What is real cost of coffee?

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When you buy a cup of coffee at Starbucks, what are you actually paying for? Unfortunately, the most expensive commodity in a cup of coffee is the cup itself. Large franchise businesses make their profits through commercial promotions, and branding rather than products they sell. (1) Currently the rate of coffee is lower than it should be because of the overproduction of coffee across the globe. The overproduction of this commodity has a devastating effect on the producers. This paper will discuss the reasons for minimal cost of coffee that occur because farmers are underpaid for their goods and how they are manipulated by large corporations and the government. In addition, we need to examine the how these actions come at an expense environmental and health consequences. Hence, unequal distributions of profits allow large businesses such Starbucks and Nestle to maximize their profits and allow us to enjoy an affordable cup of coffee.
Large corporations aim to maximize their profits and increase their returns to shareholders. They achieve this by paying producers an unregulated price of coffee that is usually below $0.80 per pound. (8) This rate is far below the cost of production and it is forcing farmers to live in poverty. Ideally coffee farmers should be paid a minimum of $1.24 per pound to produce coffee beans sustainably. (2) The rates of coffee have even sunk as low as $0.40 per pound because of an increased production of coffee and minimal consumption. (3)These increases in production also lead to lower labour costs. Large businesses such as Starbucks and US roasters sell their coffee and speciality drinks at a staggeringly higher price than they pay coffee farmers. (9) Provided that there is a large imbalance in the distr...

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