In the developing countries, agriculture is the backbone of the economy, and that is the case in Colombia. Coffee growing is a principal economic activity in Colombia, coffee farming supports other economies, and they include Kenya, Brazil, and Indonesia, among others. Just like other agricultural activities, coffee farming faces many challenges that include the attack by market speculators, fluctuating prices, natural calamities, unfavorable weather, and climate change, to name just but a few. Despite the challenges, coffee has been a key driver for economic development and social change in many economies. The International Coffee Organization, which was established in 1963 controls the global coffee prices and the liberalization of the global …show more content…
In efforts to encourage the cultivation of coffee, FNC has been giving the farmers subsidies in response to changes in the international coffee markets. More so, FNC provides the farmers social services and other infrastructure in areas where coffee is grown in large scale. These services are provided after the farmers are taxed proportionally upon the international prices reaching the ceiling. There are about 600,000 coffee farms across Colombia, and they play significant role rural development because Colombia is regarded as the second largest coffee producing country across the globe. Through coffee production, the road, rail, and ports, along with other infrastructure have been developed. These have contributed to economic development because of increased mobility of factors of production. Foreign exchanged earned from coffee exports is back rolled to fund the building of hospitals, rural clinics, referral hospitals, and dispensaries (Thurston, Morris & Steiman, 2013). More so, the revenue is used in the development of other industries. Unlike other Latin America economies where there is coffee, sugarcane, and banana plantation farming, small-scale farmers mainly practice coffee farming in Colombia (Skidmore, Smith & Green, 2014). Socio-cultural development is evident through the foundation of numerous cooperative societies where farmers form unions to enhance their bargaining …show more content…
It has played a principal role in socio-cultural, economic and political development. The greatest effect on the development was evident between the 1960s and 1970s; however, that is not the case presently because the civil wars and drug trade have taken the center stage in Colombia. Coffee farming that was regarded as the primary source of legal foreign exchange has been overtaken by oil because of the small-scale farmers have been displaced by the civil war. The major cause of the civil war is the control of the drug trade. Although coffee has played a crucial role in the development of the other sectors of the economy and the infrastructure, presently, coffee production has declined drastically. While coffee was an essential catalyst for the improvement of the majority rural livelihood, currently, the gap between the rich and the poor has expanded. In future, the stakeholders are optimistic that the National Coffee Fund will be able to redeem the image of the coffee
Colombia emerged from the collapse of the Gran Colombia in 1830. Since then the country has struggled with internal threats, illicit drug production, and estranged relations with neighboring nations. In a country slightly less than twice the size of Texas and claiming over 46,000,000 citizens, Colombia faces many challenges in its efforts to resolve internal conflict, reduce narcotics operations, improve the environment, and repair relationships in the region.
Make Chocolate Fair, a European Campaign for ethic chocolate reports that cocoa farmers in West Africa live off of less that $1.25 a day, which means that a mere 6% of all revenues from chocolate such as Hershey goes to its farmers, while a whopping 70% goes too the conglomerate company. This 6% of shares is startingly low compared to the 1980's, in which farmers got 16%. (Make Chocolate Fair, 2013) These unlivable wages have led large portions of countries such as Ghana and Cote d'Iviore to become extremely impoverished, a consequence unjust considering the strenuous and dangerous work going into the growth of cocoa beans, which involves climbing trees, cutting the cocoa pods off with machetes, letting the beans fermet by covering them with banana leaves, and loading them into bags and carrying the one-hundred pound bags on their backs to be sold. However, admist the already outragious working conditions of cocoa farmers, Hershey and other chocolate companies have a far darker secret, and it isn't "Special
Because larger scale plantations are able to sell a cheaper product it makes it almost impossible for small family farms to compete without cutting down net profits (Nelson & Galvez, 2000). In order for cocoa farmers in impoverished countries to increase national wealth they need to increase their productivity. Wealth in countries is directly correlated with the nations productivity, and in largely cocoa based nations efficiency in cocoa farms are very important. Wealth allows farmers a greater amount of leisure time to invest in education, health care, and capital equipment. While companies, like fair-trade, help provide farmers with health and fair crop prices to increase national wealth farmers have to increase productivity and increase capital investments (Nelson & Galvez, 2000). Educated citizens can advance nations to achieving a more economic and better developed society, which in return will change a vicious cycle into a virtuous one creating a more sustainable
Velasquez-Donaldson, C. (2007). Coca Production and Alternative Development in Bolivia: A Study Case. Graduate Student Journal, 2007, 58–70. doi:10.1016/j.jvoice.2010.09.010
At the end of 2014, 129 small farmers organizations in 20 countries held a certificate to produce and sell Fairtrade cocoa. Helping representing 179,800 small-scale farmers. Sales weight of Fairtrade cocoa grew to 70,600 tonnes in 2013-14, year-on-year increase by 17%. These sales include a Fairtrade Premium of $200 per tonne for farmers, this helps them to invest in their businesses or local community. In 2013-14, cocoa organizations received £8.4 million in Premiums. Which 37% was invested in various projects and programs to improve productivity and quality. The Premium is also invested in community programs such as schools (Côte D’Ivoire has only around a 50% literacy rate), medical centers and clean running water. Read more about the investments made by cocoa farmers with the Fairtrade Premium in this recount.” Farmers in the 85,000-strong Fairtrade certified Kuapa Kokoo cooperative in Ghana have spent their premium on building wells for drinking water, building public toilets, and a mobile clinic to visit member’s
The Washington Post article was about Columbian coffee. The people in Columbia have just in recent years tasted good Columbian coffee. The main reason for that is the best arabica coffee beans in Columbia were being exported leaving citizens bad, cheap imported coffee. Because of globalization and foreign investors the domestic coffee is becoming better. There are columbian people that have traveled and has had the opportunity to taste quality Columbian coffee. When these people come back to Columbia they are giving the people better coffee and coffee that they can afford. There has also been a spike in the number of cafes in Columbia. Another reason for the rise of quality coffee is the end of the war with the left-wing FARC guerrillas.
Last but not least, several governmental initiatives have emerged over the past decade to request consumer countries to take greater responsibility over the sustainability of their cocoa supply chain and further more to support cooperative organizations (ICCO, 2012). Corresponding to a sustainable cocoa supply chain, amongst the actions of each governmental initiative are the following:
Kamola, Isaac A. "The Global Coffee Economy And The Production Of Genocide In Rwanda." Third World Quarterly 28.3 (2007): 571-592. Academic Search Premier. Web. 22 Sept. 2013.
Specifically, the authors, “Contrast the results from these two major colonial extractive activities with an important postcolonial resource boom: the coffee expansion.” Furthermore, they focused on the contrasting differences between the period in which coffee production was similar to a colonial setting, and then the setting where coffee production was much more entrepreneurial and took place long after the colonial era. This supports my research because it shows that coffee became a major economic activity by end of 19th century, and changed the economic and political landscape of the newly independent country. Overall, they show municipalities with origins tracing back to the sugar cane colonial episode display more inequality in the distribution of land, while municipalities with origins tracing back to the gold boom display worse governance practices and less access to
Besides the high demand and cost for gasoline these days, coffee is considered the second most traded commodity on worldwide markets next to oil. "Coffee is grown in more than 50 countries in a band around the equator and provides a living for more than 20 million farmers. Altogether, up to 100 million people worldwide are involved in the growing, processing, trading and retailing of the product" (Spilling the Beans , ). In 2001, coffee farmers and plantations produced over 15 billion pounds of coffee while the world market only bought 13 billion pounds. The overproduction in the coffee industry is not a usual thing and is one of the major reasons why prices vary throughout the industry.
When comes to Economic aspect, coffee is the second most traded product in the world after petroleum. As the country’s economy is dependent on agriculture, which accounts for about 45 percent of the GDP, 90 percent of exports and 80 percent of total employment, coffee is one of the most important commodities to the Ethiopian economy. It has always been the country’s most important cash crop and largest export commodity. (Zelalem Tesera p
The extraction of the raw materials and natural resources can be done through the second factor of production which is labor. The labor process involves human’s effort and productivity to maintain a wellbeing workforce. Brazil’s coffee production sets ...
According to McConnell and Brue, “Pure competition involves a very large number of firms producing a standardized product (that is, a product identical to that of other producers, such as corn or cucumbers). New firms can enter or exit the industry very easily…. In a purely competitive market individual firms exert no significant control over product price. Each firm produces such a small fraction of total output that increasing or decreasing its output will not perceptibly influence total supply or, therefore, product price. In short, the competitive firm is a price taker” (McConnell & Brue, 2005, chap. 22). Coffee is a cash crop whose price varies in the world market depending on the supply and demand. According to the International Coffee Organization (ICO) in 1990 Vietnam produced 1.39 million bags (Each bag weighs 60 kg’s) of coffee in 2006. Vietnam produced 15 million bags of coffee that is an increase in production of over 10 times in the span of 17 years. According to the ICO in 1990 Vietnam exported 1.16 million bags of coffee and in 2006 their exports were 14.5 million bags of coffee. In 1994 the trade embargo was lifted by the United States on Vietnam, at the same time Brazil, the worlds largest coffee producer, was expanding its plantations this resulted in increased supply pressures. Because of the efficient production of coffee Vietnam was able to sell coffee at a lower price in the international market than the other coffee suppliers. This lower price was sometimes lower than the cost of production of suppliers in countries like Colombia, Nicaragua, Brazil and Ethiopia resulting in closing down of plantations.
Coffee is one of the most valuable primary products in world trade, in many years second in value only to oil as a source of foreign exchange to producing countries (Coffee Organization, n.d). For developing countries, coffee has been very crucial for the development of their economy and politics. Based on an article by the International Coffee Organization (n.d.), more than two billion cups of coffee are drunk worldwide every day. Statistically, more than 400 billion cups of coffee are consumed every year and there are over 80 countries that grow coffee (Michiel K et al, 2004). Nowadays, coffee shops have become a known social meeting place since coffee became a daily routine (Cleland, 2010).
As the call for cacao increases globally, the price of cacao is also increasing at a rapid rate as cocoa growers in Africa and South America struggle to meet the demand, which is an extremely relevant aspect of the macro-environment for the chocolate market. Many factors contribute to the supply problem- many cocoa growers in Africa, particularly the Ivory Coast (the world’s biggest cocoa-producing nation) are underpaid, and their share in the profit of chocolate products is increasing, with West African cocoa growers seeing earning on average 3.5% to 6.4% of the total retail value of the products (The Guardian, 2013). This results in less productive workers, and is also resulting in a decrease in the number of emerging cocoa famers, as it is often no lo...