Coffee costs down: price is way up

Kai Hagen

June 16, 2003

Oil is the largest US import. With less than five percent of the world's population, the US consumes about one-fourth of the world's oil production Even if you hadn't committed that dramatic statistic to memory, you've probably heard it a few times, and it certainly wouldn't surprise you.

You may be surprised, however, to read that coffee is the second largest US import after oil, and the US consumes one-fifth of all the world's coffee, making it the largest consumer in the world.

That is a lot of coffee. And almost every drop of it is imported.

Our lifestyle and economy depend on oil imports. While small changes in the price of oil create ripple effects at home, big changes in the price of oil can have a tidal wave of negative effects throughout the United States. Global coffee prices go up and down all the time, however, without any significant effects here. Often without even changing the price we pay for our daily brew at the grocery store or coffee shop.

But, to the mostly poor countries in Latin America, Asia, and Africa where most of our coffee is grown, the price of coffee is often as important as the cost of oil is to members of OPEC and other oil exporting nations. We don't hear much about it at our end of the coffee pipeline, but there is a genuine crisis destroying the livelihoods of some 25 million coffee producers around the world.

The price of coffee has fallen by almost 50 per cent in the past few years. The record low coffee prices have devastated long-standing coffee producers. In Guatemala, for example, where coffee was once the country's number one source of cash, more than 200,000 people in the coffee industry have lost jobs in the last three years alone (that is how many people live in Frederick County). Today, more money comes from emigrants sending money home from the United States.

In many of the communities where it is grown, there are few other options for people to make a living. Working conditions are difficult, with extremely low pay, no medical benefits, exposure to toxic chemicals, and long hours working in hot temperatures. Many small coffee farmers receive prices for their crops that are lower than the costs of production, which sends them into a never ending cycle of debt to middlemen who resell the coffee for export.

Families dependent on the money generated by coffee can no longer afford basic medicines, and are cutting back on food. Coffee traders are going out of business. National economies are suffering and some banks are collapsing. Government funds are being squeezed, too, putting pressure on health and education and forcing already impoverished countries further into debt.

In addition to the economic crisis, the same circumstances are responsible for a number of serious and unnecessary health effects and environmental problems.

The modern coffee economy depends on unprecedented applications of toxic fertilizers and pesticides, many of which (such as DDT) are banned in the United States. These chemicals not only contaminate the environment, they are also hazardous for the workers who have to apply them, and the local communities. And, of course, some are passed along to coffee drinkers everywhere.

Also, in the modern industrial form of coffee production, the new coffee plant, which requires direct sunlight, has led to extensive deforestation in some of the most diverse ecosystems on earth. When the coffee plantations cut down the shade trees to make room for the new coffee plant, they lose approximately 90 percent of the bird diversity (including a number that migrate to Frederick County in the summer). The old fashioned coffee plantation is almost a natural ecosystem because the plants are grown under shade. Where the clear-cut forest land can only sustain a few years of full sun farming, coffee production simply moves on to the next patch of newly deforested land.

Some people suggest that it isn't our problem. As consumers, we have one role in the global coffee economy, and the market will sort things out. There are winners and losers.

Currently, the losers include millions of families and thousands of communities that coffee used to support. The biggest losers are entire countries that were encouraged by the World Bank and the International Monetary Fund and others to increase coffee production, and increase export earnings.

The biggest "winners" are the handful of international corporations that together buy almost half the world's coffee beans. In spite of all the problems, their profits are up. Way up.

What about us, the folks who drink the coffee here? Well, the low prices have not been passed on to consumers, but prices haven't gone up, either.

Every part of the failing coffee economy exists to get the product we want, at a price we are willing to pay, to the stores and restaurants and coffee shops where we buy the coffee. The coffee economy reflects our tastes and our budgets. If we want basic coffee at a low price, that is what we get.

If that happens to come at a high price to farmers and communities and the environment in faraway places, it isn't our responsibility. Life is busy. The world is complicated. Who really wants to think about all this when all you want is to enjoy a fresh cup of coffee?

For me, ignorance was

But now we know....a little anyway. Enough, in my case, to feel guilty about my morning coffee (okay, okay...I'll admit midday coffee, too, and my afternoon coffee, and...!).

Sometimes there isn't much one can do about a big problem this big and distant and complex. And, sometimes, when there is, it takes time or effort or money we don't have to spare. In this instance, though, making a difference is easy. For those who do not wish to support the coffee economy as it works today, there is an alternative: Fair Trade coffee.

Certified fair trade coffee has been sold directly by producers' cooperatives. Fair trade producers are given a guaranteed minimum price of $1.26 per pound for their coffee, access to credit, monitoring of working conditions, and help implementing sustainable farming methods.

If any of that sounds familiar, it might be because the locally produced milk you buy in the grocery store is purchased from farmers at a guaranteed minimum price. Farmer that have access to credit. Farmers who own local farms that are subject to laws designed to protect workers, and the environment...and us, the consumers.

It's a good idea for the milk we drink. And it's a good idea for coffee.

Organizations and companies and others as diverse as Lutheran World Relief and Dunkin Donuts are supporting and/or selling fair trade coffee. Right now, it isn't easy to find fair trade coffee in Frederick. But, if enough of us want it, and ask for it, it will be made available to us.

For some seven years or so, I was a frequent visitor to one coffeehouse in town. I rarely go there anymore, because they don't offer fair trade coffee...yet. I really like the place, though, and I hope that will change. I was, however, glad to find an excellent selection of fair trade coffee at The Common Market on Buckeystown Pike. And, though I was willing to pay more than I had been spending elsewhere, I found the price was actually a little lower.

It may only be part of the overall solution, but you and I can savor a good cup of coffee and do something good at the same time.

To get in touch, e-mail Kai Hagen at