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The coffee con

Will fair trade in coffee change the world? Dream on.

Daniel Ben-Ami

Topics Politics

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Coffee means a lot to me: I need at least two strong cups to wake me up every morning. Alternatives, like ice-cold showers or Black Sabbath at full blast, would be far less pleasant.

But for the 25million small-scale farmers who produce most of the world’s coffee beans, the price of the commodity is a far more serious issue. A slump in the price of coffee, to just over half the level it was at three years ago, has devastated people’s lives. In real terms, the price of coffee is just one quarter of its level 40 years ago.

New sources of production in Vietnam and higher productivity in Brazil have helped create a glut in the coffee market. And the slump in prices has had a serious impact on countries that are heavily dependent on coffee production, including Burundi, Ethiopia, Rwanda and Uganda.

To the extent that millions of already poor people face destitution, Oxfam is right to highlight the issue in its report Mugged: Poverty in Your Coffee Cup (1). There is no doubt that those dependent on coffee production face incredible hardship, and may not be able to afford basic education or healthcare for their children.

But Oxfam goes far beyond the traditional role of a charity in its proposal for a Coffee Rescue Plan. Its plan will include all the main players in coffee trading, including farmers, giant corporations, the governments of producer countries and consumer countries. ‘This is about more than coffee’, says Oxfam. ‘It is a key element in the global challenge to make trade fair.’ (2)

The notion of ‘fair trade’ or ‘trade justice’, which several other prominent charities have chosen to support in coalition with Oxfam, is open to question (3). Its fundamental premise, that life in an unequal society can somehow be fair with a few changes in how we trade, is a dubious one.

The explicit aim of Oxfam’s Coffee Rescue Plan is ‘to make the coffee market benefit the poor as well as the rich’ (4). Yet the poor, by definition, are the ones who do worst in a market system. The way markets work is that a relatively small number of people – generally those with access to capital – do best out of any transaction – and the remainder of the population get what is left over. And third world peasants, who if they do anything more than subsistence farming are acutely vulnerable to shifts in commodity prices, are among the most marginalised people on Earth.

Under such a system, you cannot just magic up equality between the giant coffee corporations like Kraft, Nestle, Procter & Gamble and Sara Lee, and a peasant small-holder. Gaining equality between big consumer nations like America and Britain and producer countries like Burundi and Nicaragua will require more than a few changes in how we trade.

Downplaying or minimising fundamental inequalities does a terrible disservice to the world’s poor. The first step in transforming the position of third world countries is to recognise just how marginalised they are at present. Only then is it possible to make a convincing case for extensive economic development.

Those who read the whole of Oxfam’s report on coffee should recognise that, despite the grand rhetoric about fair trade, its conception of fighting poverty is extremely limited. Oxfam grudgingly recognises the inequality in power between corporations and peasant producers: ‘Asking some of the poorest and most powerless people in the world to negotiate in an open market with some of the richest and most powerful results, unsurprisingly, in the rich getting richer and the poor getting poorer’ (5). Its solution is therefore the ‘active participation by all players in the coffee trade…to reverse the situation’ (6).

A closer examination of Oxfam’s proposals reveals its low horizons. Essentially it sees consumer governments playing a key role in regulating prices so peasant producers can be better off, and includes moralistic exhortations on the coffee companies to pay a ‘decent price’ – whatever that means in practice – to farmers.

By ‘fairness’, such campaigns primarily mean tighter regulation by governments and multilateral institutions like the World Bank. Secondary meanings include self-restraint by corporations – or ‘corporate social responsibility’ in the jargon – and ethical behaviour by consumers.

Such campaigns sidestep the need for real economic equality in the world. As long as there is a huge gulf between rich and poor the third world will be open to manipulation. The dependence of a huge number of people in the South on one commodity illustrates this fact.

Oxfam’s report does correctly argue that it can be hard for individual coffee farmers to switch to another crop – but this misses the point. The lives of the most marginalised people on Earth will inevitably be difficult. The only solution is broader development within their economies.

The campaign for trade justice is like giving someone who has been deprived of sleep for a week a cup of coffee. It might make him feel better for a short time, but unless his problems are addressed he will continue to suffer. True fairness cannot exist until economic development brings poorer countries up to the level of the rich.

Daniel Ben-Ami is the author of Cowardly Capitalism: The Myth of the Global Financial Casino, John Wiley and Sons, 2001 (buy this book from Amazon (UK) or Amazon (USA)). He is also a contributor to Cultural Difference, Media Memories: Anglo-American Images of Japan, Continuum International Publishing Group, 1997 (buy this book from Amazon (UK) or Amazon (USA)).

(1) Mugged: Poverty in your coffee cup, Oxfam, 18 September 2002

(2) Mugged: Poverty in your coffee cup, Oxfam, 18 September 2002

(3) See Trade Justice Movement website

(4) Mugged: Poverty in your coffee cup, Oxfam, 18 September 2002

(5) Mugged: Poverty in your coffee cup, Oxfam, 18 September 2002

(6) Mugged: Poverty in your coffee cup, Oxfam, 18 September 2002

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Topics Politics

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