To make better coffee world

You may know that the most amount of trade in the world revolves around oil. Do you know what the second highest item to be traded in the world is? It is coffee. The main places for coffee production are near the equator and are collectively called the ‘coffee belt’. These countries are mostly poor. The corporations that sell oil are very rich, while coffee farmers, on the other hand, tend to be poor even though coffee is the second-highest traded commodity.

In fact, the main difference between oil and coffee is that oil is a ‘necessity’: there is currently no viable economic alternative to oil. Coffee is the most popular beverage, but there are lots of alternatives.

First, one of the problems with the coffee industry is its distribution. The coffee farmers sell to ‘middle men’, who buy at very low prices. These ‘middle men’ then sell to international companies at a very high rate. These companies and the ‘middle men’ are getting rich. For example, in 2003, 450g of coffee beans cost 60 cents. We can make 100 cups of coffee from 450g and one cup of cappuccino is sold for 4 or 5 dollars. As you see, this shows a big disparity between farmers’ profits and distributors such as coffee shops.

Second, there are 3 big instant coffee companies: Maxwell House, Nescafé and Folgers. As always happens, instant coffee prices almost never go down even though coffee bean prices do. That’s why farmers are starting to grow more profitable crops (some of them being illegal narcotics), and the quality of coffee is going down. Because of very poor profits, coffee farmers have no more interest in growing coffee.

Because of this problem, a general idea of ‘fair-trade coffee’ finally came about. Fair-trade means paying the coffee farmers the real cost of production and reducing the amount of middle-man distribution. Therefore, we can protect the farmers’ profits by purchasing their beans at a fair price determined by international approval. It is also important to increase demand of fair-trade coffee by making consumers aware of this issue so they can make a moral choice.

The interesting thing is that now fair-trade coffee is being used as a marketing incentive. Starbucks advertises that they are using fair-trade coffee beans to attract an ‘intelligent’ consumer base. They therefore have raised their coffee prices. It means that they are deferring increased costs to the customers. They are manipulating the psychology of the consumer to make them feel that they should buy the fair-trade coffee. It is true that the farmers make a little more profit, but it’s Starbucks that is still making a good profit. Not only do Starbucks protect themselves from losing money, but they’ve also created a high demand.

Fair-trade is generally a good idea, and it is necessary for farmers. But the problem is some companies using fair-trade have unfair intentions. If the companies make an ethical decision to responsibly pay a fair price for the coffee they sell but not raise prices for the consumers, we can make a beautiful coffee world.