on coffee

A big part of my work and research assistantship for the past 2 years has been on the development of the coffee sector of Burundi… From the article “Conflict and Coffee in Burundi”

American roasters insist that for best quality, coffee has to be roasted and ground near the consumer and delivered within seven days, with the premium of 48 hours. This however, is a trade barrier excuse by traders in the consuming countries of the developed world, which could easily be overcome through the technology of vacuum packing. The American roasters’ argument is consonant with the century-old opposition by the north to import value added food products from the developing world. The beneficiaries in this arrangement have largely been American and European middlemen and roasters who hold an important place in the coffee commodity chain. Over 40% of global coffee trade is in the hands of only four companies, led by Starbucks, which holds 50% of sales in the terminal markets. Three-quarters of the roasting business in the United States, home of the world’s largest instant coffee industry, is in the hands of only three roasters, with General Foods, Nestle for Maxwell House and Nescafe respectively leading the industry. This international market structure creates an oligopolistic market whose penetration by producing countries remains a daunting challenge.

The fair/alternative trade movement has emerged to reduce the length of the chain to benefit the primary producer.100  Fair trade is based on the need for more equitable, less exploitative dealings with coffee producers. It emphasises minimum prices for inputs, credit availability at concessionary rates, long-term relationships with farmers’ cooperatives where they exist, and the bypassing of middlemen. The Fair Trade initiative, however, remains a nascent developed world initiative that will take time to penetrate the complex web of intermediaries in the coffee production chain on the end of primary production and processing.