The Global
Coffee Crisis, the Current Starbucks/Ethiopia
" Patent & Trademark" Controversy and the absence of the
Ethiopian Diaspora from the Discourse
Global Coffee Market and Coffee Crisis
Coffee
is one of the most highly traded commodities in the world, second only to oil.
The trade of coffee generates $80 billion every year in the global market, and
that amount is growing.
In
2001, coffee prices on the global market hit a 30-year low, and a humanitarian crisis ensued for the
25 million coffee farmers and families around the world, including many in
Ethiopia. The fall in revenue has affected the income small farmers earned for
the 'fruit of their labor" As a result, the farmer are unable to send
their children to school and could not afford to pay for their basic needs.
However, from the retail sides demand for coffee has risen and the coffee
industry has shown remarkable profit. For example, Starbucks, an 8 billion
dollar a year company, was able to sell Ethiopian Harar coffee for $26.00 per pound,
whereas the farmer only received between $0.60 and $1.10 per pound and only 3 cents goes to coffee farmers for every cup cappuccino Starbucks coffee sales for $3.00. Coffee
prices have risen a little recently, but hard working coffee farmers
continue to work relentlessly, receiving minimal profits for their crop, while
coffee companies and corporations are bathing in earnings.
International Development Discourse and
Movement.
The
coffee crisis is only one fragment of the many crises including political
conditions that have crippled economic growth in developing nations, especially
in Africa, trapping them in alarming poverty. Compounding the problems is the
rising brain-drain of African professionals (skilled and non-skilled) to the
Middle East, Europe, and North America in search for a better opportunity.
This
escalating trend is depleting the human resources of the developing nations at
a startling rate, According to the International Organization for Migration
(IOM), Africa has already lost one third of its human capital and is continuing
to lose its skilled personnel. There are over 300,000 highly qualified Africans
in the Diaspora, 30,000 of them with PhDs. Ethiopia ranked first in the
continent in terms of rate of loss of human capital and have lost about 74.6%
of its human capitol between 1980 and 1991 alone and since then the trend has
continued.
International
and regional government and nongovernmental development organizations have
recognized the intricate impact of the many crisis and calamity of the
situations and have put forward several programs and proposals to tackle global
poverty. The UN instituted the Millennium Development Goals (MDG) which
proposes total cancellations of debt owed by these developing nations, plus a
$160 billion annual aid package to alleviate the crises and eradicate poverty
by 2025. The World Bank, IMF, and other international lending institution have
agreed to cancel some debt as well, and are making new aid packages and fresh
loans available.
From the private sector, prominent world leaders such as President
Mandela and President Clinton contributed greatly in bringing attention to the
global poverty. Major philanthropic organizations, such as the Bill Gates
Foundation, have funds available in billions to help research and build
programs engaged in alleviating and eradicating poverty and related calamities.
Rock star Bono and many other celebrities have begun a high profile world wide
campaign, NOW.org, to create massive public awareness and galvanize support for
efforts to eliminate poverty.
Current Starbucks/Ethiopia "Patent & Trademark" Controversy
In 2001, in response to the coffee crisis,
Oxfam International, Global Exchange, and other advocacy NGOs, initiated a
multi-national campaign to bring global awareness to the problem of the coffee
crisis. The campaign has created a massive global public awareness and
international support to the "Fair Trade" market and put forward a
set of recommendations to government officials, the coffee market and coffee
consumers to expand the Fair Trade market. In response to this campaign, the US
Senate and the House of Representatives have recognized the severity of this
crisis, naming it "Silent Mitch" after the Hurricane that wrecked
havoc in Latin America and have subsequently passed resolutions to tackle this
predicament.
Black
Gold, an internationally acclaimed documentary film about coffee, featured in the Sundance and Human
Rights film festivals in 2005, examines the workings of the World Trade
Organization (WTO) and connects the dots of global coffee market and makes a
profound statements that if Africa's share in world trade could increase by
just one percentage point, it would generate $70 billion a year, five times the
amount the whole continent receives in aid.
Light Years IP (LYIP) is an NGO
established to assist developing countries by urging producers to gain
ownership of their Intellectual Property (IP) and to use IP to increase export
income. In 2005, LYIP assisted Ethiopia in registering trademarks for the coffee names Harar,
Yirgacheffe and Sidamo in 40 countries. The trademark has been secured in 30 of
those countries.
In
order to be successful in today's global market, developing countries have to
add value to the raw, unfinished, agricultural products that they export, and
can further maximize earning by securing IP rights for their products. The
coffee that comes from Ethiopia is so highly recognized around the world that
having ownership over the names Sidamo, Yirgacheffe and Harar would greatly
increase the revenue generated by Ethiopia. According to LYIP, currently, the Ethiopian coffee
sector captures only 6% to 10% of the fine coffees' retail price, barely
covering the cost of production. Compare that to Jamaica, whose Jamaican Blue
Mountain Coffee is able to win 45% of the retail price for the country. Oxfam has made the claim that if
Starbucks would sign the agreement to give Ethiopia its rightful ownership over
the names, an additional $88 million would flow into the Ethiopian economy .
The role of the African Diaspora in the
International Discourse
While
all the campaigns, efforts, and the financial resources currently being dedicated
to tackle poverty and alleviate the crisis are important and can make a
significant contribution, it is the very people from these developing nations,
including those living in the Diaspora that should play a critical role in the
international development discourse and campaigns. Ultimately, long lasting
sustainable rehabilitation and development can only come about if the resources
of the African Diaspora are galvanized and invested to help businesses from
developing countries to compete in global fair trade. "Fair Trade not
Aid" is a viable solution that has not yet been given the support it needs
by the African Diaspora, who has the most vested interest, financial resources, and knowledge. It is high
time for the African Diaspora not to join the international development
discourse, but to assume the leadership role.
For
example, if 10% of the five-million Ethiopians living abroad were to spend
$10,000 a year for two years consuming Ethiopian made products and investing in
Ethiopian businesses, that amount of money directed towards Ethiopia would
amount to $10 billion dollars. This is equivalent to the sum of the earnings
that the 74 million people in Ethiopia make from the global market, for the
next 20 years, assuming all things remain the same and the crisis does not
worsen.
In
the case of the Starbucks vs. Ethiopia patent and trademark controversy, the billion dollar question is not only what
Starbucks decides to do, but also when the Ethiopian Diaspora, the sleeping
giant, will rise to overcome the challenges that we are currently facing by
making business investments to increase the number of shares of Ethiopian
coffee in the world market.
Abol
Coffee serves to give the Diaspora this opportunity by connecting Africans
directly to the global market. Abol believes that the real solution to the
current crisis lies in channeling the purchasing and investment power of the
Diaspora in the right direction. If, for example, we presume that 3% of the Ethiopian Diaspora
frequents Starbucks four times a month and spends $2.50 per visit, the total
amount of sales equals $1.5 million a month, and $18 million a year. This is a
huge amount of resource going to the Starbucks Corporation, and a step
backwards in our fight. As Africans, we ought to recognize the massive
opportunity to redirect our purchasing power and invest in those African
businesses that compete with corporations like Starbucks in the global market.
With companies such as Abol, Africans are able to directly contribute to the rehabilitation
and development of their countries.
Abol Coffee, from the farm to the cup
& back to the farm
Abol Coffee Inc. is the result of three
years of market research with the support of a diverse team of prominent
scholars and experts in international finance, economics, trade, and marketing.
The research method included face-to-face interviews with Ethiopian coffee
farmers and cooperative unions, community leaders in Ethiopia and in the
Diaspora, US Congress, US food retailers and distributors, and other trade
related governmental and NGO officials. It is a socially responsible
business concept, summed-up by the phrase "from the farm to the cup… from
the cup to the farm", which resonates at multiple levels. By working in
partnership with three Ethiopian coffee cooperative unions with approximately
300,000 small coffee farming members who will be stakeholders, Abol Coffee Inc.
seeks to advance business as a solution for the Global Coffee crisis. To bring
light to the rich Ethiopian coffee tradition and culture, Abol Coffee Inc.
plans to open its first cottage coffee shop in the Washington DC area and bring
the Ethiopian coffee culture directly to consumers.
Abol
Coffee Inc. recognizes that the global coffee crisis is only one of the many
problems that our world currently faces. However, the partnership of the
Ethiopian Diaspora with Abol Coffee Inc. to help this crisis in Ethiopia can
serve as a model of the power of social responsibility to the rest of the
world.
Tebabu
Assefa and Tamiru Degefa
Founders
of Abol Coffee Inc.
Related Links:
www.oxfam.org/en/news/pressreleases2006/pr061116_starbucks