate of food on their tables. For millions, coffee comes before their meal – the vice versa is simply a leisure. The Oromia farmers will be pleased if they won the prestigious Starbucks Black Apron that comes with an award worth $15,000 in community projects, for their coffees. But their mere survival depends on the extra few cents that enables them to serve one additional meal a day.
Coffee farmers are caught in an endless vicious cycle of poverty, at best. Severe famine, high death rate, illiteracy, lack of capital and low productivity are the major stops along a perfect cycle of poverty. These small household farms produce the best quality shade grown organic coffee in part because of the scarcity of chemicals and artificial fertilizers. It is not because they are mindful of the risk of farming in a manner that is destructive to the environment. Not even out of fear that they may be forced out of business if consumers in the West do not purchase their coffees. This does not, in any way, imply to the level of farmers’ awareness of the impact of different farming practices on the environment. Rather, it indicates opportunities for intervention and the delicate balance therein.
The theory of poverty reduction through a measured dose of periodic aid and “economic” assistance has obscured potential development resources for years. Unfortunately, humanitarian aid is still needed in most parts of the world and definitely, again, in Ethiopia. The extreme level of dependence, for instance, has drained the peoples’ courage to ask for equitable trading. Democratization has long been an export-import commodity. Health care, education, potable water and food are always tied to commerce and donors’ economic interests rather than their humanitarian values.
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| Farm workers turn sun-dried coffee beans at the Ferro cooperative in southern Ethiopia (Photo: Shayna Harris/Oxfam America) |
Equity, not to confuse with charity, is a human right; at least that is it was meant to be.
A fair price for their produces puts additional money into the hands of farmers. “Fair price,” now we learn in the corporate world, means a price which does not only cover the cost of production but also earns the producer a reasonable profit margin. Mind you “reasonable” applies only when the market is a “buyers market” where the producer is left with no more option than taking what the buyer offered. In essence, a price offered for a pound of coffee produced in Africa, for example, may not be a fair price for those farmers who produced the same commodity in, say, Central America. As a matter of fact, it is not practical to come up with one universal fair price for a commodity produced across the globe. If this were the case, the negotiation between a producer/seller and buyer should be limited to the profit margin only, and not on the cost of production.
It only takes a simple pencil-pushing mathematics, in a hypothetical market environment, to see the impact of a fair trade in a community like Oromia Coffee Farmers Cooperative Union. If the sophomore economic theory still holds true, “saving” is the difference between “income” and “consumption”; so, a fair price may be a source of savings for coffee farmers who are currently suffering from famine. Guaranteed trade agreements coupled with access to credit and democratic community governance help jump-start local economies through investment. So on.
If this combination of factors does not brake the cycle of poverty in developing countries including Ethiopia, nothing will. With flourishing business in sight, farmers undoubtedly strive to preserve their God-given natural resources thereby protecting the environment. Sustainability of the environment and human wellbeing is the challenge of the century. Companies, such as Starbucks, can play a meaningful role as development partners but only when they gauge their business strategies and success in terms of equity.
ETHIOMEDIA.COM - ETHIOPIA'S PREMIER NEWS AND VIEWS WEBSITE
© COPYRIGHT 20001-2006ETHIOMEDIA.COM. EMAIL: webmaster@ethiomedia.com
