Current situation of the coffee industry

Current situation of the coffee industry 1Coffee is one of the worlds most valuable assets and at least 25 million people around the world base their livelihood on their production. Most of these producers are small-scale farmers in the developing world, despite the extent of coffee consumption takes place in the United States and Europe Over the last twenty five years of the last century, developing countries have been incited to follow export-oriented economy models as a way to increase living standards of their citizens. With this model, countries have opened their economies globally, boosting international trade and investments, and expanding their exports with the objective of earning foreign exchange. These strategies try to substitute older models based on import-replacement, which proposed that developing countries should impose protectionism measures in order to protect their domestic economies by controlling investments and external trade. At face value, specializing in exporting coffee seems to be a good strategy for developing countries, knowing that they have the perfect conditions to grow coffee crops and taking the advantage that richer countries are not competitive in this field, but they are very interested in purchasing the product as they earn considerable profits of its distribution and consumption. However, the global coffee industry has become a nightmare as the world prices have dampened, which have an important impact on livelihoods of those countries. Why has this happened, and how is affecting developing countries? CURRENT SITUATION 2The current crisis is the latest and most dramatic in a long history of industry ups and downs. Coffee prices have plummeted to 30-years lows. (See appendix 2) Coffee, which is produced in over 50 developing countries, is one of the s worlds most important commodities exports. It makes an important contribution to development socioeconomic and poverty alleviation as well as its economic importance is based on exportation, some of represent more than the half of their export earnings. Moreover, a cup of coffee in any neighborhood in New York or Paris can reach the $ 3.60 price. That same cup of coffee, a coffee farmer in the Andes of South America or Southeast Asia receives only 24 cents, a paltry 7% which, of course, does not even cover the cost of production or the basic needs of collectors. This are the most direct consequences of a crisis in the last two years which has sunk into poverty over 25 million people, while the coffee trade of the four big multinationals (Nestle, Kraft Foods, Procter Gamble and Sara Lee) has curbed their economic growth. Therefore, it is not a trivial matter; it is actually the major source of foreign exchange for several countries. The current crisis is directly affecting some 20 million families living in the area where the center of all growing and production, between the Tropics of Cancer and Capricorn, and depend on grain as their main source of income. Moreover, the United Nations World Food Program launched an emergency operation to assist 155,000 people in Guatemala, where a severe drought that killed subsistence crops coincided with low coffee prices. CAUSES Coffee prices are at the alarming and the specialty coffee industry is in a crisis. In addition, most industry experts predict that will not improve in the near future. At the root of the current crisis is an oversupply of coffee on world markets. Since 1990, coffee production worldwide has increased by 15 percent, exceeding consumption by two folds. This increase was precipitated by new producers entering the market, most notably Vietnam (see appendix 3). Keep in mind that coffee production in Vietnam is not really traditional, in 1987. The Vietnamese were at the beginning just consumers. But the access to the position of largest producer of robusta type of coffee is actually the result of a political will, encouraged by the World Bank. As one of the most disadvantage countries in Asia, Vietnam saw in the business the chance to expand its economy and as a way to gain valuable foreign exchange. Furthermore, it provided an opportunity to encourage economic expansion in relatively disa dvantage areas. However, coffee production has surged in other countries as well. The reason for this relate to some complex technical, economic and political factors. In addition, during the last decade productivity of coffee trees increased because of enhanced agricultural practice. Moreover, many countries increased their lands in order to specialize in coffee production. 2The reasons for this is different from country to country, liberalization of trade in coffee, improving better transportation and communication on production data, prices and inventories increase security of supply World; domestic food markets were deregulated, which encouraged a general shift to export production; and land previously reserved for non-agricultural production, for example forest areas, was brought into agricultural use through privatization and non regulation. Going a little bit further, the beginning of the crisis dates back to 1989 when the International Coffee Agreement collapsed, contributing greatly to the problem of oversupply. The agreement had been responsible for the restrictions on exports of coffee, without it, many producing countries sought to increase export earnings through increased production. Unfortunately, its success in increasing it led to a surplus that, actually, decreased revenues. Moreover, severe frosts in Brazil during the middle 1990s showed a temporary rise in coffee prices, before the basic trend kept on increasing until the present days (appendix 3). But all of these effects are not just based simply one of supply and demand. The connections between the links of the supply chains that connect producers with consumers have also changed. Nowadays, coffee farmers receive less than 7% of the retail price of coffee in developed world markets; the rest of the percentage until 100%, 93% is paid to importers, packaging firms, roaster and retailers. In part this reflects a structural disparity of commercial power in the global coffee system, whereby six international trading companies control over half of the world coffee exports. In these contexts, developing country coffee growers are in a very weak bargaining position. CONSEQUENCES This downward pricing spiral is affecting infrastructures in coffee-producing countries where they are collapsing. There is no money to fix or repair roads, the cost of trucks is out of reach and distributing the merchandise is definitely a hard task. When small agricultural producers are dependent on some buyer to sale their crops for a large amount of money, slumping prices have dramatic repercussions for those poorest countries who everyday fight against hunger and social vulnerability. In recent years aid agencies have struggled to bring awareness about these human repercussions trying to call the attention of policy-makers. These human-scale dimensions of the crisis should flow into national and regional economies. For a significant number of tropical countries, coffee is the major source of export-earning. The collapse of coffee prices, then, has destabilized the systems of whole national economies. Many of these countries are also seriously in debt to international organizatio ns, and have had to renegotiate or even suspend the repayments of loans. In turn, the resultant debt crisis of developing countries is a major source of financial instability in the world. As always, the poorest countries are most affected, the business profit is becoming some of the poorest and most vulnerable of the world into extreme poverty, livelihoods of small farmers are being destroyed by international markets beyond their control. But not everyone is losing in the current scenario. While the cost of the raw material comes in a slump, some companies, particularly multinational companies along with several large coffee retailers, continue earning and being profitable. Their market powers allow them essentially to dictate to their suppliers and take advantage of the lower prices. As always, poorest countries are the most affected, corporate gain is turning over some of the worlds poorest and most weak people to extreme poverty: the livelihoods of smaller producers are being destroyed by international markets that are beyond their control. SOLUTIONS It seems clear that one of the solutions to the coffee crisis passes to limit grain production to raise prices in international trade. This would be the theory in the context of the market economy. In practice, it has been tried it last year and received the denial of the Asian countries and Brazil. in oil. Experts agree that the coffee industry is undergoing major changes in order to recover the price-crisis prices. The entry of Vietnam into the coffee trade had important consequences: the way to produce cheaper. Alternatives to the coffee crisis are in what some NGOs have called fair trade. If producing countries such as Vietnam has grown 400% in the last decade is because their culture has focused on the logical contribution of new technologies. It is a commitment to diversified organic coffee, coffee quality associated with sustainable development and fair trade outside intermediaries, to improve the price paid to farmers and reducing the supply with further restructuring of the field. An idea that is far from being realized because of the illiquidity of the farmer . 4The costs of producing differ from country to country, perhaps from 60 to 90 cents for The worst hits are Latin American countries with relatively high production costs. These countries may try to find ways to cut costs or find niche markets that command premium prices, such as organic or shade-grown coffee that provides ecological habitats. But those options do not help everyone. Many farmers ultimately have to move to other more lucrative products. In the fall of the current prices, farmers enough eventually be driven out of business, which will produce increased coffee prices again. That means another potential shortage threat in the future, especially for higher quality coffees are more expensive to produce. And this shortage can lead high enough to encourage overproduction, once again. It is not clear when this damaging cycle will repeat again, or even if it is going to finish. What is clear is that new and better solutions are needed to help the poorest countries that are affected by it. CONCLUSION AND RECOMMENDATIONS In conclusion, the existing circumstances of the world coffee industry represent a crisis of huge human cost. The low prices being received by coffee farmers not only put in danger the livelihoods of people and communities, but add significantly to global inequality and its correlated to financial and political implications. For another point of view, the crisis also unveils the failures of export-oriented models which curiously most developing countries follow. What it can be learned at this point: what is true for some countries may not be true for anothers. When one country increments its coffee exports, it benefits. But if all countries do the same, then the effects are to produce an over-supply of commodities and to cause prices to fall. The lives of smallholder farmers become vulnerable by depending on the conditions imposed those who dominate commodity markets, which in any case are structured in ways that concentrated power in a small number of transnational companies. And at least, some recommendations can be given: Correcting the imbalance between supply and demand by increasing consumer in particular by: improving quality in the world market and promoting diversification to reduce dependency. It is recognized that to ensure market access for products alternative, there must be a substantial reduction of tariffs and subsidies to those who are now protected agriculture in industrialized countries. In addition, support a broad-based rural development to enhance the capacity of local processing and producer associations, and also measures to improve access to credit and risk management. Beyond these suggestions, the coffee industry should participate in programs designed to help reducing the effects of price shocks at the farm level. These efforts should include locking roasters in contracts with farmers for the coming years, as a way to motivate farmers to keep on producing coffee, for example, paying more for certain quality coffees. Simultaneously with the efforts of importers, roasters and retailers to create mutually beneficial relationships with farmers, producers have taken steps toward understanding what the market demand for its coffee. APPENDIX 1 APPENDIX 2 Prices of the coffee market (2003) APPENDIX 3

Acetylene Lab

Chemistry 12 Acetylene Lab March 8th, 2013 Hypothesis If the amount of gas is increase, it would have a fully combustion because it contains more carbon ions after the combination. Observation % of gas in the test tube ( approximately) % of O2 in the test tube (approximately) Black soot What kind of sound is produced? Trail# 1 70. 00% 30. 00% Yes (Whole test tube) â€Å"Puff† Trail# 2 50. 00% 50. 00% Yes â€Å"Puff† Trail# 3 10. 00% 90. 00% Few( head of the test tube) High pitch â€Å"Pop† DiscussionThe observation table do not support the hypothesis, since it shows the result that as the amount of acetylene gas decreases and oxygen gas increases, there would be a greater chance of a complete combustion. In trail# 1, investigators use 70% acetylene gas and 30% of oxygen gas, which become incomplete combustion. Black soot represents pure carbon, which means it do not have a complete combustion since fully combustion's formula should have a double replacement which form carbon dioxide and water vapour. Also, when a complete combustion occurs, the test tube should be clean, because there is more oxygen gas to burn the acetylene gas.However, during the experiment, the investigators make some human errors such as do not use precise measurement for the acetylene gas and the oxygen gas, acetylene gas leaked from the test tube etc. Conclusion Even though this experiment do not have a fully complete combustion, the investigators can still predict that the less volume of acetylene gas are in the test tube and more volume of oxygen gas are in the test tube, it will have a better chance to form a complete combustion. To improve the quality of the experiment, ensure to use precise measurement and make less human errors as possible or perform the experiment few more times.

A Case Study on Formulation of the Information Strategy of Timberlodge Essay

Information strategy is an integral part of a business plan to improve the computer/communications architectures, hardware, software, peripherals, and training. The mentioned changes are targeted at refining business operations (Betz, 396). Accordingly, Timberlodge has benefited from restructuring of the technical aspect specifically its software/hardware architectures. Information strategy (IS) of Timberlodge should yield competitive advantage at a lower cost and higher profitability. IS is composed of three components namely information system (IS) strategy, information technology (IT) strategy, and information management (IM) strategy. In Timberlodge’s case study, they are looking to adapt the same innovative and technological approach into the product area of figurines based on the production driven by demand. The said aim is considered to be the company’s IS Strategy. Given the long business and supplier relationship of Timberlodge and Potterville, the company can meet halfway by integrating the new automated production processing system in their existing factory at Potterville. See more: Homeless satire essay In this way, the company and its highly skilled, experienced, and loyal workforce at Potterville that makes up the IM strategy. The company can make use of the same tool called KAPS Associates’ Systems Planning and Analytical Tool (SPLAT) as its IT strategy. Timberlodge can continue to achieve higher production through efficient, automated production system by integrating the new information technology into the traditional set up. The possible adverse publicity of the closure of its factory in Potterville can be avoided through adapting the new technology and retraining of the staff in Potterville. Timberlodge should also consider their loyalty and long standing job employment with the company. While these people are highly skilled, the new automated system requires low skilled people. Thus, workers must be re-assessed and rehired based on their skills.

A Brief Note On Social Issues Of Refugees - 1669 Words

Katie A. O’Conner SOC 2020 SEC 010 Instructor – Amanda Levitt Final Paper Social Issues of Refugees Since the United States declared independence from Great Britain in 1776, there has been numerous amount of legislation passed to increase the difficulty of gaining citizenship for immigrants. These laws passed were deeply rooted in discriminatory practices for the preservation of an idealized American culture. In today’s society the United States has continue these practices, but claims indiscrimination towards specific ethnic group since the passing of the 1965 Immigration and Nationality Act (INA). The INA changed the immigration process through which â€Å"†¦replaced the existing national-origins quota system with per country caps on†¦show more content†¦The mentality of those years has not left the United States, for in the 1980’s, Senator Alan Simpson stated â€Å"These new persons and their descendants do not assimilate satisfactorily†¦They may well create in America the same social, political, and economic problems that exist in the countrie s in which they have chosen to depart†(Gomberg-Muà ±oz, 2017; Gould, 1981). This quote from Simpson was followed by the passing of the Immigration Reform and Control Act (IRCA) in 1986 and the Illegal Immigration Reform and Immigration Responsibility Act (IIRAIRA) in 1996, focusing on the removal and changing of status of lawful immigrants to lower the immigration status in the United States led by of fear of multiculturalism and criminality. With politicians publically advocating racial ideologies and falsehoods towards immigrants, it disassociates U.S. citizens from the fact that the passage of some immigrants is due to fleeing countries that the UN declares state of emergency on. Refugees and asylum seekers are based on those â€Å"Who can demonstrate a ‘well rounded fear of persecution’ because of their race, membership in a social group, political opinion, religion or national origin†(Gomberg-Muà ±oz, 2017). Americans do not acknowledge the fear that these people have felt, or how it mustShow MoreRelatedNewcomer Pre-Employment Program Essay998 Words   |  4 Pages My First Job in Canada This program is designed for newcomers that are permanent residents, looking for guidance with job searching in the Waterloo Region. This workshop is delivered in Arabic with some English included. It is important to note that flyers for this program are printed in both Arabic and English. Bus tickets are also provided for attendees. 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