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M06
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# Posted: 28 Dec 2006 16:32
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The movie opens with a comparison of how a cup of coffee will cost you $2.90 in the western world while coffee farmers get somewhere around $0.54 for a pound of raw beans. Now I am a fairly regular consumer of coffee from Starbucks and I generally pay about $1.50 for my coffee. You are no doubt referring to some of the specialty drinks (Café Latte, Cappuccino, etc.) that such purveyors sell and which may include all manner of additional ingredients not to mention some special attention from the baristas behind the counter. Furthermore, it should be self evident that there are a host of other cost factors (the real estate, labor, etc.) which contribute significantly more to the overall cost structure of a cup of coffee than does the coffee itself. In fact the cost of the coffee in your cup generally makes up less than 5% of the operating cost at such establishments – something that you have either not taken the time to find out or willfully ignored in your movie. Clearly the comparisons you make here and throughout the movie are designed simply to elicit the most indignant reaction possible from your audience although they are of course divorced from the reality of a free market system and the real problems behind the circumstances that Ethiopian coffee growers find themselves in.
While I understand that your intentions may in fact be good, I must vehemently object to your use of inaccurate hyperbole throughout the entire film to play on your viewers emotions in an apparent attempt to cloud their judgment and distract their attention from the real facts of the matter. After seeing your movie on December 8, 2006 in Washington D.C., I must regretfully say that I found your film to be misguided, dishonest in principle if not in fact and at the end of the day counterproductive to the overall objectives that you seem to espouse assuming that this is indeed the progressive development and self reliance of Ethiopian coffee growers.
The real problem is that Ethiopia continues to sell the vast majority of its coffee as a commodity rather than as the specialty product that its intrinsic quality deserves for the most part. Further compounding this problem is the fact that very little value is added to coffee exported from Ethiopia in the form of roasting, packaging, branding or most other value enhancing elements that could significantly raise the premium commanded by it. Absent improvements in these critical problem areas, the low commodity price of coffee to the point that it barely covers a subsistent existence for the growers is then simply a market indicator that this is not the business for them to be engaged in. Were we to engage in a real discourse of the other contributing factors to the issues at hand, you could certainly cover with more relevance positions regarding land ownership, availability of capital for investment into coffee processing and other similar problems that may need addressing in the current context.
Unfortunately, you have chosen to support a misguided and ultimately flawed approach of dealing with the problems and it leaves your documentary replete with questionable premises and/or conclusions such as the following:
• You refer to WTO meetings, subsidies by some developed countries and how Western aid is frequently nothing more than a way to purchase subsidized commodities such as wheat from their farmers. All great points and incidentally I agree with them strongly but what does this have to do with coffee? Why didn't you make a movie about wheat where these points would have been far more relevant?
• You continually remind your viewers of the very low price that coffee commands at international exchanges. But this is the free market system at work (at a Q&A session subsequent to the first screening, you admitted that you know nothing about price fixing or other artificial mechanisms that may be driving the price of coffee lower) and the way to get around this problem is to somehow raise the perceived value of the product (what a shame you don't spend more time discussing this!) so that it commands a greater price or stop producing what you can't get enough money for! You did point out that some coffee growers also grow khat but you somehow made it sound like this was a negative thing even though it clearly commands a far greater price than does coffee.
• Throughout the movie, you give prominence to the idea of paying Fair Trade prices for Ethiopian coffee where these prices are somewhat arbitrarily set to include enough for set asides to build schools and benefit the coffee grower communities in other ways. Well guess what you just did? After spending a good part of the movie criticizing subsidies (and rightly so!), it turns out that you actually support subsidies after all because Fair Trade (in some measure) is clearly another subsidy! Not to mention that it is of course a subsidy that depends almost entirely on consumer goodwill towards it and in any case is unsustainable because it is quite unlikely that the top (by volume) coffee producers in the world are going to either need or subscribe to it. This basically means that given an exclusive focus on Fair Trade as the silver bullet for all the issues ailing coffee growers in developing countries, there will always be a plentiful supply of coffee at lower prices with equal if not better quality than what they make available. Hardly a sustainable business model! Let me say that I do endorse many of the principles inherent in Fair Trade but it cannot be divorced from the reality of free market economics especially within the context of large and well established competitors that have no interest in it.
• Worst of all were the repetitive references to poverty in Ethiopia including depictions of the food shortage crisis a few years ago liberally interspersed with footage of coffee drinkers in developed countries purchasing and enjoying their expensive cups of coffee. The implication that the plight of coffee growers in Ethiopia was a primary causative factor for that crisis or that the coffee drinkers shown should somehow feel guilty about enjoying their 'expensive' purchases is not just the wrong message to send, it is borderline inexcusable and shameless pandering to the sympathies of your viewers in an attempt to promote your views.
It may surprise you to know that I am Ethiopian myself. I too am quite sensitive to the plight of our coffee growers and probably to a greater degree than yourself. Nor am I here in defense of large multinationals or Western policies on farm subsidies – in fact I am very much opposed to the latter. But I feel compelled to respond to the message in your film because I strongly believe it represents a very inaccurate diagnosis of the problems at hand and prescribes by implication impractical solutions to them. In fact, it is counterproductive to the extent that it has already prompted some of your viewers to view companies like Starbucks (one of the most important customers coffee growers in Ethiopia can hope to sell to!) as the villains and begin talking about boycotting them.
The real answer to these problems lies in better linkages to the right markets for Ethiopian coffee, improved interpretation of the signals they provide, raising the perceived intrinsic value of Ethiopian coffee and adding value to that before it's exported – in other words to become better competitors in the global market rather than being portrayed as victims of it.
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zenu gebru
Member
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# Posted: 2 Jan 2007 06:03
Reply
Hello!
Right about the movie not showing the problem Ethiopian farmers face, but let us not forget Fair Trade certified coffee or Starbucks coffee from Ethiopia come from confiscated farms, by force, by Ethiopian government. Right? I am sure you know about this.It is stolen coffee.If it is not let us see the owners in their website.
Government officials are still the owners. This is income for their friends and family. Reported (BBC.COM) millions deposited in Swiss bank by high government officials, was sent back. There is no private property after all these years of democracy. The government owns the land[/b].
Kind people who see the poor farmers, are ready to help. It is stolen coffee and the poor farmers you saw in the movie are not the owners. Read all about it.
This is the truth and only the truth and nothing from the truth.
The poor farmers should be left out of this. This is about businessmen buying and selling coffee from Ethiopia.
Calling stolen coffee as [b]Fair Trade certified is wrong.[/b] If this farm belongs to the poor farmers we saw in the movie, let us see the names(photo) location of the farms and their bank account so we check the money they receive year after year.
Let the truth be told so nobody is going to feel guilty when they buy Starbucks coffee.
[b]Starbucks knows it is stolen, Fair Trade knows it is stolen.
[/b] If anyone calls this coffee from stolen farm Fair Trade certified coffee they have the burden to show the rest of the world, the owners of the farm. Again, there is no private ownership of land in Ethiopia.
[b]Using poor farmers to sell coffee is wrong.[/b]If this happens in any other country we all know it will be stopped. It is illegal. The international law is allowing Ethiopian government to continue to sell stolen coffee.
Kind people from all over the world should not feel guilty. The problem strarted in Ethiopia.Let Ethiopia fix the problem first before blaming the rest of the world.
Showing the poor farmers to sell coffee while the real owners are hiding behind them is wrong and should stop. If anyone wants to help the poor farmers let the Fair Trade organization list their names and bank accounts. Help them directly. They do not own the farms.
The truth should be told to all kind people all over the world. Millions are going to be sent to help the poor farmers in Ethiopia, but as long as the farmers see their own government continue to confiscate farms, businesses, property, they are not going to work hard in a farm and lose it. There is no incentive to work hard.
Ownership of land is important. The goverment officials are not intrerested in private owership, because they are benefiting from stolen coffee farms.(BBC.COM)
Ethiopian officials are not going to bother to change to democracy, and give back the coffee farms to the righthful owners. They are free to sell stolen coffee all over the world without any problem.The poor farmers you see in the movie are watching this. They do not blame the rest of the world. They blame their own, but cannot say a word.
It is time to tell kind people who care about the poor farmers the truth.
Thanks
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joneferguson
Member
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# Posted: 5 Jan 2007 20:30
Reply
what's the specific linkage to bbc.com reporting this? I am interested in checking it out from the source.
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BEANnz
Member
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# Posted: 6 Jan 2007 10:39 - Edited by: BEANnz
Reply
hello zenu gebru
Can you please display the full link for this site on BBC.com
cuz i i cant find it.
I noticed you have added onto alot of the forums ,and fair enough if what u say is true.
But please clarify with more specific references.
Because what you are saying is pretty full on ....it basically undermines the whole Fair trade process...in Ethiopia anyways.
I hope there is a way around this problem because there is alot of people world wide that are longing to help the ethiopian farmers.
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BEANnz
Member
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# Posted: 6 Jan 2007 11:28
Reply
hope this helps
95% of ethiopian coffee is grown on small plots of land owned by individual farmers the other 5% is state owned farms.
according to this site.
http://www.foodfirst.org/home
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zenu gebru
Member
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# Posted: 7 Jan 2007 10:10
Reply
joneferguson
http://news.bbc.co.uk/2/hi/africa/4880702.stm
The BBC News website's Africa editor Russell Smith spent time in the village of Moyale putting your questions to local people via a LIVE laptop link-up
From the newsroom of the BBC World ServiceQ: I am studying developing economics, and I understand land distribution to be a serious problem in parts of Africa. Is the land you farm under your ownership? And do you support each other within the community? All the best.
Adan Aliyo: In principle land is owned by the government. So people just use it.
I have plots I can use if the climate is convenient
http://news.bbc.co.uk/2/hi/africa/4541231.stm
Last Updated: Friday, 13 May, 2005, 08:14 GMT 09:14 UK
Land ownership is another important election issue.
The opposition believes the best way to fight poverty is ending the state's ownership of all land, and argues farmers must be free to buy and sell property and develop wealth.
The government insists the state must own land, arguing it gives more security to farmers. But this has now provoked something of a new debate.
http://news.bbc.co.uk/2/hi/africa/4182269.stm
Last Updated: Monday, 17 January, 2005, 20:46 GMT
Talking Point subsequently received an e-mail from an Ethiopian who said the idea of peasants having an indefinite right to use their land was known only by the prime minister, and if it was true it should be put into law so that local authorities could not "take land arbitrarily" from people.
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zenu gebru
Member
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# Posted: 7 Jan 2007 12:12
Reply
BEANnz
Hope you will have the time to read the report above only by BBC.COM,but others have reported the same problem facing Ethiopia.This is so you know there is no private ownership in Ethiopia.
Fair Trade may work in other countries not in Ethiopia.The poor farmers you saw in the movie are not owners. They are leasing the coffee farm and they can be thrown out just like the coffee farmers before them who now live in Ethiopia without their farm or are refugees all over the world.This is a fact.
Fair Trade organization have the burden to show the rest of the world the names of these Ethiopian farmers they are telling us they are helping.Not the co-operatives so everyone can check.
Showing poor Ethiopians while the owners or those who are going to benefit hide behind them has to stop.The report will show you.
Buy all coffee from Ethiopia. There is no difference. They all come from coffee farms confiscated by force by Ethiopian gov. officials, who still own the land.
[b]Blaming the rest of the world does not make sense. Ethiopian government continues to hold on confiscated businessess, farms and property and refuses to change to democracy.
Kind people who are ready to help should be told the truth. The movie does not show it.
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erk
Member
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# Posted: 24 Jan 2007 13:43
Reply
Some responses to M06, who had some very good points.
> it should be self evident that there are a host of other cost
> factors (the real estate, labor, etc.) which contribute
> significantly more to the overall cost structure of a cup of
> coffee than does the coffee itself. In fact the cost of the
> coffee in your cup generally makes up less than 5% of the
> operating cost at such establishments – something that you
> have either not taken the time to find out or willfully ignored
> in your movie.
While I agree this point should have been made, I thought it was fairly obvious. And in any event, this makes the point even more soundly: the cost of the beans themselves is a tiny portion of Starbucks's overall cost, meaning an increase in bean prices would impact their bottom line very little. Barrista efficiency would do far more (and I'm not calling their barristas inefficient).
> I found your film to be misguided, dishonest in principle
> if not in fact
Every documentary takes a point of view, as does journalism and history. The writer/creator must choose what to present and what not to present. Given that Starbucks and the major coffee buyers were all asked to comment, the filmmakers made at least a good faith effort to elicit their point of view.
> and at the end of the day counterproductive to the overall
> objectives that you seem to espouse assuming that this is
> indeed the progressive development and self reliance of
> Ethiopian coffee growers.
> Clearly the comparisons you make here and throughout the
> movie are designed simply to elicit the most indignant
> reaction possible from your audience although they are of
> course divorced from the reality of a free market system
Given the subsidies to U.S. and European farmers, how much of a free market does the world really have for any agricultural products? Demanding that the most impoverished in the supply chain embrace the free market first, before those who most benefit from the subsidies, is hypocritical. And the film advocated eliminating tiers from the system, not doing away with it - allowing farmers to sell directly to roasters, rather than going through additionl layers of bureaucracy. Your later criticism of Ethiopian farmers for not "adding value" utterly neglects the middlemen.
> and the real problems behind the circumstances that
> Ethiopian coffee growers find themselves in.
It would seem that poverty is a fairly immediate and dire problem on its own.
> very little value is added to coffee exported from Ethiopia
> in the form of roasting, packaging, branding or most
> other value enhancing elements that could significantly
> raise the premium commanded by it.
The genetics of the beans themselves are of significant value - Ethiopian coffees are like no other, and have value independent of downstream processing.
> Absent improvements in these critical problem areas,
> the low commodity price of coffee to the point that it
> barely covers a subsistent existence for the growers is
> then simply a market indicator that this is not the
> business for them to be engaged in.
Again, I thought the point was that by bypassing the middlemen, the farmers can sell their bean for what it is, to educated consumers, and earn more. If the farmers don't know how to get to the right markets, or who their end consumers are, then market indicators have nothing to do with it. There are many who benefit from keeping farmers ignorant of the market, and I credit Tadasse and others representing farmers for working to change that.
I certainly can't comment on Ethiopian land ownership and barriers to capital investment, but those should have been addressed in the film.
I also agree that Fair Trade can't be divorced from market realities. Education was clearly part of the message; in an abstract free market, price is the only differentiator, so there will always be a large market for mass-produced coffee where brand doesn't matter. Perceiving value relies on the consumer, of course. As a coffee drinker, I can say that Ethiopian coffees have this value - taste. That's not goodwill, and as coffee consumers have become more educated, they've begun to distinguish bean tastes. Allowing farmers to brand and market their coffee directly to roasters, without relying on middlemen, seems as free-market as it gets in the real world.
But many of your points are well-taken.
- Eric
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psmith
Member
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# Posted: 30 Jan 2007 03:54
Reply
a few thoughts regarding a earlier post - M06 :
>The real problem is that Ethiopia continues to sell the vast >majority of its coffee as a commodity rather than as the >specialty product that its intrinsic quality deserves for the >most part.
Supply-Demand: If there was the opportunity to sell in the specialty markets, they would. If there's not enought demand, all that is left is the commodity market.
For example, in a few central american countires more producers are leaving the "fair trade" (transfair) label than are becoming certified because there is not enough DEMAND for the fair trade certified coffee so they have to sell it at the commodity price. Same with Ethiopia, if there was the demand on the specialty market (and access to it), they would sell it at those prices.
>Further compounding this problem is the fact that very little >value is added to coffee exported from Ethiopia in the form >of roasting, packaging, branding or most other value >enhancing elements that could significantly raise the >premium commanded by it.
I agree with the premise of this thought, of adding value to the coffee to bring more money to the farmer and to Ethiopia in general. But the actual success of such a venture is doubtful. Roasting the coffee at origin, many would argue that the intrinsic value and nuances of the coffee would be lost in the long travel period from Ethiopia to its destination. In many circles of the specialty coffee industry it is percieved that coffee is best within the first week or two after roasting. If the exquisiteness and uniqueness of various Ethiopian coffee is to be fully realized, the coffee would need to be roasted and bagged close to where it would be consumed. Also, the marketing of the coffee would be quite difficult. The roasting/bagging at origin, has been and is currently being done in Costa Rica and has only reached limited success. Access and marketing are key to coffee distribution.
I totally agree that there sould be an increased value attributed to Ethiopian coffees which would therefore increase the price paid for it. I think that can be started by consumer awareness. Also it will be interesting to see how the patent of the name Yirgacheffe (in the US) and the pending patents for Sidamo and Harar will effect the prices paid to the farmers. We will see.
I agree with you also that the movie was disjointed at times with the references to the WTO, the distribution of wheat, the famine, etc. In some ways, I wish the one issue(coffee) was effectively dealt with without including the other references. But in other ways I don't think one can seperate the issues. The whole system that is built up around how the Western world treats the Africa (in general) is desperately flawed, at a policy level, a commerce level, and charity level. That's what I interpreted those references as.
btw, I studied abroad in Eth. for four months last year(06). I encourage everyone to go. It is an enchanting place.
Batam konjoe no. batam.
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M06
Member
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# Posted: 1 Feb 2007 15:34
Reply
Some responses to M06, who had some very good points.
> it should be self evident that there are a host of other cost
> factors (the real estate, labor, etc.) which contribute
> significantly more to the overall cost structure of a cup of
> coffee than does the coffee itself. In fact the cost of the
> coffee in your cup generally makes up less than 5% of the
> operating cost at such establishments – something that you
> have either not taken the time to find out or willfully ignored
> in your movie.
While I agree this point should have been made, I thought it was fairly obvious. And in any event, this makes the point even more soundly: the cost of the beans themselves is a tiny portion of Starbucks's overall cost, meaning an increase in bean prices would impact their bottom line very little. Barrista efficiency would do far more (and I'm not calling their barristas inefficient).
It is apparently (and unfortunately rather predictably) only obvious to those who have some knowledge of matters such as this and/or those who approach propositions such as are shown in this film, with a questioning mind. Believe me, after discussing this with many others who saw it (or more likely 'heard' about it), the perception that the vast majority seem to have is that Starbucks will simply turn around and mark up the price of the coffee they bought from the Ethiopian coffee farmers by a several hundred percent. Witness the recent protests in Seattle against Starbucks, video from which was posted to YouTube by Oxfam (same folks who sponsored the film) and where many interviewees profess their 'shock' at the disparity represented. Clearly, the producers' primary focus is to drive home the disparity between what a corporation like Starbucks pays Ethiopian farmers for their coffee and what it charges for a coffee drink (and not even pure coffee at that). It is this blind focus on hyperbole that I believe is harmful no matter what the intentions of the producers. There is certainly a debate to be had on whether corporate charity should be applied in this way and this debate in fact may be worth having. I am certainly on the opposite of that fence than you appear to be since it does not make sense to me that any 'for profit' entity would intentionally and voluntarily add to its cost structure especially in the form of incremental operating costs (the worst kind to have). I feel that such subsidies (and that is exactly what they would be) simply work to disguise the real issues that prevent the portrayed coffee growers from being more successful at what they do or realizing that this particular product may not be in their best interest to produce.
> Clearly the comparisons you make here and throughout the
> movie are designed simply to elicit the most indignant
> reaction possible from your audience although they are of
> course divorced from the reality of a free market system
Given the subsidies to U.S. and European farmers, how much of a free market does the world really have for any agricultural products? Demanding that the most impoverished in the supply chain embrace the free market first, before those who most benefit from the subsidies, is hypocritical. And the film advocated eliminating tiers from the system, not doing away with it - allowing farmers to sell directly to roasters, rather than going through additionl layers of bureaucracy. Your later criticism of Ethiopian farmers for not "adding value" utterly neglects the middlemen.
Let me first make sure we can agree on one point – subsidies are irrelevant to coffee because none of the Western and developed countries (such as the US, UK and indeed all of Europe) produce coffee and therefore have nothing to subsidize. Therefore, were we to have a discussion on subsidies it would have to be outside of the context of coffee. And it would be a fairly short discussion because I am very cognizant of (and opposed to) the impact that Western farm subsidies have on developing countries that produce the same crops. But the case against subsidies (and how the WTO enables them) was easy for the producers to make and somehow transpose (inaccurately) against the coffee industry which is again, the type of misdirection I found their movie to be full of.
BTW, rather than demanding an embrace of the free market, I am suggesting that being smart competitors in it is by far the best way to ensure fundamentally sound and sustainable progress for these growers. And my lament that not enough value adding activities take place in Ethiopia is directed more towards downstream processing capabilities and the lack of capital to improve these capabilities. As another poster pointed out, what you can do to coffee once the green beans have been dried & sorted and before you ship it abroad is limited due to the short shelf life of roasted coffee. But packaging is certainly something that would be helpful and Ethiopia does not have good facilities for this either. As far as the middlemen go, I believe they are simply responding to a market need and filling it. But to the extent that the Internet and other innovative approaches provide a construct that can go around the middleman, then by all means this should be done. Middlemen or not, given the right approach to branding & marketing, high quality coffee can fetch premium prices for the growers themselves and the 2005 ECAFE Internet Auctions at which the average price obtained for Ethiopian coffee was $3.22 per lb is proof positive of this fact. Significantly above Fair Trade prices, notably...
> Absent improvements in these critical problem areas,
> the low commodity price of coffee to the point that it
> barely covers a subsistent existence for the growers is
> then simply a market indicator that this is not the
> business for them to be engaged in.
Again, I thought the point was that by bypassing the middlemen, the farmers can sell their bean for what it is, to educated consumers, and earn more. If the farmers don't know how to get to the right markets, or who their end consumers are, then market indicators have nothing to do with it. There are many who benefit from keeping farmers ignorant of the market, and I credit Tadasse and others representing farmers for working to change that.
I certainly can't comment on Ethiopian land ownership and barriers to capital investment, but those should have been addressed in the film.
An example of another significant obstacle that inhibits Ethiopian coffee growers from getting more money for their product are the government restrictions on establishing direct producer-buyer relationships (i.e. they force all coffee to be sold through govt. auctions). This makes it very difficult for a specialty roaster for example, to consistently and reliably purchase its coffee from a single grower or group of growers that can produce exactly what the roaster wants year after year. This is how you would ideally develop and market premium brands (real ones, not the regional designation of Yirgacheffe for example over which there is currently such a ruckus). Actually, you can probably see that these restrictions actually encourage the entry of middlemen into the supply chain. Lack of access to capital is another fact of life in Ethiopia spanning well beyond the coffee industry alone. Of course this also has something to do with regulations like the one referenced above. Still, there are many opportunities to do better than is currently the case and I believe things are moving in that direction with even the government gradually adopting better policies going forward.
I also agree that Fair Trade can't be divorced from market realities. Education was clearly part of the message; in an abstract free market, price is the only differentiator, so there will always be a large market for mass-produced coffee where brand doesn't matter. Perceiving value relies on the consumer, of course. As a coffee drinker, I can say that Ethiopian coffees have this value - taste. That's not goodwill, and as coffee consumers have become more educated, they've begun to distinguish bean tastes. Allowing farmers to brand and market their coffee directly to roasters, without relying on middlemen, seems as free-market as it gets in the real world.
In the current scheme of things, middlemen serve a purpose much as we like to think they don't add any value. They know what buyers in the US are looking for and will go find it and bring it back to the market in the required quantities, grades, etc. They will essentially 'front' the buyers by taking on the risk of the inventory they purchase in the interest of making it readily available to their buyers. How else would specialty coffee retailers/roasters in particular be able to purchase what they want, when they want it short of making a trip to Ethiopia (and Ivory Coast, Uganda, Kenya, Rwanda, Colombia, etc.) every time they need some? Vice versa for the farmers and in fact to an even greater extent. The middlemen make it their business to know what's available where, when and for how much. And sure they make money at it. But they wouldn't be doing it if they didn't. The cooperatives attempt to bridge the gap but face many constraints such as not having a constant presence in their target markets, inability to deliver supplies at a moments notice (requires local inventory in your market, of course), etc.
BTW, although some of the principles espoused in Fair Trade are admirable, in my view it is certainly not the panacea many view it to be and I might even go so far as to put quote marks around 'Fair'. In order to be Fair Trade certified, a coffee grower must pay approximately $4000 initially and then $500 per year plus $0.015 per kilogram of coffee produced. Try hoisting that on an independent coffee grower in Ethiopia. Roasters that want to be Fair Trade certified must pay somewhere between $0.05 and $0.10 per pound of coffee. That just seems like an awful lot of money to me...
But many of your points are well-taken.
As are yours even though we may not agree
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M06
Member
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# Posted: 1 Feb 2007 16:00
Reply
TENAYISTILIGN!
a few thoughts regarding a earlier post - M06 :
>The real problem is that Ethiopia continues to sell the vast >majority of its coffee as a commodity rather than as the >specialty product that its intrinsic quality deserves for the >most part.
Supply-Demand: If there was the opportunity to sell in the specialty markets, they would. If there's not enought demand, all that is left is the commodity market.
For example, in a few central american countires more producers are leaving the "fair trade" (transfair) label than are becoming certified because there is not enough DEMAND for the fair trade certified coffee so they have to sell it at the commodity price. Same with Ethiopia, if there was the demand on the specialty market (and access to it), they would sell it at those prices.
Certainly the demand is there. In fact, specialty coffee (and that's not Starbucks for the most part) is a burgeoning industry in the US and it's only playing catch up to its European counterparts by a large margin at that. The 'access' portion of this equation, weak branding and marketing are really where the Ethiopian coffee industry needs to catch up in a hurry.
>Further compounding this problem is the fact that very little >value is added to coffee exported from Ethiopia in the form >of roasting, packaging, branding or most other value >enhancing elements that could significantly raise the >premium commanded by it.
I agree with the premise of this thought, of adding value to the coffee to bring more money to the farmer and to Ethiopia in general. But the actual success of such a venture is doubtful. Roasting the coffee at origin, many would argue that the intrinsic value and nuances of the coffee would be lost in the long travel period from Ethiopia to its destination. In many circles of the specialty coffee industry it is percieved that coffee is best within the first week or two after roasting. If the exquisiteness and uniqueness of various Ethiopian coffee is to be fully realized, the coffee would need to be roasted and bagged close to where it would be consumed. Also, the marketing of the coffee would be quite difficult. The roasting/bagging at origin, has been and is currently being done in Costa Rica and has only reached limited success. Access and marketing are key to coffee distribution.
You are absolutely correct in terms of the limitations that face additional processing at the source country. Many specialty retailers actually roast to order or simply sell green beans period. Better quality drying and sorting is something that Ethiopian coffee could benefit from not to mention packaging for retail (green beans only) which probably costs almost as much as the beans for the fancy stuff you see on premium coffee store shelves.
I totally agree that there sould be an increased value attributed to Ethiopian coffees which would therefore increase the price paid for it. I think that can be started by consumer awareness. Also it will be interesting to see how the patent of the name Yirgacheffe (in the US) and the pending patents for Sidamo and Harar will effect the prices paid to the farmers. We will see.
I doubt there will be much of an impact. While I think Starbucks shouldn't be making a big issue out of this at all, I do agree with them that these are simply regional designations. The coffee produced from a given region - while sharing some characteristics - can and definitely will show wide variations of quality even within the common parameters. And the reason for this is simple, what is done with the coffee beans from picking to drying to sorting can have a big impact on how the resulting beverage will taste. This is why you can buy Yirgacheffe coffee for $5/lb at one retailer and $14/lb at another. Gemadro Estate is an example of a properly branded product, IMO. Very highly rated consistently. As it's name suggests, comes exclusively from one plantation. Starbucks offered it last year as a Black Apron exclusive at $12 for half a pound. I think this is a great example of what you can do with Ethiopian coffee and a blueprint that the rest of the industry should follow all the way to the bank.
I agree with you also that the movie was disjointed at times with the references to the WTO, the distribution of wheat, the famine, etc. In some ways, I wish the one issue(coffee) was effectively dealt with without including the other references. But in other ways I don't think one can seperate the issues. The whole system that is built up around how the Western world treats the Africa (in general) is desperately flawed, at a policy level, a commerce level, and charity level. That's what I interpreted those references as.
btw, I studied abroad in Eth. for four months last year(06). I encourage everyone to go. It is an enchanting place.
Batam konjoe no. batam.[/i]
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Lancs Student
Member
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# Posted: 29 May 2007 14:46
Reply
Hello to everyone,
There appears to be some very solid and interesting points made about the markets, subsidies, farm ownership and general market strategy here. However it seems to me that we are generally missing the point, what is the purpose of this film? What is it trying to do?
Most people would suggest that it is merely trying to promote awareness of the problem, build up sympathy for these peoples plight and/or get you to buy free trade coffee.
I'm sorry but I feel that this is a waste of time and money. Something needs to be done to help curb the problem of the growing poverty in the less developed countries of the world. This would be better done by putting pressure upon the government to firstly stop siding with big buisness and industrial lobbies. They virtually <b>NEVER</b> get any attention, while we as the consumers of the product are singled out as the solution, buy free trade coffee and spend a little more on luxuries!! This is what will ease the problem of poverty, absolute rubbish! These companies are spending around 1/15 on the primary product in comparison with what they sell it for. Of course they have to pay for labour and packaging, marketing etc. But they spend so much on 'flashy' packaging to make their product more attractive to consumers! They dominate in the politcal arena and shape the governmental landscape to fit their own needs. It's capitalism that is shaping our world and not democracy, this is where its going wrong.
I must stress as well that I recognise there is a price set for coffee in the big multinational trading centres, more specifically London and New York but it is industries that dominate in the stock market exchange. Coffee farmers don't stand a chance against all this bureaucracy, as the famous saying goes, 'the bureaucracy is expanding, to meet the needs of the expanding bureaucracy'. Their needs to be some union between coffee producers, the people who control this production (government, local firms, farmers), need to be represented better in order to secure a better price for their coffee, it is the industries who manipulate the system who should be paying a little extra not the consumer.
Let us not forget that these companies make huge profits from selling tons of coffee around the developed world, its not like they don't have much of a market for their finished product! I'm sure that if the industries who package the coffee and sell it to the superstores pay a little more for it they will still make a substancial profit when they sell it and will hopefully keep their prices down due to competition between them, in an ideal world. Nevertheless, they are more likely to agree to move up their prices simultaneously.
I'm sorry i'm just a frustrated student, in good old Great Britain, I'm not complaining, i've got plenty of food and water, clothes and a roof over my head. But with the rise of inflation in Britain and the skyrocketing house prices as well as my ever incresing student debt, I sometimes wonder why it is people like me who should be feeling guilty and not the arses/ shareholders wo run these big multi - million dollar companies.
Very enlightening piece of work though, these problems need to be addressed but in the right way. Plus i'm all for the growth of autonomy within Ethiopia, in terms of roasting and perhaps packaging their own coffee and locating their own markets, including avoiding government control, although if the government control is productive towards and protective of the Ethiopian markets, then it wouldn't be such a bad thing.
I'd really like to visit Ethiopia on a gap year and help out there as a volunteer, not to big up ego, just to get a better picture of the world and to visit somewhere truly exciting and different to dreary old Britain.
Please comment, i'm sure i've misssed out so many factors involving the process and I really want to learn morw about these problems!
Thanks,
Tom
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Oistein
Member
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# Posted: 31 May 2007 00:40
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Many of you have asked what the point of making this film was. Well, one of them was to stimulate amazing debates like this one. It is truly inspiring to see so many of you really discussing in depth all the issues that we tried highlight in Black Gold. We never pretended to have all the answers but really wanted to draw attention to the global disparity and the many difficulties small scale coffee farmers in Ethiopia face.
I also agree that there are no simple solutions to this situation, but that is not a reason to sit back and be cynical and passive. What we need is more people putting there heads together, like you are doing now, to come up with and support multiple solutions and initiatives. These could include Fairtrade, increased processing and packaging in Ethiopia, ownership over regional coffee names, land reform, focus on quality and niche markets, change of government trade and agricultural policies, increased corporate responsibility, and more equal partnerships between market actor in the global South and North.
You are right, there is no one panacea, but rather lots of initiatives that could all help pull the industry in the right direction. But they need our support, whether in the form of volunteering, changing your coffee brand, campaigning for fairer trade rules og making films. Its all part and parcel of being an active and responsible world citizen. And best of all, it is in everyone#s best interest.
So enjoy your next well thought through cup of coffee!
Oistein
associate producer, Black Gold
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Camachoman
Member
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# Posted: 1 Jun 2007 13:31
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First of all a quick comment. Coffee does sell for $2.90 and more in the western world. Because the prices quoted are in USD does not mean that one means just the USA. In Western Europe (considerably larger than the US in population) a cup of coffee can and does cost on average $3. When will you yanks get it into your heads that the world does not revolve around you??
Secondly, Ethiopia is now the world's 4th poorest country. Whilst it certainly has it's fair share of corruption, the suggestion that Ethiopia has the might to match the multinationals is a joke. I am a businessman. I believe in the free market. However I do not make condone making profit in ways that are simply unethical. That there are low cost countries in the world where wages are a fraction of those in Europe/USA is one thing as long as the avarage wage is a fair wage i.e. that it affords a person an acceptable standard of living, whatever that may be. It is not acceptable that people are starving to death because of "market forces".
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Sarahhh
Member
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# Posted: 2 Jun 2007 20:25
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Hang on; I'm not an expert on coffee, but to me this film is abuot those women gett8ing what, a few dollars for a day's work? that is true right? so ther you go, an issue has ben raisen, what's worng with that?
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PurpleAmharicCoffee
Member
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# Posted: 24 Jul 2007 01:38
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AMHARIC AND ITALIAN ARE THE MOST BEAUTIFUL LANGUAGES IN THE WORLD TO ME! PLEASE DO NOT HURT EITHER!
I go on the internet and I do not see the poverty of Ethiopia but the potential of Ethiopia. Have any of you heard the sweet music of Tewodros Kassehun or Hamelmal Abate? Have you not known that Ato Kitaw Ejigu, an Ethiopian scientist, invented the Global Positioning System?
Ethiopia is the oldest independent nation of Africa, it has fought for years, decades, centuries and millenia against foreign invasion, a lot more than a lot of countries. Amharic and Tigrean are the only two well-known African languages with their own script. Ethiopia has assisted in the survival of Christianity in Africa and beyond.
It has also suffered from two not-so-good governments, first, the one of Mengistu, which nearly wiped the whole land out, and then Meles Zenawi, whose sole occupation seems to be making war with Somalia, closely followed by his persecution of enemy politicians.
DO NOT BE FOOLED
Italy hasn't had it that flash either. They have been purged by many invaders, and they did try and invade Ethiopia twice, but to no avail. But other nations have stood by and mocked Italy, is Italy just trying to get over their own pain and suffering? Some Italians might have a desire for control over Ethiopia, their coffee, etc. This may be how they are getting it. Both Italy and Ethiopia have long, hard histories, beautiful languages that emerged from another of their indigenous languages, and a passion for art, music and culture.
Is it not possible for Italy and Ethiopia to reach an agreement? I think it is possible. We should be thankful for the contribution of both lands.
Time/gize/tempo will tell.
Ethiopia and Italy are no longer a joke. Neither are Holland and Great Britain. And New Zealand. But I find that in New Zealand, people are not as aware to international problems, our nation is sealocked and isolated, yet has internet access. People need to learn how to understand eachother, as this is the part of love that we require to simply get along. Love is fair, love is kind, love does not boast, etc.
Think, friends, think, and love. You will find the answer.
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TheFlowerAuthority_com
Member
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# Posted: 22 Dec 2007 23:12
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Selling direct will become a reality with some products sooner than most realize. Take a look at http://vtmiller.blogs.com/webinfarmation/2007/12/s hangbycom-lets.html for a fantastic example of what is possible - they even have a live video shopping feed that lets people from around the world buy products direct for less than they can even get online elsewhere. I'm thinking an entire network of justin.tv shoppers unleashed in certain parts of the country could be a viable business!
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BestCardsharing
Member
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Reply
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Achieldcell
Member
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# Posted: 24 Jan 2010 09:23
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Qarlcom
Member
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# Posted: 23 Feb 2010 07:45
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