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coffee in vietnamThe comforting routine of having a rich cup of coffee in the morning is a habit shared by numerous people around the world. Unique flavors and distinctive brews come from various countries such as Brazil, Colombia and Indonesia. Vietnam, once an underdog in the coffee industry, has now become one of the top coffee exporters in the world. As a new major contender in the international coffee trade, Vietnam faces new economic opportunities moving forward. Importantly, coffee in Vietnam has the potential for reducing poverty.

How Coffee in Vietnam Took Root

French colonists introduced coffee in Vietnam in 1857. The central highlands region, Buon Ma Thuot, had ideal growing conditions for the crop. Accordingly, it became a target region for coffee cultivation. Growing coffee in Vietnam proved to be difficult yet promising. The government encouraged citizen migration to rural regions such as Buon Ma Thot, which gained a 265% increase in the overall population. By the end of 2000, over 4 million people settled in this area, which created a new and expansive workforce for the coffee industry. This new workforce, combined with the government’s coffee-growing program and the increased demand for coffee worldwide, created a boom in Vietnam’s economy.

In the span of just two decades, Vietnam became one of the most competitive coffee producers in the world. It now ranks as the 2nd largest coffee exporter behind Brazil. Starting with 8,400 tons of coffee produced in 1980, production numbers skyrocketed to 900,000 by 2000. Coffee production has contributed to Vietnam’s GDP increasing by 7.7% within the past few years. Unexpectedly, coffee became an important player in the Vietnamese economy.

Challenges Brewing Within the Industry

Two main types of coffee beans, Robusta and Arabica, compose most of the beans exported by countries worldwide. Currently, 95% of Vietnamese coffee exports are Robusta, known as lower quality beans. As a result, the success of Robusta in the market depends on fluctuations in global demand. Vietnam’s coffee industry must account for this variable by improving the flavor and quality of beans harvested in Buon Ma Thuot to remain competitive in the worldwide market.

But remaining competitive in the market is no easy task. Unlike globally known brands such as 100% Colombian coffee, Vietnam still needs to establish its trademark in the international market. Currently, processed coffee accounts for only 7% of Vietnam’s exports. Increasing coffee processing by establishing joint ventures with known retailers and roasters could create new opportunities for the industry. If Vietnamese brands become household names, Vietnamese coffee can garner substantially greater profit margins in the global market.

In addition to increasing coffee quality and ameliorating marketing tactics, Vietnam’s farming strategies must improve. Though Robusta is typically more resilient to environmental stressors, such as hot climates, pests and disease, this coffee crop is still susceptible to the dangers of unsustainable farming practices. Farming strategies that rely on intensive irrigation and the overuse of fertilizers can exhaust soil quality.

To combat land degradation, Vietnam’s government collaborates with global companies such as Kraft Foods and Nestlé. It also works with conservation organizations such as the 4C Association, Rainforest Alliance and Fairtrade Foundation. Together, they educate farmers, improve farming practices and establish an agricultural standard. This works to effectively and sustainably increase the production of coffee in Vietnam.

Solving Poverty One Cup at a Time

The significant surge in coffee production in Vietnam also means countless farmers and citizens gain a newfound source of income. With only 6% of total coffee production used domestically, coffee has become Vietnam’s key export. Coffee production provides a livelihood for around 2.6 million people. Importantly, 600,000 of these individuals are small-scale farmers, many of whom belong to underrepresented social groups.

This emerging industry has allowed Vietnam’s economy to vastly improve within a short span of time. Economic growth continuously boosts Vietnamese citizens’ quality of life. In 1994, Vietnam’s poverty rate was at 90%. As of 2020, the poverty rate has lowered to 23%.

Global corporations also take part in developing Vietnam’s coffee industry and helping farmers. Nestlé and Mondelez International have each invested more than $200 million in training farmers to distribute stable supplies of coffee. In 2015, Starbucks introduced Vietnam Da Lat, its first single-origin coffee from Vietnam, to its locations in more than 50 countries. Altogether, more than 21,000 farmers benefited from foreign investments in this booming industry.

Overall, coffee in Vietnam is a growing industry with many future possibilities. With the right policies and guidance, Vietnam’s coffee industry can further improve its economy, provide income opportunities and increase standards of living for countless communities nationwide.

-Vanna Figueroa
Photo: flicker

Kitchen Fighting Global PovertyIn 2015, the U.N. put out a list of Sustainable Developmental Goals (SDGs) to reach by 2030. The focus of these SDGs is to build a better, more sustainable world, inclusive of all countries. While the first SDG is specifically geared towards ending poverty as a whole, the rest of the goals have direct and indirect ways of addressing poverty as well. There are quite a few popular brands in the kitchen fighting global poverty and many are using the SDGs as a guideline for launching campaigns toward ending facets of poverty.

Brands in the Kitchen Fighting Global Poverty

1. Kellogg’s: In an effort toward achieving the second SDG, zero hunger, Kellogg’s launched its Kellogg’s® Better Days campaign. Since 2015, it has donated 2.4 billion servings of food to people around the world suffering from hunger. Among those receiving Kellogg’s food donations have been 3.2 million children. The goal is to feed 375 million people in need by the end of 2030. Kellogg’s also supports Breakfast Clubs in 21 different countries.

2. General Mills: Another cereal brand in the fight against poverty is General Mills. In 2008, CEO, Ken Powell, founded the nonprofit, Partners in Food Solutions. Various other companies have since joined the organization and work together to help African food processors succeed. The goal is to improve food security, nutrition and economic development in Africa. Over 100,000 volunteer hours have been put towards advising these food processors and planning technical or business projects in Africa. Additionally, volunteers from world-class corporations have developed 651 customized projects for their African clients.

3. Nestlé: The company Nestlé has identified a few of the SDGs to target in its sustainability strategy. The third SDG promotes good health and well-being. To support this SDG, Nestlé launched its global initiative, Nestlé for Healthier Kids, with which it hopes to help 50 million kids around the world live healthier lives through nutritional education by 2030. So far, the campaign has reached 27.2 million children. Nestlé also recognizes the need for addressing extreme poverty among workers around the world. As a stride towards SDG 8, decent work and economic growth, Nestlé launched the Nestlé Needs YOUth campaign. The initiative’s goal is to help 10 million young people access economic opportunities by providing them with skills, education and help in making agriculture a more thriving field. Yet another SDG Nestlé aims to help with is SDG 6, clean water and sanitation. Its global initiative, Caring for Water, involves “reducing withdrawals, reusing water and working with others to protect water at a catchment or community level.” Ultimately, the initiative seeks to increase access to safe water and sanitation around the world.

4. Kraft Heinz: With ending world hunger as a pillar of its foundation, Kraft Heinz is yet another brand in the kitchen fighting global poverty. In 2013, it partnered with the nonprofit Rise Against Hunger, which aids in global hunger relief. Kraft Heinz employees have since packaged 15.2 million meals in 30 to 40 countries. Furthermore, the company launched its Micronutrient Campaign in 2001. This campaign resulted in the creation of a micronutrient packet with essential vitamins and minerals, which promotes healthy growth and development in those suffering from hunger. On the 2019 World Food Day, Kraft Heinz employees from around the world included the micronutrient packet in over one million meal packages for families in need worldwide.

– Sage Ahrens-Nichols
Photo: Flickr

Nespresso AAAPopular on every continent of the earth, coffee is one of the most traded agricultural commodities in the world. In 2017, more than two-thirds of the global coffee production was exported, creating 125 million jobs and an $83 billion retail market value. The market is also extremely vast. While the largest importing countries are the United States, Germany and France, most coffee beans grow in smallholder farms in developing countries across Africa, Latin America and Southeast Asia, including 22 Low Human Development Countries, according to the U.N.’s Human Development Index. The Nespresso AAA Sustainable Quality Program aims to help coffee farmers in developing countries.

Coffee Farming in Developing Countries

In many of these underdeveloped regions, coffee is a particularly important crop and a significant source of income for farmers to recover from natural disasters, economic volatility or political conflicts. However, many smallholder farmers find it difficult to tap into the global premium market due to their low productivity, outdated processing technics and lack of market access. More than 2.5 million African smallholder coffee farmers are still in extreme poverty today. In other words,  they live on less than $1 a day.

Nespresso AAA Sustainable Quality™ Program

Seeing the difficulties that farmers face and the great potential for future development, Nespresso, a subsidiary of Nestlé, one of the most popular and successful coffee businesses of the 21st century, launched the AAA Sustainable Quality™ Program in 2003. AAA stands for the triple focus on high quality, productivity and social and environmental sustainability, aiming to encourage rural economic development and improve the livelihoods and well-being of coffee farmers while producing high-quality coffee. To enter the program, a farmer has to produce a specific aroma profile and meet the quality and sustainability requirements.

Technical Assistance and Business Support

Once accepted in the Nespresso AAA Sustainable Quality™ Program, farmers receive tools and learn sustainable coffee growing and processing practices from the agronomists that Nespresso sends directly to their communities. Nespresso also helps install small wet mills that allow for greater efficiency and quality control in coffee aggregating and processing. Thanks to the adoption of these new or improved practices, land productivity has increased 40-50% in Kenya and Ethiopia.

Besides, Nespresso trains the farmers for better farm economic management and business practices, easier access to new and differentiated markets and stronger resilience to climate change through climate-smart agricultural practices. Together, this ensures greater profitability and income stability. Farmers have the right to choose the buyers, although many just sell their coffee to Nespresso since it offers a fair price of around one third above the standard market price and up to 70% of the export price can go back to farmers and their local communities.

Wider Systemic Solutions

Beyond the coffee business, the ultimate goal of the Nespresso AAA Sustainable Quality™ Program is to improve farmers’ living conditions. After years of endeavor, the program is evolving into a broader rural development program that encompasses sustainable agriculture, financial literacy, municipalities and social welfares. For example, in 2014, Nespresso and Fairtrade International together launched the Farmer Future Program in Caldas, Colombia, to provide the first pension scheme for coffee farmers. This will also help with the generational transfer of farms from parents to children, ensuring opportunity for young people in coffee-producing regions.

As of 2020, Nespresso has committed an annual investment of CHF 40 million and 400 agronomists have been sent to help farmers. More than 110,000 farmers in 14 developing countries have been participating in the Nespresso AAA Sustainable Quality™ Program.

The program is a veritable triple-win collaboration between coffee farmers, Nespresso and the customers. Nespresso sources approximately 95% of its total coffee supply through the AAA program, which is not far from 100%, its ultimate vision for the end of 2020.

Jingyan Zhang
Photo: Flickr

Chocolate Production and Child Labor
When a person craves a quick snack or pick-me-up and runs to the store to grab their favorite chocolate bar, they may not wonder where the chocolate came from in the first place. However, much of cocoa production takes place in West African in places like the Ivory Coast and Ghana. The result of this cocoa harvest is sweet, but the process is quite bitter. Currently, 2 million children in these countries labor to produce chocolate. Over the last few years, measures have removed children from this labor. However, the problematic relationship between chocolate production and child labor has increased from 30% to 41%.

The Conditions of the Children

Children often work on small cocoa farms in the Ivory Coast, and mostly as victims of human trafficking. They work day in and day out using machetes and harmful pesticides to harvest cocoa pods. The children are very young and overworked with hunger. Most of them have not even gone to school for many years.

Raising Awareness

The world’s chocolate companies are aware of the atrocities of chocolate production and child labor that are part of their products’ creation. Many have pledged to eradicate child labor in the industry, but have consistently fallen short. In an article in the Washington Post, Peter Whoriskey and Rachel Siegel addressed this issue. They outlined the continuous failure of many large companies to remove child labor from their chocolate supply chain. As a result of these companies’ negligence, the odds are substantial that a chocolate bar in the United States is the product of child labor. Some of the biggest chocolate brands, such as Nestle or Hershey, cannot even claim that child labor is not involved in their chocolate production.

Addressing the Issue

The U.S. Department of Labor’s Bureau of International Labor Affairs (ILAB) is combatting child labor in the chocolate production process. It has been creating plans and programs to break the cycle. Its research and data show that the Ivory Coast and Ghana produce 60% of the world’s chocolate, with a steadily increasing demand for chocolate worldwide. This will likely exacerbate child labor issues instead of stopping them. As the leading funders of child labor combatting programs, ILAB has raised $29 million to fight child labor in chocolate production in the Ivory Coast and Ghana.

ILAB formed the Child Labor Cocoa Coordinating Group (CLCCG). It brought together the governments of the Ivory Coast and Ghana and representatives from the International Chocolate and Cocoa Industry together. They had essential conversations that are integral in eradicating child labor in the chocolate industry.

The CLCCG works toward eradicating child labor. It has also been integral in raising awareness about this issue and creating resources to combat it. However, it cannot do it all by itself. Governments, stakeholders and large chocolate companies must commit themselves to removing children from harmful environments for the sake of cocoa production.

Looking Ahead

Chocolate production and child labor have gone hand in hand for decades. However, through the efforts of government organizations, the cocoa production process could become as sweet as its end product.

Kalicia Bateman
Photo: Unsplash

Nourish Impoverished Communities
It is no secret that the United States is home to some of the biggest brands in the world. From cosmetics to food products, American brands influence many things global consumers see on their shelves in one way or another. Here is how four American brands help nourish impoverished communities.

Avon

Avon Cosmetics has been benefitting women since the mid-1950s through the creation of the Avon Foundation. For the past 65 years, more than $1 billion has gone toward sustaining women and their families all over the globe. The Avon Foundation’s humanitarian practices have opened up in more than 50 markets across nations, allowing women to feel empowered and begin their own businesses. Any woman can apply to become a representative using Avon’s online website.

Avon Connect is a program that sets the foundation for women to begin their dream businesses. The program provides education on the basics of sales and marketing to nearly 500,000 women worldwide. Through participation, women create jobs for themselves by becoming one of Avon’s Beauty Advisers.

Nestle

Nestle does not only offer water and coffee, the company also implements programs to help nourish impoverished communities around the globe. The company was originally a Swiss brand but has since expanded its locations worldwide. Now, the United States is one of its larger consumers, and it works with farmers and suppliers all over the world. By providing work for those in rural areas, Nestle creates a sustainable supply of food in those communities.

Nestle’s program Global Alliance for YOUth has helped alleviate the problem of unemployment within younger demographics. It provides work opportunities for young people, despite the lack of experience they may have. The program also encourages young people to become entrepreneurs and take control of their own business. By 2030, YOUth plans to benefit 10 million youths by providing employment and skills to help further their lives. Nestle’s Global Alliance for YOUth program brings together 21 international companies to help employ around 15 million youths by 2022.

Walmart

Walmart has provided neighborhoods with fair prices and good products since its beginning. The company aims for its global suppliers to be sustainable and responsible in the workplace. In fact, it has over 100,000 responsible suppliers around the globe. Walmart strengthens not only consumers but also those who help nourish impoverished communities.

In 2010, Walmart decided to actively help alleviate global hunger. More than $2 billion in food donations and grants went toward starving communities. In 2015, it donated around four billion meals to help the hungry. Walmart hopes to benefit an additional four million in 2020 by providing more meals and increasing education.

Walmart contributes to its local communities no matter the country. In 2019, Walmart provided over two million jobs in 27 countries. Employment is beneficial for those working toward upward mobility out of poverty. Walmart, with its 11,300 locations, helps provide just that.

Visa

Almost two billion people worldwide have not implemented banking into their lives. Visa is here to help fix that. In one year alone, Visa provided financial systems for nearly 500 million people. Its help went to women and those living in rural areas —those least likely to have any sort of financial aid.

Through Visa, many have been able to better support and sustain their small businesses. As a result, many have been able to acquire the skills they need to efficiently work in their business and develop the most appropriate services for growing their economy. Visa’s Practical Business Skills, founded in 2019, has helped small businesses from the beginning stages, allowing more efficient and proper company growth.

For instance, in Southeast Asia, Visa partnered with a large payment service to encourage all to improve their banking literacy. In Mexico, over 11 million people have started their own banking account with a Visa-partnered Mexican financial institution. Through the global implementation of Visa, people have been able to improve their finances, which helps nourish impoverished communities worldwide.

Global poverty is a huge and pressing issue. These American big brands can help people manage their lives with a bit more ease by providing support.

Karina Wong
Photo: Flickr

africa water grabWater is an essential but limited resource that is unfairly allocated in many parts of sub-Saharan Africa. Although one of the Millennium Development Goals (MDG7) is to lower the number of people that currently live without sustainable access to safe water by at least half, there is much work to do. The African water grab by international banks and corporations is leaving small African farmers quite vulnerable.

Water Rights

The term “water rights” means the right to extract water from groundwater and other bodies of water. It grants access to desalination projects, water-purification and treatment technologies, irrigation and well-drilling technologies, water and sanitation services and utilities, water infrastructure maintenance and construction. Restrictive permit systems in Kenya, Malawi, South Africa, Uganda and Zimbabwe have resulted in 100 million people being left with insufficient water.

Water rights for large commercial operations in Africa are granted primarily by permit laws that were established in colonial times. Small farmers have only customary water rights, which are agreements based on tradition rather than written law. Their operations are often too small to gain permits either because the government does not have the infrastructure to grant so many permits or farmers do not know to get them. Approximately half of sub-Saharan Africa governments use customary rights to water for home use and limited farm irrigation.

Inequitable Water Distribution

Since the end of Apartheid in South Africa, water distribution has remained inequitable despite the legislative efforts of the National Water Act (NWA 36 of 1998) and the National Water Resources Strategy (NWRS2), which prioritize the allocation of water for socio-economic growth over commercial uses.

In Malawi, 80 percent of the people live in rural areas are dependant upon rain for agriculture success. This leaves the population vulnerable because there are frequent droughts, variations in climate and natural disasters. Recent estimates suggest that foreign investment in Mali’s land jumped by 60 percent between 2009 and 2010. In locations like Mali and Sudan, a new approach is badly needed. Some investors have been given unrestricted access to water. The chairman and former CEO of Nestlé, Peter Brabeck-Letmathe, has called the buy up of farmland a “great water grab.”

Traditional access is efficient until there’s a conflict. In those cases, large-scale water users, with superior entitlements to use water for large-scale irrigation, mining, industry and hydropower generation, are better able to win disputes with the government. Internationally, water rights consolidated in the hands of a few is also a problem.

These new “water barons”—international banks and investors—are buying up the world’s water quickly.  With international and influential agents having extensive rights, and local farmers having questionable rights, the already limited water systems will be further stretched. “Exclusive reliance on national permit systems has, at least on paper, “criminalized” up to 100 million people lacking water permits in the five countries studied,” wrote Barbara van Koppen, the lead author of the report.

A Hybrid Approach

A recent report argued that the consolidation of water rights is hurting the environment and the small farmer, who holds only traditional water rights. The solution, the authors argue, is to support African governments in “decolonizing” water laws through a “hybrid” approach to water-use rights.  They recommend that permit systems be retained but used instead to regulate large-scale water users that have a large impact on small farmers and the environment. The hybrid approach would also extend legitimate rights to customary laws, which have guided investments in water infrastructure as well as water sharing for centuries.

Certain aspects of this hybrid approach are already in use in parts of Africa. Uganda is focusing on providing permits to 20 percent of its large-scale water users. These users require 80 percent of the resources. In Kenya, targeted permitting has been formalized. Water users are categorized from A to D, depending on the impact their water use has, and they are regulated accordingly. However, the legal protection for small-scale users still remains unaddressed.

Heather Hughes
Photo: Flickr

Water Privatization’s Biggest Offenders-TBP
An estimated 783 million people worldwide lack access to clean drinking water. Despite the importance of expanding access to this basic building block of life, many companies instead view water as a commodity to be bottled and sold at the expense of the world’s poor and the environment.

Bottled water is incredibly wasteful. The bottle itself also leads to widespread environmental damage, with more than 85% of globally consumed bottles being thrown in the trash, as opposed to being recycled. Furthermore, 10% of all plastic reaches the ocean, leading to the deaths of an estimated one million birds and marine animals yearly.

Yet, if the environmental impact of bottled water is disgraceful, its impact on human rights is horrifying.

Fiji Water has nearly exclusive access to a 17 mile aquifer on the north coast of Fiji while many Fijians have lived with water shortages resulting in rations as low as 4 gallons of water per family per week. Coca-Cola’s extraction of water in India to produce Dasani, meanwhile, has resulted in water shortages for over 50 villages.

Water extraction has also led to a variety of health problems. The inadequate and unclean water supply in Fiji, for instance, has lead to typhoid outbreaks and parasitic infection. The pollution caused by Coca-Cola through its Indian bottling plants has included dangerous compounds such as lead.

Of course, the causation of health problems through privatization only brings to attention a broader issue in the bottling and privatization of water—the philosophical denial of the right to water. Nestle came under fire in 2013 after the emergence of a video of CEO Peter Brabeck stating that water is not a human right, but a commodity to be given a market value and sold. Nestle owns over 15 bottled water brands, including Poland Springs and San Pelligrino, and has been criticized for its sale of Nestle Pure Life water to the developing world at the expense of the development of clean-water infrastructure. The sale and purchase of bottled water on its own denies the right to water as an infrastructural need, and instead treats it as a commercial product through which the wealthy continue to benefit at the expense of the world’s poor.

Protecting the right to water, globally, is highly important. It is a right which must exist to protect the health, agriculture and infrastructure of the developing world. Water privatizations, and the actions of the companies that control significant portions of the world’s water supply, deny the important progress to be made on this front.

– Andrew Michaels

Sources: Food Is Power, Mother Jones, World Watch, The Guardian, UN Water, Huffington Post,
Photo: Food and Water Watch

land rights
One of the world’s largest food companies recently made landmark commitments to ensure that small-scale farmers and their property are protected from land grabs. More specifically, Nestle committed to a specific set of policy provisions to hold its company and its suppliers accountable.

This new effort is designed to ensure that absolutely no land grabs take place in the harvesting of ingredients for Nestle’s products and that the company harvests products only from places where the land has not been illegally or unfairly taken from their owners.

Furthermore, Nestle has said that it will work to identify opportunities for men and women who currently do not own land to gain property and help support their families. The company will also work to ensure that women who own land will remain secure in their rights and that their rights will be equal to those of men.

These commitments allow Nestle to improve the rights of land owners already incorporated into their supply chain, as well as those who have the opportunity to gain access to land. The company will also proactively identify potential risks to each farmer’s land rights and take steps to reduce or avoid these risks completely.

While these new commitments constitute a very worthy action, Nestle has taken it a step further by advocating for each farmer’s land rights. The company has stated its desire to strengthen its efforts in assisting disadvantaged individuals and indigenous people whose rights are not currently respected or recognized.

Nestle has also announced its support for the U.N. Committee on World Food Security Voluntary Guidelines on Governance of Tenure and will promote development of public information and warning systems to help ensure that rights are respected and that no land grabs take place.

These actions that Nestle has taken are notable and admirable steps toward respecting and protecting the rights of farmers who own land.

Andre Gobbo

Sources: Oxfam, Nestle, FAO
Photo: Oxfam

Floods, Coffee and Disaster in Vietnam
A torrential season in Vietnam spelled disastrous for its citizens with flooded regions, killing many.

Vietnam is familiar with floods upon floods each year. The mid-November storm, named Podul, was the fifteenth storm to hit the country and resulted in 34 deaths, majorly caused by drownings. Evacuations in the south central coast of Vietnam number in the ten thousands as heavy rains raised water levels to .67 meters.

The numbers worsen as over 80,000 were left without homes and displaced in the ensuing floods.

Podul was a subsequent storm following Typhoon Haiyan, which ravaged the Philippines. The latter storm weakened as it passed through Vietnam but nevertheless took 14 lives. The recurrence of storms and floods often devastates the central region of Vietnam the most. The central region contains highlands that produce coffee, one of Vietnam’s primary exports.

Vietnam produces 17 percent of the coffee in the world and plays a large part in its economy. Over 60 percent of Vietnam’s population lived in poverty, but through the years, Vietnam’s transformation into the second largest coffee producer in the world has reduced to leaving 10 percent of its people in poverty.

Companies such as Nestle own processing plants located in Vietnam. Unfortunately, drying coffee beans for eventual export is hindered by the massive amounts of rain and resulting floods.

Flood regulation is a little better in Vietnam’s capital, Ho Chi Minh City (HCMC,) as urban planners ensure the infrastructure can support the city during times of flooding, especially since HCMC is situated one meter above sea level. Outside the capital, however, the less urban regions remain vulnerable to floods.

Even if the dangers of stormy weather and rising water do not endanger the Vietnamese citizens, diseases from the water such as dysentery can prove fatal.

The Wall Street Journal reports that over 220 lives have been lost due to floods and storms since the beginning of 2013.

It is with hope that the advent of the New Year will not prove to be similar.

Miles Abadilla

Sources: Al-Jazeera, BBC News, BBC News Asia-Pacific, The Economist, The Wall Street Journal
Photo: India TV

Poverty_and_Coffee_Industry
Coffee is the second most valuable export, bringing in $55 billion per year.  The coffee industry is dominated by a few key players—Nestle, Kraft, Proctor & Gamble, and Sara Lee.  Farms tied to these companies often cannot recoup production costs.  There is no shortage of coffee beans, so plantations compete to offer lower and lower prices to the big companies.  In recent years, the supply of coffee has grown even more due to improved coffee cultivation methods in South Asia.

To stay competitive, coffee plantations are notorious for paying subsistence wages and exposing workers to unsafe conditions.  Coffee beans are produced for $2 per kilo, and then sold to middlemen for about 14 cents.  Large companies then buy the beans at this low price, roast them, package them and mark up the price to around $8 per pound.  This “Coffee Paradox” essentially means that big companies win and local plantations lose.

Most coffee farmers struggle to support their families, and cannot afford healthcare or education.  This not only worsens the cycle of poverty, but also shows that coffee farmers have no control over the practices of industries which create these conditions.  In countries like Brazil, where coffee production has long been a cash crop, plantations are forced to grow lower-quality beans like Robusta that sell for cheap, instead of the high-quality Arabica beans the area is known for.

In the long run, coffee plantations around the world need to unionize and demand a fair price for their product.  As consumers, buying fair trade ensures our coffee comes from plantations that treat their workers with respect and do not use child labor.  Some of the proceeds from fair trade products even go back into the plantation community.  Buying higher-quality Arabica beans supports long-standing industries that are struggling to compete with the cheaper alternatives.

– Stephanie Lamm

Sources: Seattle PI
Photo: Media Tree Hugger