Economics of Raising Coffee
Economics play a major role in the raising of coffee. There are various things that can have an impact on the prices of coffee. As with any crop, the location of the operation has a big effect. The major dividing line between locations is whether irrigation is required or not. In some parts of Africa, irrigation of the coffee crop is necessary. This creates a large fixed cost that other regions do not have to bear.
The use of machinery also increases the operating costs. Besides the maintenance and fuel costs for the machines, the location of the crop must be suitable for machinery operation. Steep slopes and hilly terrains make it difficult for tractors to operate. It must be decided whether the cost of the machines produces enough extra revenue to justify the cost.
Another economic aspect of raising coffee is in how much labor is used. In regions where machinery is unavailable or too expensive, more labor is required. This labor is often untrained and underpaid for the work they are performing. The type of coffee also can dictate how much labor input is used. Mass production coffee variety such as Robusta and Liberica do not fetch as high a price as gourmet coffee do. Larger crops and more machinery are used to get the required amount of production at the desired cost.
Gourmet coffee is cultivated on a smaller scale than the coffee for mass production. Gourmet coffee trees are often fragile and require hand maintenance and harvesting to prevent damage. Manual labor also helps ensure that a higher quality product is harvested because only the ripe berries are picked.
Coffee Growers
The coffee growers are going through a period of dramatic change, caused by two primary forces.
First, global supplies of mild Arabica coffees are outrunning demand at the same time Brazil and other Robusta coffee growers are developing techniques to improve the market acceptance of what have traditionally been considered lower quality coffees. Second, while demand for coffee, generally, is fairly flat, the demand on coffee growers at the very highest levels of cupping quality is experiencing strong growth in the U.S., Europe, and Japan.
Over the decade of the 1990's, coffee growers produced about 5.4 million tons each year. In 2002, inflation-adjusted coffee prices plummeted to a 100 year low. The effects were particularly hard felt on the coffee growers in Central America, Colombia, and East Africa with both large and small-scale coffee growers unable to cover the costs of their production.
While the situation has often been called a 'crisis', the changes in the coffee growers market appear to be structural in nature. A number of factors have come into play: shifts in production locations and technologies, the introduction of new processing technologies, the expansion of the quality market but overlying all of this is an overall stagnant demand for coffee.
USAID to Coffee Growers .... Read Article
Coffee Growers make sense... Read Article
Eighty per cent of the total coffee earnings will now be going directly to the farmer while the remainder will go to taxes and processing expenses.
Coffee Workers
In an industry that continues to report record profits, the disparity in the economic situations of farmers and farm workers, industry players, and consumers is dramatic.
Poverty is endemic amongst coffee producing workers. A coffee worker's wage is extremely low. In Kenya, coffee workers earn about US$12 per month, while the legal minimum wage is 3 - 4 times that amount. The situation is similar in other countries: in Mexico, if lucky, coffee workers are paid a minimum wage of US$2.50 per day. Women are often paid less than men. Apart from harvesting coffee, the female coffee worker also assumes the duties of housewife, mother and sister. Though they have to work the same hours as men, they earn less than men. Coffee laborers are also subjected to discrimination and abuse. In Guatemala, a survey showed that 18% of coffee workers interviewed reported some form of harassment.
On the farms, coffee laborers are involved with every aspect of the growing/harvesting process. They are involved in weeding, spraying, picking and weighing the coffee berries. In so doing, they are at risk of being poisoned by pesticides, bitten by insects or snakes and getting injured by branches or cutting tools. High level of exposure to sunlight can cause skin cancer. They can also have musculoskeletal injuries due to repetitive movements like lifting and carrying of heavy coffee laden baskets. All these issues can be avoided if the workers are given protective gears, such as plastic coats, boots, gloves, and hats. Yet, they are seldom offered such protective gear.
In factories also, workers are at a risk of being injured with machinery, contracting respiratory diseases due to coffee dust, or suffering loss of hearing due to noisy machinery. Again, these risks can be easily averted if they are given protective clothing and equipment.
Another prevalent problem in the coffee industry is that of child labor. For example, in Kenya's central province, 60% of the workforces on coffee plantations are children. Often, they are the children of migrant workers. They start working when they are tall enough to reach the lower branches and old enough to identify which berries to pick. Children are involved in all aspects of coffee farming and manual processing activities. During the planting season and harvesting season in Honduras, children make up 20% and 40% of the labor force respectively .Child labor in the coffee sector in Tanzania is reported as one of the Worst Forms of Child Labor by ILO.
It should be noted that child labor need not harm the child. As long as the work does not obstruct the child's education, health and welfare, then the positive aspects of child labor should be recognized. However, these children experience the same, poor working and living environment as the adults. They are even more susceptible to diseases and musculoskeletal injuries. Their education is affected because of their family's low income level and their subsequent need to work to help maintain the family.
In the past few years, international awareness on issue of child labor and condition of the coffee workers has increased enormously. International trade and businesses have come under increased pressure from social activists, labor unions and others to help find new solutions to end exploitative labor and help improve the worker’s condition. The coffee industry has been swift to act publicly to support international and government initiatives to fight the worst forms of child labor, though noteworthy quantifiable progress for agricultural workers has still been slow. The task is indeed daunting given the vast scope of the problem and many hindrances. Some special programs within the coffee industry, however, have begun to make an impact: development projects, Fair Trade and other direct trade relationships, independent monitoring and authentication of labor issues and company codes of conduct are slowly taking shape and gaining industry and consumer reception.
|
