Coffee conference: more myths
November 2, 2008 – 9:14 amHigh-priced coffee might hurt farmers MORE – or at least fail to help. Economists win!
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You’re gonna have to elaborate on that one…
i will, rich.
in essence, several economists made the case that while direct-trade relationships are helpful to individual farmers as far as they go, the overall trend toward higher retail prices has two unintended effects on a macro scale: (a) it limits demand, whereas lower prices expand demand, positively affecting farmers more widely. and (b) when tough economic times hit, then a decrease in consumption (such as we’re seeing) at a higher retail price point can create more volatility, which also hurts the farmer.
it wasn’t an indictment of higher coffee prices per se, but rather a useful lesson on what’s most effective if you want to help the plight of the farmer on a wide scale (not just the 2% or whatever who can meet specialty standards).
a real interesting proposal came up. more later.
New here but what if you ask for higher prices and simply give more back to the farmers and coops through supply chain communications charities or coffeekids-type stuff? Charging more only allows us at the Organic Coffee Cartel to give back more.
The way I’ve been saying it is to “Spoil yourself by drinking better coffee and in turn honor everyone who made that cup possible” Shit coffee, while your right to drink, helps no one but the fat cats sitting in U.S.-based and European offices.
clay: welcome.
groups like yours are obviously doing yeoman’s work and thinking of farmers. your arguments are the same, logical ones that many in specialty coffee make. and it makes sense.
what i’ve never heard before is a broader argument that there may be better ways to raise the plight of farmers, and that the direct-trade model may actually calcify existing poverty for those who can’t get into such a relationship, instead of creating a tide that lifts all boats.
i’m not taking sides, but i didn’t hear anyone in specialty come up with an answer for these economists. that’s surprising.
so, i’ve got several thousand words soon to be posted here about the issue, and about what i see as some new and startling arguments made by people who know the markets.
i look forward to that post.
i would agree that if direct trade were the ultimate panacea we’d be seeing more “results.” by now.
Keep up the good work. I really appreciate you creating this dialogue.
clay: the giant block of text posted above this one is the one. i’d say “enjoy,” but …
Nice post. Thanks for reporting on the conference; glad to see an objective blogger covering a topic with so much controversy. Raises some really good questions that “third-wavers” really should consider, like economic theory. Enjoyed the “no one listens to economists” exerpts, all too common.