permaculture

[Marimike6@cs.com]

The article you passed along has provoked a few thoughts.

First, it is normal for any buyer-- you and I usually included-- to pay the lowest possible price for any product. That is why we all hate buying cheap Chinese stuff at the dollar store and WalMart. But most of us do, in fact, buy their cheap stuff in those stores. Manufacturing has left our shores in droves for this reason-- we can't compete with someone who makes $1.12 a day.

Businesses are that way too-- they are in business to strike the best bargain they can. They don't want to go out of business, so they buy very judiciously.

When they offer a farmer less for his crop than he has invested in it, he loses money-- for a year or two. But when he sees it's not going to get any better he converts to another crop, or to subsistence farming. Like you and I, he takes his business down the street.

Thus less coffee ripens and becomes market ready. Thus the buyers can't get enough cheap coffee to satisfy demand. Thus they have to raise their offering prices to compete with the rival buyers for the existing coffee.

If they collude with their business rivals to keep the price artificially low, people don't grow coffee for them any more. The companies don't have anything to put on the shelf. Thus they make less money, and have to offer a better price to stay in business.

So the strategy in combatting this entirely normal trend among businessmen is to always know when to become independent. You don't have to work for them if they're not going to pay you.

In the instant you become independent, you become a business person too. And how you run your business is your own business (and, of course, the government's).

The loudest complaints against business practises frequently come from people who feel they can't afford to quit. Know when to hold 'em, know when to fold 'em.

Mike Elvin
Fuquay-Varina, NC

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• From: PacificEdge <pacedge@magna.com.au>
• To: Intl permaculture list <permaculture@lists.ibiblio.org>
• Subject: [permaculture] Coffee - the true cost
• Date: Sat, 21 Sep 2002 14:10:21 +1000

The following text originates with Oxfam/ Community Aid Abroad Australia. I am posting it because it is probably of interest to permaculture and social lobbies as well as consumers of coffee worldwide...

TEXT STARTS...
There is a crisis destroying the livelihoods of 25 million coffee
producers around the world. The price of coffee has fallen by almost
50 per cent in the past three years to a 30-year low. Long-term
prospects are grim. Developing-country coffee farmers, mostly poor
smallholders, now sell their coffee beans for much less than they
cost to produce - only 60 per cent of production costs in Viet Nam's
Dak Lak Province, for example. Farmers sell at a heavy loss while
branded coffee sells at a hefty profit. The coffee crisis has become
a development disaster whose impacts will be felt for a long time.

Families dependent on the money generated by coffee are pulling
their children, especially girls, out of school. They can no
longer afford basic medicines, and are cutting back on food. Beyond
farming families, coffee traders are going out of business. National
economies are suffering and some banks are collapsing. Government
funds are being squeezed dry, putting pressure on health and
education and forcing governments further into debt.

The scale of the solution needs to be commensurate with the scale
of the crisis. A Coffee Rescue Plan, which brings together all the
major players in the coffee trade, is needed to make the coffee
market benefit the poor as well as the rich. This is about more
than coffee. It is a key element in the global challenge to make
trade fair.

The coffee market is failing. It is failing producers on small
family farms for whom coffee used to make money. It is failing local
exporters and entrepreneurs who are going to the wall in the face
of fierce international competition. And it is failing governments
that had encouraged coffee production to increase export earnings.

Ten years ago producer-country exports captured one-third of the
value of the coffee market. Today, they capture less than ten
per cent. Over the last five years the value of coffee exports
has fallen by US$4bn; compare this with total debt repayments by
Honduras, Viet Nam, and Ethiopia in 1999 and 2000 of US$4.7bn.

The coffee market will also, arguably, end up failing the giant
coffee-processing companies, at present so adept at turning green
beans into greenbacks. The big four coffee roasters, Kraft, NestlÈ,
Procter & Gamble, and Sara Lee, each have coffee brands worth
US$1bn or more in annual sales. Together with German giant Tchibo,
they buy almost half the world's coffee beans each year. Profit
margins are high - NestlÈ has made an estimated 26 per cent profit
margin on instant coffee. Sara Lee's coffee profits are estimated to
be nearly 17 per cent - a very high figure compared with other food
and drink brands. If everyone in the supply chain were benefiting
this would not matter. As it is, with farmers getting a price that
is below the costs of production, the companies' booming business
is being paid for by some of the poorest people in the world.

Paying prices as low as they can go - whatever the consequences for
farmers - is a dangerous business strategy in the long term. And
even in the short term it does not help the business interests of
the producers of instant coffee. It is particularly risky given
that these companies depend on the goodwill of consumers. The rise
of Fair Trade sales in recent years has demonstrated that consumers
care about the misery of those who produce the goods they buy.

Speakers at the event include Tanya Plibersek Federal MP for Sydney;
Sylvia Hale Greens candidate and Pana Wiya PNG student.

Mugged: Poverty in Your Coffee Cup
12:00pm Thursday 3 October

Oxfam Community Aid Abroad will launch the second phase of it's Make
Trade Fair campaign.Speakers include Tanya Plibersek, Federal MP for
Sydney, Sylvia Hale Greens candidate and Pana Wiya PNG student.Fair
trade coffee will be handed out;information display, video and hand
out material will be available.

[where] Martin Place Amphitheatre, Sydney
[transport] Train to Martin Place station or to St James. The amphitheatre is
located close to the Pitt St end of Martin Place.

[contact] margaret di nicola
[email] margaretd@caa.org.au
[web address] http://www.maketradefair.com

.........................
Russ Grayson
Sydney, Australia
.........................
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