Coffee

by Gavin Fridell

  While compatible with the overall model of product labeling and ethical certification, CLAC’s vision is different and broader than FLO’s in several ways, three of which are perhaps the most significant. First, CLAC is driven by and explicitly devoted to small farmers and is firmly opposed to the gradual opening of fair trade to giant coffee plantations. CLAC argues that small farmers, organized into cooperatives, represent an alternative and more socially and ecologically just model to corporate coffee plantations that already have significant economic and political advantages over small farmers in the global market.

  Second, whereas the coffee value chain in fair trade flows South-to-North along the same lines as conventional coffee chains, CLAC is explicitly devoted to fostering domestic markets and South–South fair trade to diversify away from over-reliance on Northern markets. Thus far, market realities have compelled CLAC members to remain dependent on the North for the majority of their income, but several Southern fair trade bodies have emerged in recent years and the movement is growing. CLAC’s own SPS initiative seeks to address both of these concerns, certifying only small farmers and targeting Southern markets as much as possible.

  Third, whereas FLO limits its advocacy efforts to issues directly related to fair trade labeling, CLAC has much more ambitious political and advocacy agendas that go beyond ethical consumerism. These entail support for global movements promoting cooperatives and “food sovereignty.” Whereas the dominant notion of “food security” is premised on global market integration into a food system driven by TNCs, the growing “food sovereignty” movement promotes national self-sufficiency based on local farm production; an emphasis on healthy, good-quality, “culturally appropriate” foods; and a political agenda dedicated to a more just balance between the agricultural and industrial sectors, land reform and land redistribution, discouraging chemical-intensive methods and biotechnology, valorizing peasant and indigenous agricultural wisdom, and promoting small farmer, cooperative, or state enterprise agricultural production.

  CLAC’s political agenda is also more directly concerned than fair trade North with the state and the ways that statecraft can inhibit or support the livelihoods of small farmers. CLAC is particularly opposed to the general decline of state support for small farmers in the neoliberal era, even while states continue to significantly favor plantation owners’ access to state-provided credit, subsidies, and infrastructure. Consequently, CLAC has shown cautious optimism for the rise of numerous and diverse social democratic governments in Latin America and the Caribbean since the early 2000s, as well as an interest in col-laborative efforts between state institutions and social movements that have resulted in government legislation explicitly promising financial and planning support to develop the national fair trade market, alongside “solidarity economies” and organic markets, in Brazil (2010), Bolivia (2011), and Ecuador (2008 and 2011).

  These state initiatives, like CLAC’s own independent efforts to promote its SPS certification for small farmers, are incipient and have not yet sparked a significant surge in Southern fair trade markets. They do, however, reflect important changes that are underway related to coffee and other global commodities, rooted in the growing economic and political weight of Southern economies and new Southern-focused and South–South efforts between grassroots movements, policy makers, and political and economic elites. The full impact of these changes on the global coffee economy in 10 or 20 years remains to be seen, but they are likely to be significant. Perhaps above all, they suggest that in the future the influence of Southern countries on the consumer side of the global coffee chain – from buying to branding to governing conventional, fair trade, organic, or other ethical markets – is bound to be much greater than has historically been the case.

  Coffee crises … again

  Despite the positive emergence of an organization such as CLAC, despite signs that the dominant agenda of the free trade package is increasingly being challenged and questioned internationally, and despite the appearance of new Southern trade dynamics, many of the dominant structures of the global coffee industry remain firmly entrenched; the coffee economy continues to be highly volatile, grossly unequal, ecologically destructive, and, of course, immensely profitable for a lucky minority of wealthy investors, plantation owners, and state elites. Far removed from the luxurious board rooms of Kraft Foods Group, Nestlé, and Starbucks, the coffee industry today exists in a state of daily crisis for the poorest workers and farmers, who often cannot afford access to basic food, proper housing, essential health care, and schooling for their children. These daily crises periodically erupt into major disasters.

  One such disaster emerged as I was writing this book. Beginning in 2012, a coffee leaf rust outbreak hit Latin America, having the worst effect on the main coffee exporting countries of Central America (Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua). Central American coffee countries account for around 12 percent of world production, and are particularly important in providing high-quality Arabica beans. The rust outbreak is the worst that the region has seen since 1976, when rust first appeared in Central America. According to the ICO, for the 2012/13 crop year, over 50 percent of the total coffee growing area in the region was affected, causing a drop of nearly 20 percent in coffee production and a loss of approximately $500 million. Millions of coffee farmers, the majority of whom are small-scale in Central America, experienced significant drops in income, while vulnerable rural workers were faced with mass layoffs: approximately 374,000 coffee jobs in the region were lost, representing over 17 percent of the entire coffee growing workforce. Some estimate that regional production could drop even further by the end of the crop year in 2014, by as much as 50 percent, which could have devastating social, economic, and political impacts throughout the region.

  The Central American coffee crisis and its roots are inseparable from the historical and global dynamics of the coffee industry discussed in this book. A major factor in the rapid and extensive outbreak of coffee leaf rust has been the spread since the 1970s of full-sun, monocrop cultivation, which now covers approximately 40 percent of the coffee areas of Central America. This form of cultivation has substantially reduced the genetic stock of Arabica trees, as well as the biodiversity of natural predators of coffee pests, making Central American trees exceedingly vulnerable to the spread of disease. As is always the case in the coffee world, the negative impacts of the crisis will be divided highly unequally along class lines. Even while most full-sun cultivation has been carried out by the region’s wealthiest farmers, rural workers and small farmers (who grow the vast majority of their coffee under far more environmentally sustainable shade-grown conditions) will pay the greatest price, as they lack the wealth and resources to buffer themselves from the worst effects of the crisis.17

  The impact of the coffee crisis will also be uneven internationally. Over the longer term, the crisis threatens to hasten the ecological impacts of climate change on the prime growing regions in Central America. Consequently, leading representatives of Central American nations and specialty coffee companies at the 2013 ICO meeting voiced deep concerns that the crisis might last several years and bring about the end of the region’s comparative advantage based on higher-quality, and higher-priced, Arabica beans. In place of Central American Arabicas, it is likely that coffee roasters will turn increasingly to Robusta beans with new processing technologies applied that soften Robustas’ otherwise harsh taste. Thus, as Central American coffee farmers confront the possibility of catastrophe, Robusta coffee leaders, like Vietnam and other Asian and African exporters, could well be facing continued expansion.

  These outcomes do not stem strictly from a combination of nature and markets – supply and demand dovetailing with ecological crises – but are deeply interwoven with coffee statecraft and the role that states play in managing the conditions under which coffee is grown, traded, sold, and consumed. As is so often the case in these neoliberal times, coffee states have stepped forward to oversee a
desperate bailout after the crisis has already begun: governments in Costa Rica, Guatemala, and Honduras have declared phyto-sanitary emergencies; all Central American countries have pledged tens of millions of dollars to assist their domestic growers; and the ICO has coordinated an international campaign seeking hundreds of millions of dollars in loans and grants from multilateral financial institutions, international donors, the private sector, and government development agencies to support special pesticide applications targeting rust; fund tree renovation programs to replace old coffee trees with newer, more rust-resistant ones; and provide farmers with soft loans and various food security and crop diversification programs to partially offset declining incomes. It remains to be seen how much support will ultimately materialize and how effective it will be. What is certain is that hundreds of thousands of rural workers have already lost their jobs and millions of small farmers are already confronting crises, while after-the-fact support such as this disproportionately helps those larger and wealthier farmers who are already able to withstand disasters and can remain standing long enough to see aid actually emerge.

  Coffee statecraft’s role in this crisis far precedes the bailout mode of current governments. The uneven impacts and outcomes of the crisis stem from an unequal and unjust global coffee economy forged through the actions of imperialist and autocratic states over hundreds of years of colonialism, slavery, and the expansion of a capitalist world system. The extreme volatility and unpredictability of the global coffee market stem from political and economic elites choosing to meet the territorial and capitalist logics of their states through intensified competition rather than through enhanced collective action of the sort pioneered by the ICA. This decline in collective action has been paralleled by declining commitments by states toward legally mandated, state-managed forms of social regulation on the domestic scene. Instead, they have ceded this terrain to private, market-driven, voluntary initiatives like fair trade and CSR, which can never match the state’s reach and impact, and cannot address the root causes of the coffee crisis. Having denied that the state has a robust role to play in managing the coffee economy, states will now be dragged further into managing the crisis to protect their own stability in the wake of mounting social, economic, and political tensions. We can only hope this role will be to provide further social protection and provision for the poor, but the possibility is always there for states to become more militarized and brutal in clamping down on social protest and dissent – something sadly familiar to the past and present of much of Central America.

  In seeking to address coffee crises – whether the “big” one in Central America today or the everyday crises of coffee faced by the poorest workers and farmers throughout the globe – the main issue is not whether or not the state should intervene in the coffee market. Instead, we must break free from the intervention/non-intervention trap, challenge and subvert the dominant understandings of the free trade package, and place far greater emphasis on recognizing the political roots of what are so often seen as economic forces at work. What is required is a greater push for better coffee statecraft, guided by the history of gains and losses in the highly imperfect global coffee market. This better coffee statecraft should include, first, a much greater emphasis on states directly supporting smaller and medium-sized coffee farms, and a more equitable distribution of land, infrastructure, and resources – something that the majority of the world’s most successful coffee industries have done in highly varied ways, from Costa Rica to Colombia to Vietnam. Second, better coffee statecraft requires a recognition of the benefits of collective action among all coffee states to manage markets for greater stability and higher incomes, building on the example of the ICA. This is a lesson that, unfortunately, must perpetually be relearned by states: highly competitive Costa Rica, for example, abandoned the ICA in 1989, only to then join the failed ACPC cartel four years later when global coffee prices began their downward spiral. Finally, better coffee statecraft must involve strong state support for more environmentally sustainable methods of coffee growing, such as that pioneered by small Arabica growers, that can both limit the coffee industry’s contribution to climate change and help mitigate its negative effects. Thus far, there is limited evidence of coffee states adopting such a role in any substantive manner, but organizations like CLAC and other social movements are tirelessly engaged in the struggle to change this.

  Conclusion

  The goal of better coffee statecraft might seem like an elusive one, especially as so many coffee states seem top-down, hierarchical, unresponsive, and in some instances autocratic. Moreover, state leaders and policy makers are often the first to disavow any ability to control or manage markets effectively. They must, however, not be taken at their word. The long history of coffee is replete with examples of farmers and workers demanding and getting more out of their states than they would otherwise offer. Recall that in Colombia in February 2013, when hundreds of thousands of coffee farmers went on strike, the government fervently rejected farmers’ demands and brutally sought to suppress the protests; less than two weeks later, however, the government abruptly changed its tune, agreeing to hundreds of millions of dollars of new subsidies and supports. Following this, in August 2013, Brazil, fearing the potential political and social impacts of declining coffee prices, announced plans to purchase as many as three million bags of coffee to prop up prices.18

  Coffee states have played and continue to play a central role in protecting – and in some cases opposing – the unequal distribution of coffee land and resources, in ensuring a specific set of social relations around commodity production for export, and in the separation of the economic and political spheres, a central characteristic of a capitalist economy. Consequently, the economic and political inequality in the coffee industry cannot be resolved through market adjustments, but rather requires attention to the ways in which coffee statecraft has forged these deep structural roots. Long-term, substantive improvements in the coffee world will require engaging in political struggles to change the direction of coffee statecraft, resisting the allure of quick fixes, and, as Ilan Kapoor has observed, embracing “long-term democratic struggles, with all the risks and setbacks that they entail (i.e. their success is never guaranteed).”19 If, in the end, the state “holds the cards,” then the majority of the world’s coffee producers need those cards played much better. Otherwise, the daily crises of coffee will remain for now and the foreseeable future.

  Notes

  CHAPTER 1

  1 The ICO quote comes from ICO, Monthly Coffee Market Report: May 2013 (London: ICO, 2013). The fear is repeated in future reports, including for October 2013. The reporters’ quote comes from Alexandra Wexler, Jeffrey T. Lewis, and Leslie Josephs, “Brazil Drought Jolts Commodities’ Prices,” Wall Street Journal (March 4, 2014), http://online.wsj.com/news/articles/SB10001424052702304585004579419473654460330, accessed March 5, 2014. Unless otherwise indicated, all prices in this book are in US dollars. The composite indicator prices used throughout are based on the “1976 version” drawn from the United Nations Conference on Trade and Development (UNCTAD) statistical database (http://unctadstat.unctad.org), which allows for charting prices back to 1960, essential for making historical comparisons. The ICO website (http://www.ico.org) is an excellent source on coffee data, including daily price updates. The calculations regarding real value prices during the crisis come from Oxfam International, Mugged: Poverty in Your Coffee Cup (Boston and Washington, DC: Oxfam International, 2002).

  2 ICO, Burundi: Country Datasheet (London: ICO, 2011). See the online statistical databases of the World Bank (http://data.worldbank.org) and the United Nations Development Program (UNDP), Human Development Reports (http://hdr.undp.org/en/statistics).

  3 Oxfam International, Mugged, pp. 22–5.

  4 For global activists, see Oxfam International, Mugged, and the websites of Global Exchange (www.globalexchange.org) and the Fairtrade Foundation (www.fairtrade.org.uk). For more on the historical and cu
rrent orientation of trade justice activists, see Gavin Fridell, Fair Trade Coffee: The Prospects and Pitfalls of Market-Driven Social Justice (Toronto: University of Toronto Press, 2007); Daniel Jaffee, Brewing Justice: Fair Trade Coffee, Sustainability, and Survival (Berkeley: University of California Press, 2007); Ian Hudson, Mark Hudson, and Mara Fridell, Fair Trade, Sustainability and Social Change (New York: Palgrave Macmillan, 2013).

  5 These quotes from fair trade advocates come, in the order in which they are presented, from: Fair Trade USA, “Vision Statement,” http://www.fairtradeusa.org/about-fair-trade-usa/mission, accessed November 4, 2013; Fairtrade International, Unlocking the Power: Annual Report 2012–13 (Bonn: Fairtrade International, 2013), p. 5; Sean McHugh, executive director of the Canadian Fair Trade Network, “The Importance of Trade,” Fair Trade: Canada’s Voice for Social Sustainability 2 (Summer/Fall 2013), p. 29.

  6 See the Coffee Reporter, “NCA Joins Industry Leaders Addressing World Crisis Solutions at Sentercafe,” Coffee Reporter (National Coffee Association of USA) 8: 12 (2003); Brink Lindsey, “Fair Trade” and the Coffee Crisis (London: Adam Smith Institute, 2004).

  7 For example, see the World Bank’s Sustainable Coffee Landscape Project in Burundi: World Bank, Project Information Document (Appraisal Stage) – Sustainable Coffee Landscape Project – P127258 (English) (February 8, 2013), p. 3, http://data.worldbank.org, accessed November 3, 2013. The project has been heavily critiqued by the UN special rapporteur on the right to food, Olivier De Schutter, for pressuring for full privatization despite negative and volatile impacts on small growers. See the press release by De Schutter, “World Bank-Led Privatization of Burundian Coffee Industry Must Not Repeat Errors of the Past” (April 18, 2013), http://www.srfood.org/en/news, accessed November 3, 2013.