Books Business, Finance & Law The Coffee Paradox: Global Markets, Commodity Trade And The Elusive Promise Of Development

The Coffee Paradox: Global Markets, Commodity Trade And The Elusive Promise Of Development.pdf

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Read online or download a free book: The Coffee Paradox: Global Markets, Commodity Trade And The Elusive Promise Of Development

Pages: 320

Language: English

Publisher: Zed Books; 1 edition (1 Nov. 2005)

By: Benoit Daviron(Author) Stefano Ponte(Author)

Book format: pdf doc docx mobi djvu epub ibooks (*An electronic version of a printed book that can be read on a computer or handheld device designed specifically for this purpose.)

Can developing countries trade their way out of poverty? International trade has grown dramatically in the last two decades in the global economy, and trade is an important source of revenue in developing countries. Yet, many low-income countries have been producing and exporting tropical commodities for a long time. They are still poor. This book is a major analytical contribution to understanding commodity production and trade, as well as putting forward policy-relevant suggestions for ‘solving’ the commodity problem.Through the study of the global value chain for coffee, the authors recast the ‘development problem’ for countries relying on commodity exports in entirely new ways. They do so by analysing the so-called coffee paradox – the coexistence of a ‘coffee boom’ in consuming countries and of a ‘coffee crisis’ in producing countries. New consumption patterns have emerged with the growing importance of specialty, fair trade and other ‘sustainable’ coffees. In consuming countries, coffee has become a fashionable drink and coffee bar chains have expanded rapidly. At the same time, international coffee prices have fallen dramatically and producers receive the lowest prices in decades.This book shows that the coffee paradox exists because what farmers sell and what consumers buy are becoming increasingly ‘different’ coffees. It is not material quality that contemporary coffee consumers pay for, but mostly symbolic quality and in-person services. As long as coffee farmers and their organizations do not control at least parts of this ‘immaterial’ production, they will keep receiving low prices. The Coffee Paradox seeks ways out from this situation by addressing some key questions: What kinds of quality attributes are combined in a coffee cup or coffee package? Who is producing these attributes? How can part of these attributes be produced by developing country farmers? To what extent are specialty and sustainable coffees achieving these objectives?

'An important contribution to the literature on primary products and economic development.' Diego Pizano, National Federation of Coffee Growers of Colombia'Daviron and Ponte have done a masterful job both of showing the limits to 'free' trade in agricultural products as well as providing some concrete proposals as to what must be done to promote greater equity. The story of the global coffee trade is an essential lesson for all those concerned about international development. This volume should be read by anyone who is interested in how international trade takes place on the ground as opposed to abstract theorizing about it.' Lawrence Busch, director of the Institute for Food and Agricultural Standards, Michigan State University'This book uses value chain analysis to go beyond the normal hand-wringing about the coffee crisis. The authors blend theory and practice (including new data) to provide all those interested in coffee with new insights, ideas and perspective.' Peter Baker, senior coffee scientist, CABI Commodities'Ponte and Daviron bring fresh insights to the persistent difficulties of trade as a lever of development for poor nations. Their well-crafted and historically grounded arguments precisely characterize the important intangible attributes of value and market power that are often overlooked and offer some stimulating perspectives for anyone interested in development and in coffee.' Daniele Giovannucci, consultant and author of The State of Sustainable Coffee'The Coffee Paradox offers a fascinating account of how our favourite morning cup of coffee travels from poor producer regions in the Global South to relatively affluent consumer regions in the Global North. Analyzing recent transformations in coffee quality specifications and global trade networks, Daviron and Ponte illuminate the challenges and opportunities inherent in tropical export production, global trade, and shifting consumption trends. The book is theoretically sophisticated, empirically grounded, and goes the extra mile to identify promising pathways for fuelling development.' Laura T. Raynolds, co-director of the Center for Fair and Alternative Trade Studies, Colorado State University'Aimed at academics and researchers, the Coffee Paradox raises interesting questions, using the example of coffee to explore a complex, but important subject.' New Agriculturist'....is an intriguing study..is likely to make an important contribution to the research, debates and initiatives addressing the relationship between commodity trade and development, as well as to the future potential of more equitable North/South relations amidst the rapid changes in production, trade and consumption in the global economy.' Douglas L. Murray, Colorado State University'Recasts the so-called coffee paradox - the coexistenceof a 'coffee boom' in consuming countries and of a 'coffee crisis' in producing countries. While coffee bar chains have expanded rapidly in consuming countries international coffee prices have fallen dramatically and producers receive the lowest prices in decades.' Development Action, Nov/Dec 2005


Read online or download a free book: The Coffee Paradox: Global Markets, Commodity Trade And The Elusive Promise Of Development.pdf

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Customer reviews:

  • By Alan Kasket on 2 August 2007

    The "coffee paradox" of this book's title describes the situation whereby the farm gate price of coffee is depressed and many coffee farmers and workers remain poor, while the price of your latte at Starbucks seems to have been stuck at around two quid for ages. The "Latte Revolution", the explosion of coffee bars and consumption in the North does not appear to have benefited coffee farmers in the South (who receive as little as 1% of their product's final selling price) and this book asks why.Coffee starts out as green beans, is milled, then sold to roasters then to retailers and then to consumers. But the different actors in this chain, the authors point out, are buying and selling different goods and services and exploit their position accordingly. Whereas the coffee farmers sell beans, supermarkets sell convenience and coffee bars sell lifestyle, or "in person services" (ie. sofas, wifi, cute baristas, etc). Roasters, meanwhile, make supernormal profits from an oligopolistic position which allows them to exploit information assymetry inherent in the coffee value chain. It is in particular the behaviour of the roasters which excites the authors' opprobrium; the true quality of the coffee is kept from consumers on the one hand and the nature of consumer demands and often the market price is kept from the producers on the other.Now, there is a school of thought which believes that addressing the coffee paradox is beyond the control of the actors in this chain. Rather, it stems from a straightforward supply and demand imbalance whereby new entrants to the market have brought oversupply to the coffee market, depressing prices. Such analysis, favoured, according to the authors, by "business segments, more orthodox academics, policy makers and think tanks" no less, is deemed not to show the whole picture, however, and the authors don't even consider whether it would be a good thing to allow market forces to regulate supply or why coffee should be treated differently to, say, milk as an input into our daily brew. Nor do they ask why, given the returns available, and despite the market position of the larger firms, more roasters do not enter the market.No, Ponte and Daviron have a problem to solve. They ponder regulation of roasters' behaviour by means of "competition or anti-trust legislation at the WTO level" but don't believe this would provide the complete answer; they hark back almost fondly (but, they realise, impractically) to the days of price stabilisation pacts but realise that such measures, which failed in the past amongst other reasons because pact members cheated, are unlikely to work now; and they believe sustainable coffees (organic, Fair Trade, etc), are "unlikely" to bring about "a better deal for [the farmers'] product".Having considered these pseudo-administrative measures, they conclude with a set of their own, which make much more sense and are more genuinely market-based. The coffee trade should be far more transparent, to address information assymetry; producers should create a dialogue with consumers, so that they can tailor their products to demand. Consumers, meanwhile, should understand where their coffee is coming from (and whether it's any good); an Indication of Geographical Origin system should be established, giving a recognisable and reliable territorial symbol and providing quality assurance; education programs should be set up to teach us more about coffee also. More challengingly, producers must capture more value from sales of "in person services" by understanding what consumers value and will pay for (a "Mild Arabica Inside" label, anyone?). Where the authors favour regulation it is more to ensure the integrity of quality or territorial certifications (they do see a role for some kind of anti-trust legislation).Daviron and Ponte, given their evident knowledge of the market, are important participants in this debate. They at times give the impression of missing the good old days of state regulation and producer cartels but they are above all pragmatists and they draw from all parts of the economic spectrum to deliver a blueprint for the future of the coffee trade together with sensible recommendations to deliver an improvement in farmers' well being.

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