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The dark side of international coffee trade: Last Viewpoint of the semester screens ‘Black Gold’

    By Malin Meyer. May 8, 2014 - 11:45 pm

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The end of the spring semester is drawing near, and on Friday the Viewpoint film series screened its last movie of the term. 

Putting the spotlight on the international coffee trade, the 2006 documentary “Black Gold” shows the harsh reality of growing coffee in Ethiopia – the land where coffee originated from and the largest coffee producer on the African continent.

Coffee is a multi-billion dollar industry and the second most actively traded commodity in the world, with two billion cups of the black, liquid stuff being consumed across the world every day. 

For many developing countries, coffee is central to income and employment; in Ethiopia, the birthplace of coffee, an estimated 15 million people depend on coffee production in one way or another for their livelihood. 

Yet, despite the fact that coffee is one of the largest global industries, Ethiopia and other coffee producers in Africa are far from reaping the benefits of their hard work. According to a 2010 report by The African Development Bank Group, the entire African continent stood for less than 11 percent of global exports in 2009 and 2010, which is nearly equal to that of Indonesia – the third largest world producer of coffee. 

In an attempt to establish a fair price for Ethiopian coffee farmers, Tadesse Meskela formed the Oromia Coffee Farmers Cooperative Union – representing roughly 100 individual co-ops in the Oromia regional state.  

One of the primary benefits of co-ops is that cuts the supply chain by up to 60 percent, getting rid of numerous middlemen and establishing a closer link between the farmer and the consumer – making it easier to ensure that the farmers receive a fair price for their work. In Meskela’s own words, the “main aim is to bring more money into the coffee growers’ pockets.” 

During a visit to the Kilenso Mokonisa cooperative, one of the Union’s suppliers, locals expressed frustration over the fact that a cup of coffee costs 1 Birr ($0.12) in the area, while in the West it sells for about 25 Birr ($2.90). 

Meskela explains that from one kilo of coffee you can produce about 80 cups of coffee, which – at $2.90 per cup in the Western World – amounts to 2,000 Birr ($200) worth. 

Yet, in the Kilenso Mokonisa area one kilo of coffee does not sell for 2,000 Birr, but rather 2 Birr ($0.23) – “if we’re lucky” one farmer explains. 

One farmer later states that if they were able to get just 5 Birr ($0.57) for one kilo of coffee it “would change our lives beyond recognition.” Farmers are not even asking for a full dollar’s worth of value and still the market can’t seem to meet their need.

At the time of this documentary, the Union was struggling to export all its coffee beans in the wake of a 2001 coffee crisis that caused prices to surge and brought devastating repercussions to the small scale Ethiopian farmers and the communities they support. 

In a region called Sidama – a region which supplies coffee to Starbucks – people suffered under disastrous famine and therapeutic feeding centers were forced to turn children down due to limited capacity, explaining that they were simply not malnourished enough. 

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It takes about four years for coffee trees to reach full size and five years before they actually start producing proper beans that are of value to the farmer. This means that small-scale farmers put everything they have into their coffee farm and both they and the community they live in depend on the market to buy the coffee beans once they become ripe. 

When the market doesn’t come through, farmers are forced to take measures. The film explains that many farmers cut their coffee trees down in order to plant chat – a narcotic substance– instead. A farmer selling 20 branches of chat can get up to 30 Birr ($4), a price significantly higher than coffee. 

African farmers, whether they’re growing coffee or other commodities, struggle to gain sufficient access to the world market, partly because the of the subsidies that the developed world swear by – an aspect Meskela says is resulting in unfair trade.  

The World Trade Organization (WTO) determines the rules of global trade and has shown little interest in addressing Western subsidy policies, partly because of the strong positions held the EU and the United States – both of which have stated that they have no plans to stop subsidizing their farmers. 

Interviewed at the WTO’s 2003 meeting in Cancun, Mexico, Barry Coates – who’s since served as Executive Director of the New Zealand branch of NGO Oxfam – explained that even the WTO negotiations are unfair: most of the developing countries are only able to send small delegations – three or four people – while the EU group consists of 650 delegates. 

With the majority of negotiations taking place behind closed doors and in meetings between two countries – it becomes impossible for developing nations to cover all negotiations and have a say at the different meetings. 

When you further factor in that the World Bank and International Monetary Fund (IMF) have forced Africa to seize its subsidies of agriculture and farmers on several occasions, Coates explains, it’s easy to see why African farmers are frustrated at the situation.

African government leaders have called on the WTO and the Western World on numerous occasions to make world trade less unfair, and make the continent better suited to compete with developed nations. 

It’s interesting to note that Africa is the only continent that has become poorer in the past 30 years, and is now more dependent on emergency aid than ever before. For the past 20 years or so Africa’s share of world trade has fallen to 1 percent. 

If the continent would increase its share of world trade by just one percentage point it would generate an additional $70 billion in income, which is five times of what the continent receives in aid.

Photos courtesy of http://blackgoldmovie.com/

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