Kathrin Brunner
Black Gold Coffee – Ethics in the Coffee Industry The Impact of the Cash Crop on Countries of the South vs. Increasing Ethical Awareness of Northern Roasters and Consumers in terms of CSR, Coffee Certification and Direct Trade
Master’s Thesis
To be awarded the degree of Master of Arts in Global Studies at the University of Graz, Austria
Supervised by Univ.-Prof. Dr. Leopold Neuhold
Department of Ethics and Social Studies
Graz, May 2016
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Author´s Declaration
Unless otherwise indicated in the text or references, or acknowledged above, this thesis is entirely the product of my own scholarly work. Any inaccuracies of fact or faults in reasoning are my own and accordingly I take full responsibility. This thesis has not been submitted either in whole or part, for a degree at this or any other university or institution. This is to certify that the printed version is equivalent to the submitted electronic one.
Date: Signature:
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Acknowledgements
I would like to express my sincere appreciation to all the people who supported me over the course of my studies and who contributed to the completion of this thesis.
First, I would like to thank my thesis advisor Prof. Leopold Neuhold of the Department of Ethics and Social Studies at the University of Graz. The door to his office was always open whenever I had a question about my research or writing and I am very grateful for his input. In addition, assistance provided by Prof. Bernhard Ungericht and Prof. Peter Teibenbacher during the final steps of the Global Studies program, was highly appreciated.
Further, I would like to express my great appreciation to Eva Haberler and Harald Fischer of Tribeka, who have inspired the topic of this thesis and contributed valuable information to my case study. They have turned my student job as a barista into a thoroughly enjoyable experience. Special thanks also go to Ulrich Salamun of Biosfair in Nicaragua, for his participation and expert opinion in this research project.
Finally, my profound gratitude goes to my parents, for their unfailing support and patience throughout my years of study, to my boyfriend, Steven, for his continuous encouragement and last but not least to my brother, Christoph, whose glass is always half full, Namaste!
Kathrin Brunner
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Table of Contents
1. Introduction ...... 1
2. Coffee as a commodity ...... 6
2.1 The origins and the diffusion of coffee ...... 6
2.2 Coffee production in the era of colonialism ...... 8
2.3 Coffee and Brazil ...... 10
2.4 Coffee in the 20th century ...... 13
2.4.1 Early crises and price manipulation ...... 13
2.4.2 The ICO, ICAs and coffee politics ...... 16
2.4.3 Market developments in the second half of the 20th century ...... 21
2.4.3.1 Specialty coffee and the Starbucks revolution ...... 22
2.4.4 The most recent coffee crisis ...... 24
2.4.4.1 The problems with volatility ...... 25
2.4.4.2 The coffee commodity chain...... 26
2.4.4.3 Small-scale farmer livelihood vulnerability ...... 27
2.4.5 From the 20th to the 21st century...... 29
2.5 The coffee economy in terms of Development Theories ...... 29
2.5.1 A short note on definitions ...... 30
2.5.2 From Modernization to Dependency Theories ...... 31
2.5.2.1 Terms of Trade and the Prebisch-Singer Hypothesis...... 33
2.5.2.2 World Systems Theory ...... 34
2.5.2.3 The theories’ implications for coffee economies ...... 35
3. Ethics in the coffee industry ...... 36
3.1 Morals and ethics ...... 37
3.2 Ethics in economics and business ...... 37
3.2.1 Corporate social responsibility ...... 38
3.2.1.1 CSR in the coffee industry ...... 40 III
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3.2.1.2 CSR and environmental ethics in the coffee sector ...... 42
3.3 Ethical consumerism ...... 43
3.3.1 Coffee certification and labelling ...... 44
3.3.1.1 Organic coffee ...... 44
3.3.1.2 Fair Trade coffee ...... 44
3.3.1.3 Eco-friendly or shade-grown coffee ...... 45
3.3.1.4 Utz-Kapeh ...... 45
3.3.2 The Fair Trade network ...... 45
3.3.2.1 Fair Trade mainstreaming ...... 46
3.3.2.2 Criticism of Fair Trade coffee ...... 47
3.3.2.3 Ideological fantasies of Fair Trade coffee...... 49
3.3.2 Direct trade coffee ...... 53
3.3.3.1 Third wave coffee ...... 54
3.3.3.2 The Cup of Excellence ...... 56
4. Case study: An example of direct trade between Nicaragua and Austria ...... 57
4.1 Historical overview ...... 57
4.2 The coffee economy of Nicaragua ...... 58
4.3 Tribeka coffee shop and roaster ...... 62
4.3.1 The roaster’s point of view ...... 62
4.3.2 Employees’ experience ...... 66
4.3.3 The customers’ opinion ...... 67
4.4 Biosfair ...... 68
5. Conclusion ...... 73
References ...... 77
List of Abbreviations ...... 85
List of Illustrations ...... 86
Appendix ...... 88
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1. Introduction COFFEE – For many of us the first thing in the morning, for others an afternoon power boost, to some the most reliable companion throughout the day, to a few even an essence of life. It is likely, the readers as much as the writer of this thesis, enjoy coffee on a regular basis and every minute you flip through these pages some two million cups of coffee are consumed around the world (Kienreich & Schwarz 2008: 5). For centuries, many countries have been affected by coffee production and consumption, albeit in very different ways. Coffee as a crop, as well as in the cup, has had major effects on societies, their economies, cultures and histories. Not only is there “a world of history in your cup”, it is also “a palpable and long-standing manifestation of globalization (Topik & Clarence-Smith 2003:1)”. This paper will focus on the ethical aspects of today’s coffee industry, but to begin, I will give a general overview of the physical, historical, cultural and economic dimensions of the rightfully-so-named black gold.
The coffee plant (coffea) grows in the form of bush trees in (sub-)tropical climates and relatively high altitudes. What is known as the coffee bean develops from white blossoms (cf. Illustration 1) into yellow or red so-called cherries, or berries (cf. Ill. 2), one cherry encloses two seeds i.e. two coffee beans. The leaves of the shrub as well as the beans contain Ill. 2: Blossoms of the coffee plant caffeine. While there are around one hundred different kinds of the coffea plant, only two are mainly relevant for cultivation and sold on the world market: Arabica (Coffea Arabica) and Robusta (Coffea Canephora) (Kienreich & Schwarz: 10).The former is more valuable regarding market prices and Ill. 2: Ripe coffee cherries widely considered of higher quality. It makes up about two thirds of the world market and is primarily grown in Latin America, the world’s leading region in coffee production. The Arabica plant grows best in the tropical highlands, i.e. above 1,000m around the equator and a little lower at greater latitudes. It needs relatively warm and rainy weather – 18° to 22° degrees of annual mean temperature – for a good yield (EOLSS). The latter gains lower market prices, holds about one third of the market share and is mainly produced in Africa and Asia (Kienreich & Schwarz 10, Topik & Clarence-Smith 3). Similarly to Arabica, Robusta needs rainy weather, but prefers hotter temperatures – 22° to 30° annual
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Master’s Thesis Brunner mean – of lowlands below 900m. It is generally agreed upon that coffee beans from higher altitudes, which grow slower, are more dense and flavorful in quality than those of lower altitudes. In natural surroundings, both plants grow in the shade of forests and are therefore ideally cultivated in the form of agroforestry, similar e.g. to cocoa. The environmentally more controversial method of monoculture under full sun results in higher yields of cherries within less time. This, however, comes at a loss of bean quality (EOLSS, Pendergrast 25). Robusta and Arabica coffees taste very differently as beverages and typically our drink comes from a blend of two or more Arabica beans. Robusta, however, is generally not consumed purely, but it remains highly important as a part of blends with Arabica beans and in certain market segments e.g. instant coffee (Jaffee 2007: 78). It is often claimed that Arabica is per se of better quality and better taste than Robusta, an opinion that has been – quite successfully – diffused by marketing and sales departments of roasters and retailers. In fact, both Arabica and Robusta beans come in excellent and appalling qualities. The mere label ‘100% Arabica Coffee’ should therefore not be considered a statement about quality (Kienreich & Schwarz 15). Many of the most well-known roasters, especially of our immediate Italian neighbors, such as Lavazza, or Segafredo Zanetti use rather high amounts of Robusta in their blends. Apart from the bad image, another reason why Robusta generally receives lower prices is the simple botanical fact that the plant yields about twice as much as its Arabica counterpart, generating much more supply within any period of time. Also, the Robusta plant is literally more robust to outside influences, e.g. the highly problematic leaf-rust, while the Arabica plant may need more tending to (EOLSS, Coffee Research Institute, Pabari 2014).
The coffee plant originated in Ethiopia, where the trees probably had been cultivated for centuries before the first mention in print by the Persian physician Rhazes, sometime around 900AD. It spread to Yemen where the Arabs started cultivating qahwa professionally. Qahwa, an Arabic word for wine, is the etymological origin of the word coffee; however, there are other possible origins, such as the Kaffa region of Ethiopia, the Arab word quwwa (power) or kafta, a drink made from the khat plant. From Yemen, later part of the Ottoman Empire, coffee had been introduced to the Islamic world in Persia, Egypt, Turkey and North Africa by the end of the 15th century – by that time the preparation method of roasting and brewing with hot water had been discovered. Soon it made its way to Europe and spread throughout the colonial possessions of the Dutch (Java, Surinam), French (Réunion, Martinique, Guadeloupe, Saint Domingue, Madagaskar, Côte d’Ivoire, Vietnam, New Caledonia) British (India, Ceylon, Jamaica, Kenya, Tanganyika, Uganda), Portuguese (Brazil, Angola, São Tomé), Spanish (New Spain, Cuba, Puerto Rico, Philippines), Italians (Eritrea), Belgians (Congo), Germans 2
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(Cameroon, New Guinea) and later North Americans (Puerto Rico, Hawaii). From the very beginning, coffee has been a lucrative trade product (Pendergrast 6, Topik & Clarence-Smith 2).
Today, green coffee – green because of the light green color of raw beans – is the fourth most valuable agricultural commodity, after wheat, sugar and soybeans, even though it is frequently – though incorrectly – referred to as the second most valuable traded commodity after oil (Pendergrast XIX). If we take a look at the figures of the 2015/16 harvest season provided by the International Coffee Organization, we find that overall 144,752,000 bags of coffee were exported. Coffee is mostly traded in 60kg bags, so the amount is equivalent to 8,685,120 tons of beans. The biggest producer is, and since the end of the 19th century has been, Brazil, accounting for about one third of all production. Today, the second largest share of global supply is delivered by Vietnam; more than one fifth in 2014/15. Another 10% is contributed by Colombia, which historically was the second largest producer before the rise of Vietnam. Other major producers in Latin America include Honduras, Guatemala, Peru, Mexico and Nicaragua. India and Indonesia each account for about 5% of worldwide production. The most important African producers are Uganda and Ethiopia (ICO).
Coffee is a very labor intensive crop and the livelihoods of roughly 125 million people depend on it. Once the seeds are planted, a coffee shrub takes about four to five years to mature and yield a decent amount of cherries. After the harvest, the beans are removed from the pulp and mucilage of the cherries surrounding them. After this fairly complicated process they need to be dried. In another step, the parchment and silver skin are removed from the beans, before they are ready for export. Several methods exist for each step in the process. Currently, the composite indicator price for green coffee is at approximately 1.17$ per pound (ICO April 2016), i.e. roughly the amount of money received by the producers. The laborers who work on that side of the supply chain earn 3$ a day on average; often this means a life in poverty. The consumer on the other end of the chain – after import, roasting and retail or distribution – frequently spends just as much as a worker earns for a day’s work – on one single cup of coffee (Pendergrast XVI).
From a socio-cultural point of view, we can safely say that coffee, as well as all associated rituals, have transformed the everyday lives of people in the consuming nations, as Pendergrast fittingly describes: “Beginning as a medicinal drink for the elite, coffee became the favored modern stimulant of the blue-collar worker during his break, the gossip starter in middle-class kitchens, the romantic binder for wooing couples, and the sole, bitter companion of the lost soul. 3
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Coffeehouses have provided places to plan revolutions, write poetry, do business, and meet friends (XVII).” Coffee is now an omnipresent beverage, especially in Europe, North America, Australia and Japan, the major markets. Also, Russia, Turkey and China are increasingly experiencing a trend towards coffee consumption (ICO). In addition, some producing countries have quite extensive domestic markets. Coffee has been equally vilified as a dangerous health destroyer and at the same time hailed for its health benefits (Pendergrast XVII). As we will see through the course of this paper, today’s coffee industry is very powerful and has historically been very influential, transforming the economy, politics and social structures of entire world regions (Pendergrast XVIII).
I have already mentioned the large discrepancies between the livelihoods of farmers and laborers in the Southern producing countries and the lifestyle of most consumers in the North and I have chosen this gap as a starting point for my analysis. Coffee as a link between two worlds. In recent decades ethical concerns and rising consumer awareness about where coffee comes from and the conditions under which it is produced, have given rise to initiatives that try to challenge the system.
In this paper, I aim to investigate how much of an impact such ethical concerns and similar notions on the part of the consumers, the traders or roasters can have on the livelihoods of farmers and other people who work in the coffee sector in producing countries. In other words, how can a coffee industry guided by Northern ethical norms and values contribute to positive changes in the lives of those in the South who – supposedly – live off it. I will investigate current efforts such as the Fair Trade movement, direct trade initiatives and corporate social responsibility programs in order to understand whether they live up to their promises and whether they challenge the status quo of a commodity sector characterized by the currently prevailing model of neoliberal capitalism. It will be important to ask who such efforts serve the most and whether the newest trend of direct trade can provide a true alternative. I hypothesize that, currently, ethics in the coffee industry, may be interpreted as a means of fundamentally making a difference and changing the lives of millions in the sector to a significant degree, it can even be interpreted as a means of development. Yet, to simply believe that current efforts are working well to drive forward real change, would be very short-sighted. Looking beyond the surface, we might discover that all efforts taken are still mainly driven by, or heavily rely on, consumer interests and are only relevant for very small portions of the vast coffee sector. From a more critical point of view, I might suggest that none of the alternative trade forms or CSR initiatives challenge the status quo. On the contrary, they work very well within the 4
Master’s Thesis Brunner confines of a neoliberal capitalist world system. At this point, it is safe to say that, while growing ethical concerns within the industry are a positive development, so far initiatives such as Fair Trade and other certification systems have fallen short of their promise to revolutionize the system. Paradoxically, they help to reinforce and justify the current situation, while at the same time supporting the niche market for concerned consumers. I will argue that CSR policies more often than not are merely a cosmetic device to demonstrate a superficial interest in ethical issues. I think direct trade might help solve the dilemma to a certain degree, because it promotes truly close and long-term relationships between farmers and roasters and due to the top quality demanded in this market segment also promotes very high prices for raw coffee and environmentally sustainable, organic farming.
This paper will be divided into three parts. First, I will focus on coffee as a commodity, the most important historical and recent developments on the market. This will include: the introduction of coffee as a crop for export in the colonies of European powers, the rise of coffee as a consumer product, the International Coffee Agreement as well as the impact of Starbucks and commodity market speculations. I will look at how the coffee sector is embedded in the neoliberal capitalist system and how the forces of globalization have shaped the industry. From the pool of development theories, I have chosen Dependency Theory and World Systems Theory to highlight my arguments and better understand concepts such as the deteriorating terms of trade or unequal exchange. The three core factors that will be analyzed in this first part are the factors of production, distribution and consumption of the product. Second, I will investigate ethics in the coffee economy. The ethically relevant factors that will be discussed include the livelihoods of coffee farmers and other workers in the sector in producing countries, as well as the impact of coffee cultivation on the environment. In that section I will present certification programs such as Fair Trade and assess their impact. Also, I will focus on the relevance and success of CSR in the coffee sector. My analysis will critically reflect the idea of ethical consumerism for the supposed benefit of the producer, and from a broader perspective I will highlight what have been called ‘Fair Trade fantasies’ as well as the concept of development guided by the North. Third, I will add a practical dimension to the paper by focusing on the coffee economy of Nicaragua and presenting a case of direct trade cooperation between an Austrian specialty roaster and a coffee trading company in Nicaragua. Nicaragua is part of the traditional coffee production area of Latin America and will provide a good example of how an agricultural commodity like coffee can transform a country, how it can affect its economy and is interlaced with politics. The locally based company Biosfair sells specialty coffee to buyers in Europe via direct trade. The Austrian roaster in this case is Tribeka, a local 5
Master’s Thesis Brunner coffee shop with four outlets in Graz. I will present the direct trade relationship between the two using information gained through interviews with the owners. Also, I have acquired an inside view of Tribeka, because I have worked there for several years during my studies. My growing interest in all the details behind the bean has ultimately inspired the topic of this thesis. In addition to the views of the roaster and the direct trader, a short insight into the views of employees of Tribeka as well as its customers will be included. Let’s now begin our journey through the histories, the economies and the peoples of coffee lands.
2. Coffee as a commodity In order to best understand the impact and relevance of coffee as a crop and in the cup, to see how well it exemplifies the processes of globalization, I would like to start by providing the reader with a concise overview of the rather complex historical and economic developments of the industry.
2.1 The origins and the diffusion of coffee Coffee originated in today’s Ethiopia, more precisely it is assumed to come from Abyssinia. Legend has it that there was once a goatherd by the name of Kaldi who would summon his animals every afternoon with the sound of his pipe. One day, however, the goats did not return. After a while Kaldi found them and could not believe his eyes when he saw them dancing on their hind legs and bleating excitedly. As he observed, he found that the animals were eating leaves and berries off a tree he had never seen before. He was curious, tried them himself and was thrilled by the effects. News about the magical trees spread quickly and coffee became incorporated into Ethiopian culture in the form of beverages and snacks. The spread of coffee from Ethiopia to Yemen might have occurred sometime in the sixth century, when the Ethiopians ruled the area for several decades (Neuberger 1996: 29, Pendergrast 4-5). Coffee cultivation remained confined to terraced fields in the area of Yemen for one and a half centuries, before it began to spread slowly through trade with the Arabs. They took to coffee cultivation, once it had been established that the stimulating substance should not be banned under the Sharia (Topik & Clarence-Smith 5).
In the diffusion of coffee during that initial period, Muslims were responsible for planting the seeds in places they visited. Thus, coffee had made its way to the Islamic world in Persia, Egypt, Turkey and North Africa by 1600 (Pendergrast 6). In the case of the Turkish Empire, for instance, it was the Ottoman Turks who started exporting coffee from Yemen, which they occupied in 1531. The name of the port was Mocha, which gave the name to the coffee
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Master’s Thesis Brunner originating from the area. From Mocha, the beans were shipped to Suez and then transported to Alexandria where merchants from France and Venice bought them. Coffee cultivation and trade became so lucrative that the Turks made sure the monopoly remained in their hands, at least they tried to keep raw coffee beans from escaping across the borders. Beans were either boiled or partially roasted before leaving Mocha, to make sure they could not be used as seeds. Of course, it was only a matter of time until some of the treasured seeds escaped. A Muslim pilgrim smuggled a few seeds to India in the 17th century and from there Muslim traders and travelers took them to Java and most likely Sumatra, well before the much heard of introduction of coffee there by the Dutch. They, however, dominated the world’s shipping trade at the time and managed to bring a coffee tree to Holland in 1616. Approximately forty years later they started coffee cultivation on Java and at the turn of the century on Sumatra, soon followed by other islands of the East Indies. The latter became one of the first main coffee growing regions for the emerging world markets (Pendergrast 7).
As other European powers joined in to get their share, they introduced coffee in other regions of Asia, the Pacific and the New World. Especially in the Pacific, Catholic missionaries often raised coffee first (Topik & Clarence-Smith 5). Initially reserved for the upper classes as an expensive medicine and luxury product, like sugar, cocoa, or tea, public coffeehouses were soon to be a common sight in Italy, Britain and then France. Coffee was received somewhat differently in all European countries, but eventually it prevailed. As far as Austria is concerned, a story exists involving the Turks trying to invade Vienna, which resulted in a man named Georg Franz Kolschitzky opening one of the city’s first coffee houses. Said man, who was accustomed to the Arab culture, took on the job of a messenger during the siege of 1683. Only a few months later, the Turks were defeated and fleeing the city left behind tents, oxen, camels, sheep, rice, honey, grain, gold and many bags of a seed that looked like camel fodder to the Viennese. When they started burning them, Kloschitzky noticed the scent of coffee, very familiar to him from his time in the Arab world. Exasperated, he made them stop the fire and secured his first stock of beans, which was later available for consumption in the Blue Bottle, Vienna’s first coffee house (Soentgen 2006: 54, Pendergrast 9-10).
In the Muslim world, and later in many European countries, there was controversy about coffee, coffeehouses and their effects on human health and society as a whole. In several cases coffee and coffeehouses became so troublesome that rulers felt the need to close down respective establishments or ban the substance entirely. For instance, upon discovering that satirical verses about him were told in the coffeehouses, the governor of Mecca had them closed down in 1511
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(Topik & Clarence-Smith 5, Pendergrast 6). Similarly, Christian priests worried about coffee as the devil’s drink and tried to have Pope Clement VIII ban it around 1600. While French physicians warned about coffee causing impotence in men, some of their German colleagues were convinced it was responsible for stillbirths and sterility in women. At one point Frederick the Great forbade the roasting of coffee, mainly because he much rather invested in the domestic beer industry and thereby made sure local beer producers would not suffer from caffeine competition (Pendergrast 8-11). Skepticism about the health effects of coffee has remained widespread throughout history. Drawing on a local publication from early twentieth century Austria, a guidebook on health reads as follows: “Kaffee hat sich in unserer modernen Zeit als allgemein beliebtes Nationalgetränk eingebürgert. Die Kaffeestaude ist eine Giftpflanze, somit ist auch die Bohne giftig, denn aus den Kaffeebohnen wird das stärkste Gift, das Koffein, gewonnen, von dem eine winzige Portion ausreicht, den stärksten, robusten Menschen zu töten (Maier 1929: 88).“ On the upside, there is coffee’s alleged role – albeit rather symbolic – in the process of bringing about the American Revolution. Shortly after the Boston Tea Party in 1773, a group of men referring to themselves as Sons of Liberty gathered in the Merchant’s Coffee House – located in Manhatten on Wall Street/Water Street – to form a committee, setting out to promote anti- British activities and to protect the interests of the colonies. With the rejection of taxes on tea, the colonists also boycotted the drink in general and quite abruptly switched to coffee instead. It was from then on considered patriotic to consume coffee, an act of high symbolic value, contributing to the forming of an American identity. Especially French and Dutch coffee traders of the time seized the opportunity to offer any amount of green coffee to the colonists at very reasonable prices. Further, as soon as the war of independence had ended in 1789, a reception was held in the Merchant’s coffee house for General Washington by the city of New York. He had successfully led his troops to victory and had just been inaugurated as the first president of the United States of America (Heise 1996: 115-116).
In any case, for all of us who do enjoy our daily cup(s) of liquid black gold, we can safely continue to enjoy them, despite all the myths and half-truths about its negative health effects. It is today generally agreed upon that: “[f]or adults consuming moderate amounts of coffee (3-4 cups a day […]) there is little evidence of health risks and some evidence of health benefits (Higdon & Frei 2006: 101).”
2.2 Coffee production in the era of colonialism With large quantities traded since the 16th century, coffee has been one of the most valuable commodities in international trade history. As Topik and Clarence-Smith (2) have pointed out, coffee is not typically treated as a colonial product in much of the literature, even though the 8
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European colonial powers played a leading role in the introduction of coffee cultivation as an export crop and as a driving factor on the importing side. Due to the physical properties of the crop, it is one of many typical goods that are grown exclusively in the South and consumed mainly in the North, or as the authors put it: “Essentially, poor countries have grown coffee for rich ones (2).” One of the reasons it might not have been thoroughly discussed as a colonial product, is that the most productive coffee-producing countries have been those of Latin America since the middle of the 19th century, a time by which they had gained independence. At that time, however, coffee was already being cultivated mainly for the world market as opposed to subsistence purposes. The driving forces behind growing international trade were the colonial powers, their demand for the crop and the manner in which they incorporated their (former) colonies into the continuously globalizing world market. It was a time at which “export products became ‘social motors’ that sucked peripheral areas into the world economy (4).” Due to the requirements of the plant, coffee was perfectly suited for the so-called colonial division of labor. This meant it was produced in the tropical regions and shipped to the European mother countries, some of it was re-exported to countries with no colonies. Coffee was basically consumed entirely in the West (Topik & Clarence-Smith 6).
Wherever coffee was cultivated, the questions of labor recruitment and control were central for the colonial governments and their representatives in the South. Even after independence, the methods of coercive labor in many areas remained largely unchanged for a long time. In West Java, for instance, the Dutch East Indies Company – after the imposition of coffee cultivation – had introduced contracts with local regents, who were in charge of delivering certain amounts of the crop. They forced their subjects to cultivate coffee accordingly. This left the native population with little, or no wages and no time to tend to their own fields for subsistence. Hunger and even famine followed in a country that could not be more fertile (Pendergrast 18, Topik & Clarence-Smith 6). The system of obligatory deliveries of coffee to the state in Indonesia, contributed an overwhelming 82% of Dutch government revenues from its introduction in 1832 up to 1860. After slavery was abolished, it was not until the First World War that forced coffee cultivation had largely subsided (Topik & Clarence-Smith 9).
In the New World, it was mainly African slaves who were forced to work on coffee plantations. Slavery was not abolished in Brazil until 1888, by then it had already been the largest producing country for several decades (7). Long before the rise of Brazil, the French had started coffee cultivation in the Caribbean, where also sugarcane was grown for export by African slaves. In fact, the two crops share a quite interrelated history. By the end of the 18th century little San
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Domingo, today’s Haiti, delivered 50% of the world’s coffee supply. The treatment of slaves as well as their working and living conditions were amongst the most inhumane and cruel, as torture was common. It should therefore not surprise that the only major slave revolt in history that was ever successful, started in Haiti in 1791. Still, even after a twelve year struggle for independence, workers remained confined to plantations owned by the state, working very long hours for low wages (Pendergrast 17-18). Similarly, people were forced into labor in the coffee economy in other Latin and Central American countries, e.g. the Mayans of Guatemala and Mexico. There, debt peonage was a common means of subjugating the laborers (Topik & Clarence-Smith 9). Generally, independence from European powers did not per se mean that working conditions for those subjugated under forced labor ameliorated considerably. I therefore agree with Topik & Clarence-Smith that it makes perfect sense to talk about coffee as a good inextricably linked to colonial history, a product whose history can tell us a lot about the forceful manner in which ‘new’ world regions were ‘discovered’ and then exploited for the needs of the colonizers. After all, the power structures between North and South have essentially remained the same and no current complexity of issues can truly be understood without thorough investigation of its history.
As we have heard, the most important coffee growing region in the world is Latin America, most notably Brazil, which has shaped the industry like no other single country. Since it has been so significant in the history of the coffee industry and the developments on the world market I will dedicate to it the following section.
2.3 Coffee and Brazil The first big coffee boom, or explosion of production, is most frequently dated to the mid-19th century. Indeed, the country’s coffee export increased 75-fold between its independence in 1822 and 1899 while world consumption grew 15-fold during the century (Topik 2003: 31). The simultaneous rise in demand and supply had several reasons. In early modern Europe, a time when mercantilism was influential, coffee was still a luxury good and remained one until the end of the 18th century. As such it was highly taxed and demand for the rather expensive product remained low. By the time coffee cultivation exploded in Brazil, free trade and sharply reduced taxes on the crop helped pave the way for widespread consumption. As it became affordable for the masses, coffee developed into an inherent part of the diet in Europe and North America, where the impacts of the industrial revolution meant rising populations, growing towns; thus higher demand (Topik & Clarence-Smith 7). Coffee was something like the engine of growth for much of Latin America and especially Brazil. It also helped create the demand of the
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Master’s Thesis Brunner working classes in Europe and North America, by producing coffee in unseen quantities. Brazil became the dominant player on the field (Pendergrast 21) and was so successful that a popular proverb developed “God is Brazilian” because he made the country’s soil and climate to be ideal for coffee cultivation (Topik & Clarence-Smith 8). As Pendergrast notes: “Coffee made modern Brazil” and ads “but at an enormous human and environmental cost (22).” Major coffee growing regions of the country are indicated on the map below.
Brazil was ‘discovered’, colonized and exploited by the Portuguese who soon learned to take advantage of the fertile lands. Coffee cultivation was preceded by that of sugarcane, which served as an ideal model of wealth extraction. The established system of huge plantations – so-called fazendas – in the hands of the elite was based on slavery. The slaves’ working and living conditions were appalling and the situation was reinforced by the fact that it was cheaper to import new slaves from Africa, after the average Ill. 3: Map of Brazil indicating coffee regions laborer died after about seven years in the plantations, than it would have cost to maintain the health of existing slaves. Intense sugar cultivation had turned vast areas in the northeast of Brazil into arid savannas, sugar prices on the world market were declining and the gold and diamond mining boom of the 18th century was fading out. Coffee, on the other hand, was on the rise in mountainous areas close to Rio de Janeiro. Tracks down to the ports at the sea had already been developed by the mining sector, slaves as well as mules who were previously used in mining, then worked in coffee plantations and were used to transport the bags of beans down the mountains to the port. With the coffee boom, the need for cheap labor grew immensely, which was reflected in growing slave imports from roughly 26,000 in 1825 to 44,000 only three years later. By 1848 the annual import of slaves had risen to some 60,000. Under growing international pressure, Brazil truly banned importation of slaves in 1850; however, two million people already enslaved at the time, remained unfree. The huge coffee plantations came to be known as latifundias and were not unlike their cotton or tobacco counterparts of the Old South in the United States, turning their 11
Master’s Thesis Brunner owners into some of the wealthiest men in the country. As early as 1828, about one third of Brazil’s total population consisted of slaves in bondage, keeping in mind that this was about two decades before the first big coffee boom (Pendergrast 22-23). In comparison, at the height of agricultural production based on slave plantations in the Deep South of 1860 (i.e. South Carolina, Mississippi, Louisiana, Alabama, Florida, Giorgia, Texas), shortly before the civil war, an average of 46% of the population were salves (Razaghian 2004: 41). The struggle against abolition of slavery in Brazil lasted until the end of 19th century; the growers’ perception of their subjects as subhuman remained persistent at a time where virtually all other countries had given up slavery (Pendergrast 23).
The effects of coffee in Brazil were not only devastating for the scores of slaves working on the plantations, but also for the ecosystems and the environment. Large sections of the rainforest were logged and burned to create ever more space for coffee, which was planted in rows and grown under full sun exposure, leading to fast depletion of the soil as well as erosion. When a piece of land no longer generated sufficient crops it was abandoned and new areas were made accessible. Tropical rainforests like those of Brazil would take centuries to regenerate and according to some accounts, people even back then, worried about the immensity of natural destruction that was going on (Pendergrast 24).
Brazil as a coffee exporting region focused on maximum quantities of exportable beans and the agricultural methods that would facilitate such yields took their toll on the environment just as forced labor did on the enslaved workers. Ideal soil and weather conditions helped generate more crops than in other areas, e.g. through three or four, versus only one or two flowerings elsewhere (Pendergrast 25). The country was thoroughly transformed by the powerful coffee sector, which pushed for technological change, innovation and infrastructure during the times of ever rising coffee prices in the 1860s and 1870s. For instance, a submarine cable for the telephone connection was installed, steam boats were introduced and the train track system was expanded from 800 miles in 1874 to 6,000 miles by 1889. As the coffee cultivation area moved slowly from the exhausted Rio region southward and westward to the plateaus of the São Paolo region, labor became an issue once more. The ban of slave imports and the eventual abolition of slavery triggered the immigration of European workers, who would accept large amounts of debt in order to find work in the Brazilian coffee plantations. Frequently, they were not able to repay what they owed and lived a life in debt peonage. Mostly Italian, but also Swiss and German immigrants, the so-called colonos, arrived in large numbers – about one million between 1884 and 1914. With the arrival of white workers, African slaves, grew even more
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Master’s Thesis Brunner marginalized, because Europeans were considered superior. The colono system turned out to be even cheaper than slavery and produced another explosion of coffee supply. During the last decade of the 19th century it tripled, with 16.3 million bags of Brazilian beans flooding the market in 1901. While only decades ago, growing coffee was a sure way to grow rich, awareness about the dependence and overreliance on one single crop soon began to sink in as the country now had to import food crops. Considering the fact that its lands are amongst the most fertile, the necessary importation of wheat by Brazil seems ironic (Pendergrast 26-28).
2.4 Coffee in the 20th century As the coffee economy developed in Brazil and brought wealth to those in charge, other countries in Latin America with the same natural predisposition for coffee cultivation entered the growing sector. Among the most economically successful coffee producing countries were Venezuela, Puerto Rico, Guatemala, Mexico and Nicaragua. More often than not, coercive labor was an essential part of the system and frequently it was indigenous people who did the work, e.g. Mayans in Guatemala and Mexico, and American Indians in Nicaragua (Topik & Clarence-Smith 9).
“The coffee industry was an enormous interconnected global economic force by the turn of the twentieth century (Pendergrast 73)”. Indeed, the rising coffee industry had started its global conquest early. The number of producing countries in the South was increasing, as were outputs of green coffee and the demand in the North as coffee started to be served on most American breakfast tables. The coffee sector had benefitted from early globalization, making use of new communication methods and considerably free international trade on the world market. By the turn of the century, however, it had also become clear that the coffee industry was prone to ups and downs, with producers as well as traders suffering from the cycle (73).
2.4.1 Early crises and price manipulation Previously, up until the end of the nineteenth century, coffee was considered a secure form of income on both the exporting and importing side of the chain, as consumption rose with production. Expecting good prospects, more and more farmers started to grow coffee. Then, the Brazilian crop of 1896 for the first time flooded the markets with many more tons of coffee than could be sold. Prices for green beans fell from between 14-18 cents a pound in the preceding decade to below 10 cents, where they remained for years to come. According to Pendergrast (73), that was the time that initiated the infamous boom and bust cycle that still shapes the coffee sector today. Coffee had become an important trade item on the stock market, but as a logical consequence of the cycle, the market was volatile and hard to predict. Typically, 13
Master’s Thesis Brunner this can be attributed to different levels of outputs, i.e. overproduction, as in the 1896 Brazilian harvest, underproduction e.g. through diseases, bad weather conditions, or other external factors such as war or manipulation. The brokers on the floor of exchange in New York and other cities with major trade ports and stock exchanges, apparently had a quite nerve-racking job. John Arbuckle, who helped create and shape the US coffee market to a large degree, in 1897 stated that: “[t]here appears to be no help for it; coffee is the most speculative business in the world (quoted from Pendergrast 65).”
It is therefore not surprising that coffee was one of the first commodities for which some sort of control of world trade was attempted (Ponte 2001: 4411). As the crisis continued and the price for green coffee had fallen to 6 cents in 1902, representatives of both exporting and importing countries met at the first International Congress for the Study of the Production and Consumption of Coffee, at the New York Coffee Exchange. Since the producer side hoped to push the price of coffee up and the consumer side preferred for it to be as low as possible, negotiations were slow. The representatives eventually agreed on several proposals, such as a ban on the export of triage – the worst grade of coffee – a reduction of European coffee import taxes, efforts to increase sales and advertise the product and finally, a quota system to limit the export of the crop to a reasonable amount. However, the efforts of the delegates failed and no agreement was found at that time (Pendergrast 75-76).
The times of crisis continued into the early twentieth century and while some agreed that the problem was mainly Brazilian overproduction, another factor which has been influencing the coffee price since those times, was manipulation. Planters often accused foreign coffee monopolies of purposefully keeping the price of green coffee down, e.g. through short sellers, who bet on declining prices and speculators in the market. More importantly, it is helpful to understand that at the time, the 20 biggest firms exported almost 90% of coffee, with the five largest among them already accounting for more than 50% (76). Incidentally, this also reflects today’s power relations in the sector, where five international corporations are in control of more than half of the market (Topik et al. 2010: 8). Thus, the power structures in the sector have obviously been tilted toward the North since the beginning.
With regard to manipulation, we also need to consider Brazil’s valorization program, a scheme that should help maintain the price of the commodity. The idea was for the government to create a contract with a private syndicate of merchants and financiers for the long-term. The government would buy 20%, the syndicate 80% of surplus coffee and store it, thereby keeping it off the market, until prices rose again. This scheme relied on the country’s complete control
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Master’s Thesis Brunner over the coffee market, in fact, at the time the world market share of the Brazilian state of São Paulo alone was between 75% and 90% (Ponte 4411). Hermann Sielcken, the coffee titan of the time, was powerful enough to assemble a consortium of German and British banks and coffee merchants to help finance the program. In October 1906 the syndicate started buying up green beans in Santos; valorization purchases would continue until the price for one pound rose above 7 cents (Pendergrast 78-79). The Brazilian government was soon unable to supply its 20% share, but with some more help by Sielcken and some financial trickery the program continued to exist and the price rose to 14 cents by 1911. On the other side of the supply chain, mainly American consumers and politicians grew rather upset about the valorization program and pressed legal charges. Sielcken was tried at court, but managed to make such a convincing case for himself and valorization that he was not punished, regardless of the ridiculously high amount of money he had made with valorized coffee (82-85). Widely criticized, this first valorization scheme went on until 1921 and should be followed by several similar programs. It can be safely said that such programs had some positive effects e.g. they prevented mass bankruptcies and foreclosures, possibly revolution in Brazil; however, those who were already rich and powerful, benefitted the most (88).
Generally, the 1920s was a good time for coffee on the customer and importing side in the United States. Especially coffeehouses in major US cities started to flourish and average per capita consumption had gone up to thirteen pounds by 1923. One of the reasons why coffee as an energizing drink and coffee houses as a meeting point gained popularity was prohibition, i.e. the time when sale and consumption of alcohol was prohibited. It is even said that coffee helped create the jazz age. Also, the motorization of America spawned good business for some coffee companies as more places to drink coffee popped up along thousands of miles of roads (Pendergrast 146-149).
Coffee not only meant big business in importing countries; on the contrary, some of the wealthiest individuals in the sector at the time were the coffee barons of Brazil, El Salvador, Guatemala and other Latin American countries. A third valorization program in Brazil in the early 1920s as well as doubling coffee prices by the middle of the decade and a new storage policy helped them to sell most of their stock, with overproduction usually being the issue. The new policy, which contained a retention plan, helped protect not only Brazilian coffee farmers but all producers in Latin American (162). Even though the problem of oversupply was already well known at the time, the planters did not seem to have learned the lesson: rain forest was being cut down in rapid rates to create space for new coffee plantations (161). American
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Master’s Thesis Brunner business interests – many banks provided credit to the coffee industry – were protected in some countries, e.g. Haiti and Nicaragua via the ‘dollar-diplomacy’, making use of U.S. Marines. Generally, the US made sure the coffee regions remain stable to ensure profits on Wall Street, which at the same time helped coffee farmers prosper. However, great wealth stemming from coffee in the South was restricted to few coffee barons, who lived in great splendor, while the regular coffee workers remained impoverished (163).
Another development of the early 20th century was the first round of consolidation within the coffee business. Previously to 1929 the coffee economy in the North had been in the hands of family businesses. However, ‘corporate monsters’, as Pendergrast calls them, soon swallowed up many of the coffee firms as the production of consumer goods reached a new era leading to “the ultimate death of family businesses (155)”. Large companies with well-known names like Standard Brands and General Foods, which is still in the business today, emerged.
By early autumn 1929 it was clear that overproduction and falling prices as a result would be an issue once more. Planters grew nervous and coffee men skeptical – and all for good reason. About two weeks before the New York Stock Exchange crashed, so did the Santos Bolsa, Brazil’s coffee exchange. The São Paulo Coffee Institute was bankrupt. Many who were involved in the coffee sector, on the American as well as Brazilian side, up to the Brazilian coffee kings had amassed debt and investments as if the coffee prices (and stock prices generally) were bound to rise endlessly. Similarly, the Brazilian Paulista government seemed to be considering themselves invincible. On October 17, incidentally, an American economic professor had commented on the stock prices being at an unusual, permanently high plateau, but both the coffee barons as well as Wall Street remained ignorant of the pending doom (163- 164).
2.4.2 The ICO, ICAs and coffee politics The volatility of the coffee markets proved to be a long-term issue, therefore many efforts have since been made to find a way of stabilizing coffee prices. While efforts to control coffee prices before World War II centered on Brazil, similar control schemes during the post-war period started to include other Latin-American countries (Ponte 4411). The most influential actor in this process during the twentieth century was the International Coffee Organization and the International Coffee Agreements. They were preceded by several short-term agreements, mainly among producing countries, before the so-called Coffee Study Group was initiated and – with the help of the United Nations in New York – managed to restart negotiations including producer as well as consumer countries. Finally, the first International Coffee Agreement came
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Master’s Thesis Brunner into force in 1962, including most exporting and importing countries as members. The ICO was established in 1963 and continues to exist today, even though its influence has diminished since 1990. There are 40 members which are exporting countries and eight members belong to the importing group, among those the European Union, comprising 28 states. The basic ideas for how to control prices were partly the same as those already discussed at the International Coffee Congress of 1902. The participating countries agreed on a quota system, where supply that exceeded demand would be withheld from the market. They set a target price, or price range and an export quota was calculated for each exporting country (Ponte 4412). Other provisions of the agreement held suggestions for diversification policies in order to limit coffee output and for promotion activities to increase demand. For the first two rounds of the agreement, each lasting five years, this regulation was applied. The quota system, however, was abandoned in 1973 and a new agreement was negotiated in 1975, a time where the market situation differed significantly from a decade earlier. A serious frost in Brazil had caused concerns about harvest outcomes and therefore the new agreement would include the possible suspension of a quota in case prices were high. As the biggest producing country, any relevant changes in the output of Brazil had repercussions on the global coffee market (ICO History).
The negotiations for new agreements every five years were not easy, often lengthy and tense; they grew more and more difficult until the system essentially collapsed in 1989/90. As Ponte (4412) points out, however, it is widely agreed upon that coffee prices were successfully raised and stabilized through the ICA regulatory system and that its end marked the beginning of newly increased volatility and lower price levels. A more detailed analysis of the reasons why the ICA was successful and why it has ultimately not been renewed, will give us a better understanding of the workings of the coffee market, how economic and political changes have influenced the sector and about the political economy of coffee.
Ponte (4412) lists four distinct reasons for the relative success of the ICA regime: first, the participation of consuming countries in the quota system; second, the fact that producing countries could be understood as single market units, with governments in charge and making decisions regarding exports; third, Brazil’s acceptance of a shrinking market share as a result of the agreements; fourth, a strategy of import substitution in coffee producing countries, requiring highest possible export earnings and therefore high commodity prices. Also, there are numerous reasons why no new agreement was found at the end of the 1980s. As Gabriele and Vanzetti (2008: 416) have observed, the market climate had changed from being favorable to commodity exporting countries in the 1970s to rather hostile, characterized by declining prices.
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While regulatory systems were accepted as helpful before, market-oriented approaches set in during the 1980s and neoliberal policies increasingly took over. At that time many developing countries accumulated large debts and in order to repay them sought to maximize commodity exports. The collapse of the ICA seemed proof that regulatory approaches were misleading. Before it collapsed, the system was undermined by free-riding, i.e. countries who gained from the benefits of the agreement, but did not take any of the cost, permanent fighting over the quotas and increasing amounts of beans being traded at below-market prices with or through importing countries that were non-ICO members. Further, the system of fixed quotas, which were hard to newly negotiate, naturally resulted in a rather stable and static supply mix that would only adapt slowly to changes in consumer demand. The latter did change, however, as Americans started to prefer ground coffees, which use a high proportion of Arabica beans, over soluble instant coffee that traditionally contained high proportions of Robusta. With rigid supplies, roasters were worried about competitors gaining access to cheaper beans (price discrimination favoring non-members), undermining their cooperation with the ICO. Also, importing countries were unwilling to grade distortions between the two types of beans. Another issue that was disagreed upon among producing countries, was the distribution of the benefits from the coffee trade and within each country the distribution between growers and marketing boards.
On an international level, the ideological shift and changes in geopolitics, had changed the political landscape by the end of the 1980s. The cold war had come to an end and the Soviet Union was disintegrating. In the White House, the leftist government of Brazil was no longer considered a threat and the rigid ICA quota system left not much room for individual economic relations with various Latin American countries who were still ‘enemies’. Basically, the US Congress, entering the neoliberal era, was against market intervention and thus did not support any form of binding ICA. The Brazilian government, too, discontinued their efforts in coffee policies by abolishing the previously powerful Instituto Brasileiro do Café in 1990. This was in line with the declining role of the state in commerce at the time. Similarly, many other national agricultural ministries stopped the coordination of coffee production, commercialization and quality control, in short, the state largely retreated from the sector. This also meant that the negotiating power of their governments was extremely diminished. Finally, one more reason for the ICA collapse was the general belief that negative impacts of a lacking control system would only be short-lived and that the free market system would ultimately work better (Ponte 4412, Topik et al. 6, Gabriele & Vanzetti 416, Bacon 2005: 498-99).
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Coffee has been called a very political crop and I will further consider some of the political factors in order to present a broad analysis. This is based on Gabriele and Vanzetti’s investigation on the feasibility of regulation /supply management in the coffee sector. On the level of the individual, coffee cultivation is the main source of income for millions of people in producing countries, farmers, their families, hired workers etc. many of which are poor or live on the brink of poverty. From the government perspective of such countries, revenues from coffee exports are often one of the main, in some cases the main contributor to foreign exchange earnings, to taxes and to GDP as a whole. Clearly, governments of coffee producing countries have a strong interest in their coffee economies and continued efforts to find regulatory programs like the ICA are proof of that.
After decades of completely free market policies, regulation of some sort has started to be respectable again, because supply-management schemes and ICAs are rationally sound. It should be noted, however, that coffee producing countries and commodity exporters generally, as part of the so-called ‘developing’ world, do not have as much bargaining power in the international economic arena as their ‘developed’, importing counterparts. More details on the development idea and the North-South divide as it relates to coffee will be dealt with in section 2.5.
The factors influencing coffee politics are so diverse it is understandable that no binding international agreement exists. The coffee sector is very heterogeneous, both on the production side and from an institutional, organizational and political economy perspective. And then every country’s internal political economy of coffee is different from that of other countries. If we look at coffee production, for instance, there are various methods and techniques to use on different types of land, yielding beans of a wide quality range and also the Arabica/Robusta varieties issue is of concern. With the neoliberal, free-market turn most producing countries have witnessed a decline in institutions that previously regulated, promoted or in some ways shaped the national coffee sector e.g. producer associations, marketing boards, or trading organizations run by the state. Still, the effects of such developments have been very different in various producing countries, depending on how much of a role coffee plays, that is, how much it determines the livelihood of how many people, or how strongly the coffee economy determines a country’s economic stability and prospects. With regard to the people who cultivate coffee for a living, in some countries those producing coffee are a well-organized, socially homogeneous group, powerful enough to lobby for themselves, in other countries they are internally divided, poorly organized, in some cases they are especially vulnerable ethnic
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Master’s Thesis Brunner minorities and for that reason of geo-political importance. The implementation of coffee policies in producing countries may be a challenge to any government. The list of diversities could go on, but it suffices to gain some understanding of the complexities in coffee countries. Now, the authors of this particular study ask the question about the feasibility of supply management schemes. In short, the result of their calculations was that realistically it would take four countries, together responsible for 50% of market output. Brazil, as the biggest producer, would definitely need to be one of the four, in order to generate reasonable gains from supply management. If the four member countries decreased their exports by ten percent, revenues for them would increase by six percent and revenues for non-member states would even increase by 30%. This would obviously be much more beneficial for the non-members than for the members, who would have to cut their exports, which is exactly why such an agreement is highly unlikely to form. But the authors also suggest that an agreement with such few members would be much more likely to remain stable in the long-term, it would be easier to enforce and could even be formulated so as to comply with WTO regulations (Gabriele & Vanzetti 417-420, 429). In any case however, we should keep in mind that the general approach of obligatory export reductions is not in line with the ideals of a free market and the usual WTO goals of stimulating more production. Also, it seems to me that export reductions in a sector that has suffered from oversupply for over a century would be very hard to negotiate and carry out fairly, would go against the general idea of growth and the WTO trade regime.
Essentially, the coffee sector has seen a free market period since the disintegration of the ICA. During the 1990s there was an attempt by the Association of Coffee Producing Countries (ACPC) to regulate output by retention plans; but success was limited (Gabriele & Vanzetti 414). According to the ICO, three new coffee agreements have come into effect since 1990, but they are of no binding relevance anymore and therefore cannot be compared to the ones of the ICA controlled period between 1963 and 1989. The ICO also continues to exist and fulfills an important function as a data collection and information platform for the coffee sector. It regularly reviews and analyses market dynamics and prospects, works on sustainability and trade issues.
Complex interrelations between international and national coffee politics, unequal power structures between North and South, and struggles between national elites and suppressed coffee farmers have frequently contributed to violent conflict in producing countries. There are several Latin American examples for such crises, for instance El Salvador, where about 75,000 people were killed in the civil war between 1979 and 1992. Leftist rebels aimed to overthrow
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Master’s Thesis Brunner the government while right-wing death squads started roaming the country side. The coffee oligarchy, all opposed to the rebels, some supportive of the death squads, were politically divided. Similarly, civil war shaped Guatemala in the late 1970s and 1980s. Big coffee importers like P&G or Nestlè were happy to do business with Uganda around the same time, where dictator Idi Amin suppressed his people under genocidal conditions (Sherfey 2016, Pendergrast 298-300). Another African country that has been shaped by the introduction and spread of the cash crop coffee, is Rwanda. By the time the ICA collapsed it was heavily dependent on coffee exports. Kamola (2007) presents a very critical and eye-opening analysis about the role of the coffee economy in the creation of the conditions for genocide. Contrary to the most frequently used scientific approaches which put ethnicity at the center of the analysis, Kamola focuses on the century-long integration into the coffee economy as a contributing factor. He argues that the common approaches “understate how structured economic-material relations made the conditions for genocide possible (571)” and aims to show that “what is commonly understood as a local ‘ethnic conflict’ can simultaneously be described as an over- determined symptom of a particularly violent neoliberal restructuring of the global capitalist economy (573)”. The following quote highlights some of the interrelatedness at the time: “While firearms were purchased from abroad with foreign aid money, major players in the coffee industry were busy supplying the hoes, axes and machetes. The largest importer of machetes in this period was Félicien Kabuga, a friend of [president] Habyarimana and a wealthy coffee exporter. Rwandex Chillington, a joint venture between the British company Plantation and General Investments and the coffee production company Rwandex, was the largest domestic producer of metal tools and sold more machetes in February 1994 than during the entire previous year (586).” These are only a few examples to illustrate the negative repercussions that have resulted partly and indirectly due to coffee politics, even though there may be no direct causal linkages. The next section will complete the overview of the coffee market in the 20th century.
2.4.3 Market developments in the second half of the 20th century The second half of the twentieth century saw several noteworthy developments in the global coffee markets. As far as consumer markets are concerned, Japan emerged as a rising and significant market for coffee. It was first General Foods and Nestlé that entered the market at the time the country sought westernization; by the mid-1970s there were 21,000 coffeehouses in Tokyo. The soluble coffee segment, Nestlé being the largest producer of instant coffee, also grew in Europe at that time, however, it was not equally popular everywhere. The European coffee market has for obvious reasons always been much more heterogeneous than the American. While Britain and West Germany increasingly consumed instant coffee, Italians
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Master’s Thesis Brunner stick to espresso till this day and Scandinavia has traditionally preferred high quality and, at that time, regular drip coffee. The large roasters were Douwe Egberts, Jacobs, Eduscho, Tchibo, Lavazza and Gevalia, bought by General Foods in 1970. Given the recovering economy after World War II, coffee consumption in Europe overtook that of the US with about half of the world’s coffee by the 1970s, while the US consumed about 40%. The relative decline of the American coffee market, from about three to about two cups a day between 1962 and 1974, might also have been due to new concerns about the negative effects of coffee on human health – none of which were based on solid scientific evidence – or the fact that soft drinks surpassed coffee in 1976 as the most widely consumed beverage. It was a time where small roasters were unsuccessful, whereas thousands of retail outlets were opened in Europe by Tchibo and Eduscho, focusing on Arabica blends (Pendergrast 273, 276-277, 284, 292).
2.4.3.1 Specialty coffee and the Starbucks revolution On the world market GF, P&G, Nestlé and Jacobs were competing in the mass-marketed canned coffee segment; however, slowly but steadily small roasters with a focus on quality beans and European inspired coffee craftsmanship began to make their way into the American market. In 1966 Peet’s Coffee & Tea opened its doors in Berkeley, arguably being the first specialty coffee business in America. Its owner of Dutch descent had not only travelled the coffee growing countries of the world, making him an expert on where to find the best beans, he had also worked for some of the big players in the industry and had been long wondering why America of all places consumed low-quality coffee and did not seem to care. So the intention of his own business was to make available high quality coffee beans for home use as well as brew it in the coffee bar. People started to sniff, sip and swoon their coffee with newfound expertise, not unlike they would taste wine, Peet’s became an attraction thanks to high quality beans and brewing expertise – and to a lesser degree due to the show he put on roasting the beans right on site (265-66). This sparked what later came to be known as the specialty revolution or sometimes called the Starbucks revolution.
In 1971, inspired by and with the help of Peet’s, three Seattle friends who knew each other from college – Baldwin, Bowker and Siegl – opened a coffee store in the city selling mainly high quality whole beans and supplies – the original Starbucks. The first years were promising, as specialty coffee became increasingly popular. The specific term specialty coffee was coined in that period, in a 1974 issue of the Tea and Coffee Trade Journal, reporting on this new gourmet coffee movement (279-80). By 1980, specialty coffee stores had become a part of urban America, moving into suburban and even rural areas and the scene of coffee enthusiasts
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Master’s Thesis Brunner dedicated to quality grew largely unnoticed or ignored by the large roasters or the National Coffee Association (296).
In 1982 the Specialty Coffee Association of America was founded, initially by 42 members, and three years later the specialty coffee segment of the market was an estimated 5% (308). Starbucks was taken over by Howard Schultz in 1987, who also was inspired by Italian baristas brewing full-bodied espressos and steaming milk to cappuccino perfection (312). According to a Forbes article of 1995 the major roasters had literally overslept the rise of specialty coffees and were now missing out on the boom enjoyed by small-scale roasters (331).
Americans, by the mid-1990s, enjoyed the Starbucks experience virtually everywhere nationwide and were guaranteed quality coffee in a particular atmosphere they themselves had helped to create. Starbucks came up with their own very specific terms for drinks and sizes, today known all around the world. Instead of small, medium or large, Starbucks beverages came in short, tall or grande, later also venti. Schultz made sure his customers were comfortable, enjoyed his background music and he catered to those who just wanted a quick cup of coffee to go as well as to those who spent hours chatting with friends, or who appreciated Starbucks for the communal solitude it offered. The mix of coffee idealism and professional chain franchise management based on standardized consumer goods worked perfectly; in 1991 over 100 stores made $57 million in sales. The following year Starbucks went public successfully, within three months shares were up from $17 to $33 and the company was worth $420 million. A few years later the number of stores had quadrupled and the rate of new openings was at one each business day (335-338).
In 1996, with well over 1,000 outlets in business, Schultz brought the Starbucks experience to Tokyo, where the Japanese happily lined up to buy his coffee. Contrary to the big roasters in the industry, who regularly spent millions and millions on advertising and marketing hoping to gain back a few percent market share from their competitors, Starbucks grew popular without a single national campaign, simply by word-of-mouth. During its first quarter of a century in business less than $10 million were spent on advertising – other coffee companies regularly spend multiple that amount on one single campaign. Additionally, Starbucks started to make money while advertising itself, selling mugs, thermoses and all kinds of other franchise featuring the famous mermaid (340-341).
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2.4.4 The most recent coffee crisis In recent literature on issues regarding the coffee sector, the reader typically finds him- or herself confronted with references to the coffee crisis, which may seem confusing considering the very volatile and crisis-prone coffee market history. What is meant is only the most recent crisis. There is abundant research on the impact of that crisis on many different producer countries: Renard & Ortega Breña (2010), for instance, fiercely criticize the liberalization of the coffee market and especially the deregulation of the national coffee sector in Mexico. The powerful roasters, processors and traders in the country, most notably Nestlé, have made it nearly impossible for small farmers to gain reasonable prices for their crops and even the access to the fair trade and organic niche markets was made difficult. The results were staggering levels of migration and wide-spread dependence of those left behind on remittances. Watson and Achinelli (2008) focus on the effects of the coffee crisis on conventional small-scale coffee farmers in Brazil, where neoliberal reforms have resulted in increasing marginalization, soil degradation and overall rural decline. Even more alarmingly, Rettberg (2010) examines the link between the breakdown of the ICA and the outbreak of violence and armed conflict in Colombia. While some results of the crisis were very country-specific, the underlying factors of the big picture are mostly the same and will be discussed in the following sections, providing the basis for further analysis.
Typically, the beginning of the crisis is said to coincide with the end of the ICA in 1989/90 when green coffee prices fell sharply to the lowest levels in the century and remained extremely low for several years. For the period 1990-93 the average real price indicator was only 42% of the period 1985-88, the final years of the regulated ICA period (Bacon 2005: 497, Ponte 4412). If we compare the years 1989, before the crisis and 1995, well into the crisis, the figures are even more striking; the indicator price had dropped from $1.34 to only $0.77 per pound, a decline of nearly 75% (Brown 2014). According to the ICO this coffee crisis marked the “longest period of low prices ever recorded (2014: 2)” and the organization seems to agree with other research that volatility in the free market period has been higher than during the ICA. Since price volatility is an ever present factor in the coffee world, a closer look at it should be of interest.
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2.4.4.1 The problems with volatility The price volatility of coffee has always been of concern to all stakeholders in the sector. The ups and downs of the last forty years are visible in Illustration 4, showing also the crisis starting in 1989. From a macroeconomic and govern- ment point of view in pro- ducing countries, the most Ill. 4: Coffee price development ~1975-2016 pressing issues regarding the crop have been and continue to be export earnings and tax revenues. The concern about the “instability in producer incomes” comes in third on the list. On the importing side, volatility is difficult for roasters to deal with and it “affects profit margins for traders and stockholders (ICO 2014: 3).” I would like to point out that I consider such representations somewhat misleading, because it sounds like there are simply several parties for whom price volatility of raw coffee is an inconvenience. In fact, however, there is a clear relationship of inequality between the parties on either side of the chain, because even the ICO, which represents both sides, does not explicitly mention poverty of coffee farmers and coffee workers as a result of the crisis. Researchers in the field (e.g. Bacon 2005, Eakin et al. 2006, Ponte 2001), who have focused on the situation in producing countries have consistently highlighted the devastating effects of low and volatile coffee prices to farmers. It is important to consider that the livelihoods of some 25 million families that produce and process coffee beans are at stake, which are highly vulnerable.
The basic reasons for price volatility have been the same for the last one and a half centuries. Every season the yield of a coffee crop depends on weather conditions, i.e. changes in temperatures and rainfall such as frost or drought, which can have extensive effects on the harvest. Similarly, diseases or pests can be a problem (Ponte 4412). The most recent outbreak of hemileila vastarix, the coffee leaf rust, for instance, caused damage to up to half of the coffee trees in the affected areas in central America (ICO 2014: 7). It attacks the leaves and prevents the cherries from ripening. If any of these factors affect the largest coffee producer Brazil, this will dictate the price of coffee worldwide. Another contributing factor to price volatility lies in botany. Upon planting, coffee trees take several years to mature and yield beans, which emphasizes the cycle of ups and downs. Especially in the past, increased coffee production 25
Master’s Thesis Brunner would be promoted in times of high prices and about four years later the resulting crops would flood the market causing prices to fall until other factors would help to raise them again. More recently, the chronic overproduction is not only due to overplanting but also due to technical innovations aiding the growing and processing of coffee. Yet, research has shown that another powerful factor has been influencing the market since the beginning of the crisis, namely the rise of the futures market, or stock market speculation on coffee prices. Originally, the purpose of a futures contract was to fix prices in advance for a set date in the future, to avoid the risk of declining prices in the physical commodity market. During the 1980s, before the unregulated market period set in, the amount of coffee traded on the futures market was about four times that of coffee traded on the physical market. That is not a lot at all, compared to the free market period in the early 1990s where that ratio had risen to 11 times. The original purpose of hedging price risks through the futures market, is lost if price volatility of the futures themselves becomes too high. This typically happens due to increasing speculative activity on top of the basic demand and supply factors that influence the price. During the 1990s new actors such as investment funds have increasingly entered and affected commodity markets. Such funds do not necessarily act on actual supply and demand trends of the real coffee market and therefore contribute to increased volatility, which has no sensible basis in the reality of the coffee sector. In other words, actors that are not part of the sector may affect the price of coffee, which in turn essentially determines the livelihoods of farmers, workers and small-scale traders in producing regions. Rising price volatility thus affects those the most who do not have hedging instruments, or often any other type of security, at their disposal. Figures of price variability confirm this problematic trend. Between 1982 and 1989, with the ICA intact, the monthly price variability was at 14.8%; that figure rose to 37% and 43% in the periods of 1990-97 and 1998-2000 respectively (Ponte 4412-13). It is difficult to determine exactly the role of speculative activity in coffee prices, however, it seems safe to conclude that it can be quite extensive.
2.4.4.2 The coffee commodity chain In the course of the major coffee crisis, researchers have recorded structural changes and shifts in power within the coffee commodity chain. With the exception of directly traded coffee, green coffee typically takes the following steps on its way to the consumer: Small-scale farmers usually sell it to their cooperative who sells it to an export company, or the farmers themselves sell it to the export company. Depending on the area, there is often an intermediary who buys the beans at the farms and takes and resells them to the processing plant or the export company. Jaffee (2007: 37, 77), for instance, provides interesting insights into the role of such middlemen – local coyotes – who are both essential and problematic in Mexican coffee producing regions. 26
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Similarly, the role of such middlemen has been heavily debated in India and Ethiopia, where they are called sabsabies. On the one hand, they have been shown to abuse their market power, on the other they provide a service to smallholders (Pelupessy 2007: 200). Before the beans are exported, they need to be processed, wet or dry, which typically happens at cooperative-owned facilities. Apart from small-scale farmers, there are large estates in the industry in some countries that sell to export companies, or also likely, directly to roasters in consuming countries. The predominant route goes from export companies to roasters, while some cooperatives sell directly to roasters or via trading houses of the consuming country (Valkila 2010: 264). Once the coffee is roasted, about 70% is distributed via supermarkets and other retailers, while the other 30% is consumed in restaurants, hotels, bars, institutions i.e. at work and specialty coffee shops (Pelupessy 195).
I have mentioned above the economic and geopolitical changes that came about in the coffee sector after the disintegration of the ICA and with the beginning of the neoliberal free market paradigm. The void of power created by the retreating state governments was quickly filled by transnational trade and roasting companies. It was also a time of increasing corporate consolidation so that by 1998 five large transnationals – Philip Morris, Nestlé, Sara Lee, Procter and Gamble and Tchibo – controlled 69% of the market, while eight export-import companies with similar clout were in charge of 56% of the coffee trade (Bacon 2005: 499). Additionally, income distribution along the coffee commodity chain was altered in favor of the demand side. During the 1970s the portion of value retained by the supply side was around 20%, while 53% went to consuming countries. By 1995 those figures had dropped to 13% and risen to 78% respectively, illustrating very well the transfer of resources from producer to consumer countries (Ponte 4413). By the mid-2000s, six trading companies, the largest among them Neumann and Volcafé, handled half of all global coffee imports. The multinationals Nestlé, Jacobs/Kraft GF, Sara Lee/Douwe Egberts and P&G together with Starbucks controlled 75%- 80% of the US market. Also in Europe the big players continued to be market leaders, e.g. Nestlé in the UK, Kraft in France and Sweden, Sara Lee in the Netherlands and Belgium. In Austria, Germany, the Czech Republic and Hungary Tchibo holds first place (Pelupessy 192, 197). According to the author, the producers receive 10%-25% of the consumer price in the chain (208).
2.4.4.3 Small-scale farmer livelihood vulnerability The most recent coffee crisis has also prompted a series of studies that investigate the local level of producer livelihoods, i.e. the way coffee farmers, their families and other people in
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Master’s Thesis Brunner producer communities such as workers, who harvest and process the beans, are affected by the coffee price and changing structures in the sector within the free market period. Bacon (2005: 497) reminds us of the fact that, while we drink some 2.3 billion cups of coffee each single day, there are about 25 million families in the South that essentially live off the production and processing of coffee beans. Their daily lives depend to a large part on the income gained through coffee production and with increased price volatility, these people find themselves under more and more pressure as their livelihoods are at risk (Bacon 2005: 497, Oxfam 2006: 3). For an in- depth study about the livelihoods of small-scale Mexican coffee farmers and their families, compare Jaffee (2007).
Although I have mentioned the large estate production and monoculture as one form of coffee cultivation, 75% of all coffee is grown on small-scale family farms in altogether 85 Latin American, Asian and African countries. Within the so-called ‘livelihood vulnerability framework’ the term vulnerability refers to “an external source of stress or shock and an internal component describing the exposure and response to this shock as it is interpreted through the socio-ecological relationships that shape an individual’s or group’s livelihood assets.” Livelihood in turn is defined as “the means of gaining a living, including the tangible and intangible assets that support an existence (Bacon 2005: 501)”. A cultural dimension can be added to the definition when we look not only at how people make a living, but include how they make it meaningful, which allows some understanding of subjective farmer perceptions, narratives, feelings of well-being and empowerment. Usually, in times of a crisis, regardless of whether it is caused by natural disasters like hurricanes or earthquakes, or by market forces, local producers and workers in the coffee industry resort to various coping mechanisms: taking children out of school to help with the farm work in order to avoid costs for hired labor, migration of one or more family members who seek paid work elsewhere and then send money back home to their families, increased borrowing of money, crop substitution or diversification to decrease the dependence on coffee as the single source of income. Moreover, these recent studies have shown that the most important intangible assets to reduce vulnerability in times when livelihoods are under pressure, are relationships and networks of relatives and friends. In addition, the extent of people’s vulnerability to declining coffee prices depends on where in the coffee commodity chain they find themselves (e.g. hired worker for harvesting vs. farmer), whether they have access to (more) land, credit, additional employment and on how well- established their social networks are (Bacon 2005: 502-3).
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2.4.5 From the 20th to the 21st century We have seen how forces of globalization have shaped the coffee sector and today it is more than ever clear that liberalization policies and free-market ideologies are what have characterized the sector over the last several decades – and the coffee sector is certainly not alone with this development. It developed according to the changing worldwide economic paradigms that have been perpetuated by Western institutions und politics. Much of the literature on these relatively recent developments views them as negative because they have put people and environments under pressure that were already experiencing strain. Today five transnational corporations control more than half of the world’s coffee market. For giants like Kraft and Neslté coffee remains a commodity to be bought at the lowest possible price and processed for sale to the masses. Such treatment of the commodity influenced the extremely low prices of the 1990s and early 2000s and is also partly responsible for the devastating environmental effects coffee cultivation can have when production relies heavily on pesticides, chemical fertilizers and shadeless, densely planted lots (Topik et al. 8). Of course, it always depends on who you ask, though. As an institution that traditionally promotes neoliberal policies, the World Bank claims that market interventions like the ICA “are generally regarded as unsuccessful” and with a little econometric help they manage to “show that the liberalization of coffee markets has benefited producers substantially both in terms of a higher share of the world price of coffee and higher real prices (Russell et al. 2012: 514-515)”. Specifically, the article covers only Brazil, Guatemala and India and towards the end it is mentioned that the impact of liberalization on the input costs of producers was not taken into account in the study and that liberalization might cause new problems (535-536). Topik et al. (7) in turn highlight that with neoliberal reforms creating a lack of government assistance, as well as spikes in oil, fertilizer and pesticide prices, the production costs of many producers have risen considerably.
2.5 The coffee economy in terms of Development Theories “The regional impact of the coffee crisis can be considered an example of the frequent economic crises that affect the global South (Bacon 2005: 501).” This very simple statement refers to the chronically problematic economic situation in many countries of the global South whose dependence on commodities, together with other factors, results in major disadvantages in the international arena and on the world market. On a similar note, Pendergrast concludes in his final chapter: “Coffee is inextricably bound up in a history of inequality (373).” We have already heard quite a bit about history and economic hard facts of the coffee industry, but for a more critical analysis of the sector I will now investigate the idea of development, provide some insights into the field of development studies and as it relates to coffee. 29
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2.5.1 A short note on definitions The issue of definitions has always been of special importance within the field of development studies and in general is of great relevance in scientific research. From a very broad perspective, there are many very diverse types of development theories that understand development differently, therefore, what development entails depends very much on context, perspective and the period of time we investigate. The phrase ‘development thinking’ has been used to refer to the total sum of ideas about development, development theory, strategy and ideology (Potter et al. 2008: 79-80).
In light of the different historical contexts, researchers have come up with a series of terms and definitions to analyze the discrepancies in power and development among the countries of the world. The most well-known terms include: first-, second-, and third-world countries, developing countries vs. industrialized countries, developed vs. underdeveloped countries and countries of the North vs. countries of the South or the global North & South. One of the problems with such dual definitions or dichotomies and the underlying language is that they label countries and world regions in a way that seems static and definite, they generalize highly complex and diverse issues that are manifested in a much more differentiated manner in each country and are subject to change. All these terms imply a hierarchical relationship between the categories they denote, and they come with positive and negative connotations. Even the terms North and South that I frequently refer to, which were coined specifically to present things in a neutral, unbiased light, do not completely live up to that expectation. That is because new terms for long-standing issues cannot magically change the way we think about such issues. Still, I have chosen North/South because they refer to geographic entities and lack at least obvious positive and negative connotations that come with developed or underdeveloped. The North is typically used to refer to North America and Europe, Australia and Japan, while the South includes Latin America, Asia and Africa. European colonialism, we might say, has caused development and underdevelopment to take place asymmetrically from North to South, even if the geographic terms fall short of describing the whole extent of dominance and dependency relationships (Englert et al. 2006: 13). Or, as the authors put it: “’Nord’ und ‘Süd’ werden zu Metaphern eines auf Ungleichheit basierenden und stets neue Ungleichheit hervorbringenden Dominanz- und Abhängigkeitsverhältnisses (14).“
Another dichotomy that can be helpful in the context of this thesis and that structurally describes similar relationships is center vs. periphery. It is more flexible in terms of gradation, overlaps
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Master’s Thesis Brunner and regional differentiation and also, depending on context and perspective, one area can be considered both center and periphery. More details on this model will be discussed below.
2.5.2 From Modernization to Dependency Theories Through the first half of the twentieth century development was most frequently discussed in the light of modernization theories. It then essentially meant progress in a clear direction, a development according to western standards, a so-called catching-up to the North by all the countries that once were colonized. Such development was defined mainly in economic terms, but also it entailed the assimilation of cultural and political norms, as well as ways of life. Typically, the South was seen as backwards and underdeveloped, in need of assistance during the modernization process (Fischer et al. 2006: 24). This top-down paradigm of development from the Western world view can be best exemplified by Walt W. Rostow’s famous stage model of economic growth, first published in 1960. He suggested that all countries could simply progress through five stages: starting from the traditional society, to the preconditions for take- off, followed by the take-off itself, the drive to maturity and finally the age of high mass consumption. Rostow himself was anti-communist, strongly believed in the workings of capitalism and in industrialization as the necessary means to start progress away from a traditional society (Potter et al. 89). What authors of modernization theories have in common, is that they typically did not consider historical backgrounds or economic structures as factors of development. Development or the lack thereof was seen as something caused by endogenous factors, most commonly the lack of capital or the lack of efficiency and work ethic. Thus, underdevelopment was self-inflicted due to low levels of motivation, education, rational thinking, democracy, capital etc. The lack of capital was to a certain extent countered by the emerging development aid industry in the first half of the twentieth century. The basic solution to the problem within the modernization paradigm until the 1960s was the development of a modern industrial sector (Fischer et al. 35).
It was around the same time, however, that new ways of development thinking became predominant, because in many countries the catching-up process did not work as well as predicted. This was exemplified by the limits of import substitution through industrialization. Generally, the capitalist world system was in economic and political crisis and increasingly also its theoretical base was challenged, as it became obvious that it would not promote positive socio-economic development in the South. Developmental theorists increasingly studied the asymmetrical, forced incorporation into the capitalist world system and its socioeconomic determining conditions as factors that influenced development (Fischer et al. 35-37). Many
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Master’s Thesis Brunner scholars of the emerging so-called Dependency Theories, themselves came from countries of the South. Most notably, Raúl Prebisch, whose contributions will be relevant below; Fernando Cardoso, Brazilian sociologist and later president, who contributed the study Dependency and Development in Latin America (1969); German-born Andre Gunder Frank, who spent much time in Chile as a sociology and economics professor, is most known for The Development of Underdevelopment (1969) and more recently Arturo Escobar, author of Encountering Development: The Making and Unmaking of the Third World (1995). They share the emphasis on exogenous as opposed to endogenous factors of development. Essentially, dependency theories arose from formative critiques of colonial and neo-colonial relationships and consider globalization in its historic aspect, i.e. starting from the era of colonialism, constituting hundreds of years of exploitation of resources and people, the incorporation of the South into world trade that soon tied together the rich and the poor, the imperialist and the colonized. “Thus, dependency-school theorists were reacting explicitly to ‘modernization theorists’, who said that poor nations lacked the capital (investable piles of money in a few hands), values (of hard work and investment), and business practices (like modern accounting) to make firms and nations succeed. Dependency theorists considered this ‘blaming the victims’ (Hite & Roberts 2000: 9)”. The term dependency – dependencia in Spanish – describes very well the unequal aspect in the relationship between North and South. A country of the South is dependent on the North if its entire socioeconomic development is determined by external factors and if at the same time it is not able to exert the same sort of power on the economic partner. An asymmetrical type of interaction works in favor of the more developed, industrialized countries and to the clear disadvantage in control of the developing country. Both sides in this relationship determine each other, the constraints and power of the North over the South, however are much stronger than in the opposite direction (Kolland 2006: 93).
According to Raúl Prebisch countries of the South are ‘victims’, as they were termed above, because they have been subordinated by their European colonizers and have first and foremost served as a cheap source of raw materials and as an export market for the more expensive European manufactured goods (Hite & Roberts 9). Undoubtedly, coffee is an excellent example for such a primary commodity. The result can also be interpreted as a center-periphery model with advanced means of production located in the Northern centers and the Southern peripheries remaining limited to their role as raw material supplier. In this understanding of dependency theory underdevelopment is not simply a phase that a country goes through on the path of development, as would be suggested by modernization theory. On the contrary, development and underdevelopment are simultaneous processes, which can be analyzed as the two different 32
Master’s Thesis Brunner sides of capitalism that have developed over time. What today is understood as the developed world was never underdeveloped, it was only not-yet-developed (Kolland 93). The South has been and still is at a clear disadvantage in this constellation, which will shortly be outlined below.
2.5.2.1 Terms of Trade and the Prebisch-Singer Hypothesis In a situation where one country that is less powerful only exports agricultural commodities and the other, more powerful country, benefitting from fairly cheap raw materials, exports manufactured goods, there is one fundamental economic problem: the trend of declining terms of trade, to the disadvantage of the commodities exporter. This is because the value of manufactured goods tends to increase over time, while that of primary commodities tends to decrease. Thus, countries that mainly depend on raw material exports have to sell ever higher amounts of their commodities and receive less and less in return over time. During the 1950s when Raúl Prebisch worked for the Economic Commission for Latin America (ECLA) such declining terms of trade where identified as the key reason why Latin America remained stuck in underdevelopment (Hite & Roberts 9).
It was previously assumed that the opposite would be the case, i.e. that the terms of trade would over time develop in favor of commodity exporting countries. Without going into too much detail about the theory and practice of international trade, it is crucial to note that today’s international trade policies are still based on the famous theories and models of Adam Smith, David Ricardo, Eli Heckscher and Bertil Ohlin. These models have in common that they generally assume positive effects of trade between two countries, even if one country is clearly disadvantaged as far as the input factors – land, labor and capital – are concerned. Raúl Prebisch und H.W. Singer have provided empirical evidence for their hypothesis that the central assumption of prevailing trade theories – that through trade a world market will be beneficial for development of all parties – was flawed. Mere logic should suffice to understand that declining terms of trade pose a problem in theory and practice of international trade. The Prebisch-Singer hypothesis, however, also shows that even with constant terms of trade, developing countries face disadvantages in their exchange with developed regions. As a result, trade is not necessarily beneficial for both parties in the long run. Only with fairly strongly increasing terms of trade could the commodity exporting countries escape deterioration of their position. It took many decades of fierce discussion and ever more complex econometric analyses, but since the 1990s the Prebisch-Singer hypothesis about the tendency of commodities to promote deteriorating terms of trade is generally accepted as correct (Raffer 2006: 116-117).
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This does not mean, however, that this finding has since been considered much in the practice of international trade. Related to the deteriorating terms of trade is also the theory of unequal exchange. In a nutshell, it states that the same outputs are compensated unequally in developing and industrialized countries. For example, this means that the worker who loads bags of coffee onto a container in Africa will earn less in real terms than the worker who unloads them in Europe. The economic dependence of the South on the North is partly due to the South’s relatively one-sided structures of production, i.e. reliance on the primary commodity sector. The theory of unequal exchange explains why a liberalized world market does not work as an equalizer of the unequal status quo, on the contrary, it can reinforce and further intensify unequal exchange (Raffer 118).
2.5.2.2 World Systems Theory To complete the section on theories I will briefly discuss the above mentioned World Systems Theory before going into detail about how all the theories can help us understand the economic situation and challenges faced by coffee-exporting countries. World systems theory emerged from a variant of dependency theory, sometimes it is also referred to as its own type of dependency theory, and generally attempted a more comprehensive analysis of development processes including a historic perspective as well as the workings of capitalism and the globalized economy (Hite & Roberts 11). Accordingly, Immanuel Wallerstein’s world system theory is essentially based on today’s capitalist world economy, which – in this particular theory – originated in the 16th century and is held together not by a common political structure or culture, but by the global division of labor (2004: 23-24). The world consists of cores, peripheries, and semi-peripheries, as well as external areas, which are not yet incorporated into the capitalist world system. The different regions produce different goods and services, hence the global division of labor. There are some regions in the world that produce core-like products while others produce peripheral ones. The difference between core and periphery lies in the profitability of the production process. Core products offer higher profit margins because they are produced within quasi-monopolies, whereas peripheral products face much harsher competition and are therefore less profitable. The surplus flows from the periphery to the core; the exchange is unequal (28). The similarities between Wallerstein’s concept of core and periphery products and the above described pair of commodities vs. manufactured goods should be easy to grasp: a typical product of the periphery is an agricultural raw material, a typical product produced in core countries could be new technology, e.g. computer software. Over time, production processes shift as the world system develops and regions that were once peripheral might ascend to become semi-peripheries or even cores as others drift the other way. 34
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Wallerstein describes this as a cyclical development in the world-system where phases of expansion are followed by phases of stagnation and production processes are relocated in the light of increasing competition. Through such shifts, more and more people become integrated into the world-system as low-wage workers, the problem being that at some point there will be no additional labor available for the capitalist system, which requires ever more expansion (32). Thus, also Wallerstein’s world-system has a hierarchical structure that is characterized by exploitation. Raw materials are extracted mainly from the periphery and exported towards the core states, where products are made that require much higher technology and which are then sold for a larger profit, rendering the core nations wealthy. The peripheral states are strongly dependent on trade with the core and the semi-periphery. The latter, while being exploited by the core, also acts as exploiter of the periphery and is under most pressure (Halsall 1997).
2.5.2.3 The theories’ implications for coffee economies Which conclusions can we draw if we apply these theories of development studies to the current situation of coffee economies? In connection with the most recently discussed theory by Wallerstein, we find that when coffee started conquering the world it was more or less forcefully established as a crop for export, thereby incorporating previously external areas and in many cases that meant virgin lands of untouched rainforest, into the world system as peripheral regions. Land and labor were exploited, coffee cheaply exported to Europe and North America with much more profits reaching the core than remained in the periphery. The core, being on the demanding side of the system, has always been more powerful. Typical coffee producing countries are peripheries that export coffee as a raw material, requiring relatively little technology. The beans are roasted in the importing countries, which requires a higher level of technology. Some coffee producing countries have moved towards being semi-peripheries since their incorporation into the world market. Brazil for example has developed other important economic pillars, such as various industries. The fact that it is part of the so-called newly industrialized BRICS-countries as well as a part of the G20 is testimony for its economic success. It is indeed an excellent example to show how the coffee sector has shaped the history of the entire country: After its integration into the world system Brazil gained independence from Portugal in 1822 and from then on developed into the most important coffee producer in the world. By 1888 it was – compared to other coffee producing regions – well developed. It produced more than twice the amount of coffee than all of Latin America combined, its GDP was presumably higher than that of its former colonial master and Rio de Janeiro was a bigger city than Rome or Madrid. Also, by 1890 Brazil had the longest railroad system outside of Europe or the United States, the extent of which was only matched by that of India. Still, the 35
Master’s Thesis Brunner exploitative nature of the country’s economy cannot be denied, neither can the crucial role of coffee in Brazil’s economic and political development. From the perspective of dependency theory, it is indisputable: “dass die auf Sklavenarbeit beruhende Kaffeeproduktion die Abhängigkeit […] Brasiliens im Weltsystem begründete (Kaller-Dietrich 2006: 133-134)“.
Brazil is the single most powerful country in the coffee sector, and while its role as an exporter of coffee is remarkable, it also features a quite extensive domestic market. Brazilians consume about half of the coffee they produce, whereas on average only 26% of coffee is consumed where it is grown (Pendergrast 380). If we considered only the coffee industry, blending out the rest of the world economy, I would classify Brazil as a clear core country, because it is already in possession of the raw material and also has a domestic coffee roasting industry, i.e. core-like technology to produce the more sophisticated final product. Other, much smaller coffee producing countries, who might lack a domestic market and consequently domestic roasters altogether, would be classified as peripheral regions, since they are much more dependent on other actors in the system. For example Tanzania is a country dependent on agriculture, which accounts for one quarter of GDP, employs 80% of the population and generates 85% of exports. Coffee is the number one agricultural commodity, but the 2015/16 production of 800,000 bags is not very significant within the coffee sector as a whole. In comparison, the leading African coffee exporter, Ethiopia, produced 6.4 million bags in the last season, and world production was roughly 143 million bags. (CIA Word Factbook, ICO Country Infographics). With 1.5kg of annual per capita consumption Ethiopia has a much larger domestic market than Tanzania, where the respective figure is 0.07kg (Pelupessy 202).
After concluding this first part of the paper and with the information of coffee as a commodity in mind, I will move on to the second main section, concerning more precisely ethics in the coffee industry.
3. Ethics in the coffee industry Approaching the context of ethics as it relates to the coffee industry we find that there are numerous issues that can be investigated. Most frequently, ethical concerns arise with regard to the exploitation of people and the environment for the purpose of profits gained from coffee cultivation. In light of the most recent coffee crisis, ethical issues typically discussed concerned farmers’ livelihoods. In addition to the concerns regarding the situation in producing countries, we could also include the working conditions of people in the coffee industry of the consuming countries, e.g. employees who unload the containers or who are in charge of the roasting
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Master’s Thesis Brunner process, up to the waiters who serve the coffee drinks to your table in the coffee house. Yet, for the purposes of this paper, the spotlight will remain on ethical concerns in the producing countries, whereas the importing countries will be considered only in their role as consumers. The first step will be to provide the reader with some definitions in order to gain a clear picture of what morals and ethics in general, but more importantly in relation to the coffee industry are about.
3.1 Morals and ethics The terms morals and ethics in everyday use are frequently used synonymously. There is, however, a quite clear distinction between them, summarized well in the following quote: “[U]nter ‘Moral’ [versteht man] einen Komplex von Regeln und Normen, die das Handeln der Menschen bestimmen oder bestimmen sollen und deren Übertretung zu Schuldvorwürfen gegen sich selbst bzw. gegen andere führt. Dagegen versteht man unter Ethik die wissenschaftliche Theorie der Moral. Ethik befasst sich mit den Prinzipien der Moral, mit dem Zusammenhang der einzelnen Normen, mit ihrer Begründung und Konsistenz, mit ihrer Entstehung und Funktion, sowie mit Vorrangregeln für die Fälle, in denen es zwischen verschiedenen Regeln zu verschiedenen Handlungsempfehlungen kommt, zu Konflikten also (Homann & Lütge 2013: 5)“. Put very simply, the basic idea in ethics is that human action and its consequences can be judged as morally right or wrong, good or bad. Different approaches to ethics focus on the intention and motive behind an action, the action as such or the action’s consequences as the main category of analysis (Homann & Lütge 7). Capitalism and its free market economy is widely presumed to have evolved as the superior economic system, meaning superior to other forms of economic organization, in particular superior to socialism. Still, the globalized world of today is facing a myriad of issues that are morally wrong such as hunger and poverty, underdevelopment, child mortality, discrimination of women, organized crime, environmental destruction, to name but a few (4). In the following analysis of ethics regarding the coffee sector, I mainly draw on developments in the fields of ethics in economics and business, and to a lesser degree on environmental ethics.
3.2 Ethics in economics and business Similar to ethics being the theoretical approach to morals, economics can be regarded the theory of business and macroeconomics (Homann & Lütge 11). Traditionally, the spheres of economics and ethics are not easily reconciled, neither in academia nor in practice. On the contrary, especially in business we frequently observe behavior and actions that would be classified as immoral – corruption, fraud or tax evasion. The so-called Panama Papers have most recently shed light on tax evasion and money laundering facilitated by offshore bank accounts and shell companies (cf. ICIJ). The field of business ethics tries to bring together two
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Master’s Thesis Brunner spheres that on first sight seem to have not much in common (Heidenreich 2012: 9-10). It is not surprising therefore that the exact links between ethics and a free market economy or the role moral concerns should play within the globalized capitalist system, remain ambiguous. While business ethics and especially recent developments in the field such as ethical consumerism seem like rather modern phenomena, it is worth mentioning that the question of morals with regard to economic action has long since concerned people. The fact that Adam Smith – so typically referred to as the father of modern economics – was first and foremost a moral philosopher, is telling of that (Homann & Lütge 4). The man, whose tale of the needle factory no book or lecture about economics and business can do without, whose Wealth of Nations has reputedly become the first bible in the field, was much more worried about society’s well-being than about profit maximization. This becomes very apparent in his Theory of Moral Sentiments (1759), where he outlines his ideas on moral and political philosophy. We can derive from there the assumption that Smith would not have approved of the neoliberal paradigm insisting on the ultimate power of markets and their economic actors while demonizing government intervention: “Smith did not favor as hands-off an approach as some of his self-proclaimed followers do today—he believed that states could and should re-distribute wealth to some degree, and defend the poor and disadvantaged against those who wield power over them in the private sector (Fleischacker 2015)”.
One of the basic dilemmas in reconciling economic goals with ethical ideals is the role of competition as an integral part of the capitalist system. Those economic actors who choose to invest more resources for moral reasons might face disadvantages in a competitive environment and be forced to exit a market. On the other hand, competition is seen as an important driving force for innovation and arguably one of the reasons the current level of affluence and quality of life could be achieved for many people, which is also of moral value. So the goal in economic ethics has become to have competition service moral intentions, a goal that Adam Smith would also have supported (Homann & Lütge17-19). According to Suchanek & Lin-Hi the underlying norm for an economic ethic can be phrased: “Investiere in die Bedingungen der gesellschaftlichen Zusammenarbeit zum gegenseitigen Vorteil (2008: 72)”. Such investments are essential for a company’s so-called license to operate i.e. the legitimacy of its actions as judged by society.
3.2.1 Corporate social responsibility I have already talked in this paper about the wave of increased liberalization of the global economy after the end of the cold war. This process was accompanied by the retreat of the state
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Master’s Thesis Brunner and declining government intervention into economic matters, leaving a void of responsibility and guidance. Thus, economic actors and civil society actors have increasingly shaped social processes (Heidbrink 2008: 15). Consumers, NGOs and critics of globalization and neoliberalism have had good reasons for questioning the morals of companies. Especially global corporations have again and again been criticized for lack of responsibility regarding for instance environmental impacts or labor issues. Famous examples include the Shell Brent Spar case (cf. Greenpeace online), where public and NGO pressure resulted in the company reversing their plan to dispose of the oil storage and tanker loading buoy in the deep sea. Nike was publically denounced for accepting child labor in their production chains (cf. Wilsey & Lichtig) and Nestlé has faced numerous scandals, for instance regarding powdered baby milk products (cf. Muller) and bottled water (cf. Bottled Life documentary). One of the most recent shocking events was the collapse of a garment factory in Bangladesh in May 2013 where seamstresses produced clothes for familiar Western brands (cf. Clean Clothes).
Over the last several decades companies have increasingly taken on these new responsibilities as economic actors, or so-called corporate citizens. Various different and sometimes overlapping concepts have emerged and been implemented e.g. corporate governance, corporate giving, corporate philanthropy and corporate volunteering, most notably, however, companies’ intentions and actions in this regard have been discussed under the term corporate social responsibility. A single clear definition of what this responsibility entails for a company is lacking, because such definitions and resulting actions are up to the company itself. The spectrum of what CSR means is therefore very wide, but according to the literature general agreement is that it should be more than what famous Milton Friedman had in mind, who said that the one and only social responsibility of business is to increase its profits. One very general and common definition of CSR which will suffice in the context of this paper is that it contains commitments, typically of social and/or ecological nature that go beyond the core interests of the business as such. Today there are hardly any notable companies that do not in one way or another communicate such commitments to the public (Heidbrink 10, Suchanek & Lin-Hi 69- 71). The true effects of CSR on society or the environment as well as the real underlying motives are highly controversial and for our purposes it should be clear: All that glitters is not gold, no matter how sleek and shiny the CSR report may appear.
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3.2.1.1 CSR in the coffee industry For the purposes of this paper, I have found that the so-called Triple Bottom Line idea as a tool of CSR is very suitable for the coffee sector. It entails that a company is not only judged by the economic value it adds to society, but also by the environmental and social value (Elkington 2004: 3). The concept can easily be grasped by and is typically illustrated by a graphic like the one to the left (cf. Ill. 5). In some contexts the three spheres are marked people, profit and planet. It has been Ill. 5: The triple bottom line of sustainability widely used to articulate companies’ dedi-cation to social and ethical, as well as environmental concerns, in addition to the traditional financial goals, suggesting that they measure and report the fulfillment of all three obligations to their stakeholders. Norman and MacDonald criticize that, both on conceptual and practical grounds, the model cannot keep its promises, its rhetoric is highly misleading and it may even “provide a smokescreen behind which firms can avoid truly effective social and environmental reporting and performance (2004:243)”. I therefore consider the triple bottom line model as an ideal, which companies in the coffee business aspire to, rather than a tool of measurement.
As I have outlined above the coffee sector has undergone some considerable changes since the collapse of the International Coffee Agreement in 1989. These changes have increased attention to coffee in relation to CSR, as the commodity chain has become more buyer-driven and CSR initiatives in the sector have stared out most prominently with codes of conduct since the mid- 1990s (Kolk 2005: 228). The development of such codes happened wave-like; in all of the examined cases of multinational corporations investigated by Kolk one company started a dynamic, usually first with internal, then supplier related guidelines, and others followed. The four major MNCs in the coffee sector, at the time of the study, are Nestlé, P&G, Sara Lee/DE and Altria, a part of Kraft Foods. Around the same time also Starbucks was already dealing with public pressure and non-profit organizations like Utz Kapeh, Rainforest Alliance/Sustainable Agricultural Network and others have formulated codes at that time. The latter, however, will more closely by dealt with in section 3.3.1. As far as Starbucks is 40
Master’s Thesis Brunner concerned, it is important to note that it is very different from the large MNCs as it operates in a niche market and is a much smaller player. Interestingly, Starbucks was the first company to formulate quite specific CSR policies with regard to labor conditions and it was the first among said companies that incorporated fair trade coffee into their product range (229-31). Further, Kolk investigates the Europe based 4C, the Common Code for the Coffee Community. It is a joint initiative for the mainstream coffee market going back to 2002 and today unites producers, trade and industry, standard setting organizations and civil society organizations in the coffee sector (4C). While in 2005 Kolk was not sure whether it would be a reliable and viable framework to ensure more responsible and sustainable coffee production, it now has over 300 members in 21 countries and has become something like a CSR umbrella organization that sets minimal standards. Major players in the sector such as Nestlé and Kraft have become members, as have Utz Kapeh, Rainforest Alliance and Fair Trade International. The 4C Code of Conduct describes 27 principles regarding economic, social and environmental dimensions, as well as ten so-called unacceptable practices that have to be done away with, before an application for certification is possible (4C). Kolk concludes in her article that “[t]he route towards a more sustainable and equitable coffee production, nevertheless, still seems to be a long and complicated one (235).” This conclusion makes sense, because CSR initiatives tend to remain rather general instead of very specific in their contents (234).
Even though roasters and retailers frequently proclaim their devotion to high social standards for producers and put independent organizations in charge of the control mechanisms, I choose to remain very skeptical. We can trace quite well the development of CSR for Tchibo, the largest coffee retailer in Germany, Austria and parts of Eastern Europe. As happened also to Starbucks in the US, Tchibo, was publically criticized in 2005 and again in 2008, when it received negative media attention about the working conditions in producing countries. Luckily for Tchibo, they had already employed a leading CSR expert in 2005, who swiftly devised numerous programs to assure the public of Tchibo’s taking on responsibility for their actions and promising better control mechanisms. In 2008, however, Tchibo still refused to publish exact names of suppliers, e.g. for their textile products, and the actual working conditions in the garment factories had not changed (Amann 2008). Since 2008 Tchibo emphasizes CSR in the coffee branch not only by offering FT coffee, but also by focusing on the environmental effects of the entire coffee commodity chain (Becker 2012: 64) This will be further outlined in the following section.
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3.2.1.2 CSR and environmental ethics in the coffee sector Within the field of ethics, environmental ethics is a rather new phenomenon as it goes beyond the scope of classical ethics to include non-human life, as well as entire ecosystems in its system of morality (Gudorf & Huchingson 2010: 3). Other than the classical anthropocentric theories that focus on human life, it is an eco-centric approach concentrating on ecosystems, i.e. “loose associations of species – from subsoil microbes to megafauna and great forests – that live together in countless numbers as citizens in a larger community (13)”. With such an approach in mind, it is possible to critically reflect on environmental issues in the coffee sector. For instance, we can question the morals of humans’ interference with intact ecosystems for economic reasons, like cutting down parts of a rainforest to expand coffee plantations. In part four of this paper I will present a case of Nicaraguan coffee farmer cooperatives that specifically cultivate their land with ecologic factors in mind in order to preserve the remaining virgin rainforests in the region. Since coffee grows best in rainforest-like conditions, the cutting down of these great forests and resulting environmental devastation has always been associated with the crop (Pendergrast 24).
Tchibo has put a lot of effort into CSR related to environmental aspects in the coffee sector. They have increasingly offered products which are environmentally friendly throughout their entire lifecycle, from the sourcing of the raw material, processing, transport, utilization to final disposal. Tchibo says they take the risks of climate change very seriously, therefore opt for a sensible use of energy during the roasting process, in their retail outlets and on their employees’ business trips, all with the goal to significantly reduce CO2 emissions of their enterprise. Similarly, the resource of water in the coffee producing regions is handled with care (Becker 64-65).
More recently, one of the most prominent key words when it comes to environmental concerns about the commodity and related CSR initiatives, has become sustainability. It seems the versatility of the concept has made it especially useful for CSR purposes. As Gunder (2007) notes: “Sustainability, even if a fuzzy, ill-defined, concept, has now reached the near-universal status of being a desired concept of 'good'”, and as such has found wide-spread application in the coffee industry. Whereas until a few years ago roasters published CSR reports, the same documents are now called sustainability reports. Tchibo’s 2014 sustainability report, for example, is 152 pages long, the respective publication by Starbucks, featuring only 22 pages almost seems disappointingly short in comparison. Both, CSR as well as sustainability reports,
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Master’s Thesis Brunner read more like advertising brochures than like serious discussions about sustainability issues in the coffee sector.
A recent study from 2014 focuses on sustainability issues of Nestlé’s Nespresso brand and Starbucks with regard to ethical sourcing of beans and the issue of waste. Even though the business models of these two brands are quite different, with Starbucks being known mostly for the omnipresent coffeehouse chain and Nespresso for more exclusive boutique shops and the capsule system for home use, they are both players in the relatively high priced premium coffee segment, make use of lifestyle in their marketing and promise sustainability in sourcing and production of their products (Hamann et al 2014: 31-32). Nespresso clearly aims for a green and ecological image and launched their AAA Sustainable Quality Programme in collaboration with the Rainforest Alliance. The biggest ecological issue for Nespresso, however, remains the waste problem that comes with their home capsule system. Apart from the problems of collecting and recycling the capsules and the amounts of physical waste generated, aluminum as a material is highly problematic in extraction and processing i.e. the production of the capsules is already extremely energy consuming, generating emissions and producing hazardous waste from bauxite ore. Nespresso therefore has received much criticism for ecological destruction (Hamann et al. 34). Starbucks’ focus lies on community, ethical sourcing and the environment. The company came up with the Coffee And Farmer Equity practices (C.A.F.E.) together with the environmental NGO Conservation International and collaborates with SCS Global Services to ensure the third party verification process. More specifically, Starbucks sets the standards and formulates the criteria while SCS verifies and checks whether suppliers comply with them. According to SCS “C.A.F.E. Practices has significantly benefited more than one million workers employed by participating farms.” According to the company’s 2014 Global Responsibility Report, 96% or over 400 million pounds of their coffee was ethically sourced. Out of that, 95.5% met the C.A.F.E. Practices standard, 8.6% was Fair Trade coffee and 1% was certified Organic, keeping in mind that some coffees receive more than one certification (SCS, Starbucks 2014).
3.3 Ethical consumerism Over the last several decades, the trend of ethical consumerism on part of the individual has developed. It refers to consumers who use their purchasing decisions as a way to demonstrate commitment to certain ethical values (Long & Murray 2013:351). There are several different forms and practices of ethical consumption ranging from boycotts of certain products or companies, to a drastic reduction of individual consumption, so-called voluntary simplicity, but
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Master’s Thesis Brunner vital for the argument here are consumers who are “making purchasing decisions based on values embracing environmental and/or social sustainability (352).” The related concept of political consumerism additionally highlights consumer choices “with the goal of changing objectionable institutional or market practices (Micheletti 2003:2)” For ethical consumers of coffee the range of coffees to choose from, all promising benefits to the producers or the environment, has virtually exploded over the last decade. Tangible outcomes of CSR policies frequently include labelling and certification programs which will be discussed below.
3.3.1 Coffee certification and labelling This section of the paper is dedicated to alternative markets for coffee, or rather market niches of the same world market, which have been growing in recent years. They might offer better conditions and outcomes for the farmers, not simply limited to higher prices for their crops. I will present the most common initiatives and give more details especially about the fair trade movement, its impacts and also criticism.
In light of the extreme inequalities associated with international free trade in coffee and other commodities alike, but also due to growing environmental concerns and growing consumer awareness about food safety, numerous sustainability initiatives have emerged in the coffee industry. They are helping to set new types of standards in international trade that lead to quality- as well as process-oriented changes. The following definitions should be helpful for an overview (Giovannucci and Ponte 286-87).
3.3.1.1 Organic coffee Coffee certified as organic, or Bio on the German speaking markets, is grown under conditions that enhance natural soil activity without synthetically produced agrochemicals. Ecological harmony is restored, maintained and improved, as agencies monitor organic standards on production, processing and handling. Ill. 6: US & EU organic labels
3.3.1.2 Fair Trade coffee Fair Trade puts emphasis on the improvement of livelihoods and well-being of small-scale producers by increasing their market access, strengthening their organizations, guaranteeing fairer minimum prices and providing continuity in trading relationships. Ill. 7: FLO label
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3.3.1.3 Eco-friendly or shade-grown coffee Among these coffees are Bird Friendly certified by the Smithsonian Migratory Bird Center and Rainforest Alliance coffee products. Bird Friendly coffee is typically shade-grown, i.e. farmed in a traditional way under the shade of a diverse arboreal canopy. SMBC insists on organic certification and on strict requirements as far as tree coverage is concerned, because of the habitat that is preserved for birds and other organisms. They also conduct research and education around issues of neo-tropical migratory bird populations. Similarly, Rainforest Alliance emphasizes biodiversity Ill. 9: Rainforest conservation, but focuses more on the improvement of social and labor Alliance & SMBC labels conditions.
3.3.1.4 Utz-Kapeh The foundation offers a certifiable code of conduct for sustainability in growing coffee, combining good agricultural practices and social guidelines. Ill. 8: UTZ Kapeh It is less strict than the certifications listed above. label
Very frequently a combination of these certifications can be found, e.g. in 2000 40% of all internationally traded certified Fair Trade coffee was also certified Organic (Fridell 2007: 204). In 2009, 8% of global coffee exports were certified by at least one labelling organization. This share varies considerably in the consumer countries, in the US, for instance it was 16%, in the Netherlands an impressive 45% in the same year, while the shares for Scandinavia and Germany were at 10% and 5% respectively. Certified coffee has over the years developed from a niche product towards the mainstream market (ITC 2011: 4, Ingenbleek & Reinders 2012: 470). According to Counter Culture (2015), one of the US pioneers in third wave coffee – which will be discussed in section 3.3.3.1 – all certifications share similarities, but there is no one certification that covers all aspects of environmental, social and fiscal sustainability. Bird Friendly and Organic coffees focus most on environmental issues, Rainforest Alliance and FT on social aspects and the only certification program that guarantees price premiums remains FT. For more details on the different certification schemes about their mission, criteria, fees and scope, the SCAA (2010) has created a comparison matrix for sustainable coffee certifications.
3.3.2 The Fair Trade network The Fair Trade network emerged in the 1940s and 1950s pursuing its original purpose of establishing an alternative trading system with alternative trade organizations that would
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Master’s Thesis Brunner support producers in the South and thus reform conventional commodity trade. On a broader scale, the movement aimed at creating a new international economic order. In the late 1980s, however, the movement shifted towards the conventional market as several Fair Trade labelling initiatives developed, most notably Max Havelaar, TransFair and the Fair Trade Federation, as well as the umbrella organization Fair Trade Labelling Organizations International (cf. FT online). The FLO would now support the certification of conventional corporations as long as they met the criteria (Fridell 2006: 9-10). The definition of these exact criteria and standards can differ somewhat depending on the organization, but most commonly the following have to be met:
Guaranteed minimum (floor) prices to producers; fair wages to laborers; social development premium Advance credit or payment to producers Democratically run producer cooperatives or workplaces Long-term contracts or trading relationships Environmentally sustainable production practices Public accountability and financial transparency Financial and technical assistance to producers Safe, non-exploitative working conditions
Coffee was not only the first commodity to be traded fairly, it still remains the biggest in quantity (Jaffee 2). By 2007, the total Fair Trade retail value was more than €2.3 billion and the biggest markets are the United States and Europe. In the European coffee market the Fair Trade segment was the only one to show significant growth between 2000 and 2007 (Cailleba & Casteran 2010: 613). In 2002, the market share for Fair Trade coffee in Europe was 2% on average (Soentgen 332). The share of certified coffee in general was also 2% of the global coffee supply in 2004, but has strongly increased since, especially if we look at individual countries’ markets. By 2008, more than 10% of the US coffee market was made up of certified beans, illustrating the rapid increase in demand for specialty coffee over the years (Bacon 2010: 51). According to the FLO total sales of Fair Trade products in 2015, amounted to €5.9 billion.
3.3.2.1 Fair Trade mainstreaming As mentioned above, Fair Trade has experienced a reorientation towards the mainstream market as labelling organizations such as the FLO managed to gain the participation of conventional importers, processors and distributors, leading to substantial growth rates in the 1990s (Fridell 2007: 62-63). It is not surprising that the success of fairly traded products coincided with the 46
Master’s Thesis Brunner time of the coffee crisis that started in the early 1990s. The promotion of sustainably produced and fairly traded coffee and other goods is a mechanism that links social responsibility and market capitalism. Efforts of the non-profit certifying and labelling organizations go towards influencing individual consumers’ as well as corporations’ behavior in the North in such a way that they include concerns for the livelihoods of the southern producers in their purchasing decisions (Linton 2005: 600). NGO pressure was responsible for many big players at the roasting and retailing end of the chain to enter the Fair Trade market. Starbucks, for example, agreed to introduce a Fair Trade blend and develop educational material for employees and customers after Global Exchange, an NGO dedicated to the promotion of Fair Trade, scheduled 30 demonstrations at Starbucks stores throughout the United States and asked them in an open letter to do more to guarantee a fair price to coffee farmers. Shortly afterwards, in 2001, Starbucks promised to purchase one million pounds of Fair Trade coffee within the following 12-18 months and the company has since been committed to include Fair Trade coffee in their stores. In 2003, Kraft Foods has partnered with the Rainforest Alliance and P&G has committed to introduce Fair Trade coffee in their line-up (Linton 608). While the involvement of such large corporations in the Fair Trade sector has greatly contributed to the expansion of the movement, it has been criticized that the motivation behind TNCs’ support of certified coffee is mainly the protection of a positive public image through CSR and corporate ethics initiatives, rather than genuine support for the producers. Offering Fair Trade certified coffee generates positive publicity and thereby masks that, mostly, business goes on as usual i.e. most coffee offered by MNCs is still produced and traded under exploitative conditions. For instance, in 2007 only 2% of beans sold by Starbucks were certified Fair Trade (Fridell 2007: 73-74). By 2014 the latter figure had risen to 8.6%, but mostly the company relies on its own C.A.F.E. program (Starbucks 2014).
3.3.2.2 Criticism of Fair Trade coffee Jaffee (1) notes: “At the heart of fair trade lies a fundamental paradox”, and he refers to the fact that fair trade, even though it aims at creating an alternative to unjust world trade practices which harm small-scale producers in the South, makes use of the same market mechanisms that have initially created the injustices. Fundamentally, the FT market still operates according to the same principals as the world market it is embedded in. This is reflected in the value chain that is mostly the same. In spite of the price premiums paid to producers, a relatively large share of retail prices remains in the consuming country. Fair Trade may empower the small farmer on the one hand, on the other; however, it contributes to an increase of the power of the roasters and retailers at least to the same degree (Valkila et al. 257). 47
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As was mentioned in section 3.3, the role of large corporations in the Fair Trade sector has been viewed critically, due to their relatively minor commitment to the cause and their main concerns for corporate image and publicity. In spite of these facts, it has to be noted that because of their size TNCs contributions to Fair Trade have been substantial, e.g. Starbucks is one of the biggest Fair Trade roasters. Clearly, this has given them more power and influence within the Fair Trade network and might challenge some of its fundamental standards. For instance, the FLO considered the demand voiced by TNCs to certify coffee produced on large plantations, which is certainly not in line with the principle of only certifying small-holder cooperatives. Further, the strengthened position of large corporations threatens the many small-scale alternative trade organizations and roasters, who sell 100% FT coffee, but have not much financial or marketing power (Fridell 2007: 74).
Another point of criticism is that information on how exactly FT coffee benefits the farming communities, is not very transparent, but rather blurred and incomplete. Usually, there are no exact figures that indicate how much exactly of the retail price the certifying organization passes on to the growers (Valkila et al. 260, Philpott et al. 2007: 984, Kienreich & Schwarz 143). Roasters and retailers benefit from this lack of information, because consumers are willing to pay considerably higher prices for FT certified coffee, but often there is not as much price difference between certified and conventional coffee for the importing firms. In fact, the FT sector faces the problem of oversupply, meaning that cooperatives typically sell only a portion of their production under Fair Trade terms (Valkila et al. 267).
Further, it has been reported that producers frequently lack knowledge of FT and since knowledge is fundamentally linked to democratic organizations and decision making processes, their participation remains limited. Typically, farmers do not have a clear understanding of what Fair Trade exactly is. Instead, it has remained an abstract concept to many due to the cooperative leaderships’ position as managers. As a result, there is a lack of producer identification and democratic participation. Often, the overall responsibilities are left to the leaders of the cooperative which can undermine central values of the Fair Trade concept (Murray et al. 2006: 188).
As Becker suggests, FT in the coffee sector is closely linked to CSR. In many cases FT certified coffee has been used as an instrument of CSR, e.g. by Tchibo and Starbucks. Both multinationals use their CSR methods as marketing tools to illustrate to the public how they operate in a respectful, environmentally friendly, socially desirable and overall sustainable manner, while still being successful corporate businesses (67).
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3.3.2.3 Ideological fantasies of Fair Trade coffee For more of an in-depth approach to Fair Trade criticism, Fridell (2014) provides an excellent analysis of Fair Trade as a fantasy of Northern consumers. A closer look at his article in Third World Quarterly will explain why FT has received so much, mostly positive attention over the decades, while a different development in the coffee sector – the rise of Vietnam – has been viewed rather negatively. He considers both cases as projects of development, but of different kinds and backgrounds. On the one hand, there is FT coffee, which has been booming since the late 1980s and has become one of the most well-known forms of ethical consumption. On the other hand, there is Vietnam’s boom as a coffee exporting country, paralleled by the FT boom and the aftermath of the ICA collapse, unprecedented in speed and involves more than three times the amount of coffee farmer families as benefit from FT. Fridell argues that much more positive attention has been given to FT because of its “compatibility […] with ‘free trade’ and its emotionally charged ideological fantasies (1179).” He further relies on the works of Slavoj Žižek, Jodi Dean and Ilan Kapoor works on ideology and fantasy, the free trade fantasy and the fantasies of neoliberal capitalism. Central to their thoughts is the notion of ideology as necessary for the construction of social reality. This reality is based on unconscious desires that entail various gaps and inconsistencies with the real world. Ideology serves the purpose of obscuring a reality we are not quite comfortable with, a reality that goes against our unconscious desires. It helps to cover up those gaps, inconsistencies, contradictions and imperfections of reality. Also, it “is often operating at its deepest when the denial of its existence is most intense (1181)”, as seems to be the case today. The dominant free trade paradigm for instance can be unmasked as a fantasy if we highlight the speculative modelling it is based on, its ignorance of the role of politics, ideology, class, gender, race etc., its disregard of the role of the state (e.g. import controls, tariffs, quotas, preferences) and the fact that such agreements contain many non-trade components concerning intellectual property, services and investment rights that serve the interests of Northern TNCs. All these are gaps in a free trade system that fantasy allows us to make excuses for. The ideological fantasies of international development can be analyzed in a similar manner. The paradigm of participatory development provides the opportunity for the self-righteous Northern development expert to promote community empowerment, while remaining ignorant to local conflicts, but all the time imposing idealized demands for democracy and participation on marginalized communities. The latter thus become an ideological dumping ground for surplus idealism and disgruntlement. In order to overcome our ideological fantasies we must uncover the unconscious underneath, i.e. in this case the unconscious of the fair trade fantasy
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Master’s Thesis Brunner and the gaps, inconsistencies and contradictions the fantasy allows us to overlook (1181-1182). Some of them have already been mentioned above, they include but are not limited to: FT’s focus on the consumer; accepting that consumer demands take precedence over the needs of the producers The increasing involvement of global actors like the World Bank and TNCs who mainly consider FT as a CSR opportunity, as non-binding and who largely operate outside of it. For instance, Nestlé, the largest food company in the world and one of the biggest roasters, buys a tiny portion of 0.02% of its beans via the FT market. In 2012 Starbucks bought just over 8% of its beans on the FT market, while some 92% were purchased from non-FT-certified suppliers. Tensions within the FLO about corporate involvement in the US has led to FT USA’s break with the FLO system; thus the American branch operates in a much more corporate friendly way, making possible certification for large plantations. While FT has helped to improve the livelihoods of thousands of farmer families it is best not to overemphasize its impacts, as most producers remain very vulnerable to world market trends and relatively poor. Many are not able to sell their crops on the FT market due to oversupply and have to accept the conventional market price. Sometimes the certification process as well as the check-ups are a burden. Contrary to FT’s original mission, consumers and producers of FT coffee are no more connected than those of conventional coffee. Millions and millions worth of advertising and marketing campaigns help paint a pretty, but misleading picture.
Yet, mostly positive media coverage, public discussion including books, magazines on ethical and FT consumption, articles, reports from international financial institutions, governments and NGOs, as well as academic attention to the topic have skyrocketed (1182-1184). The latter is exemplified by the recent publication of the Handbook of Research on Fair Trade (2015), edited by Raynolds and Bennett, which summarizes FT research of the last 25 years on over 600 pages and by the institutionalization of FT research at Universities, e.g. the Center for Fair and Alternative Trade of Colorado State University. A closer look at the rise of Vietnamese coffee with Fridell (2014) will put the role of FT into a different perspective. Within less than two decades, Vietnam rose from an insignificant coffee-producing country to the second largest producer, putting Colombia in third place and accounting for 22% of the world’s coffee exports. That is about twenty times as much coffee as is certified FT and about 2.6 million people live off the Vietnamese coffee sector, a group roughly three and a half times as big as that benefitting from FT certification. Vietnam grows mostly Robusta beans, 50
Master’s Thesis Brunner traditionally used in soluble instant coffees and, due to new processing techniques toning down their harsh flavors, are increasingly popular in blends with higher quality Arabicas. Between 1981 and 2001 the annual average export growth rate for Vietnamese coffee was 29%. Considering that Vietnam was a poor country in the 1970s, emerging out of a devastating war, it is safe to say that the transformation of the coffee sector was a remarkable achievement (1185, 1187). Fridell lists three main economic and social gains of the rise of Vietnam: First, its position as the second largest producer and the power in world trade that came with it, have gained Vietnam significant political and economic influence in the coffee world. Second, coffee has become the second most valuable agricultural export, has helped diversify the Vietnamese agricultural sector and has provided income to millions of families, mainly tending to small- scale farms. Third, Vietnam is likely to increase its market share because Robusta is increasing in popularity and the Chinese market, with 75% Vietnams biggest purchaser, is fast growing and unsaturated as far as coffee consumption is concerned (1188). The main defining actor in the Vietnamese coffee sector is the state, which started resettlement programs to the central highlands soon after the war. The Dak Lak province is now the major coffee-producing region. Coffee farmers and traders were offered preferential credit, export bonuses, easier access to land, technological support, extension packages e.g. seedlings and fertilizers. Further, the Vietnamese state supported their coffee growers during the last big crisis by retaining some of the stock to limit supply and by freezing the loan repayments to avoid the risk of people not being able to pay back. Overall, the expansion of the coffee industry has brought financial gains to the farmers. However, Vietnam’s approach has also been heavily criticized, mainly for ecological reasons. The methods of high productivity and high input on not ideal land conditions have taken their toll on the environment. Massive deforestation was caused by the implementation of mono-cultures with full-sun farms, while the excessive use of chemical fertilizers and irrigation have intensified soil erosion, water scarcity and pollution of soil and waterways (1186-1187). Moreover, this recent history of coffee in Vietnam has a social and an ethnic component to it. The fertile lands that farmers were resettled to by the government were not uninhabited and with prospects of increasing wealth through coffee farming the area experienced high rates of voluntary migration during the 1990s. Traditionally, those were the lands of hill tribes who used to live a nomadic life-style and used slash-and-burn methods for cultivation. New laws regarding land-ownership forced them to settle down and slash-and-burn methods were banned. Gradually, the tribes were pushed out of their traditional areas and higher uphill while new migrants bought the most fertile lands from them. The ethnic make-up of the region has changed dramatically due to the high levels of migration, which would not
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Master’s Thesis Brunner necessarily be a problem, however, the result was demographic inequity. The minority hill tribes now reside on land of poorer quality that is not well suited for the cultivation of export crops and therefore cannot generate nearly as much income as the new migrants who cultivate excessive amounts of coffee in an unsustainable manner (D’haeze et al. 2005: 73-74). The indigenous minorities have been pushed to the fringes of society and are denied their traditional ways of life. Fridell highlights that the rise of Vietnam in the coffee sector is usually only, if at all, mentioned for the social and economic issues it created, while the case of FT coffee is discussed as a development project of higher status. He argues that this evaluation is based on the fact that FT caters to Northern ideological fantasies around free trade and international development and not on objective judgment. According to him, both cases can be regarded as development projects, targeting small scale coffee farmers, with different impacts and with both showing success and failures. Even though the FT approach is more desirable from an environmental and sustainability point of view, we should not underestimate the role of productivity, as exemplified by Vietnam. On the contrary, it has been shown by some studies that certification may not be helpful at all if a farm does not reach a certain level of production in the first place, because certification alone will not generate enough income. The attention given to FT and its widespread support is therefore very likely due to the (un)conscious belief that the voluntary, market-driven approach, and increasing corporate influence are perfectly in line with our free trade fantasies. Further it caters so well to our fantasies of international development, what with its ideals of local democracy, empowerment and the romanticized, exotic images of the so- called modern primitive (1189-1190). As West (2012: 13) describes, with a focus on Papua New Guinea, a dual image is infused on the people and the lands that grow specialty coffee, one of exotic primitivity and one of poverty. At this point the liberal Northern consumers step in and take on their “key role of guiding the poor towards modernity (Fridell 1190)”. Marketing and CSR campaigns of coffee companies exploit such imagery, working with the desires and fantasies of consumers to boost sales and it works because – at least at an unconscious level – we believe in the reflections of sunny coffee landscapes, worked by happy farmers. FT offers the possibility to Northern consumers of changing the world by individual consumption, it makes us feel empowered to challenge the world order and project our ethical values. Vietnam, however, offers neither the possibility to apply the free and fair trade fantasies, nor the modern- primitive-in-need-of-saving-idea. On the one hand, it does not produce specialty coffees for the FT market, its government is not democratically elected, but the state plays the central role in the coffee industry. Historically, negative myths about the so-called Red Menace or the Yellow
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Peril, are still associated with the Vietnamese, especially in a US context. On the other hand, coffee farmers with equipment such as chemical fertilizers, extensive irrigation systems and governmental loans do not leave much space for ethical consumers of the North who believe their purchasing decisions are a powerful contribution to the cause. As Fridell concludes, we should be aware of the contradictions, slippages and gaps of FT as well as the limits of FT as a development project. FT operates at a rather long distance of the “necessarily messy terrain of politics (1191)” by merely appealing to unconscious beliefs and desires around individualism, voluntarism, democracy and our exaggerated powers as Northern consumers. The case of Vietnam, on the other hand, is “deeply situated in the messy terrain of politics” with hardly any room for the Northern consumer in an active role. Finally, in our attempt to traverse the fantasy we have to take into consideration the bigger picture: Vietnam’s high productivity was also a response to the high competitiveness of the global capitalist market as well as a contribution to oversupply and falling prices. The latter could be regulated by collective action among states, like during the ICA period, but such action needs pressure from below. Competition drives ecological destruction, as was the case with Vietnam, and that also needs to be addressed by collective action on a global level in order to combat climate change in a way that “[…] properly balances the environmental responsibilities and burdens of everyone, North and South, so that small Southern farmers do not become an ‘ideological dumping ground’ for the lack of genuine climate action among those with the largest environmental footprints in the North. […] The first big step in this regard might come in recognizing that the road to transformative politics does not come through consumption at all (1191)”.
3.3.2 Direct trade coffee Direct trade coffee as the most recent and not very well researched market channel differs to Fair Trade coffee in several respects. It can be interpreted as one more step towards enhancing producers’ power in the process. The main difference between FT and direct trade coffee is the focus on the quality of the bean. While FT farmers receive a price premium once they are certified, the amount does not depend on the quality of the crop. Thus, the quality of FT coffee is often essentially the same as that of conventionally sold beans, especially if we recall that only a portion of the coffee traded by FT cooperatives ends up being sold through the FT market channel, while the rest goes to conventional buyers. The emphasis on quality for directly traded coffee goes hand in hand with much closer cooperation between the farmers and the buyers, usually small specialty roasters. Farmers may have a specific advantage through outstanding climate and topographic attributes of their land, which is the basis for growing excellent quality beans. Through direct work with the buyers a long-term sustainable relationship is built and 53
Master’s Thesis Brunner farmers are able to produce greatly superior crops. The prices are – ideally – discussed face to face, cover the cost of production and pay a high quality premium, but there are no additional costs for certification as is the case with FT. Also producers are much more involved in the decision making processes and the power imbalances of traditional supply chains are reduced, as is the number of intermediaries involved on the coffee’s way from harvest to roaster (Macatonia 2013). While all of this information sounds positive and desirable, it seems to be an increasing problem that there is no one single, exact definition of direct trade and no overarching organization that validates certain criteria, as is the case with Fair Trade. Also, there is no easily identifiable label or logo that is put on coffee packaging comparable to that of the FLO. Instead there are many labels, often individual to the roaster or coffee shop and different people in the specialty coffee industry will define direct trade differently, according to their various experiences. This is not per se a bad thing, since a large part of the specialty segments’ success is based on the very many small, individual initiatives of roasters and coffee shops dedicated to top quality, whose relationships with their suppliers of green beans are arguably much more sustainable than those between the same actors on the conventional coffee market. However, the lack of standardization and control mechanisms also facilitates not only room for speculation, interpretation and free-riding. Hence, there will be some people in the business who exploit the positive image of direct trade without being truly dedicated to the cause. DT coffee was pioneered by small American specialty roasters like Intelligentsia Coffee & Tea, Stumptown Coffee Roaster and Counter Culture Coffee, who are frequently associated with third wave coffee.
3.3.3.1 Third wave coffee Direct Trade is often associated with the so-called third wave of coffee consumption, which mainly refers to the higher levels in quality consumed today. The idea of the three waves was created with regard to the American coffee market, but the description of third wave coffee shops fits very well also in Europe. The first wave was the time after world war two when freeze-dried coffee by brands like Folgers flooded the US market. It was the time where regular, filtered coffee was the norm. This was followed by the second wave which brought widespread changes in the preparation of coffee beverages, with espresso machines and an elevation in quality through the replacement of most Robusta by Arabica beans. Specialty coffee shops like Starbucks became more and more popular, as the second wave became dominant in the 1990s. Now third wave coffee is characterized by yet higher quality, coffee is enjoyed for what it is rather than just consumed for caffeine. The way this high quality product is marketed and treated is very similar to wine. Like every grape and vineyard has specific characteristics, every 54
Master’s Thesis Brunner coffee bean and every crop can differ in taste. Directly traded coffee takes account of such characteristics and typically gives very detailed information on roast-dates, degree of the roast, country and farm or estate of origin. In most of commercialized coffee market history, the goal has been to achieve a constant, pre-defined flavor profile, even though there is no crop that produces identical beans year after year. Third wave particularly concentrates on this diversity of flavors and variation in espresso. Specialty roasters like Intelligentsia Coffee & Tea, or Stumptown Coffee pioneered the 3rd wave of coffee in the US via DT relationships (Cho 2014, Waak 2014). Further, the second wave, which started with similar motives – we recall Peet’s dedication to top quality and origin – has developed into a mainstream phenomenon with chains like Starbucks that have become more about the place of the coffeehouse as such, the atmosphere, the convenience and comfort they supply. Third wave coffee shops typically (re- )focus on the beans with their specific origin, they make an effort to find the perfect roast for each harvest and the baristas are often well trained latte-artists who can work magic with espresso and milk foam (cf. Ill. 10).
Moreover, much more interest has frequently been given to the vast variety of brewing methods, most of which have been ignored by big chains, since the semi-automated Italian-style espresso machines became omnipresent. Now it is not uncommon to be offered a wide selection of brewing methods in Ill. 10: Latte art 'Swan' addition to the traditional drip coffee and espresso machines e.g. hand filtered (using Hario V60 system, Aero Press or French press such as Bodum). Third wave cafés are frequently associated with ‘nerdy hipsters’, some people feel that the hype is somewhat overrated and the beverages overpriced. Mostly, however – and from my experience with such coffee places I would agree – small scale roasters/coffee shops that fall into this category are characterized by great transparency and communication concerning the origin, processing, roasting and marketing of their beans, mostly source directly traded beans thereby eliminating many intermediate steps along the conventional commodity chain and offer products that are greatly superior in quality to chains like Starbucks or the traditional Viennese coffee house. Typically, the small scale third wave coffee shops place equal emphasis on the quality of other beverages and food items they offer e.g. they source organic milk from regional farmers and bake homemade pastries using equally high quality ingredients (Edwards 2014, Childers 2014, Ozersky 2013). 55
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3.3.3.2 The Cup of Excellence Starting in 1991 Italy’s illycaffé, famous for high-quality espresso roasts, put on cupping contests in Brazil for its suppliers to participate in and giving them the chance to win large sums of money, as well as the help of professional agronomists to support their farms. This has led to considerable improvements in bean quality and even to new methods in their processing. Similarly, George Howell, a specialty roaster, initiated the Cup of Excellence in Brazil and soon had international judges cupping and evaluating beans in an effort to draw attention to their exceptional quality. These so-called Oscars for coffee continue to take place, they have been held in many Latin American and African countries. After the competition the beans are sold off via internet auctions, some have received incredibly high prices and many coffee estates have profited from being discovered during the competition. Not only has the Cup of Excellence helped to build stronger personal relationships between specialty roasters and coffee farmers, it has also empowered farmers themselves by giving them the opportunity to compete without relying on a cooperative or other organization (Pendergrast 350).
Today the Cup of Excellence is put on by the Portland, Oregon, based Alliance for Coffee Excellence, it takes place in several countries each year. The winners of the national cupping contests, which are determined by national juries consisting of experienced cuppers from the country of origin, go on to three more rounds of testing by an international jury, made up of importers, buyers and others on the consuming side. The revenues from the online auctions go to the country of origin entirely, almost all of it to the farmers. Once the contest is over, interested buyers can order samples from the specific farms they are interested in, giving them the opportunity to taste themselves, before the internet auction is held about six weeks after the Cup of Excellence national events (ACE). The most recent Cup of Excellence contest at this point was the December 2015 Brazil Naturals, the beans went on sale on 2 February 2016. The winner bean gained a 94.47 score and sold for $8.1 a pound. The highest price was achieved by the bean in place eleven at $8.5/lb., while most beans sold for prices from $4-5/lb. These are astronomic sums compared to the current regular stock price of Brazilian Naturals which is at $1.25/lb as of 2 May 2016 (ICO). The majority of this top quality coffee – more than 20 out of the 30 distinguished sorts – were sold mainly to Japanese coffeehouses and roasters; several were purchased by Korea, Australia, the UK and the rest went to Norway, the US and China (Cropster Hub).
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4. Case study: An example of direct trade between Nicaragua and Austria This final part of the paper will be dedicated to a short case study on direct trade. Upon outlining the coffee economy of Nicaragua, I will present an example of a cooperation between an Austrian small-scale coffee roaster and the Nicaragua-based company Biosfair, which trades green coffee directly with its clients in Europe.
4.1 Historical overview Nicaragua gained independence from Spain in 1821, from the United Provinces of Central America in 1838, and it seems fair to say that it “is a country overwhelmed by its history. Since colonial times, Nicaragua has suffered from political instability, civil war, poverty, foreign intervention, and natural disasters (Merill 1994: XXV).” Various governments have failed to bring political stability and sufficient economic growth to the country, but instead have allowed or encouraged foreign intervention, typically by the United States, to repeatedly interfere with political and economic affairs of the country. The twentieth century was mostly shaped by dictatorial regimes. The Somoza family ruled the country from the mid-1930s until 1979, in power of the government, the military and increasing parts of the economy. In 1979 an insurrection led by the socialist Sandinista National Liberation Front overthrew the dictator, however, the emerging government also developed into an authoritarian regime. During the 1980s Nicaragua became a key location in matters of the Cold War, with the Soviet Union and Cuba supporting the socialist Sandinista government, while the US government assisted antigovernment forces. It was not until the late 1980s that the civil war could be brought to an end and the Sandinistas were not able to succeed in the following elections of 1990 (Brás 1994:3-4). In 2006, however, former Sandinista president Daniel Ortega was elected president in 2006 and reelected in 2011. Nicaragua remains the poorest country in Central America, economy and infrastructure – which have been hard hit by the civil war and hurricane Mitch in 1998 – are being rebuilt (CIA World Factbook).
Like many other countries of the South, whose problems I have outlined above, Nicaragua has abundant land resources and has always been dependent on its agricultural exports. For the most part, one or two crops have determined the sector, with coffee being the primary agricultural export commodity since the 1870s. Agriculture and textiles together account for almost 50% of Nicaragua’s exports. Since the middle of the twentieth century, cotton has been of importance, as have bananas, beef and other animal products (Annis 1994: 125-126; CIA World Factbook).
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4.2 The coffee economy of Nicaragua Coffee was introduced to Nicaragua in the mid-19th century in the Carazo region. More specifically, a man called Manuel Matus Torres started coffee cultivation on his finca La Ceiba in the town of Jinotepe (cf. Ill. 11) around 1848. The Department of Carazo is located on a high plateau in the coun- try’s Pacific Zone and ever Ill. 11: Map of Nicaragua since has remained an important coffee growing region. In the period from 1880 – 1930 the coffee industry initiated vital changes and new developments in Nicaragua’s economy and society. Through the export of coffee, land had become a valuable commodity by 1877, inducing the government to create a land registry. The newly created market for coffee also lead to expanding markets for land, credit and labor as well as the general commercialization of Nicaraguan society. Traditionally, coffee in Nicaragua is cultivated on small and medium-sized farms. Especially in the early period investigated by the author, coffee was a very lucrative business providing the opportunity for large profits. While small and medium-sized coffee producers held the majority of the land, the processing and exporting of the beans, as well as associated financing matters, came to be concentrated in the hands of the largest coffee growers (Charlip 2003: 236-238). Due to the high costs of equipment, it was customary for small and medium sized growers to sell their beans to the larger producers for processing (246). The early coffee boom in Nicaragua brought to power three dominant families whose members still owned the most important fincas in the region in the 1960s: the Rappacciolis, Gonzalezes and Baltodanos started from humble backgrounds and grew wealthy through coffee. They had a lot of political power – producing two senators, one presidential candidate and one candidate for vice president of the country – they modernized the region – e.g. introducing gas lighting and they had a lot of social influence, bringing the elites together in a social club and extending their power by linking the families further through intermarriage (248-250).
The agricultural sector in Nicaragua was diversified after World War II, but it has remained a significant part of the economy, although the 1980s saw disruption and destruction of coffee 58
Master’s Thesis Brunner harvests and trees by the Contras and a general decline of output. Despite extremely fertile soils, the country remained dependent on food imports, because too much focus was put on foreign exchange generating crops for export. This affected the rural population most, which was chronically malnourished. Still, in 1992 more land was devoted to coffee than to any other crop (Annis 126-127).
After decades of resistance the US-backed Somoza dictatorship was overthrown in 1979 and the Sandinista government was installed. The Sandinistas, upon seizing the Somoza dynasty’s assets, implemented a series of land reforms that applied to half of all land used in agriculture. Through these reforms the amount of land in the largest latifundios was decreased, facilitating access to parcels for over 100,000 small-scale farmers and their families, where the land was owned collectively in state-run enterprises. The government also encouraged membership in cooperatives and rural unions, which helped farmers to access land, coffee export channels, credit and agricultural inputs. Over the course of the 1980s, 42% of coffee producers in the provinces of Matagalpa and Jinotega were given land titles through the agrarian reform. That decade, however, was also characterized by the terror of the Contras, a resistance force shaped by political, economic and military interventions of the US. The latter helped to equip, train and transport the Contras inside Nicaragua and thereby contributed to the death of over 50,000 people. Such terror resulted in a defeat of the Sandinistas in the 1990s elections and paved the way to privatization and liberalization. The newly elected government, once again backed by the US, gave up control of coffee exports and ended subsidies to the collective farms and cooperatives. In consequence, most of them had to be closed down. During the coffee crisis many NGOs, specialty coffee companies and some of the remaining producer organizations put a lot of effort into the expansion of the certified sustainable coffee market. Together with the Specialty Coffee Association of America they worked towards an improvement of the quality and sustainability of Nicaragua’s coffee. Several aid and development projects were initiated targeting especially social justice. While the Sandinistas had promoted large state-owned coffee farms cultivated through collective agriculture, NGOs promoted that farmers work individual plots (Topik et al. 14, Bacon 2010: 54).
Today, more than 45,000 families work on small scale coffee farms. With 95% almost all producers of coffee in Nicaragua are micro and small-scale producers where the families themselves are the primary source of labor and coffee is often their main source of cash income. These families also live off their farms through subsistence agriculture and, when needed, hire outside labor during the coffee harvest season. The few medium, large and agro industrial coffee
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Master’s Thesis Brunner plantations in the country typically maintain a permanent labor force and some provide living quarters and food to the families and workers they employ. On the bottom of the chain are rural landless workers who most frequently live in poverty. The large scale farms usually own processing facilities and sometimes export their own coffee (Bacon 2005:502). Almost all coffee in Nicaragua is shade-grown, i.e. the farmers cultivate their coffee plants traditionally under a canopy of other trees, which helps to conserve and sustain the ecosystem of the forests, high levels of biodiversity, soil and water. Since deforestation, water contamination and soil erosion are recurrent problems in Nicaragua, the traditional way of coffee cultivation contributes positively to the state of the environment (Equal Exchange). Among all the countries in Central America, Nicaragua was arguably most affected by the recent coffee crisis at the beginning of this century. Having been hit by hurricane Mitch in 1998 and with farm gate prices reaching a 30-year low in 2001, Nicaragua’s coffee exports had dropped by 50% from the year before. Between 500 and 3,000 coffee farms were foreclosed during that period, equaling 10% of all coffee farms in Nicaragua. Banks had severely cut their lending to the sector since 1999, expecting losses, and three private banks that mainly financed coffee production declared bankruptcy under the weight of too much debt. The effects of the crisis, as described also in section 2.4.4, of declined investment and foreclosures, were widespread unemployment, food shortages and rising levels of poverty and migration (Wilson 2010: 84; Bacon 2010: 51).
Several studies (e.g. Bacon 2005, Bacon 2010, Wilson 2010, Valkila et al. 2010) have specifically been conducted to assess the impact of Fair Trade certification on coffee farmers in Nicaragua. During the last coffee crisis many farmers in Nicaragua have turned to and benefited from Fair Trade coffee contracts. Their economic vulnerability was reduced through coffee certification, because Fair Trade facilitated access to credit, paid considerably higher prices than the conventional market at the time, provided technical assistance and helped develop cooperatives. The social development premiums derived from FT contracts were invested in education and health care programs. For many farmers the participation in FT cooperatives was a way to stay on and work their land which they might have lost otherwise. Also, other alternative trade organizations and specialty coffee importers, especially from the United States, partnered with cooperatives and offered higher prices and social programs for the higher quality beans. In fact, those farmers who were forced to sell property or abandon their land altogether and migrate, were frequently those who were not affiliated with a cooperative. According to Wilson’s study, small scale farmers associated with FT cooperatives were four times less likely than non-affiliated farmers to lose their land to credit lenders or sell 60
Master’s Thesis Brunner it (84-85). The quality of coffee produced in the country is comparatively high and therefore Nicaragua has great potential to become a leader in the production and trade of organic, specialty and FT coffee. In fact, already around 80% of Nicaraguan coffee was potentially specialty coffee in 2001, but only 10% was exported as such (Bacon 2005: 501). Such numbers sound very promising, however, it should be kept in mind that, even though the FT and specialty segments of the market have been growing since the beginning of the new millennium, the problem of oversupply of FT coffee has also prevailed. And while the premium on FT coffee might be a significant advantage in times of crisis when the FT minimum price is substantially above market prices, as soon as world market prices recover and reach a certain level, the price premium gained by FT coffee can be negligible (Valkila 265-267).
I have mentioned above the importance of the access to credit for small-scale farmers and how many of them were able to keep their farms during the crisis through their cooperation with FT cooperatives. The supply of credit was crucial at the time, however, several studies have shown that many peasant farmers have had problems repaying the loans and paying for on-going investments needed for a commitment to fair trade. Despite the FT price premiums, the farmers continued to suffer from the long period of very low farm-gate prices long after the peak of the crisis, as the nominal gains made through FT premiums are erased by rising labor costs, input costs, food costs and transaction costs. In such a situation, the farmers are left with very real material debts. Indebtedness in general can be a major problem for farmers and FT cooperatives across Latin America and Mexico, because debts prolong the negative effects of the crisis. Some households fall into a cycle of indebtedness, struggling for solvency over many years and not recovering even as prices have risen considerably. Coffee farmer households then find themselves in a so-called reproduction squeeze, i.e. a situation determined by falling prices, rising household costs, declining productivity, rising production costs and market uncertainty. It was shown that the cooperation with FT has not necessarily helped to fend off the reproduction squeeze and so the notion that FT helps to empower disadvantaged small-scale farmers and gain them more control over their own lives, is certainly not always true in the case of Nicaragua (Wilson 84-85, 88, 91). In his conclusion, the author makes a point worth repeating:
“The flexibility of the peasant household to mend and patch together a disarticulated capitalist market by stretching out their resources, self-exploiting and self-provisioning, enables them to continue to produce coffee for the Fair Trade market even when it is unprofitable. Although farmers may be staying afloat, the burdens they carry as laborers at the bottom of the coffee chain are heavy to bear (Wilson 91).”
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4.3 Tribeka coffee shop and roaster Tribeka is a small specialty coffee roaster based in Graz, Austria, and was first opened in 2003. Today, there are four coffee shops in prominent locations around town (Grieskai, Technikerstraße, Reiter- kaserne, Kaiserfeldgasse) and the city’s specialty coffee and third wave pioneer has become an insti- tution in the coffee scene. Harry Fischer and Eva Haberler (cf. Ill. 12), the owners of the business, have about sixty staff and are devoted to the highest quality Ill. 12: Haberler & Fischer, owners of Tribeka of coffee, responsible sourcing of the beans and an ethical way of doing business in general. About 22-23 tons of beans, or a little over one ship container of coffee, are roasted per year. Roughly half of that amount is consumed as beverages and sold in the four outlets in Graz, while the other half is sold to different cafés and restaurants in Austria.
As I have worked at Tribeka during my studies in Graz, I have greatly benefitted from the knowledge and experience of the owners – specifically their knowledge about coffee and their approach to a sustainable and ethical way of doing business. They have always made very sensible decisions about the products involved in the coffee shop, with the origin and trade process of the coffee beans being the most important issue. The following sections will shortly present three different perspectives on the business in relation to ethical sourcing of coffee, namely the roaster’s, the employees’ and the customers’. To round off the study, the essential perspective of the direct trade partner will complete the case study in section 4.4.
4.3.1 The roaster’s point of view This section serves to present the information I have gained from an interview with Harald Fischer (cf. Appx. I), about his company philosophy, especially how it relates to direct trade and the specialty coffee sector. When Tribeka started out in 2003 with one coffee shop, the amount of coffee purchased was significantly lower than today, but the focus was already on specialty coffee. Fischer would purchase the number of bags he estimated necessary for roughly half a year and experiment with Arabica beans from many different types of origin. Based on the trial and error method he chose from the supply lists of raw coffee traders in Hamburg, with time gaining experience and learning the characteristics of the market. The suppliers offer weekly updates about the range of specialty coffee beans they hold, including details about
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Master’s Thesis Brunner price and availability, i.e. how many containers or bags of a certain bean are left in stock, names of coffee estates and fincas etc. It takes time to learn the dynamics of the specialty market and how it can affect small roasters. Initially, the espresso blend consisted of six different beans. This might seem unnecessary or unusual because through marketing methods of the coffee business in general, high quality has lately been associated with the term ‘single origin’.
‘Single origin’ alone, however, does not automatically equal ‘high quality’, much like the label ‘100% Arabica’ does not Ill. 13: Bag of green coffee either. Being able to resort to several different kinds of beans can be important for a small roaster because availability of specific beans may vary considerably. If a blend consists only of two beans and one of them becomes unavailable, e.g. because it is sold out, it will be hard to replace without significantly changing the flavor of the blend and without putting a lot of effort into finding the new roasting profile. Each bean exhibits different features during the roasting process, e.g. how it tastes after a certain time in the roaster and at different temperatures.
When asked to name the main criteria for choosing a certain coffee bean, Fischer puts the quality of taste and flavor first on the list, followed by the price. In general, the prices in the specialty segment are well above those on the conventional market, but there are also great variations within that segment. For several years, Fischer was in charge of roasting the coffee used by Weltcafé in Vienna. The coffee he purchased and roasted for them according to their specifications was always the cheapest coffee he bought. Weltcafé specifically advertises using the phrase ‘100% Fair Trade & Organic’ and I am sure this is true; however, the example illustrates the gap in price and most likely quality between FT coffee and true specialty coffee.
Ill. 14: Typical small-scale roaster as used by Tribeka 63
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Ill. 15: Price range within the specialty segment Illustration 15, by the Deutsche Röstergilde, an association of specialty coffee roasters, shows that the price for simple FT coffee is on the lower end of the specialty coffee price spectrum. As indicated, there are several steps on the price ladder, each for a different degree of how close the relationship between producers and roasters is. Some specialty coffees are quite ridiculously overpriced for reasons that do not have much to do with bean quality, but with other market forces. One example is the famous Jamaican Blue Mountain coffee, grown only in the Blue Mountain region of Jamaica and known for its mild taste. It has successfully been marketed as such (Clynes 2009), is mainly bought by Japanese roasters and the prices have grown out of proportion. The quality may be very high but not necessarily higher than that of other coffees in the specialty segment. Another example for a similar coffee hype is Kopi Luwak, widely considered the most expensive coffee available. It is special because the coffee cherries it comes from are eaten and defecated by the Asian palm cevit, the process of digestion presumably gives the beans a special flavor. Since Kopi Luwak became a luxury, however, it has become hard to find it in its genuine form, i.e. from wild cevit cats. Most Kopi Luwak available today is either inauthentic or comes from cevit cats that are caged and kept in bad conditions inappropriate to the species (Wild 2013).
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Apart from such luxury coffees, the prices in the specialty coffee segment are still well above those on the conventional market. Typically, there is a certain price premium on Fair Trade coffee and another one if the coffee is also organic, while specialty coffees are located even higher up the price ladder. For the owner of Tribeka, price as a factor in coffee sourcing is important, i.e. the price of any coffee has to be reasonable within the specialty segment and in line with the quality, while the importance of specific names or brands within the segment are not considered much. The main reason Fischer continuously searched for and for five years now has been buying coffee directly from Biosfair in Nicaragua, is the access to what he calls ‘background information’. By that he means information on the people involved in the growing, harvesting, processing and trading, exact geographical location of the farms and their specific environmental aspects, information on how the farmers can find assistance and help if there are problems with their crop, e.g. with diseases like the leaf rust. That sort of information is most valuable to the roaster in this case. He emphasizes that the relationship to ‘his coffee’ and to Ulrich Salamun is most importantly built on trust gained in years of doing business and he points out that trust is really the only option, at a certain point. He also visited the farms to form his own opinion, but he realizes that he has no way of total control in the matter, i.e. he trusts Salamun to pay the farmers and workers well instead of insisting on being shown figures. The longtime commitment on both sides is a great advantage in the coffee business because the market can be very volatile. And Fischer is happy about the cooperation with Biosfair, which initially came about by coincidence via mutual friends.
As far as ethical values in other parts of the business are concerned, it was made clear that the origin and quality of all other products and ingredients is equally considered important – apart from coffee beverages Tribeka offers e.g. tea, juices, smoothies, lemonade as well as sweet and hearty snacks, such as cakes or bagels with various toppings. Ideally, Fischer aims for local and organic ingredients to all these items, but explains that some compromises are necessary. I will illustrate this with a few examples. The second most frequently used ingredient in the beverages, besides coffee, is milk and it is the best example for an ingredient that lives up to both criteria, organic and local. It is purchased from the company Mantcha Müch, an organic farm located on the outskirts of the city and is delivered fresh daily. Another good example is the brand of beer Tribeka offers, which comes from Brauerei Gusswerk, a comparatively small organic brewery in Salzburg. Other products like tea or cocoa for chocolate drinks are impossible to source locally. Fischer has recently switched to a new tea supplier, a small British company that sells high-end whole leaf teas – teapigs. The dark chocolate powder is provided by a new Austrian chocolate label, where the organic ingredients are mixed on site, the white 65
Master’s Thesis Brunner cocoa powder however, remains a compromise. On the one hand it is not organic or made of very natural ingredients, which is not surprising for white chocolate, but on the other hand the customers love it and it is an important ingredient in some of the best-selling non-coffee drinks, i.e. hot chocolate and milk shakes. Finally, regarding the food that is offered, again there are some items where the organic and local standards can be fulfilled, e.g. with the homemade baked goods, some fulfill only the organic standard, e.g. the bagels. Overall, Fischer emphasizes his preference to rely on small companies with a strong focus on quality wherever possible, as opposed to large corporations which are also increasingly present on the market for organic foods.
As far as environmental aspects are concerned, Tribeka tries to avoid the use of plastic where possible, emphasis is placed on waste recycling and on a very mindful and sustainable use of all resources involved.
4.3.2 Employees’ experience In order to gain some insight into the experience of employees of Tribeka on the topic of direct trade and ethical consumption, I have created a questionnaire for voluntary participation and conducted two more detailed interviews, one with the person in charge of roasting coffee at the time and one with the manager of the Tribeka outlet at Reiterkaserne (cf. Appx.II). Apart from asking their personal opinions in the question of FT vs. direct trade coffee and certified products in general, I also inquired about their experience with customers specifically on the origin of the coffee.
Customers occasionally ask about the origin of the coffee, most typically they ask whether it is Fair Trade certified. When told that the coffee is purchased via direct trade, many customers’ first reaction is skepticism, because they might not know much about direct trade, whereas Fair Trade has been around for decades and people would easily be able to identify the label. It seems that the lack of such a label is what leads to skepticism at first, but after an explanation as to the precise source, the contacts in Nicaragua and the personal relationship of the owners with the person exporting the coffee to Austria, most customers show themselves positively surprised. In most cases such information also helps them to better understand the high price of the whole bean packages sold in the coffee shops – €7.90 and €24.50 for 250gr and 1kg respectively. The manager of the Tribeka location at Reiterkaserne/Leonhardstraße further points out that nowadays, more and more customers constantly have labels and certifications of products in mind and because of these categories it is sometimes necessary to explain to them that there are still products without certification or special label that are of higher quality than
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I can definitely say that Fair Trade as far as it regards coffee has a positive image among the customers in these particular coffee shops and I am sure this is also the case for most of the general public in Austria. It seems to me that many of us have fallen victim to the Fair Trade fantasies created by powerful marketing campaigns and their imaging. One of my former colleagues had a very fitting comment on the matter: “Ich denke wenn man Fair Trade liest, stellt man sich gerne irgendwo in Argentinien einen Mann mittleren Alters vor, der in aller Früh seinen selbst gebrühten Kaffee genießt und sich dann im Sonnenaufgang ab an die Arbeit macht – das macht für viele den Geschmack aus.“ She describes well the imagery of ideological FT fantasies as discussed in section 3.3.2.3
4.3.3 The customers’ opinion To present a balanced picture about the business – and I realize that my personal opinion as a former employee of Tribeka and my perspective on the topic are biased – I have conducted four short interviews with regular customers (cf. Appx.III). Again, the goal was to find out about their opinions on FT and direct trade coffee, but more specifically, to find out whether or not the origin of Tribeka’s coffee is one of the reasons why they visit regularly. I wanted to find out if the aspect of ethical consumption played a role in the choice of their favorite coffee shop and I chose regular visitors on purpose, instead of random people, because my assumption was that if someone visits at least once per day, sometimes twice or even three times, it most likely will have to do with specific features or the quality of the product. My assumption was confirmed to a certain degree, but it would be an exaggeration to claim that any of the regular customers I interviewed visit Tribeka especially because the coffee is traded directly. On the other hand the quality of the coffee is one of the main reasons, if not the main reason they come – and when I talk about quality in this specific context, it is really the taste that matters. People come because the coffee tastes good. Additional reasons for their choice of café include the friendly atmosphere and the location, in close proximity to either home or work. Two of the customers specifically said that they appreciate the atmosphere, in part because they notice that the people that work there like their jobs and are treated well by the owners.
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Surprising was one specific outcome of the interviews, concerning coffee consumption at home. All but one person said that they do not put much emphasis on the quality of coffee consumed at home. Specifically, one of them told me they use exclusively instant coffee at home and do not care about the quality or taste at all, because all they need there is a fast caffeine kick and something to hold in their hands while working on the computer. Similarly, another customer told me that for home use they deliberately buy cheap coffee, because at breakfast time they prefer coffee with sugar; putting a lot of sugar into a cup of high quality coffee might seem like a waste. Finally, all four interview partners have one thing in common. Even though they visit daily, including weekends, the time they spend in the coffee shop is still special to them. They have all created their own rituals around their visit and value the high quality of the product they consume in that specific setting. The same person who drinks exclusively instant coffee at home, for instance, is very specific about the quality of the milk used in the cappuccino and how it complements the taste of the coffee.
4.4 Biosfair The company Biosfair Agroexport Nicaragua S.A. was founded by the Austrian Ulrich Salamun (cf. Ill. 16) as a social enterprise based in Jinotega, a department in northern Nicaragua. Especially Austrian readers might know him for his role in the comedy and satire group maschek, with whom he, for instance, appeared on the ORF late night show Willkommen Österreich. Ill. 16: Salamun on one of his fincas
In Jinotega Salamun himself owns three plantations and works together with several cooperatives in the area, from which he purchases coffee in line with the highest quality standards. For this case study Salamun provided me with information via a questionnaire (cf. Appx. IV) which, unless indicated otherwise, is the source for this section.
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Biosfair focuses on SGH – strictly high grown – coffee, meaning elevations between 1,100m and 1,700m. The cherries are picked by hand and mules frequently serve as a means of transport (cf. Ill. 17), because the area is only partly accessible by motorized vehicles. Upon harvest the cherries are wet-processed and dried before export (Grandoro, Kaffeefabrik).
Ill. 17: Farmers transporting coffee
Biosfair was founded in order to provide a contact for potential European buyers in the region of origin of the raw materials. It essentially fulfills the function of a match-maker, representing both the interests and expectations of the buyers – quality, on time delivery, and delivery reliability – as well as the interests of the producers – price range, terms of delivery. Thereby producers and buyers are brought together, Biosfair helps with the balance of interests and facilitates long-term business relationships.
The company has learned from and analyzed the failure of development projects in the country that were conducted e.g. by the Austrian Development Agency. Their objective was to make it possible for the cooperatives to be in charge of the entire value chain, from cultivation to the marketing and export of the product. However, the results were not as desired. Frequently, business relationships that had taken a lot of effort to establish were neglected and subsequently ended after the designated duration of a project, or the partnering NGOs in charge of mediation between producers and buyers as well as marketing of the product, did not have the necessary know-how. Salamun explains that only very large cooperatives or umbrella organizations have managed to maintain long-term, direct relationships with buyers in Europe. Usually, however, such organizations have such heavy administrative overhead structures that they lose touch with the producers at the base. Those in turn grow upset, resulting in cooperatives leaving the umbrella organizations, which then suffer from weakened stability. Also, quality standards play a subordinate role, after all they want and need to sell what they have available. Additionally, the lack of quality differentiation is due to the lack of a true understanding of the buyers’ requests.
Nicaragua has great potential for the cultivation of organic agricultural products that grow only in the tropics. Salamun says, they even call it the “Spezialitätenkammer” of Latin America
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Ill. 19: Small coffee trees in the shade Ill. 19: Rain and cloud forest in Jinotega because several products grown here surpass the competition in quality, within the organic segmet, e.g. Chia seeds that are completely free of pesticides. Biosfair aims to support small- scale farmers with the marketing and export of such premium quality niche products, thereby generating as much added value as possible for the farmers and establish stable business relationships that are based not on fictitious stock exchange prices but on production costs and living expenses of the farmers. For the price calculation of the coffee exported by Biosfair, the FLO’s price indicator for FT coffee is used as the minimum baseline. The cooperatives distribute all premiums and overpayments directly to the producers. Over the last several years the average prices received by the farmers were 25%-30% above the FT prices. In the future, Salamun aims to completely detach price calculations from stock prices and instead base them solely on production costs.
The tropical rain and cloud forests of Nicaragua (cf. Ill. 19) are threatened by ongoing deforestation, mainly for the creation of farmland or pastures for cattle. Sustainable and organic cultivation of coffee in these areas can help to slow down and even reverse this process, thereby supporting reforestation. Specialty coffee needs to be grown in the shade of bigger trees and therefore can be planted on land that is already farmed; it grows well among other plants, e.g. bananas (cf. Ill. 18). It is important that the families can live off the cultivation of coffee so that the incentive to convert their land to cattle farms or other agricultural purposes remains low. The increasingly valuable resources of the rain and cloud forests in the area can thereby be protected and preserved (Salamun 2015). Or as Salamun himself puts it:” So tragen die Kaffeeproduzenten in sensiblen Regionen eine große Verantwortung, denn sie sind die Hüter jener natürlichen Ressourcen, von deren Erhaltung auch wir in Europa abhängen (via Sonnentor 2012)”. This approach is very much in line with the ideals of environmental ethics as seen in section 3.2.1.2, which includes entire ecosystems when considering the impact of economic activity. The farmers in the area of Jinotega traditionally cultivate coffee and together with
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Biosfair they have adapted their farming methods to meet the high standards of sustainability of organic specialty coffee.
Thus, the natural resources are conserved, grazing land is being reforested and the rain and cloud forest remains as a natural habitat and source of water. This natural environment is also what gave the name to the company. Even though it sounds like it derives from the German word bio for organic and fair as linked to Fair Trade, it really comes from the Spanish word for biosphere, i.e. biosfera, denoting living organisms together with their environment or more generally the parts of our planet and atmosphere that support life (Merriam Webster). Additionally, the natural environment in the area is so valuable that several natural reserves have been created.
Apart from supporting the farmers and cooperatives with Know-How on sustainable and organic production, Biosfair can help to finance the cultivation if needed, is in charge of marketing, sale and export of the product via direct trade. In order to monitor and retain the high quality, agronomists pay visits to all the producers several times a year and the farmers have the possibility of calling an agronomist, if they need help. This is especially important in order to deal well with plant diseases or insect attacks in an organic manner. In case of an outbreak, the diagnosis needs to be quick because organic plant protecting agents take longer to be effective than their chemical counterparts (Sonnentor 2012).
In 2015 Biosfair exported eleven containers, of 18,975kg each, to Europe. Apart from Sonnentor and other middle sized roasters in Germany and Italy, more and more smaller roasters are buying the beans, since it is possible to purchase only a number of bags or palettes. As Tribeka owner Fischer pointed out, this is very rare even within the specialty segment, because typically the minimum quantity for a purchase is one container, sometimes half a container, unless you are willing to pay large extra fees for special transport and delivery. Biosfair also offers tailor-made specialty coffee, where everything from bean variety to the design of the bags is according to the buyer’s requests. Moreover, Salamun takes special requests of buyers regarding the processing of beans very seriously and produces so-called honey dried coffees. During this process the half-washed Arabica beans are laid out to dry with the pulp and mucilage, which is usually removed completely before the drying process (cf. Ill. 20).
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Apart from selling raw coffee to specialty roasters in Europe, it was also important to Salamun to offer this high quality product domestically. In order to break with the colonial tradition of exporting top quality and keeping only the minor quality within the producing country, Biosfair has set up a Ill. 20: Drying process, honey dried (foreground, dark) & roasting facility in Nicaragua to distribute regular beans (background, light) the finished product. Even though he says it is a hard market to conquer due to the high prices in the specialty segment, he has roasted and sold roughly nine tons in Nicaragua last year. The buyers are high-end restaurants and hotels.
In addition to selling the raw product, together with a business partner and roaster in Vienna Salamun has established a coffee brand – Grandoro – which is available online on specialty coffee platforms for home consumption. Also, the coffee shop and responsible roaster Kaffeefabrik in Vienna sells Grandoro in the form of any coffee drink, as do several other cafés around the city.
Salamuns goal when he founded Biosfair was to support the farmers and their families in the creation of a long-term stable livelihood on their land and a life without want through the production and export of high quality organic goods. To conclude this section I would therefore like to answer the question: what has changed for the participating farmers since the cooperation with Biosfair in the coffee producing region? The company’s profits are all reinvested in the region. The focus was first put on the necessary training and education of farmers and employees as well as on infrastructure. Thorough information about sustainable, organic and ecologically valuable cultivation of coffee is vital, because the advantages of a switch from conventional coffee farming to organic agriculture are not necessarily obvious. Through better Know-How and more awareness about their product, the local cooperatives will be able to establish the necessary structures and in the medium and long term be able to manage all processes involved. Also, cooperatives have been able to repay their debt, a very important improvement, since we have seen in section 4.2 that indebtedness of coffee farmers has long been an issue in Nicaragua. The financial stability also enables the young generation to build a life in the countryside instead of migrating toward the cities, keeping in mind that migration is a common result in struggling coffee regions. In addition to these accomplishments Harald Fischer of Tribeka, who visited Salamun’s fincas recently in 2015, adds that Salamun’s
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In conclusion of this short investigation, I suggest that the cooperation between Tribeka and Biosfair is a good example of how direct trade and the devotion to a top quality product on both sides can have a positive impact on producer communities, mostly due to the focus on environmental and social sustainability and a long-term commitment. Ulrich Salamun describes his achieved goal well in the following statement:
”Wir haben in Nicaragua einen Wandel hin zur Qualität vollzogen, der die Kaffee- produzenten vom Almosenempfänger zu mündigen ‘Caficultores’ macht. Ein gutes Produkt kann der Jugend eine Perspektive, dem Leben auf dem Land einen Sinn und allen die ihnen gebührende Würde zurückgeben (via Sonnentor 2012).“
5. Conclusion In the final section of this paper I would now like to retrace my steps in order to briefly summarize the most important insights gained along the way and answer the question about the size and relevance of the impact of ethical concerns in the North on the lives of Southern coffee producers.
Section two was dedicated to the historic and economic perspective on coffee as a commodity. I have accompanied the bean from the beginnings of its cultivation on its journey across the world, highlighted the forces of globalization involved in the process and outlined the defining features of today’s world coffee market and trade. The perspective of development theories has shown how the forceful integration of coffee growing countries into the world system has left them with unequal power within the same. The shifts in geopolitics and the prevailing economic paradigm of neoliberal capitalism have consolidated already existing relationships of dependency between the North and the South, to the disadvantage of the latter.
The emphasis of section three was on the role of ethics in the coffee industry. Ethical aspects with regard to producer livelihood and environmental issues have only relatively recently begun to shape the coffee sector. The negative impact of neoliberal restructuring, exemplified by the devastating effects of the last coffee crisis on producer communities triggered many efforts by NGOs such as the FLO to help farmers through certification and access to respective market segments. In combination with increasing awareness of consumers about the ethical
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The case study of section four served to illustrate the specific features of a cooperation based on direct trade between producers in Nicaragua and coffee roasters in Austria. One of my initial questions was whether direct trade could live up to some of the expectations that fair trade has failed to fulfill and the answer is: in this case, yes. Apart from the price premium, that is higher than with FT coffee, the farmers as well as the buyers benefit from personal, long-term relationships facilitated by Biosfair, their dedication to the highest quality standards and environmental sustainability. Through the partnership with Biosfair, the natural environment in the area is conserved, participating cooperatives have been able to repay debts, the pressure of migration has been reduced and the farmers have regained a sense of pride and self-esteem. Finally, new members have increasingly joined the cooperatives affiliated with Biosfair, which affirms the quality and relevance of their work in the area.
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I conclude that, as far as ethics in the coffee industry are concerned, direct trade relationships are as good as it gets and they have great potential to benefit producers, roasters and consumers alike. DT is the most recent development in a sector that has long since been characterized by exploitation and unequal exchange. While FT has pursued noble goals in the past and tackled many issues in producing countries, it has failed to revolutionize the system as intended. My investigations have shown that DT differs from FT in three main aspects. First, the uncompromising focus on top bean quality that goes along with organic and sustainable cultivation. Second, the elimination of almost all middlemen along the chain so that producers and buyers see eye to eye and negotiate prices and quality features according to their mutual benefit. Third, DT lacks the bureaucratic structures of FT membership and certification, which result in burdens to the producers that do not necessarily pay off.
In my particular case study, everybody wins. I am confident that the people in the cooperatives working with Biosfair in Nicaragua are better off than small scale coffee farmers who cater to the conventional market or who are part of substandard FT cooperatives. I realize, however, that I might have created my very own direct trade fantasy, much like Fridell (2014) claims consumers have fallen victim to the fair trade fantasy. Indeed, it would be an illusion to believe that DT will revolutionize world trade, of coffee or any other commodity. It might gain several percent of market share, it may become as omnipresent as fair trade, but in my opinion that will not truly be a measure of success. On the contrary, if an international DT certification and label were to be developed, a bureaucratic over-head similar to that of FT may emerge, weighing heavy on producers and loosening standards in the process of mainstreaming the concept. What distinguishes specialty roasters who source their coffee through DT from those who buy through conventional market channels, is that their first concern is bean quality and prices play a less significant role. For most conventional importers and roasters of coffee, however, the bean is likely to remain a simple raw material input factor they will try to buy at the lowest possible price, at reasonable qualities. Therefore, DT relationships like the one portrayed above are unlikely to be of interest to large companies or multinationals, whose product range consists of much more than just coffee. Yet, from the consumer perspective DT coffee offers an opportunity for those interested to explore all the different facets of a product that has long been under-appreciated in its potential for quality. Individuals who weigh out ethical aspects in their purchasing decisions may spread awareness about DT and since coffee is consumed virtually everywhere, this holds lot of potential. Still, I do not believe that the plight of the coffee farmer will be alleviated through ethical consumption.
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The question of what can truly be done to end producer exploitation in the coffee sector, remains. Phrased differently, I wonder whether it is even possible to do so. I tend to say that it is unlikely under the present circumstances. In order for the producers of coffee – or any other classic commodity – to escape their disadvantaged position in the global market, the world economic system has to change significantly. The solution will not be niche markets like FT, DT or control mechanisms like the ICA which have been used in the past. Instead, a thorough restructuring of the world system would be necessary, in which the power relations are not as unequal. Superficial attempts to make monstrous economic actions socially and environmentally sustainable have to be replaced by a critical reflection on the state of our environment, our ecosystems and the dwindling amount of remaining resources. To significantly reduce exploitation of people and resources in an ethically sound economic system, that system cannot be based on an inherent need for increasing inputs and growing outputs, inevitably and regularly resulting in crisis. My basic discussion about the development and current state of the world coffee economy, as well as its ethical shortcomings, reflects both the embedded inequalities of our world system and the challenges we are facing in our attempts to revolutionize the capitalist world economy. In theory, I am certain that we, as responsible individuals and as a civilization more knowledgeable and interconnected than ever before, have the means to create a more equitable world, in which de-growth replaces growth as the predominant paradigm. In practice, I am now taking a coffee break.
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EOLSS – UNESCO Encyclopedia of Life Support Systems. Hermann A. Jürgen Polhan, and Marc J.J. Janssens. Soils, Plant Growth and Crop Production. Vol.III. Growth and Production of Coffee. Fair Trade International Webpage. [retrieved 04 Nov 2015] http://www.fairtrade.net/ Fair Trade International. Annual Report 2015. [retrieved 14 Apr 2016] http://annualreport.fairtrade.net/en/ Fischer, Karin, Gerald Hödl, and Christof Parnreiter (eds). “Entwicklung – eine Karotte, viele Esel?”. 13-54. Entwicklung und Unterentwicklung. Eine Einführung in Probleme, Theorien und Strategien. Wien: mandelbaum 2006. Fridell, Gavin. “Fair Trade and Neoliberalism: Assessing Emerging Perspectives.” Latin American Perspectives. Vol. 33, No. 6 (2006): 8-28. Fridell, Gavin. Fair trade coffee: the prospects and pitfalls of market-driven social justice. Toronto: University of Toronto Press, 2007. Fridell, Gavin. “Fair Trade slippages and Vietnam gaps: the ideological fantasies of fair trade coffee”. Third World Quarterly. Vol. 35, No.7 (2014): 1179-1194. Fleischacker, Samuel. “Adam Smith’s Moral and Political Philosophy.” Edward N. Zalta (ed.) The Stanford Encyclopedia of Philosophy. Winter 2015. [retrieved 28 Apr 2016] http://plato.stanford.edu/entries/smith-moral-political/#SmiPol Friedman, Milton. “The Social Responsibility of Business is to Increase its Profits”. The New York Times Magazine. 13 Sep. 1970. Online [retrieved 12 Apr. 2016] http://www.colorado.edu/studentgroups/libertarians/issues/friedman-soc-resp- business.html Gabriele, Alberto, and David Vanzetti. “Long Black: Export Controls as a Means of Addressing Coffee Price Instability.” Journal of Economic Integration. Vol. 23, No. 2 (2008): 411- 433. Giovannucci, Daniele, and Stefano Ponte. “Standards as a new form of social contract? Sustainability initiatives in the coffee industry.” Food Policy. Vol. 30 (2005): 284-301. Grandoro online. Der Ursprung Nicaragua. [retrieved 12 Apr 2016] http://www.cafegrandoro.com/der-ursprung-nicaragua/ Grandoro Kaffee: http://www.cafegrandoro.com/ Greenpeace. 1995- Shell reverses decision to dump Brent Spar. [retrieved 23 Jan 2016] http://www.greenpeace.org/international/en/about/history/Victories-timeline/Brent- Spar/ Gudorf, Christine E. and James E. Huchingson. Boundaries. A Casebook in Environmental Ethics. Washington D.C.: Georgetown University Press. 2010. Gunder, Michael. “Sustainability: Planning’s Redemption or Curse?” Planetizen online. 08 Feb 2007. [retrieved 12 Apr 2016] http://www.planetizen.com/node/22812 Halsall, Paul. Modern History Sourcebook: Summary of Wallerstein on World System Theory. Fordham University. 1997. [retrieved 08 Dec 2015] http://legacy.fordham.edu/halsall/mod/Wallerstein.asp
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Hamann, Lisa, Kaya Luschnat, Stephanie Niemuth, Paulina Smolarz, and Svenja Golombek. “CSR in the Coffee Industry: Sustainability Issues at Nestlé-Nespresso and Starbucks“. Journal of European Management & Public Affairs Studies. Vol.2, No.1 (2014): 31-35. Heidbrink, Ludger und Alfred Hirsch (Hg.). Verantwortung als marktwirtschaftliches Prinzip. Zum Verhältnis von Moral und Ökonomie. Frankfurt: Campus, 2008. Heidenreich, Felix. Wirtschaftsethik zur Einführung. Hamburg: Junius, 2012. Heise, Ulla. Kaffee und Kaffeehaus: eine Bohne macht Kulturgeschichte. Leipzig: Kiepenheuer, 1996. Higdon, Jane E. and Balz Frei. “Coffee and Health: A Review of Recent Human Research.” Critical Reviews in Food Science and Nutrition. Vol. 46, No. 2 (2006): 101-123. Hite, Amy Bellone, and J. Timmons Roberts (eds.) “Development and Globalization: Recurring Themes” From Modernization to Globalization. Perspectives on Development and Global Change. Oxford: Blackwell Publishers. 2007. Hohmann, Karl und Christoph Lütge. Einführung in die Wirtschaftsethik. Berlin: Lit, 2013. ICO – International Coffee Organization Webpage. [retrieved 02 May 2016] Total Exports Data: http://www.ico.org/prices/m1-exports.pdf Daily Coffee Prices: http://www.ico.org/coffee_prices.asp Historical Data: http://www.ico.org/new_historical.asp?section=Statistics ICO History: http://www.ico.org/icohistory_e.asp?section=About_Us Current State of Trade: http://www.ico.org/monthly_coffee_trade_stats.asp Country Info Graphics: http://www.ico.org/profiles_e.asp Ethiopia: https://infogr.am/_/qoxr0v5i5EcFsyH9Zsmg Tanzania: https://infogr.am/_/HAhEZseOeNmOeOM5aUQp ICO. World Coffee Trade (1963-2013). A review of the Markets, Challenges, and Opportunities facing the Sector. 50 Years ICO. 2014. ICIJ – The International Consortium of Investigative Journalists. The Panama Papers. Politicians, Criminals and the Rogue Industry that Hides their Cash. [retrieved 05 May 2016] https://panamapapers.icij.org/ Ingenbleek, Paul T.M., and Machiel J. Reinders. “The Development of a Market for Sustainable Coffee in The Netherlands: Rethinking the Contribution of Fair Trade.” Journal of Business Ethics. Vol. 113 (2012): 461-474. ITC – International Trade Centre. Trends in the Trade of Certified Coffees. Technical Paper. Geneva: 2011. Jaffee, Daniel. Brewing Justice: Fair Trade Coffee, Sustainability, and Survival. Berkley: University of California Press, 2007. Kienreich, Martin and Steffen Schwarz. FAQ Kaffee – Fragen, Antworten, Quintessenzen. Mannheim: coffee media & event, 2008. Kaffeefabrik online. Unsere Kaffeeproduzenten. [retrieved 12 Apr 2016] http://www.kaffeefabrik.at/unsere-kaffeeproduzenten/ Kaffeesortiment: http://www.kaffeefabrik.at/kaffeesortiment/ Kaller-Dietrich, Martina. “Las Américas im Vergleich – Good Neighbors im Schatten der ‘Zweiten Conquista’”. 123-144. Nord-Süd-Beziehungen. Kolonialismen und Ansätze zu ihrer Überwindung. Wien: mandelbaum. 2006.
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Kamola, Isaac A. „The global coffee economy and the production of genocide in Rwanda“. Third World Quarterly. Vol. 28, No.3 (2007): 571-592. Kolk, Ans. “Corporate Social Responsibility in the Coffee Sector: The Dynamics of MNC Responses and Code Development.” European Management Journal. Vol. 23, No. 2 (2005): 228-236. Kolland, Franz. “Zwischen Fortschrittsoptimismus und kritischer Gesellschaftsanalyse. Die klassischen Entwicklungstheorien.“ 79-104. Karin Fischer, Gerald Hödl, Irmi Maral- Hanak, Christof Parnreiter (eds.) Entwicklung und Unterentwicklung. Eine Einführung in Probleme, Theorien und Strategien. Wien: mandelbaum 2006. Lavazza. Qualità Rossa product information. [retrieved 12 Apr 2016] http://www.lavazza.com/en/at-home/coffee-blends/qualita-rossa.html Long, Michael A., and Douglas L. Murray. “Ethical Consumption, Values Convergence/Divergence and Community Development”. Journal of Agricultural and Environmental Ethics. Vol. 26, No. 2 (2013): 351-375. Linton, April. “Partnering for sustainability: business-NGO alliances in the coffee industry.” Development in Practice. Vol. 15, No. 3 & 4 (2005): 600-613. Macatonia, Steven. “Going beyond fair trade: the benefits and challenges of direct trade” The Guardian online. 13 Mar 2013. [retrieved 06 Mar 2016] http://www.theguardian.com/sustainable-business/direct-trading-coffee-farmers Maier, Johannes. Weg zur Gesundheit. Klagenfurt: St.-Josef-Bücherbruderschaft.1929. Merill, Tim L. (ed). Nicaragua: a country study. Area handbook series. Federal Research Division, Library of Congress. Washington DC: US Government Printing Office, 1994. Merriam Webster online. Definition biosphere. [retrieved 24 Apr 2016] http://www.merriam-webster.com/dictionary/biosphere Micheletti, Michele. Political Virtue and Shopping. Individuals, Consumerism and Collective Action. New York: Macmillan. 2003. Muller, Mike. “Nestlé’s baby milk scandal has grown up but not gone away”. The Guardian online. 13 Feb 2013. [retrieved 23 Jan 2016] http://www.theguardian.com/sustainable-business/nestle-baby-milk-scandal-food- industry-standards Murray, Douglas L., Laura T. Raynolds, and Peter L. Taylor. “The Future of Fair Trade Coffee: Dilemmas Facing Latin America’s Small-Scale Producers.” Development in Practice. Vol. 16, No. 2 (2006): 179-192. Neuberger, Günther. Süd-Nord: Zum Beispiel Kaffee. Göttingen: Lamuv Taschenbuch, 1991. Norman, Wayne and Chris MacDonald. “Getting to the Bottom of ‘Triple Bottom Line’”. Business Ethics Quarterly. Vol. 14, No. 2 (2004): 243-262. Oxfam. Grounds for Change. Creating a Voice for Small Coffee Farmers and Farmworkers with the Next International Coffee Agreement. 2006. Ozersky, Josh. “Third Wave Coffee, Explained.” Esquire online. 30 Aug 2013. [retrieved 05 Mar 2016. http://www.esquire.com/food-drink/drinks/a24501/third-wave-coffee-ozersky/ Pabari, Suneal. 10 Differences between Robusta and Arabica Coffee. 19 Sep 2014 online. [retrieved 10 Nov 2015]
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http://theroasterspack.com/blogs/news/15409365-10-differences-between-robusta- arabica-coffee Pelupessy, Wim. “The World behind the World Coffee Market”. Études rurales. Vol. 180 (2007): 189-212. Pendergrast, Mark. Uncommon Grounds. The history of coffee and how it transformed our world. 2nd ed. New York: Basic Books, 2010. Philpott, Stacy M., Peter Bichier, Robert Rice, and Russell Greenberg. “Field-Testing Ecological and Economic Benefits of Coffee Certification Programs.” Conservation Biology. Vol. 21, No. 4 (2007): 975-985. Ponte, Stefano. “Behind the Coffee Crisis.” Economic and Political Weekly. Vol. 36, No.46/47 (2001): 4410-4417. Potter, Robert B., Tony Binns, Jennifer A. Elliott, and David Smith. “Theories and Strategies of Development” 79-126. Geographies of Development. An Introduction to Development Studies. 3rd ed. Harlow: Pearson. 2008. Raffer, Kunibert. “Handel und Unterentwicklung. Kritische Anmerkungen zur Frei- handelsideologie”. 105-124. Karin Fischer, Gerald Hödl, Irmi Maral-Hanak, Christof Parnreiter (eds.) Entwicklung und Unterentwicklung. Eine Einführung in Probleme, Theorien und Strategien. Wien: mandelbaum 2006. Raynolds, Laura T. and Elizabeth A. Bennett (eds.). Handbook of Research on Fair Trade. Northhampton: Edward Elgar Publishing. 2015. Razaghian, Rose. Financing the Civil War: The Confederacy’s Financial Strategy. (2004) [retrieved 10 Apr 2016] Working Paper: http://politics.as.nyu.edu/docs/IO/4734/razaghian_s05.pdf Tables: http://politics.as.nyu.edu/docs/IO/4734/razaghian_s05.5.pdf Renard, Marie-Christine, and Mariana Ortega Breña. “The Mexican Coffee Crisis.” Latin American Perspectives. Vol. 37, No. 2 (2010): 21-33. Rettberg, Angelika. “Global Markets, Local Conflict: Violence in the Colombian Coffee Region after the Breakdown of the International Coffee Agreement.” Latin American Perspectives. Vol. 37, No. 2 (2010): 111-132. Russell, Bill, Sushil Mohan, and Anindya Banerjee. “Coffee Market Liberalization and the Implications for Producers in Brazil, Guatemala and India”. The World Bank Economic Review. Vol. 26, No.3 (2012): 514-538. Salamun, Ulrich. Online Forum Kaffee-Netz.de (20 Jan 2015) [retrieved 12 Apr 2016] https://www.kaffee-netz.de/threads/liste-von-direkt-gehandelten-kaffees-von- roestereien-aus-deutschland.87895/page-2 SCAA – Specialty Coffee Association of America. Sustainable Coffee Certifications: A Comparison Matrix. Online. Adam Kline, 2010. [retrieved 12 Apr 2016] https://www.scaa.org/PDF/Sustainable%20Coffee%20Certifications%20Comparison %20Matrix%202010.pdf SCS Global Services. Starbucks C.A.F.E. Practices: Ensuring the ethical sourcing of coffee. Online [retrieved 27 Apr. 2016] https://www.scsglobalservices.com/starbucks-cafe-practices Segafredo Zanetti. First Step: The Blend. [retrieved 02 Apr 2016]
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http://www.segafredo.it/en/away-from-home/for-the-professional/the-blend/first-step- the-blend.html Sherfey, Jimmy. “El Salvador’s Coffee Industry at a Crossroads”. Daily Coffee News online. 06 Jan 2016. [retrieved 14 Mar 2016] http://dailycoffeenews.com/2016/01/06/el-salvadors-coffee-industry-at-a-crossroads/ Soentgen, Jens, and Armin Reller (eds.). Kaffee. Die Biografie eines weltwirtschaftlichen Stoffes. München: oekom, 2006. Sonnentor 2012. Im Gespräch mit dem Biosfair-Gründer Ulrich Salamun von Maschek. Online. [retrieved 02 Apr 2016] https://www.sonnentor.com/index.php/media/dateien/pdf_dateien/Im-Gespraech-mit- Ulrich-Salamun Sonnentor 2013. Nicaragua – Land des duftenden Kaffees. Online. [retrieved 02 Apr 2016] https://www.sonnentor.com/nicaragua Starbucks Global Responsibility Report 2014. [retrieved 14 Mar 2016] http://globalassets.starbucks.com/assets/ea2441eb7cf647bb8ce8bb40f75e267e.pdf Suchanek, Andreas, and Nick Lin-Hi. “Die gesellschaftliche Verantwortung von Unternehmen in der Marktwirtschaft.“ 69-96. Ludger Heidbrink und Alfred Hirsch (ed.). Verantwortung als marktwirtschaftliches Prinzip. Zum Verhältnis von Moral und Ökonomie. Frankfurt: Campus, 2008. Tchibo. 2014 Sustainability Report. [retrieved 27 Jan 2016] http://www.tchibo-nachhaltigkeit.de/csrweb/servlet/cb/1122192/data/- /TchiboNachhaltigkeitsbericht2014.pdf.pdf Topik, Steven and William Gervase Clarence-Smith (eds). The Global Coffee Economy in Africa, Asia and Latin America. Cambridge: Cambridge University Press, 2003. Topik, Steven. “The Integration of the World Coffee Market”. 21-49. Steven Topik and William Gervase Clarence-Smith (eds). The Global Coffee Economy in Africa, Asia and Latin America. Cambridge: Cambridge University Press, 2003. Topik, Steven, John M. Talbot and Mario Samper. “Introduction: Globalization, Neoliberalism, and the Latin American Coffee Societies”. Latin American Perspectives. Vol. 37, No. 2 (2010): 5-20. Valkila, Joni, Pertti Haaparanta and Niina Niemi. “Empowering Coffee Traders? The Coffee Value Chain from Nicaraguan Fair Trade Farmers to Finnish Consumers.” Journal of Business Ethics. Vol. 97, No. 2 (2010): 257-270. Waak, Anne. “Das bringt die ‘Third Wave‘ des Kaffee-Bewegung“ Die Welt online. 03 Feb 2014. [retrieved 28 Apr 2016] http://www.welt.de/icon/article124428858/Das-bringt-die-Third-Wave-der-Kaffee- Bewegung.html Wallerstein, Immanuel. World-Systems Analysis: An Introduction. Durham: Duke University Press, 2004. Watson, Kelly and Moira Laura Achinelli. “Context and Contingency: The Coffee Crisis for Conventional Small-Scale Coffee Farmers in Brazil.” The Geographical Journal. Vol.174, No. 3 (2008): 223-234. West, Paige. From Modern Production to Imagined Primitive: The Social World of Coffee from Papua New Guinea. Durham: Duke University Press, 2012.
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Wild, Tony. “Cevit coffee: why it’s time to cut the crap.” The Guardian online. 13 Sep 2013. [retrieved 02 Apr 2016] http://www.theguardian.com/lifeandstyle/wordofmouth/2013/sep/13/civet-coffee-cut- the-crap Wilsey, Matt and Scott Lichtig. The Nike Controversy. [retrieved 23 Jan 2016] https://web.stanford.edu/class/e297c/trade_environment/wheeling/hnike.html Wilson, Bradley R. “Indebted to Fair Trade? Coffee and crisis in Nicaragua.” Geoforum. Vol. 41 (2010): 84-92.
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List of Abbreviations ACE Alliance for Coffee Excellence
ADA Austrian Development Agency
BRICS Brazil, Russia, India, China and South Africa
CSR corporate social responsibility
DE Douwe Egberts
DRG Deutsche Röstergilde
DT direct trade
ECLA Economic Commission for Latin America
FLO Fair Trade Labelling Organization
FT fair trade
GF General Foods
ICA International Coffee Agreement
ICIJ The International Consortium of Investigative Journalists
ICO International Coffee Organization
P&G Procter & Gamble
SCAA Specialty Coffee Association of America
TNC transnational corporation
UNESCO United Nations Educational Scientific and Cultural Organization
US(A) United States of America
WTO World Trade Organization
4C Common Code for the Coffee Community
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List of Illustrations Ill. 1: Blossoms of the coffee plant ...... 1 Source: Ökumenische Initiative Mittelamerika http://www.ini-ecumenica.org/themen/bester-kaffee-aus-Guatemala
Ill. 2: Ripe coffee cherries ...... 1 Source: Photograph by Ulrich Salamun
Ill. 3: Map of Brazil indicating coffee regions ...... 11 Source: Typika Coffee Roasters. http://typika.com.au/learn-about-coffee/coffee-regions/
Ill. 4: Coffee price development ~1975-2016 ...... 25 Source: Trading Economics. http://de.tradingeconomics.com/commodity/coffee
Ill. 5: The triple bottom line of sustainability ...... 40 Source: My illustration, adapted from: http://www.foresightcompany.com/guide/chapter-5/spreckley-triple-bottom-line/
Ill. 6: US & EU organic labels ...... 44 Source: www.usda.gov & www.oekolandbau.de
Ill. 7: FLO label ...... 44 Source: www.fairtrade-deutschland.de
Ill. 8: UTZ Kapeh label ...... 45 Source: www.migros.ch
Ill. 9: Rainforest Alliance & SMBC labels ...... 45 Source: www.rainforest-alliance.org & www.nationalzoo.si.edu
Ill. 10: Latte art 'Swan' ...... 555 Source: My photograph
Ill. 11: Map of Nicaragua ...... 58 Source: Science for all. http://science-all.com/image.php?pic=/images/nicaragua-map/nicaragua-map-07.jpg
Ill. 12: Haberler & Fischer, owners of Tribeka ...... 62 Source: Billa Frischgekocht. https://www.billa.at/Frischgekocht_ONLINE/Frisch_Gekocht/Trend___Design/Espres sobars/Espressobars/FgContent.aspx
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Ill. 13: Bag of green coffee ...... 63 Source: My photograph
Ill. 14: Typical small-scale roaster ...... 63 Source: My photograph
Ill. 15: Price range within the specialty segment ...... 64 Source: Deutsche Röstergilde http://www.deutsche-roestergilde.de/de/news/87-die-einkaufspreise-fuer-rohkaffee- unserer-verbandsmitglieder.html
Ill. 16: Salamun on one of his fincas ...... 68 Source: Photograph by Ulrich Salamun
Ill. 17: Farmers transporting coffee ...... 69 Source: Photograph by Ulrich Salamun
Ill. 18: Small coffee trees in the shade ...... Fehler! Textmarke nicht definiert. Source: Photograph by Ulrich Salamun
Ill. 19: Rain and cloud forest in Jinotega...... Fehler! Textmarke nicht definiert. Source: Photograph by Ulrich Salamun
Ill. 20: Drying process, honey dried (foreground, dark) & regular beans (background, light) 72 Source: Photograph by Ulrich Salamun
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Appendix Appendix I
Interview Zusammenfassung – Harald Fischer (Jänner 2016): Tribeka Gastronomie & Handels GmbH Graz A= Kathrin Brunner, B= Harald Fischer A: Frage hinsichtlich Gründung und Eröffnung d einzelnen Filialen B: Gründung und Eröffnung 2003, Filiale Technikerstraße seit Jänner 2004, Reiterkaserne Sommer 2007, Kaiserfeldgasse November 2014 A: Wie viele Mitarbeiter gibt es insgesamt und wofür sind sie zuständig? (z.B. Lokale, Administration, Rösterei) B: Insgesamt ca 60, davon sind jeweils etwa 15-18 bei Grieskai/Kaiserfeldgasse, je 10-12 bei Reiterkaserne/TU. Administration zwei Mitarbeiterinnen (Anm.: eine davon ist Miteigentümerin Eva Haberler. Rösterei zwei Mitarbeiter (Anm.: diese rösten nicht ausschließlich, sondern arbeiten auch in den Lokalen) A: Bezüglich der Rösterei, da wird einerseits für den Eigenbedarf, andererseits für externe Abnehmer (Weltcafé in Wien) geröstet? B: Momentan nur für Eigenbedarf, Rösten für das Weltcafé wurde letzten Herbst eingestellt, da der Aufwand und die damit verbundenen Kontrollen zu mühsam wurden (Anm.: weitere Infos dazu siehe unten). A: Wieviele Tonnen kaufst werden pro Jahr bezogen, wieviel davon ist Eigenbedarf für die Lokal ein Graz und wieviel wird weiterverkauft? B: Wir kaufen etwa 22-23 Tonnen pro Jahr, davon ein Container aus Nicaragua (etwa 19 Tonnen) plus ein paar Tonnen extra aus Hamburg. Ca. die Hälfte davon brauchen wir und die Hälfte verkaufen wir. A: Wo und an wen wird der geröstete Kaffee verkauft? B: In Graz und anderen Orten in Österreich, z.B. Bruck a.d. Mur und Wien (Anm.: z.B. Kaffeeküche am Schottentor). Wir verkaufen an andere Gastronomiebetriebe. A: Auf welche Kriterien wird bei der Auswahl von Rohkaffee generell geachtet? B: Erstmal auf den Geschmack. Zweitens muss ein Kaffee preislich passen, wobei beim Preis natürlich nicht ausschlaggebend ist, dass er besonders billig ist, da wir sehr hochwertigen Kaffee kaufen, d.h. der ist von Haus aus schon in einer sehr hohen Preiskategorie, aber selbst da gibt es nochmal gravierende Unterschiede. Und natürlich, was uns auch zum Nicaraguakaffee geführt hat, dass man auch bestimmte Hintergrund Informationen bekommt. Die bekomme ich beim Händler in Hamburg nicht. Wenn wir in Hamburg einkaufen, also auf der normalen Handelskette (über die die oben genannten extra Tonnen Spezialitätenkaffee bezogen werden), gibt es einen Exporteur und einen Importeur. Wir sparen uns preislich nichts dadurch, dass wir direkt in Nicaragua den Kaffee kaufen, obwohl wir in der Handelskette einiges überspringen. Es gibt in diesem Fall keinen Importeur mehr und Ulrich (Salamun, von Biosfair) tritt quasi als Exporteur in Nicaragua auf. Wir kaufen den Kaffee also nicht billiger ein, sondern die hat damit zu tun, dass wir gerne Hintergrundinformationen möchten und
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Beziehungen wirklich längerfristig aufbauen wollen. Das war immer der Grundgedanke, aber wenn man als Röster klein ist, ist das natürlich besonders am Anfang schwierig. A: Kannst du kurz erklären wie sich das am Anfang entwickelt hat mit dem Rösten? B: Wir hatten mehrere Sorten, jeweils ein paar Sack und es macht keinen Sinn wegen 10 Sack nach Äthiopien zu fahren und es sich vor Ort anzuschauen nur um dann drei Sack Kaffee zu kaufen. Das macht jetzt Sinn wo wir genug Kaffee brauchen und die Mischung entsprechend angepasst haben. Gestartet haben wir mit sechs Sorten, jetzt sind es nur mehr zwei. Man hat also auf gut Glück ein paar Sorten bestellt und geröstet um den passenden Blend zu finden. Der Vorteil bei einer großen Mischung ist, wenn eine Sorte wegbricht ist es nicht so dramatisch diese zu ersetzen. Wenn du nur zwei Sorten hast und eine bricht komplett weg ist das viel schwerer. Das Problem war, dass wir damals immer nach Bedarf gekauft haben und nicht auf Vorrat ein Jahr, also ich hab im Frühjahr gestartet und nicht gewusst wo die Reise hingeht. Im Herbst brauchte ich dann einen neuen und es war nicht sicher ob ich dann den gleichen Kaffee wieder bekomme. Ich hatte als Röster gerade erst angefangen und war nicht sattelfest, dachte mir, rösten wir mal viele Sorten, um einen Einblick zu bekommen und mich weiterentwickeln zu können. Dann sehe ich wie die alle schmecken und eben mit dem Gedanken, wenn einmal eine Sorte wegbricht, tut man sich leichter ein Sechstel zu ersetzen, als die Hälfte. A: Passiert das relativ häufig im Spezialitätenbereich, dass eine Sorte einfach wegfällt von einem Jahr auf das nächste? B: Ja, schon. Rohkaffeehändler kaufen auch nur in Containern und wenn es ein guter Kaffee ist kann es sein, dass der dann irgendwann vergriffen ist. Ich erhalte die Preislisten immer wöchentlich, mit Infos über Länder, welche Kaffeesorten es wo gibt, welche Plantagen usw. Dann gibt es immer die Chargennummer und die Sackanzahl bzw. Containerzahl (Anm.: z.B. 60kg Brasil, 320 Sack pro Container) Teilweise gibt es mehrere Container, teilweise nur einen. In der Angebotsliste sieht man dann z.B. es gibt noch 70 Säcke. Wenn ich weiß ich brauche 5 davon, dann kauf ich diese 5, aber dann kann es natürlich in einem halben Jahr sein, dass es keine mehr gibt. Mittlerweile planen wir natürlich ganz anders als zu Beginn. Jetzt planen wir für das ganze Jahr voraus. Momenten haben wir das fünfte Jahr in dem wir direkt aus Nicaragua den Kaffee beziehen. Da kaufen wir gleich einen ganzen Container, weil das Sinn macht. Weniger als einen Container zu kaufen ist oft schwierig. Man kann auch einen halben Container kaufen, aber der kostet gleichviel, was den Transport betrifft. Manche kleine Röster lassen sich per Luftfracht Kaffee schicken, aber das ist natürlich sehr teuer und macht auf Dauer keinen Sinn. A: Wie ist es zur Zusammenarbeit mit Biosfair und Nicaragua gekommen? B: Zufällig, über eine Bekannte und frühere Arbeitskollegin, deren Bruder im Orpheum gearbeitet hat, als Maschek dort gespielt haben. Sie kamen auf das Thema Kaffee und das Tribeka zu sprechen, sodass sich das erste Treffen mit Ulrich ergeben hat. Er hat zu diesem Zeitpunkthat aktiv in Europa nach Abnehmern gesucht. A: Wie sieht der Handelsweg zwischen Tribeka und Biosfair im Unterschied zu den anderen Händlen in Hamburg aus? Der Handelsweg mit Nicaragua besteht nur aus mir auf der einen Seite und Ulrich bzw. Biosfair auf der anderen, mit den Kaffeebauern im Hintergrund. Beim Spezialitätenkaffee aus Hamburg gibt es mehr Zwischenstufen, wir haben dort 1-3 Händler, wo wir hin und wieder beziehen. Diese gehören wiederum zu einer Firma, die international extrem groß aufgestellt sind, d. h. die haben selbst Firmen die exportieren und eigene Plantagen in diversen Ländern. In der Regel gibt es einen Exporteur und einen Importeur, das sind zwar eigene Firmen, aber tatsächlich 89
Master’s Thesis Brunner gehören die zusammen zum gleichen Konzern. Mittlerweile haben diese Firmen in fast allen Kaffeeproduzierenden Ländern eigene Niederlassungen. Teilweise gibt es von Land zu Land große Unterschiede was den Einkauf betrifft. In Kenia z.B. wird alles über die Kaffeebörse versteigert, über Auktionen, da ist es nicht so einfach Kaffee zu beziehen. A: Wie sieht es mit dem Preis aus, wie viel Unterschied liegt etwa zwischen dem Kaffee von Biosfair und FT bzw. dem regulären Börsenpreis? B: Meines Wissens nach, ohne Gewähr, gibt es bei FT einen garantierten Aufschlag von 20 Cent auf den Börsenpreis und nochmals einen ähnlichen Aufschlag für Bioqualität, pro Pfund. Beim Kaffee aus Nicaragua muss ich sagen, dass ich zahlenmäßig nicht genau weiß, wieviel Ulrich seinen Leuten zahlt. Es ist nicht so transparent, weil ich es auch nicht genau hinterfrage, da ich mich auf seine Angaben verlasse. Ich weiß, dass er deutlich mehr zahlt als FT garantiert. Für uns ist der Preis ähnlich wie er auch für entsprechende Qualität über den Spezialitätenhändler wäre, aber zusätzlich haben wir den direkten Kontakt. A: Was sind z.B. Hintergrundinformationen bezüglich des Nicaragua Kaffees die für dich wertvoll sind, außer der Garantie fairer Preise für die Bauern? Ich weiß z.B. dass Ulrich selbst 3 Plantagen hat dort und mit 3 oder 4 Kooperativen zusammenarbeitet. Von diesen übernimmt er den Kaffee bestimmter Mitglieder, die nach den entsprechenden Kriterien anbauen bzw. die besseren Kaffeelagen haben (Anm.: Anforderungen z.B. SGH, Bioqualität etc. siehe Fragebogen Biosfair). Ulrich hat einen Agrarökonom, der auf seine Kosten den Bauern zur Verfügung steht. Es gibt in dem Gebiet etwa immer wieder Probleme mit dem Kaffeerost. Außerdem ist einer der Grundgedanken die Biosphäre zu schützen, daher kommt auch der Name, von Span. ‚biosfera‘. Der Name ist etwas fälschlich mit ‚bio‘ und ‚fair‘ verbunden, obwohl es damit auch zu tun hat im Ergebnis. In dem Anbaugebiet ist auch ein Nationalpark, daher der Zusammenhang zur Biosphäre. Es gibt dort ein eigenes Mikroklima, das ist Regenwald-ähnlich und teilweise noch ursprünglicher Nebelwald, wo die Bauern dazwischen ihre Kaffeepflanzen setzen. Ulrich möchte sicherstellen, dass ökologisch wertvoll angebaut wird, aber entsprechend auch einen hohen Nutzen haben, sodass die Bauern nicht in Versuchung geraten diesen Wald abzuholzen. Es steckt also ein Nachhaltigkeitsgedanke dahinter. A: Habt ihr ganz bewusst auf FT Kaffee verzichtet, bzw. verzichtet ihr bewusst auf eine Kennzeichnung, die auf den direkten Handel hinweist? B: Ja, genau. Wir haben uns damit sehr wohl beschäftigt, weil Kunden interessanterweise sehr oft glaubten, dass der Kaffee FT ist, obwohl wir das im Lokal nie kommuniziert haben und nie ein Logo auf den Packungen war. Man muss auch dazu sagen, dass viele in der Spezialitätenkaffeebranche (z.B. sog. ‚Kaffee-Nerds‘), die Top Qualität möchten, den Labels und FT extrem kritisch gegenüberstehen. In diesem Privatsektor von Spezialitätenkaffee, werden zum Teil Preise bezahlt, die ein Vielfaches von FT Preis betragen. Im Vergleich, der Kaffee den wir für das Weltkaffee in Wien gekauft haben, das war immer unser billigster Kaffee. Wir haben keinen einzigen Kaffee gehabt der billiger war als dieser FT Kaffee. Ich denke, FT richtet sich qualitativ extrem nach dem Massenkaffee. Den bekommt man auch im Supermarkt, da gibt es um 6 Euro auch einen Kilo FT Kaffee. Da sind wir beim Tribeka im Einkauf aber gerade erst bei dem Preis für Rohkaffee, ohne Rösten und Arbeitsinput. Das Spezialitätensegment ist eben aus dem Anspruch an höhere Qualität heraus entstanden, es werden also für sehr gute Qualitäten Preise bezahlt die ein Vielfaches über dem Börsenpreis liegen.
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A: Würdest du sagen, dass sehr gute Qualität und direkter Handel normalerweise einhergehen? B: Ich denke schon. Es ist auch immer die Frage welche Möglichkeiten Länder haben sich selbst zu vermarkten, da passiert jetzt gerade relativ viel. Es gibt mittlerweile einige kleine Rohkaffeehändler die in dieser Spezialitätenkaffeeszene entstanden sind, z.B. in Norwegen, Dänemark oder Holland. Die haben sich vom vom Barista zum Röster und Rohkaffeehändler entwickelt, gehen durch die Weltgeschichte und suchen sich ständig neue Kaffees. Es gibt auch die Cups of Excellence, organisiert von der SCAE, wobei Kaffeefarmen ihre Bohnen einschicken können, diese werden von einer internationalen Fachjury blind verkostet und bewertet. Daraus ergeben sich nationale Gewinner, die Siegerkaffees werden via Internet versteigert und erzielen extrem hohe Preise. Die sind dann schwer umkämpft. Vor allem werden sie Japan ersteigert oder auch von Norwegen, die zählen u.a. zu den high-end Kaffeeländern. Japan etwa kauft auch sehr viel von diesem Jamaica Blue Mountain Kaffee, weshalb der auch so teuer ist. Über den Cup of Excellence haben auch mittlerweile kleinere Farmen die Möglichkeit sich einen Marktzugang zu schaffen. Das gab es früher nicht, es sind aber mittlerweile sehr viele, was ganz dem Sinn der SCAA/SCAE entspricht. Deren Ziel ist u.a. auch die Kaffeehandelskette zu verkürzen, Produzenten und Käufer näher zusammenzubringen. Das hat gut funktioniert, auch durch andere Meisterschaften und Messen. Einerseits entsteht etwas Wettbewerb, andererseits entwickeln sich daraus viele Kontakte und Beziehungen. Zum Teil sind auf den Messen sogar Kaffeebauern. Als ich einmal bei den Meisterschaften in Triest war, traf ich auf Anhieb einen Kaffeebauern aus El Salvador, der mir Muster angeboten hat; eine gute Möglichkeit zum Austausch eben. In den letzten zehn Jahren hat sich also extrem viel getan im Spezialitätensegment, auch was den Handel betrifft. Ich sehe das als eine richtige Bewegung gegen Massenkaffee. Bezüglich FT/Bio Kaffee, wir haben das kurzfristig überlegt um uns auch die Fragen nicht immer gefallen lassen zu müssen. Wenn man nämlich versucht zu erklären warum man nicht FT/Bio Kaffee hat, wird man meist schräg angeschaut, als ob man sich entschuldigen müsste. Wir haben uns also informiert und über einen Kontakt der Einkaufsgenossenschaft Mitka in Berlin versucht über die Genossenschaft direkt Kaffee zu beziehen. Die Mitka ist eine Einkaufsgenossenschaft von einigen Bio ‚Hardlinern‘, ähnlich wie dwp, oder el puente. Das Informationsgespräch war allerdings eher abschreckend. Der Fokus ist eher sozial, was an sich nicht schlimm ist, aber in dem Fall war die Qualität nicht vordergründig. Außerdem wäre man auch in puncto Vorfinanzierung und Haftung bei Kaffeeprojekten involviert gewesen, was zu riskant und vage war. Bei dem FT Kaffee, den wir für das Weltcafè geröstet haben, war der Grund für die Stornierung hauptsächlich, dass es zu mühsam wurde, vor allem wegen der Kontrollen. Da gibt es jährlich zwei Kontrollen, eine für Bio und eine für FT, d.h. es kommt jemand in die Rösterei und kontrolliert ob alles passt. Prinzipiell ist das verständlich, allerdings ist das jedes Mal mit relativ viel Aufwand verbunden und angesichts der Tatsache, dass dieser FT Kaffee sowieso der billigste war den wir bezogen haben, war die ständige Rechtfertigung besonders mühsam. A: Wie hat sich dein Bewusstsein hinsichtlich der Auswirkungen von Kaffeekonsum, bzw. Kaffeeeinkauf auf die Kaffeebauern über die Zeit verändert? B: Das ist relativ schwer zu beurteilen für mich, man hat trotzdem relativ wenig Einblick, bzw. sind wir im Vergleich natürlich sehr klein als Rösterei. Man erfährt Dinge über die Medien, aber in erster Linie ist man immer angewiesen auf Informationen aus erster Hand, soweit das möglich ist. Wir haben jetzt den Ulrich als eine Kontaktperson die vor Ort lebt und der für mich repräsentativ ist, mit dem ich in sehr gutem Kontakt stehe. Zu den Bauern habe ich nach wie vor keinen wirklichen Kontakt, da ich kein Spanisch spreche. Wir haben während dem Besuch in Nicaragua zwei Fincas besucht, die Familien dort bei der Arbeit gesehen. In dem Fall 91
Master’s Thesis Brunner haben sie quasi oben am Berg gearbeitet, da standen Unterkünfte zur Verfügung und mittlerweile konnten sie es sich auch leisten auf ihrer eigenen Plantage im Tal Kaffee und anderes für sich selbst anzubauen, unten im Tal. Es ist üblich, wie auch in vielen anderen Ländern wo Kaffee produziert wird, dass die Kinder mithelfen z.B. bei der Ernte. Die Kinder gehen auch zur Schule mittlerweile, das war früher nicht so, es gibt aber jetzt einen mobilen Bus mit dem die Lehrer herumfahren und unterrichten. Diese Dinge sind aber von Land zu Land verschieden. A: Abgesehen vom Kaffee, was sind bei anderen Produkten/Zutaten Kriterien, die bei der Auswahl beachtet werden? B: Z.B. Regionalität, auch wenn es begrenzt möglich ist, weil das sehr von unserem Angebot abhängt. Die Kuchen etwa, die wir selber machen die sind sehr regional, aber die Dinge die zwangsläufig zugekauft werden müssen, z.B. Bagels, die gibt es so in Österreich nicht, kommen u.U. aus anderen Ländern. Die Bagels sind aus einer kleinen Bäckerei in Berlin, wo wir auch extra deshalb nach Berlin geflogen sind um die kennenzulernen weil es mir wichtig war, dass es nicht von einem Riesenkonzern kommt. Teilweise lässt sich das aber nicht vermeiden, z.B. bei Muffins und Ciabatta Brot, die kommen von einer riesigen Firma, sind aber trotzdem qualitativ gut und zumindest den Vertreter kenne ich bereits sehr lange. Diese Produkte haben sich bewährt und man könnte das in der eigenen Küche, wo die hausgemachten Backwaren hergestellt werden, was das Preis-Leistungsverhältnis betrifft nicht entsprechend herstellen. Mir wäre auch lieber wenn das ‚die Hausfrau nebenan‘ machen würde. Aber wir sehen bei unserer eigenen Bäckerin, dass das bei gewissen Produkten nicht geht. Einerseits mengenmäßig, andererseits würde es einen Rattenschwanz nach sich ziehen an Aufwand, an Kalkulation, an Einkäufen etc. Am Beispiel Cheesecake, wäre es einerseits für unsere Bäckerin nicht möglich die nötige Anzahl Kuchen zu backen, andererseits wäre schätzungsweise der Preis beim Wareneinkauf schon so hoch wie der des zugekauften Kuchens, sodass sich das schlicht nicht rechnen würde. Wir versuchen also in gewisser Weise einen Spagat bei manchen Produkten. Die weiße Schokolade ist ebenso ein Beispiel für eine Zutat die weder bio noch regional ist, aber die ist tatsächlich unersetzbar, wie die Nachfrage zeigt. Für die dunkle Schokolade (ursprünglich auch von Ghirardelli) haben wir bald eine neue Lösung. Von einem Händler in Österreich gibt es demnächst eine Bioschokolade, die er selbst hier mixt. Produkte von Biofirmen sind v.a. die Milch (Mantsch Müch), die auch regional ist. Andere Dinge (Sojamilch, Bengal Spice Chaitee, Getreidekaffee u.a.) kommen von einem Biokonzern Beim Tee haben wir generell umgestellt auf einen neuen Produzenten (teapigs) weil der frühere seit der Übernahme durch einen Konzern unzuverlässig und mühsam wurde.
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Appendix II
Fragebogen Mitarbeiter Tribeka (Jänner 2016) - Zusammenfassung
MitarbeiterIn m/w Alter Angestellt seit M 1 w 26 ~ 3 Jahren M 2 w 26 ~ 1 ½ Jahren M 3 w 23 ~ 7 Monaten M 4 w 31 ~ 6 Jahren M 5 m 21 ~ 2 Jahren M 6 m 27 ~ 6 Jahren (Leitung Reiterkaserne) M 7 m 25 ~ 4 Jahren (Rösterei)
1. Was sind deiner Einschätzung nach die Vor- & Nachteile von FT Kaffee im Vergleich zu herkömmlich gehandeltem Kaffee? Wodurch unterscheidet sich des Weiteren direkt gehandelter Kaffee, wie ihn Tribeka anbietet? M 1 Vorteile Kaffeebauern: bessere Bezahlung für Kaffee, Kooperationen erleichtern Arbeit, mehr Marktsicherheit / Nachteile Kaffeebauern: nicht bekannt / Vorteile Konsumenten: bessere, kontrollierte Qualität des Kaffees, Gefühl etwas Gutes zu tun beim Kauf von FT / Nachteile Konsumenten: höherer Preis / Tribeka Kaffee: Direkte Kommunikation, direkter Handel mit den Kaffeebauern, bei FT sind mehrere Parteien dazwischengeschaltet M 2 FT Produkt verkauft sich besser, verändert allerdings nicht den Geschmack. Ich denke wenn man FT liest, stellt man sich gern irgendwo in Argentinien eine Mann mittleren Alters vor, der in aller Früh seinen selbst gebrühten Kaffee genießt und sich dann im Sonnenaufgang ab an die Arbeit macht- das macht für viele den Geschmack aus / Man kann nicht genau sagen ob wirklich FT „drinnen“ ist / Wenn ich die Wahl habe, gehe ich nach Geschmack des Kaffees, nicht nach Label / Man kann sich nie wirklich sicher sein / Tribeka: Bezug zur Herstellung des Kaffees / wir kennen die Röster, die Chefs / bekommen die „Liebe“ zum Kaffee in der Arbeit mit, sehen wie sehr das Produkt bei den Kunden ankommt M 3 Vorteil: Bauern werden gerecht entlohnt und nicht ausgebeutet, was selbstverständlich sein sollte / Nachteil: FT ist teurer, aber in Österreich prinzipiell für alle leistbar / Direkter Handel: Vorteil, keine Zwischenhändler die mitschneiden / Wir wissen genau was wir kaufen und welchen Preis bzw. Wert es hat M 4 Vorteil: faire Behandlung und Bezahlung von Kaffeebauern / Nachteil: nur eine Auswahl an Kaffeebauern, auch bei FT kassiert ein Zwischenhändler mit / Tribeka Kaffee: Kaffeebauer wurde sorgfältig aufgrund verschiedenster Kriterien gewählt, unabhängig von Zwischenhändlern / Kaffeebauer wird direkt und wirklich fair bezahlt M 5 FT: man weiß oft keine Herkunft und nichts über Arbeitsbedingungen bzw. Gewinnbeteiligungen / habe gehört, dass die Gewinne nicht den Bauern sondern dem jew. (exportierenden) Staat zufällt / bin eher skeptisch / direct trade ist besser, wir wissen woher der Kaffee kommt und welche Bedingungen für das Produkt und die arbeitenden Händen gelten / man steht in unmittelbarer Verbindung M 6 FT: nicht immer besser / kein Fan / Mindestabnahme Preis für Kaffee wird bezahlt, das kann aber durch den flexiblen Markt irrelevant / FT mittlerweile ein Riesenkonzern, aufgeblasen, sodass ein Teil vom Gewinn auch an FT selber geht / direkter Handel im Vergleich besser, da ethisch korrekt und mit Kommunikation zu Erzeugern M 7 Vorteil: FT gegenüber konventionell, Kaffee wird immer eine Spur besser gehandelt, Bauern bekommen mehr für die Arbeit / FT und Spezialitätenkaffee ist ein deutlicher Unterschied, wird teilweise direkt gehandelt ist, noch bessere Auszeichnungen / FT nicht schlecht, aber es gibt bessere Optionen / Vorteil direkt gehandelt: der Preis wird persönlich
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ausgehandelt, keine Zwischenhändler, so wenig Stopps wie möglich, Bauern bekommen viel mehr Geld
2. Was ist deine Meinung zu Zertifizierungen & Labels und haben diese einen Einfluss auf deine Kaufentscheidung von Kaffee oder anderen Produkten? M 1 Man hat ein gutes Gefühl / Greife eher zu regionalen Produkten als zu FT / Kaufe eher Bio als herkömmlich, mache aber trotzdem manchmal einen Preisvergleich, was ggf. meine Kaufentscheidung beeinflusst M 2 An oberste Stelle steht für mich Kontrolle, da es in allen Geschäften der Welt Korruption gibt / Ich achte sehr auf diese Marken bei Tierprodukten / Wähle dabei sehr bedacht und verzichte auch längere Zeit auf solche Produkte wenn ich mir nicht zu 100% sicher bin dass es regional ist M 3 Zertifizierungen gut / helfen mir öfters wenn ich nicht weiß welche Marke ich von einem Produkt kaufen soll weil es so viel Auswahl gibt / greife wenn es angeboten wird zur Bio bzw. Fair Trade Marke M 4 Zertifizierungen nicht schlecht / geben Aufschluss über Qualität und Herkunft der Ware / glaubwürdiger als der Herstellertext auf der Packung / haben auf jeden Fall Einfluss auf Kaufentscheidung / kaufe v.a. regional und bio z.B. ja! Natürlich-Produkte M 5 Stehe gerade in der heutigen Zeit, wo durch Trends wie dem veganen Lifestyle immer mehr Bio Produkte in den Läden zu finden sind, allen Zertifikaten skeptisch gegenüber / man weiß nie was wirklich drinnen ist / Das Gleiche gilt für Fair Trade / ein Logo überzeugt m ich mich nicht, besonders beim Discounter / vertraue nur dem ‚Biokisterl‘ das ich selbst beim Bauern hole M 6 Kaufe gerne zertifizierte Produkte, v.a. Bio, allerdings zählt Rationalität noch vor Bio / FT ist für viele Teil eines positiven Lifestyles heutzutage M 7 Bin sehr skeptisch, da ich viel damit in puncto Kaffee zu tun habe / in Österreich bei Bio halte ich es für sehr gut, aber Bio aus anderen Ländern ist viel schwieriger nachzuvollziehen / kaufe aber trotzdem eher zertifizierte Produkte
3. Glaubst du, dass man mit dem Kauf von zertifizierten Produkten „etwas Gutes“ tut? Wem kommt der höhere Preis zu Gute? M 1 Ja, das Gefühl hat man / manchmal nicht sicher, wie sehr man auf die Zertifizierung vertrauen kann, ob wirklich die Produzenten einen großen Teil der Gewinne bekommen, gute Arbeitsbedingungen haben / Zertifizierte Produkte als kleiner Luxus M 2 Nein das denke ich absolut nicht / höherer Preis geht vielleicht an die Logistik & Vermarktung, nicht an Produzenten M 3 Grundsätzlich ja, glaube nicht, dass man z.B. bei Biosiegeln angelogen wird / hoffe der höhere Preis den Herstellern zugutekommt / damit glaube ich auch etwas Gutes zu tun M 4 Ja, wobei schwer zu sagen ist wer alles mitschneidet / Zertifikat setzt aber gute Arbeit voraus / für Qualität wird auch gerne gezahlt M 5 Nein, ich glaube das nicht solange man sich nicht persönlich überzeugen kann / dazu gibt es zu viele Geschichten über Tricks und Betrug in der Hinsicht M 6 Ja, da ein Schritt in die richtige Richtung / Bio / FT Produkte sind nicht so gut wie man vielleicht glauben möchte / bin überzeugt, dass ein Bioprodukt grdsl. besser ist als ein nicht- bio Produkt, auch was den Handel betrifft / kann aber auch in der gleichen Fabrik hergestellt werden / fände generell mehr Fokus auf Lebensmittel als etwas sehr wertvolles für den Menschen wichtig sowie dementsprechende Entlohnung M 7 Bin zumindest so naiv das zu glauben, der Preisaufschlag kommt zu einem Teil jedenfalls den Herstellern zu Gute und ist gerechtfertigt weil z.B. weniger Ertrag durch Verzicht auf Düngemittel entsteht
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4. Falls du zu Hause Kaffee trinkst, nach welchen Kriterien wählst Du den Kaffee für den Verbrauch zu Hause aus? Z.B. bevorzugte Marken? M 1 Ich selbst trinke keinen Kaffee, aber bei mir Zuhause wird Tribeka Kaffee konsumiert / kaufe diesen mit dem Mitarbeiterrabatt, ohne diesen wäre der Kaffee für meine Verhältnisse eher teuer M 2 Drei Kaffeemaschinen zu Hause: Filtermaschine, da bevorzuge ich Tchibo, Herdplattenespresso Maschine für alles, was ich nicht als gut empfinde, Favorit ist Nespresso Maschine, die ich aber bewusst nur ab und an aktiviere, aufgrund des Kapselverbrauchs und hoher Preise / Verliere außerdem den Bezug zu einem Genussmittel wenn ich nur ein Knöpfchen drücken muss / Positiv ist, dass Nespresso jetzt auch Recycling anbietet, fraglich bleibt ob das wie versprochen durchgeführt wird M 3 Trinke keinen Kaffee M 4 Selten, aber wenn, Tribeka M 5 Kaum, aber durch die Arbeit nun Tribeka Kaffee hin und wieder M 6 Trinke fast ausschließlich Tribeka Kaffee, auch zu Hause M 7 Trinke zu Hause Tribeka Kaffee, achte in anderen Lokalen auch auf den Kaffee bzw. trinke ggf. auch qualitativ schlechteren / ohne Mitarbeiterpreis würde ich mir Tribeka Kaffee wahrscheinlich nicht leisten / sehr skeptisch bin ich bei Nespresso, da das konstante Ergebnis in der Tasse rätselhaft ist, wenn man über Rösten und Kaffeezubereitung gut Bescheid weiß / Qualität und Preis passen nicht zusammen / Kapseln aus Umweltsicht nicht vertretbar
5. Welche Erfahrungen gibt es mit Kunden wenn es um das Thema FT / direkter Handel geht? Wird aktiv danach gefragt? Wie reagieren die Kunden wenn ihnen erklärt wird, dass der Kaffee direkt gehandelt wird? M 1 Kunden fragen immer wieder nach, ob der Kaffee FT ist. Wenn man ihnen erklärt, dass dieser direkt gehandelt ist, können sie nicht viel damit anfangen und brauchen eine genauere Erklärung. Direct Trade ist nicht so bekannt wie FT M 2 Kunden interessieren sich öfter für den Session Espresso, wo Land/Region draufstehen, aber viele bemühen sich auch nicht weiter darum / wenn von FT die Rede ist sind alle begeistert, wirken interessiert / manchmal enttäuscht wenn sie erfahren, dass man den Menschen der die einzelne Bohne gepflügt hat nicht gleich beim Vornamen kennt / Kunden schätzen generell Tribekas direkten Handel sehr / höhere Preise dafür sind nicht das Problem M 3 Wurde bisher zweimal gefragt ob der Kaffee FT ist / direkter Handel verursachte zuerst Verwunderung, dann Begeisterung / der hohe Preis war kein Thema M 4 Es wird hin und wieder nachgefragt / heutzutage ist das Bewusstsein für die Herkunft der gekauften Produkte geschärft / FT kennen die meisten als Marke, was es genau bedeutet wissen die wenigsten / sie wissen, dass sie etwas mehr zahlen und dafür wird auf die Hersteller des Produktes etwas besser geachtet / Direct Trade wird gerade erst Bekannt /wenn ich erkläre warum wir direct trade statt FT haben ist das immer ok M 5 Als ich einmal gefragt wurde, erklärte ich den Unterschied zwischen FT und unserem Direct Trading, Kunde hat sich total gefreut, dass es so etwas heutzutage überhaupt (noch) gibt / Über den Preis hat sich bei mir noch nie jemand beschwert M 6 Momentan gibt es ein starkes Zertifikat-Denken, man muss oft erklären, dass es Produkte gibt die nicht zertifiziert sind und trotzdem besser als jene mit Zertifikat / wenn man Leuten Hintergrundgeschichten erklärt, vorausgesetzt es interessiert sie wirklich, dann sind sie sehr froh darüber, dass die Qualität noch besser ist als bei FT M 7 Einerseits freuen sich viele über den direkten Handel / für manche aber ist der Preis viel zu hoch, da bringt es auch nicht viel diesen Preis genau zu erklären / es ist kein Problem, dass es kein FT Siegel gibt, solange der direkte Handel erklärt wird
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6. Inwiefern sind deiner Meinung nach ethische Aspekte in anderen Bereichen des Betriebs im Tribeka umgesetzt? (z.B. andere Produkte/Zutaten, Umgang mit den Mitarbeitern etc.) M 1 Im Betrieb ist man auf ethische Werte angewiesen, zB. Vertrauen gegenüber Mitarbeitern, Kunden, Lieferanten, Allgemeinheit / Faires Verhalten untereinander, verantwortungsvolles, verlässliches Handeln & Arbeiten sind notwendig / Jeder trägt Verantwortungen und Verpflichtungen / Nachhaltigkeit ist wichtig / Ethische Standards /Leitlinien/Verhaltensstandards sollten eingehalten werden / Vorgesetzte agieren als Vorbilder M 2 Bewusster Verbrauch wird einem sehr nahe gelegt, Nichts zu verschwenden z.B. nur so viel man gerade braucht aufschneiden / Umgang mit den Mitarbeitern ist wie sonst im keinem Betrieb wo ich bis jetzt war, makellos / Respekt wird einen entgegengebracht / Anregungen und Tipps zur Verbesserung des Klimas werden stets auf- und ernst genommen / Für mich gibt es nur einen geringen Unterschied von den „Höheren“ weil der Umgang einfach so freundlich und wertfrei passiert M 3 Gut finde ich den Versuch von zu viel Plastik weg zu kommen / auch andere Produkte werden gut gehandelt / Umgang mit Mitarbeitern ist super klasse, von oben wie untereinander / jeder arbeitet in jedem Bereich, da gibt es keine Unterschiede M 4 Es wird generell viel Wert auf Qualität gelegt und versucht regionale und bio Produkte zu bevorzugen / Umgang mit den Mitarbeitern ist freundschaftlich / Es wird im Team gearbeitet, von den Chefs kommt jederzeit Unterstützung M 5 Wir haben mit unserem familiären Team und der relaxten Chef-Etage wirklich Glück / Auf persönlicher Ebene gibt’s wirklich nichts zu bemängeln / Dass unsere Süßigkeiten zum Großteil selbst in einer Backstube zubereitet werden und bei den Zugekauften auf Top- Qualität geachtet wird rundet das Bild sehr positiv ab. Nach innen und außen. M 6 Mir ist speziell Nachhaltigkeit wichtig, wenn man mit Produkten zu tun hat, aber auch besonders bei der Arbeitskraft, die auch nicht verschwendet werden soll /Arbeitsverhältnis ist sehr freundschaftlich / das positive Verhältnis zwischen Mitarbeitern merken auch die Kunden M 7 Meiner Meinung nach wird viel umgesetzt z.B. auf regionale und Bio-Produkte geachtet wo es möglich ist / Nachhaltigkeit ist wichtig, auch im Umgang mit Mitarbeitern gibt es nichts zu bemängeln
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Appendix III
Kurzinterviews Kunden Tribeka (Jänner 2016) - Zusammenfassung
Kunde/in m/w Alter K 1 m 44 K 2 m 32 K 3 m 54 K 4 w 33
1. Trinken Sie auch zu Hause Kaffee, wenn ja welche Art bzw. Zubereitungsform nutzen Sie? K 1 Trinke zu Hause sehr selten Kaffee, habe aber dort eine Nespresso Maschine K 2 Zu Hause habe ich eine Filtermaschine / kaufe bewusst FT Kaffee, aber keine bestimmte Marke / achte hauptsächlich auf die Röstung, den Geschmack / bevorzuge dunkle Espressoröstung K 3 Zu Hause trinke ich wenig Kaffee, nur zum Frühstück, Filter, und da trinke ich ihn gerne sehr süß, achte eher auf den günstigen Preis als auf die Qualität in dem Fall K 4 Zusätzlich zu 1-2mal im Lokal trinke ich auch zu Hause täglich Kaffee, etwa noch 2-3 Tassen zusätzlich. Zu Hause muss es schnell gehen, instant Kaffee, also einfach löslicher Kaffee, dabei geht es mir nur um den schnellen Koffeinkick / im Kaffeehaus ist das was ganz anderes, da ist das viel bewusster und der Geschmack und Qualität sind wichtiger / es geht im Konditionierung in dem Fall, dass ich etwas in der Hand haben will etwa bei Arbeiten am PC
2. Aus welchen Gründen kommen Sie gerne zu Tribeka? K 1 Lage sehr passend für mich, da genau zwischen Wohnung und Arbeit / ist für mich ein Ort in der Früh um nochmal zu entspannen bevor ich in die Arbeit gehe, ein Ort zum runterkommen für einen guten Start in den Tag / Geschmack ist außerdem wichtig / früher habe ich viel mehr Kaffee getrunken v.a. bei der Arbeit, das war extrem / jetzt genieße ich Kaffee ganz bewusst einmal am Tag hier, anstatt einfach aus Gewohnheit etwas in der Hand zu haben K 2 Erstens, weil der Kaffee gut schmeckt und zweitens weil ich ums Eck wohne / ich gehe auch in andere Kaffeehäuser und schmecke die Unterschiede, hier ist die Lage am besten für mich K 3 Der Kaffee schmeckt gut, die Leute sind sympathisch, die Atmosphäre gefällt mir. Es ist auch einfach Teil meines Tagesablaufs, ich gehe immer spazieren einmal am Tag die Mur entlang und dann mache ich hier eine Pause und gehe dann zurück, das passt ganz gut K 4 Es geht um die Atmosphäre, die Nähe zum Wohnort, die Qualität, z.B. auch der Milch, ich trinke nur Sojamilch und da ist mir wichtig, dass die gute Qualität hat, beim Kaffee hier weiß ich außerdem, dass er gut gehandelt wird, ich kenne die Mitarbeiter und die Chefs und weiß, dass der Umgang untereinander sehr gut ist
3. Welche Meinung haben Sie zu Zertifizierungen bei Kaffee und anderen Produkten? K 1 Ich achte schon darauf und wenn es passt kaufe ich auch zertifizierte Produkte, aber es ist nicht ausschlaggebend / ins Café hier würde ich in jedem Fall kommen, da ich weiß, dass es auch ohne Zertifikat gut gehandelt wird / Prinzipiell suche ich nicht nach Labels auf anderen Produkten z.B. bei Gemüse, aber wenn es vor mir liegt entscheide ich mich oft dafür K 2 Das ist sicher ein Schritt in die richtige Richtung, aber so richtig auf Labels verlassen sollte man sich wahrscheinlich nicht / bestimmt wird viel Schundluder damit betrieben / wahrscheinlich mehr Marketing als sonst was dahinter / andererseits aber ist es für den Konsumenten fast die einzige Möglichkeit was zu kontrollieren, außer gleich selber hinzufahren und Kaffee von der Plantage zu holen, was natürlich vor allem beim Kaffee sehr schwer ist / beim Gemüse achte ich vor allem auf regional und Bio / wenn möglich die Kombination, sonst regional zuerst, dann Bio
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K 3 Finde es wichtig, dass es so etwas gibt, aber die Frage bleibt ob die Produzenten wirklich den ganzen Mehrwert bekommen, ich glaube das ist nur zu einem gewissen Teil so K 4 Bin froh wenn ich weiß etwas ist FT, aber im Konsum selbst muss ich ehrlich sagen, achte ich kaum darauf / es ist theoretisch was Gutes für mich, aber ich setzte es wohl zu wenig um im Konsum / bei Bio bzw. regionalen Produkten schaue ich noch eher darauf, aber oft ist die Eile beim Einkauf zu groß / idealerweise kauft man wohl am Bauernmarkt, da ist die Frage nach Regionalität und Saisonalität kein Problem, aber das mache ich ehrlich gesagt zu wenig / im Fall von Tribeka vertraue ich den Menschen hier viel mehr als irgendeinem Siegel, also sehe ich das besser als FT, weil man den Chef dahinter kennt
4. Wem glauben Sie kommt dabei der höhere Preis zu Gute bzw. tut man mit dem Kauf dieser Produkte etwas Gutes? K 1 Der Ansatz ist, dass es den Produzenten zu Guten kommt und generell glaube ich das auch z.B. dass die Herstellungsbedingungen oft besser sind K 2 Ich bin mir nicht sicher ob der ganze Preis den Bauern zu Gute kommt. Es wird wahrscheinlich schon ein Teil den Bauern zufließen, aber nicht der Großteil des Extrapreises, also es wird sich in Grenzen halten, auch wenn man sich vielleicht besser fühlt K 3 Jein, es ist wohl so, dass man das gerne so meinen möchte, aber die Realität sieht wahrscheinlich anders aus. Bis zu einem gewissen Grad wird es stimmen, dass z.B. der Aufpreis an den Produzenten geht, da es ja auch Kontrollen gibt K 4 Ja, auf jeden Fall / ethischer Mehrwert von Produkten wird momentan viel diskutiert, v.a. auch FT und man hat das Gefühl das geht mit höherem Qualitätsbewusstsein einher
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Appendix IV
Fragebogen - Ulrich Salamun (März 2016): Biosfair Agroexport S.A., Nicaragua 1. Zur Einleitung: 1.1 Aus welcher Motivation heraus gründeten Sie die Firma Biosfair? Bitte beschreiben Sie kurz den Hintergrund, wie es dazu kam.
Unsere Firma Biosfair Agroexport Nicaragua S.A. haben wir aus der Notwendigkeit heraus gegründet, dass potentielle Abnehmer aus Europa einen Widerpart im Ursprung brauchen, der einerseits Ihre Interessen gegenüber der ProduzentInnen-Kooperativen (Qualität, Pünktlichkeit der Lieferung, Liefertreue etc.), aber andererseits auch die Interessen der Produzenten (Preisvorstellungen, Lieferbedingungen etc.) gegenüber der Abnehmer vertritt. Biosfair erfüllt daher vor allem auch eine „matchmaker“-Funktion, indem sie Abnehmer und ProduzentInnen an einen Tisch bringt, wechselseitige Interessen vertritt, für Interessenausgleich sorgt und so langfristig stabile Geschäftsbeziehungen ermöglicht. Wir haben unsere Erkenntnisse vor allem aus der Analyse des Scheiterns von Projekten der österreichischen Entwicklungszusammenarbeit in Nicaragua, die sich mittlerweile seit ein paar Jahren völlig aus Nicaragua als Schwerpunktland zurückgezogen hat, gewonnen. Hier war die Prämisse, dass die Kooperativen die gesamte Wertschöpfungskette vom Anbau bis zu Vermarktung und dem Export eines Produkts (z.B. Kaffee) übernehmen sollen. Im Ergebnis hat das aber nicht funktioniert, da nach Ablauf der Projektlaufzeiten, die mühsam aufgebauten Geschäftsbeziehungen wieder zerfallen sind (z.B. Kakaoprojekt mit Fa. Zotter) bzw. NGOs, die nicht über das nötige Wissen verfügen (z.B. Horizont3000) die Vermarktungs- und Vermittlerrolle übernommen haben. Grundsätzlich kann man sagen, dass nur große Kooperativen, bzw. Kooperativen-Dachverbände direkte Beziehungen mit Abnehmern aus Europa langfristig unterhalten können, dabei meist aber einen zu großen Verwaltungs-Overhead und eine eigene „Verwalter Kaste“ aufbauen und sich dadurch zunehmend von der Basis, den ProduzentInnen, entfernen. Das führt wiederum zu Unmut bei den Mitgliedern an der Basis und zu Austritten einzelner Kooperativen aus den Dachverbänden, was wiederum die organisatorische Stabilität beeinträchtigt. Auch ist die Wahrung des Qualitätsanspruchs der Abnehmer aus Europa bei großen Kooperativen nicht gesichert, es wird versucht zu verkaufen was da ist. Differenzierung bei der Qualität wird nicht gemacht, weil Anliegen der Abnehmer nicht verstanden oder wahrgenommen werden (u.a. auch das große Problem von Fair Trade).
1.2 Was sind ihre Ziele und Anliegen? Nicaragua hat als Ursprung für biologisch angebaute oder unter geringstmöglichem Einsatz von Düngemitteln produzierte Lebensmittel, die nicht in unseren Breitegraden angebaut werden können, aufgrund seiner bewegten Geschichte und seiner zeitweiligen Isolation großes Potential. Wir bezeichnen Nicaragua oft auch als die „Spezialitätenkammer“ Zentralamerikas und versuchen diese positiven Voraussetzungen in Verbindung mit der Bevölkerung zu Ihrem Vorteil zu nutzen. Wir setzen gemeinsam auf nachhaltig angebaute und langfristig vermarktete Nischenprodukte, die zwar möglicherweise etwas teurer als Konkurrenzprodukte aus z.B. Indien, Paraguay etc. sind, aber was die Schadstofffreiheit (z.B. Pestizidfreiheit bei Chia) und die Zusammensetzung (z.B. Curcumingehalt bei Curcuma) von höherer Qualität sind. Es dauert meist einige Zeit bis sich die Bio-Marken-Abfüller in Europa für das teurere Produkt entscheiden, leider wird erst wenn der Leidensdruck groß genug ist, und aus anderen Ursprüngen gekaufte Ware, wegen erhöhter Pestizidwerte nicht in den Verkehr gebracht werden kann, sondern vernichtet werden muss, auf das höherwertige Produkt zurückgegriffen. Unser Ziel ist, mit Nischenprodukten hoher Qualität möglichst viel Wertschöpfung bei den Produzenten zu generieren und langfristige Geschäftsbeziehung, bei denen nicht (fiktive) Börsenpreise, sondern reale Produktions- und Lebenshaltungskosten den Preis eines Produkts definieren, zu unterhalten.
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2. Zahlen/Daten/Fakten: 2.1 In welcher Region Nicaraguas liegen Ihre Anbaugebiete und wodurch zeichnen sie sich aus? Der Kaffee den Biosfair exportiert, wird ausschließlich in Höhenlagen über 1.000 Metern Seehöhe im Department Jinotega angebaut. Jinotega bietet die idealen Voraussetzungen für einen nachhaltigen Anbau im Einklang mit der Natur, so wird beim Anbau auf den Schutz von Nebelwald, Quellgebieten und Wasserläufen und der Fauna und Flora generell Wert gelegt bzw. auch an Bewusstseinsbildung bei den ProduzentInnen gearbeitet. Für den Kaffeeanbau dürfen ausschließlich bestehende Agrarflächen genutzt werden, besonderes Augenmerk wird auf Rückwidmung und Wiederaufforstung von vorhandenen (Weide-)Flächen gelegt. Selbstverständlich findet der Kaffeeanbau auf den Fincas der ProduzentInnen im Schatten diversifizierter Bäume als sog. Schattenkaffee statt.
2.2 Wie viele Tonnen/Säcke Rohkaffee haben Sie 2015 produziert und exportiert und wer sind die Abnehmer? Bitte nennen Sie einige Beispiele.
Im Jahre 2015 hat Biosfair 11 Container Rohkaffee zu je 18.975kg nach Europa exportiert. Zu den Abnehmern gehören neben der Fa. Sonnentor und anderen mittelständischen Röstern in Deutschland und Italien auch immer mehr kleine Röster, die unsere Rohkaffees auch sack- und palettenweise abnehmen. Wir exportieren zu diesem Zwecke auch immer wieder Sammelcontainer mit „tailormade“ Spezialitätenkaffees bei denen von der Varietät bis hin zum Design des Kaffeesacks alles nach Kundenwunsch gestaltet wird.
2.3 Wird Biosfair Kaffee auch innerhalb Nicaraguas vertrieben? Falls ja, welcher Anteil der produzierten Menge Rohkaffee bleibt im Land?
Im Jahre 2015 hat Biosfair ca. 9.000kg innerhalb Nicaraguas geröstet und vertrieben. Der nationale Markt ist aufgrund des höheren Preises des Spezialitätenkaffees schwierig zu erobern. Gehobene Gastronomie und Hotellerie gehören zu den Abnehmern.
3. Direct Trade: 3.1 Wie läuft der Handel mit Biosfair grundsätzlich ab, z.B. wenn ein europäischer Gastronomiebetrieb/Röster/Vertreiber mit Ihnen in Kontakt tritt und Rohkaffee beziehen möchte? Als Europäer mit österreichischem Hintergrund fällt es uns leichter mit Abnehmern in Europa in Kontakt zu kommen, meist entdecken engagierte Röster, Bio-Abfüller uns bzw. werden wir durch Mundpropaganda weiterempfohlen.
3.2 Können Sie kurz die Vor- bzw. Nachteile von direkt gehandeltem Kaffee Ihrer Erfahrung nach beschreiben? Welche Potenziale und welche Schwierigkeiten gibt es? Das größte Problem ist wohl die blinde „Siegeltreue“ der Konsumenten, und die mangelnde Bereitschaft sich mit neuen Konzepten wie dem direkten Handel auseinander zu setzen. Manchmal scheint es, dass auch die Tragweite des direkten Handels und das damit verbundene Zusammenrücken der ProduzentInnen und Konsumenten nicht realisiert wird.
3.3 Inwieweit hebt sich der direkte Handel den Sie betreiben von Fair Trade nach FLO Kriterien ab? Grundsätzlich liegt der Preisberechnung auch bei uns der von FLO vorgegebene Rahmen zugrunde, jedoch legen wir darauf wert, dass alle Prämien und Überzahlungen auch direkt von der Kooperativen an die ProduzentInnen ausgeschüttet werden.
3.4 Welche Rolle spielen Fair Trade Preise, sowie der reguläre Börsenpreis bei der Preisfindung für Biosfair Kaffee? Wie oben erwähnt spielt das FLO Preisschema als Mindeststandard der Preisbildung eine zentrale Rolle, in den letzten Jahren sind wir jedoch durchschnittlich 25-30% effektiv über den von FLO bezahlten Preisen gelegen. Mittelfristig ist eine völlige Loslösung von einer NY-börsenabhängigen Preiskalkulation, hin zu einer an den realen Herstellungskosten orientierten das Ziel. 100
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3.5 Was hat sich konkret im Leben der Kaffeebauern, ihrer Familien, sowie anderer Menschen die in Nicaragua mit Ihnen zusammenarbeiten, seit der Kooperation über direkten Handel geändert? Wir konnten bei unseren ProduzentInnen eine Steigerung des persönlichen Lebensstandards und den Wunsch der Jugend „auf der Finca zu bleiben“ und sich dem Kaffeeanbau zu widmen anstelle in die (Haupt)-Stadt auszuwandern bemerken. Auch ist durch den Kompetenzzuwachs im Anbau eine Steigerung des Selbstwertgefühls und der Stolz auf das Produzierte spürbar geworden. Zahlenmäßig spiegelt sich das in der effektiven Entschuldung der Kooperativen und dem erhöhten Zulauf an neuen Mitgliedern wieder.
3.6 Inwiefern stehen Bemühungen wie jene von Biosfair mit Entwicklungszusammenarbeit in Verbindung? Wie oben erwähnt, ist Nicaragua kein Schwerpunktland der österr. Entwicklungszusammenarbeit mehr und es werden in Nicaragua keine von der Austrian Development Agency (ADA) geförderten Projekte mehr verwirklicht. Die Ausnahme bilden noch die sog. Wirtschaftspartnerschafts-Projekte, bei denen die ADA die Umsetzung von Projekten von Abnehmern in Europa bis zu 50% fördert. In unserem Fall setzt die Fa. Sonnentor als Projektnehmer der ADA mit Biosfair als Partner im Süden ein Wirtschaftspartnerschaftsprojekt zur Förderung biologischer Landwirtschaft in Nicaragua um. Die Förderung wird gezielt zum Aufbau einer biologisch zertifizierten ProduzentInnen-Basis im Bereich Kaffee und Gewürze und zur Abdeckung der Zertifizierungskosten und damit zur Entlastung der Kooperativen eingesetzt.
3.7 Gibt es über Biosfair eine Kooperation zwischen Bauern und Käufer in der am Qualitätsprofil eines speziellen Rohkaffees nach den Vorstellungen dieses einen Käufers gearbeitet wird? Ja, das passiert bereits mit einigen Abnehmern. So wird z.B. in der Aufbereitung auf Kundenwünsche sehr genau eingegangen. Wir produzieren auf Kundenwunsch auch sog. Honey dried coffees, das sind „halbgewaschene“ Arabicas, die nach dem pulpen direkt im sog. beneficio seco (dry mill) auf den Trocknungsflächen mit dem Fruchtfleisch getrocknet werden.
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