From Bean to Cup: the Battle Between Starbucks and Ethiopian Coffee Farmers

Nov 11 2009

Posted by Cappuccino Admin as Coffee News

Every day in the early hours of the morning, the farmers of the Oromia region leader in coffee plantations in the Ethiopian highlands for a day's work. Often, walking barefoot for miles to get there, farmers use their bare hands to collect the coffee beans to steep mountain at high altitudes and a scorching sun. For these farmers and their families, agriculture, coffee is the only way to earn a living in one of the poorest countries in the world. Earn less than a dollar a day.
The other side of the world, clerical tail asleep before the Starbucks on 14th St. in New York, willing to pay three dollars for the first jolt of caffeine. Starbucks, with more than 11,000 outlets around the world and annual revenues of over 7 billion dollars, gets most of its coffee from countries like Ethiopia.
Since its founding in 1985, the company promoted fair trade as part of its corporate image. Starbucks has wooed its customers politically correct "Ethiopian Fair Trade coffee in the packaging Fun Cup But the relationship between society and farmers is more complex than it seems. Recently, there has been a growing controversy over whether or not the economy of Ethiopia and the Ethiopian farmers fair treatment of the multinational. This debate has generated a fierce campaign by fair trade organizations, trade unions and the Government of Ethiopia, who has publicly questioned the ethics of business.
Responsible
Starbucks maintains that enjoys a positive relationship with the coffee farmers. With their "commitment to social responsibility, Starbucks has developed an integrated approach to the supply of coffee with CAFE (Coffee and Farmer Equity Practices), a series of socially responsible coffee buying guidelines. This strategy is said that the sustainable improvement of working conditions for farmers, help them earn more, while protecting the environment.
Starbucks agrees to pay a high price for its coffee and its attempts to buy coffee that is certified as fair trade coffee. Starbucks acquires Global Fair Trade Certified Coffee equal to 11. 5 million pounds for 2005, becoming the largest purchaser of Fair Trade certified coffee in North America, "the company said in a brochure. "In addition to paying a high price for our coffee, our areas of investment in social development projects and access to loans at affordable prices in the coffee culture has been recognized for its leadership in the industry" , Starbucks said in a press release in October 2006.
Blocking brands
However, farmers Ethiopians believe they receive the short end of the stick in this relationship. While Starbucks continues to generate billions of dollars each year, Ethiopian farmers and their supporters believe that Starbucks does not want to see them or their countries to reap the benefits comparable.
Oxfam International, a human rights organization in Colombia, says that Starbucks tried to block the attempt by the Ethiopian government "for the brand of coffee grown in Harar, Yirgacheffe, Sidamo and regions, depriving poor countries earning potential of up to 80 million. The U.S. National Coffee Association (NCA) has attempted to block the efforts of the mark, and Oxfam accused Starbucks of being behind these efforts. Although Starbucks denies this assertion, the spokesman for Oxfam's Jo Leadbetter said it was the validity of his claim. "We heard a number of sources that actually Starbucks was involved in warning the U.S. coffee association to block these applications and that" stinks of corporate bullying, "said Leadbetter.
According to Oxfam, for every cup of coffee sold by Starbucks, the farmers of Ethiopia, at the beginning only about $. 03, receives a very small portion of their profits from their consumption of coffee. "The Ethiopian coffee farmers often collect about 10 percent of the profits from these cafes. The rest goes to the players in the coffee sector in a position to control prices, retailers, importers, distributors and roasters such as Starbucks, Oxfam said on his website Make Trade Fair. In response, Oxfam launched a campaign for fair trade to support farmers, such as those in the Ethiopian highlands. "Starbucks has engaged in some positive initial steps to help coffee farmers living in poverty. I do not understand why they do not take the next step and sit down to discuss the proposal of Ethiopia in good faith, "said Seth Petchers, director of Oxfam America's coffee program.
Ethiopian coffee industry
Ethiopia, known as the birthplace of Arabica coffee in its region Kaffe depends on coffee production for its economy. Production of coffee is so important for agriculture-based Ethiopian economy that 50-60% of its revenue from coffee exports. The industry employs one in four. Approximately 15 million coffee farmers and their families depend on coffee for their survival.
Coffee is also a central part of Ethiopian culture, with traditions that date back to the 10th century, when the first tree was domesticated in south-Tops in Western countries. The coffee is so important to the daily routine of life in Ethiopia as "coffee ceremony" will be every day throughout the country. A third of national production is consumed locally.
Starbucks potential impact on the Ethiopian market
Ethiopia should have success in trade marking beans, which allow countries to monitor the use of its cereals on the market, giving its farmers a greater portion of the price of retail. "Protecting the brand for its Sidamo, Harar and Yirgacheffe coffee beans would have allowed the country to increase its influence in negotiating the control of designations and, finally, (take) a larger share of retail prices in the global market "Ministry of Foreign Affairs of Ethiopia said in a statement.
The potential benefits for the Ethiopian market is huge, second Fitsum Hailu, the Second Secretary Trade and Investment at the Embassy of Ethiopia. "When farmers can grow and thrive, improving not only the production and quality, but also increasing the value of their intellectual property portfolio, so everyone in the coffee sector – including retail partners and distribution and consumers — benefits. "Fitsum added that in a case such as Ethiopia," the stronger bargaining power to enable millions of coffee farmers and traders to invest and prosper in the future of these fine coffees. "
Location of Ethiopia
Tadesse Meskel, the representative of the Oromia Coffee Farmers Cooperative Union, Ethiopia, agrees with Fitsum. According Meskel, Starbucks sells coffee for $ 14. 00 per pound, but pays only $ 1. 20 per pound, which does not even cover production costs.
However, Mr. Meskel explained that the problem of production of coffee is also with the World Trade Organization, not just Starbucks. In a telephone interview, said: "The WTO is responsible for a huge amount of trade profits and a change must be made in international trade law. The price that we [farmers] are very low and is lower because of unfair trade laws. "
Meskel is working hard to save his 74,000 coffee farmers impoverished, and he is on a mission to find buyers who are willing to pay a fair price for their coffee. Meskel is also the main character of Black Gold, a documentary that compares the experiences of coffee farmers with consumers who purchase the product at the end of the world. "This film highlights the vulnerability of producers of coffee and the gap that exists between poor farmers and huge profits. Oxfam seeks to correct the imbalances of power has led to unfair trade practices, "said Petchers.
Starbucks Location
In response to the campaign of Oxfam, Starbucks has launched an attack. "We have never filed an opposition to the Ethiopian government's trademark application, nor claimed ownership to the region names used to describe the origin of our coffees," the company said. Dub Hay, Starbucks Senior Vice President of Global Procurement coffee and told BBC radio, "We were not involved in trying to block the attempts of Ethiopia. We have not had the ANC in question was actually the opposite. Are those who have contacted us about it. "
While Starbucks denies being behind the trade block process, the company does not believe that trade marking is in the best interest of farmers and the Ethiopian economy. "If the points to be implemented – roasters might avoid the purchase of coffee for fear of becoming involved in complex litigation. Or worse, they can buy the coffee and their market without brand names. Let the high quality beans go to market without a geographic identification would completely compromise the value of the brand, "Starbucks said in a statement.
The Ethiopian government has also asked Starbucks to sign an agreement that will allow Ethiopia to have the ownership of its coffee. However, Starbucks has refused to sign the agreement, the Company believes that if Ethiopia were the trademark of its products, he, with the exception of the market. According Hailu, is a serious crime. "The only way this statement could be accurate if Ethiopia is completely mismanaged the brand once they were acquired, and I hope that Starbucks has not admitted that Ethiopia is incapable of managing intellectual property assets one of its most important exports, "said Hailu.
As an alternative to the filing of brand products, Starbucks suggests the development of certification programs geographically. Through certification programs, a country can be identified as the source of a product. Starbucks says that these systems are more effective than registering trademarks for specific geographic names, names such as the regional government of Ethiopia trying to make. The mark means the manufacturer of a product or a product, while the certification was that the product meets the standards of product quality. Alain Poncelet, head of Starbucks Green Coffee Purchasing told Spiegel Online, the online German newspaper that his company "is all for Ethiopia" protecting its regional names, not only through the brand. "
This position does not receive much press, though. The company has received over 70,000 phone calls and faxes from consumers concerned, expresses support for farmers. But is this negative publicity of this type have an impact on every home-Hold name and company of billions of dollars? "Probably not," said an employee of Starbucks in New York who requested anonymity. "People are so hooked on coffee, will not be affected by something that happened so far. The only people who are protesting Starbucks are a minority of activists. Everyone thinks their problems. "The employee has also praised Starbucks treat their employees. "They treat their employees better than most commercial enterprises, and give much to the community," he said.
Power Positioning
Meskel As noted, the struggle between the coffee farmers and Starbucks not only the issue of trade mark rights. It also highlights how the coffee farmers are almost entirely outside the area of negotiation between governments and businesses. The problem is the fact that farmers in "developing" countries do not have much bargaining power in international trade.
Senait Assefa, a resident of New York, Ethiopia, believes that strengthening the position of producers of coffee on the international market, should be the focus of efforts, not Starbucks. "The producers of coffee, should unite to control the supply of coffee on the international market, thus allowing himself to dictate their own terms (similar to how the oil-producing countries to manipulate the price of oil to reduce or increase production and supply), "said Assefa. However, Assefa admits that this might not work. "If oil is a resource only a few countries have almost anyone can grow coffee," he added.
Although coffee is a plant that can grow in different regions, the high quality of Ethiopian coffee is what makes it so unique. While Ethiopian farmers continue to work hard to produce good quality coffee, their market position in international trade, has just begun to attract world attention, thanks to the tireless work of Meskel and others. As the battle for their trademark coffee continues, coffee farmers have been fighting the laws of commerce that make them invisible in the chain of international actors.