Fair & Free Trade on Coffee business
Coffee prices soar and businessmen in the middle of it rake in profits at the expense of the coffee farmer who for years has been on the verge of absolute poverty after investing heavily on the incumbent commodity through massive inputs and labour. However this has been the commonplace media hype about the coffee problem and the businessmen connections in the global markets. The truly profound is that the cost of producing coffee in the farm level has outdone the purpose of doing so due to lack of regulation of the coffee trade and maximising the price to benefit the farmer.
In the farm level of the coffee business the farmers have gradually doubted the importance of coffee as a cash crop due to absence of regulation and protection of their inputs to the market through farming. As such the issue of free and fair trade in context lacks within the market structures which interlink these farmers and the coffee buyers. The problem now needs both legal redress and coffee producing states coming in to look at the checks and balances in the market. So far the general overview on the fair and free trade is on the basis of an
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But what is the truly profound on this demographic aspect of market implications is based on the fact that most coffee cooperatives have failed to deliver to both the farmers and the market in terms of having free and fair trade policies. These policies have a varied approach to contracts based on coffee sales and gains from coffee sales. This has reduced market value aspects and confidence of coffee sellers in the market levels hence reduced price equity and a subsequent low price implication on the coffee market price.
This has drawn free and fair trade policies to be eyed sceptically due to aspects of cyclical structural outlooks on coffee. Inflation and political implications weigh heavily on market capitalization and cooperatives fail to address the need for standardized market value and quality of coffee opening corruption and extortion windows hence the subsequent rip offs based on irregular facade of the latter. Chris Kenning: The coffee connection: Published by Courier Journal September 2007 (www. couorier-journal. com)
Fair and free trade is becoming increasingly popular at the farm level with confidence in it growing profoundly. The general perception is that it is helping farmers to earn a living from the coffee farming. Previously this has been intrinsic and the complexity of it being based on the long marketing and sales chain. This has blocked the small scale farmer’s ability to understand and access the market and compete with the sellers as well as lobby for better prices in context forming one of the complexities hindering coffee from benefiting the millions of peasants who are coffee farmers.
Free trade policies have jumped this jinx and closed the corruption-extortion window through increased equity for the farmer through cooperative based regulation and contracts which guarantee good coffee prices on a minimum value basis which obviously is insulation. As such free and fair trade practice is the onset of profiting out of coffee farming for the coffee farmers in a long term basis and will offset the traditional antagonism of middlemen extorting activities.
This practice also has regulated labour issues and bars child labour in coffee farms while it addresses and refers farmers to the Fair Trade Labelling Organization, which certifies coffee farmers. Coffee trade farmers are getting a raw deal, less than fair world market value. Examples are West African coffee farmers and South American farmers. Efforts to offset this have been downplayed by pressure from middlemen who have selfish corporate ambitions.
In the African coffee farming arena the farmers have been loosing equity and hence resulted to looking down at coffee as more of a liability than a cash crop which rates as the second most valuable commodity after oil. This African problem is significantly similar to the Guatemalan one where the middlemen complex has nullified great expectations of the coffee farmers. Market prices have been high and though fluctuating have had little significant on the farmer basis level.
They have been too minimal and possibly a loss to the farmers who are mostly peasants. The cooperatives have been offering returns per a kilo of coffee at a price of cents while the market price has been beyond the one dollar scope. This is a raw deal and discontent has culminated to cooperative wrangles which have impacted the sector quite heavily negatively. Oakland Ross: A bitter brew for coffee farmers: Framers struggle even as prices soar. The Toronto Star 2002. Toronto.
West African farmers have had a fair share of this miserable problem and a movement of cutting down coffee stems has been on the rise. In East Africa, most farmers have neglected coffee farming in favour of more profitable agricultural activities rather than coffee. Besides, the farmers have felled coffee stems to clear land for subsistence farming and horticultural activities. The issue here has been that they have lobbied enough for free trade but the regulation and political interests of several players weighs heavily on them and reduce their efforts chances.
In Guatemala farmers cry foul over minor gains from their coffee sales and blame it on middlemen who have applied standards on cooperatives forcing them to fail to deliver on basis of any fair trade ties. This is on-setting constrains on the gains of coffee to the farmers. Prices have also been unfavourable and the most intrinsic gain seen is on the corporate level where corporations confirm that quality and brands are asymmetrical to consumer needs and have a chunk of market share in contributing to market equity.