The Effect Of Coffee On Globalization
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The production of coffee is a process affected many people in the world today. Not only are the drinkers of the coffee affecting their own health, but the choice they make is also determining the quantity of goods purchased by Starbucks at the next trade time. If no one buys a particular brand, Starbucks will not purchase it. Consequently, the South American farmers exporting that particular type of coffee will not have any profit and will be unable to feed their families, plant new crop, or buy any materials to improve their overall quality of life. These poor farmers are excellent examples of the tragedy that occurs when coffee is exported and sent through numerous funnels before the consumer enjoys the delicious beverage.
The awful dependency of the foreign coffee market is based on market price. The problem with free trade isnt with the end price for AmericansЖfor some reason, consumers are happy to pay the $5 per cup at Starbucks. The problem lies at the beginning of the market chain. The farmers who pick the product are left out of the prosperity that coffee production brings. “For every pound of coffee sold in the United States – which can vary from $2.69 for a 13-ounce can of Folgers to $8.49 for a one-pound bag of Starbucks beans – farmers get less than 35 cents and coffee pickers less than 14 cents, according to industry statistics” (Neuffer). These statistics are only assuming that the farmers are lucky enough to have their product bought by a foreign investor. In many instances, the farmers are dependent
upon the market price for their beans. If a certain region of the world were to produce a bean at a fraction of the cost, all coffee-buyers would move their purchases to the more inexpensive option. This forces these South American farmers to keep up with other farmers around the world, regardless of the price. Situations like this contribute to the atrocious underdevelopment of these countries.
As Americans, we have grown accustomed to the free trade market. It is our belief that as long as people are buying your product, you are going to be financially secure. This, however, is not true in the farming of coffee beans. Farmers are the only people on the long chain of profiteers that are not benefiting enough. It is the responsibility of other people to assist these poor farmers in making their product profitable. We cannot stand idle while companies like Starbucks sell each Carmel Machiatto for a huge net profit and the farmer responsible for that drink makes a minuscule
amount. It is an exploitation of our free trade system that has made our nation the greatest in the world.
While the concept of globalization is often looked at as being detrimental to the farmers in developing countries, there are positive aspects of free trade that are overlooked. While the common argument is that we are simply assisting in the under-development of these countries, there is also another argument that credits the system as being beneficial toward building a stronger economy in these areas.
The issue that many people bring to attention is the principle of the free trade market. The basic concept of free trade is producing a good will result in a profit. While no one will argue that the farmers are fairly compensated, some argue that a farmer receiving some benefits is an accomplishment in itself. If not for the “evil” companies of the United States that are buying this product, the farmers would be left with nothing. They would have an excellent crop to sell, and no one willing to pay the price for it.
After the farmers realize their crop is not profitable, they would be forced to switch to another aspect of agriculture, and that switch would cost them money. Furthermore, it would be a tremendous risk. What if the crop is unmanageable for the farmers? Perhaps the world economy could not support another type of crop as well as it supports coffee? There are too many variables, and a risk such as this could cost the farmers in an entire nation their crop.
In addition to the system being beneficial to otherwise unemployed South American farmers, the competition among the aforementioned farmers assures Americans of quality products. If the farmers must challenge one another for the companies to buy their coffee,