Download `coffee paradox`? - International Coffee Organization

Solving the ‘coffee paradox’?
Stefano Ponte
Senior Researcher
The book
„
„
QuickTime™ and a
TIFF (LZW) decompressor
are needed to see this picture.
Danish Institute for
International Studies
„
„
[email protected]
Benoit Daviron (CIRAD,
Montpellier) and Stefano
Ponte
The coffee paradox:
Global markets,
commodity trade and
the elusive promise of
development
Zed Books: London
Available: November
2005
The coffee paradox
Why?
„ Coffee
„ Usual
crisis in producing
countries
„ Coffee ‘boom’ in consuming
countries
„ Widening gap between producer
and consumer prices
An alternative reading
„
„
„
Producers sell ‘material’ coffee quality
Consuming country-based actors sell
„ ‘symbolic’ quality (brand, ambience of
consumption, packaging, ‘sustainability’)
„ ‘in-person service’ quality (personal
interaction at specialty outlet, coffee bar)
It is in symbolic and service quality that most
value addition possibilities reside
QuickTime™ and a
TIFF (LZW) decompressor
are needed to see this picture.
explanations:
„ End
of ICA system
„ Oversupply
„ Consolidation at roaster and
international trade levels
• market power
An example
Tanzania-Italy value chain for espresso blends
100.00
90.00
80.00
70.00
home, lowend
60.00
home, midrange
home,
high-end
50.00
bar, midrange
40.00
bar, highend
30.00
20.00
10.00
0.00
farm-gate
auction
export harbour
import harbour
value chain node
roaster
retail
1
Sustainability initiatives
„
„
They add ‘symbolic value’
Key question:
„
„
Policy implications (1)
„
Some current proposals
„
„
How much of this value goes down to the
producer?
„
„
‘Sustainability’ becoming the new
minimum standard
Little or no premium at the farm level
„ Some exceptions (fair trade, organics)
„
„
„
„
Let the market solve it
Get infrastructure and institutions right
Re-establish supply management
CQP
Anti-trust and competition law
Price risk management
These are about ‘material’ quality
„
A dead end?
Policy implications (2)
Policy implications (3)
Need more focus on symbolic and inperson service quality
„ Find ways for producer-country actors to
generate and capture value added from
these quality attributes
„ A few proposals/examples
„
Improve sustainability initiatives
„
Indication of Geographic Origin (IGO)
„
Truth and transparency in labeling
„ Juan Valdez coffee shops in the US
„
„
„
„
„
„
„
Participation, ‘ownership’, premium
Valorization of ‘place identity’
Intellectual property rights on ‘origin’
Expand IGO register at the WTO
Groups managing IGOs -- wider territorial strategies
Cultivate consumers, not more coffee
2