Crisis in a coffee cup?

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A coffee shop in a
supermarket.
by Team 01639.


A huge selection of
coffee sold at
supermarket.
by Team 01639.


Coffee shop in a mall.
by Team 01639.The World Bank and the International Monetary Fund (IMF) encouraged these poor countries to liberalize trade and follow growth led by export, thereby, partly contributing to the current crisis. This leniency helped transform the coffee market from a managed market, in which governments played an active role both nationally and internationally, to a total free-market system. What exactly does this mean? In the free-market system, the market itself sets the price of coffee. The practice of paying prices as low as they go, without regard to the cost for farmers, is a hazardous and unethical business tactic in the long term. If this trend continues, the coffee market is sure to weaken the colossal coffee-processing companies who are at present so proficient at turning beans into bills. The overproduction and glut of coffee being dumped on the market has created a buyers’ market. As a result, many of the poorest and most helpless citizens in the world are left to negotiate in an open market with some of the wealthiest and most influential citizens. It is not a surprise to see that such an approach favours the rich and powerful and the adage “the wealthy get wealthier and poor get poorer” rings true.

Quiz

by Team 01639.Dynamic partaking by all players in the coffee trade is essential to overturn the current situation. Co-operative work between international institutions, giant coffee-processing companies, and coffee-producing nations is urgently required to reduce supply. It is startling that 80% more coffee is presently being produced than being consumed. The World Bank and IMF should propose sound cost-effective advice to developing countries on overall global commodity trends, and their likely impact on prices. Urgent steps need to be taken to create a more manageable debt burden for the poorest countries that are not destabilized by commodity shocks. Otherwise, the coffee industry is likely to see a drastic and extremely agonizing overhaul. Action is needed to work towards a more humanitarian approach to stabilising world coffee production. We also have to establish measures to address long-term rural underdevelopment.

We simply have to make the coffee market work for everyone.

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Interviews

• Mr. Nguyen Van Chinh on Vietnam Coffee Industry
  Representative of the Advancement of Community Empowerment and Partnership (ACEP) office of Central Vietnam
• Steve Leighton on Specialty Coffee
  Steve Leighton, owner of successful Internet-based coffee company talks to us about specialty coffee.
• Mr. Ted Lingle
  Mr. Ted Lingle, Director of Specialty Coffee Association of America (SCAA) talks to us about specialty coffee and the current crisis.

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