Essay on What is the Real Cost of Coffee?

Essay on What is the 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 the products they sell. (1) This leads to 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. Currently the rate of coffee is lower than it should be because of overproduction of coffee across the globe and this is exactly what consumers want. Even though, the high supply of this commodity will have devastating effect on the producers. The purpose of this essay is to discuss how consumers are able to pay minimal cost for coffee by corporations underpaying and are manipulating farmers through government policies. In addition, we need to examine the how these actions come at an expense of environmental and health consequences.
Large corporations aim to maximize their profits and increase their returns to shareholders. At the same time businesses want to set a reasonable price for their products, since they want their products to be financially available to their customers. They achieve this by paying producers an unregulated price of coffee that is usually below $0.80 per pound. (8) This rate for coffee is far below the cost of production that farmers have to invest. 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 consequently lead to lower labour cos...

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9. Brown, Grace. “Making Coffee Good to the Last Drop: Laying the Foundation for Sustainability in the International Coffee Trade.” Georgetown International Environmental Law Review, 16 (2004): 248-278.
10. Talbot, John, “Where Does Your Coffee Dollar Go? The Division of Income and Surplus along the Coffee Commodity Chain.” Studies in Comparative International Development, 32 (1997): 56-91.
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12. Rice, Robert. “Coffee Production in a Time of Crisis: Social and Environmental Connections.” Journal of International Affairs, 23 (2003): 221-245.
13. Topik, Steven. “Coffee Anyone? Recent Research on Latin American Coffee Societies.” Hispanic American Historical Review, 80 (2000): 225-266.
14. –
15. Blowfield, Mick. “Ethical Supply Chains in the Cocoa, Coffee and Tea Industries.” Greener Management International, 43 (2003): 15-24.
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