Global Coffee Trade

PART ONE: THE PROBLEM

In 1947, the US, Britain and Russia, as the world’s most powerful nations, signed an agreement that restructured the way nations viewed and interacted with each other. The tragic events of World War II had left the world reeling with shock and horror.  The rise of Hitler and the Fascist quest for world domination led the allies to rethink their national ideologies, allowing economics, rather than military competition, to take center stage in the world of international relations.  In order to prevent the horrors of World War II from reoccurring, the allies signed the General Agreement on Tariffs and Trade, commonly known as GATT, which gave economic might greater importance than military buildup. This agreement was an important step towards economic integration and interdependence between nations.  As signatories of the agreement lowered their tariffs, trade between nations dramatically increased, and protectionism became a road to failure in the new globalized world.

As globalization increased, the General Agreement on Tariffs and Trade became applicable to all countries around the world.  The beginning negotiations in the agreement “led to some 45,000 tariff reductions, affecting $10 billion, or one fifth of world trade (Gerber 20).”  The GATT has been very successful in accomplishing its goal of bringing down trade barriers gradually.  In the last fifty years, trade grew more than 6% per year, which is much faster than any growth the world experienced before World War II.

 

BACKGROUND ON COFFEE INDUSTRY

The dangers imposed by the unregulated market in the name of free trade are clearly evident in the devastating impact globalization has had on coffee farmers across the globe. Since the unregulated market price for a good is determined by the supply and demand scale, prices are continuously fluctuating based on the current supply and demand of the good. In such an unstable market, oversupply of a good can mean drastically lower prices for the producer, while a shortage could mean much higher prices for the consumer. To prevent this from occurring, before the World Trade Organization was established, coffee growers worldwide were typically supervised under state-issued institutions to ensure a somewhat stable market.

One such institution was the El Instituto Mexicano del Café (The Institution for Mexican Coffee), known as Inmecafe. Inmecafe was a government agency originally created in 1952 that, by the time of its collapse, controlled 45% of the coffee industry in Mexico. Inmecafe’s primary responsibilities were to regulate coffee marketing and production, provide the farmers with low-cost credit and fertilizer ensure stable prices, and issue “technological packages” that increased coffee production. Under this institution, coffee production between 1969 and 1989 “rose by 289 percent, and the area planted in coffee increased by 220 percent (Jaffee)” and this is a notable increase. Inmecafe’s paternalistic approach drew in the majority of Mexico’s 260,000 coffee farmers who were able to live modestly under the cooperative’s regulations.

 

 

 

 

 

Unfortunately, Inmacafe was forced in 1989 to abandon its patrons virtually overnight when the government, under the direction of the International Monetary Fund, required its abolition. Mexico was forced to limit the state’s role in regulating its economy, and in return the coffee farmers were harshly exposed to the erratic unregulated market. Over the next three years, coffee prices dropped an astounding 70 percent, hitting a record low of 49 cents per pound. The deadly combination of the disintegration of Inmecafe along with world-wide drop in coffee prices made the first coffee crisis unbearable for the Mexican farmers. Growers were left without any knowledge of how the market functioned or how to compete with other low wage producers around the world. Small coffee farmers were forced into poverty, debt, and bankruptcy overnight, deepening preexisting social tensions and inequality in the country. Farmers had one of two options: migrate off the land in hopes of finding work or continue farming and selling coffee under either the free market or the growing fair trade market.

 

GLOBAL IMPACT OF COFFEE CRISIS

The devastation experienced by coffee farmers from the first coffee crisis was only a taste of what was to come. In line with neo-liberal policies, the World Trade Organization, the World Bank, and the Asian Development Bank, all international organizations geared toward economic globalization, promoted export-led development aimed at reducing poverty in developing countries. One of the many export crops that was introduced to developing countries was coffee. A rapid expansion of production worldwide caused a surplus of coffee, drastically reducing the world price for coffee. Vietnam, formerly a small contender within the coffee market, increased production by 1,130 percent, going from the world’s tenth-largest producer to the world’s second largest in one decade. While Vietnam and India opened up a new market for coffee, Brazil and Indonesia continued to increase its already exploding production. Countries worldwide were increasing their coffee plots, despite the fact that demand was remaining steady. In fact, “during the 1990s, while demand grew by 1 percent yearly, the coffee supply was expanding by 3 percent (Jaffee, 42).” As mentioned above, if demand does not grow in proportion to the supply, excess supply will decrease the price of the good. The World Trade Organization failed to predict the obvious folly of increasing the production within an already flooded market, when the worldwide demand had stayed the same. The price for coffee in Mexico alone went from $1.20 a pound down to $41 cents in 2001 due exclusively to the oversupply of coffee. The destructive, demoralizing drop in price in the market for coffee has affected farmers not only in Mexico, but growers and producers of coffee worldwide.

In spite of reduced worldwide prices, the coffee market grew by $50 billion from 1989 to 2001, and producing nations were allotted an appallingly low percent of the profits. “The share of the purchase price kept by the coffee-growing nations, then, plunged from between 30 to 33 percent to less than 8 percent in little more than a decade. ‘Taking inflation into account…families are earning less for their product than their ancestors did 100 years ago (A Fair Cup).’” Despite the fact that the market is increasing in value, the actual producers are seeing far less profit as time progresses. Although some may attribute the loss in profit to the many intermediaries involved, it is the multinational companies that pocket the majority of the profits from the producers. While the former are growing richer, the latter are growing more impoverished with each cent that is being kept by multinational companies. In 2001, the “Big Five” coffee roasters, Starbucks and Nestle among them, had control of 69 percent of the world’s roasted and instant coffee market. The above mentioned corporations increased their profits by 41 percent and 33 percent, respectively, even as world prices drastically decreased. One expert’s estimate maintains that the coffee industry has reaped 8 billion in additional profits from the recent crisis, essentially a direct transfer out of the pockets of coffee farmers. It is evident that the gains corporations make are driving the farmers to poverty.

The difference in income from worldwide coffee production is drastic in terms of dollars, but horrifying in terms of what that has meant to the coffee growers. From Latin America all the way to Asia, 25 million coffee growers are forced to suffer the terrible conditions of the current market. According to Martin Raine, head of the World Bank’s Sustainable Development Office for Latin America, “600,000 jobs have been lost in Central America alone because of the coffee crisis” (Adams). Ethiopia is on the verge of an economic collapse as “earnings from coffee have dropped from 70 percent ($330 million) of GDP to 35 percent ($168 million) in the space of five years” (Afrol). In Nicaragua, a regional famine was the result of 122,000 coffee workers fired from their jobs after the coffee crisis hit. When market prices spiral downward or upward, it is not only the consumer who must decide whether they can afford a small cup of coffee, but also the small farmer who must face the daunting decision whether to keep their oldest child in school or feed their family dinner that night.

LOCAL INFLUENCE OF COFFEE CRISIS

The effect of the low world price for coffee has been felt strongly by the world’s seventh largest exporter, Mexico. “Income from coffee exports fell from $800-million to only $250-million in the past three years. The area where coffee used to be grown has been reduced by nearly 700,000 acres in recent years” (Adams). Widespread hunger, unemployment and poverty have driven many farmers to sell their livestock, take their children out of school, reduce food consumption, and ignore medical conditions. Moreover, workers on the farms work long, hard days receiving about 4 dollars a day for a twelve hour day. The amount they receive doesn’t even cover the cost of production. Along with a low salary, a study conducted by the Commission for Verification of Codes and Conduct has discovered that 80 percent of workers do not get paid overtime and 60 percent are not given health care.

Many farmers are forced to face the harsh reality that coffee production can no longer be a means for survival and must make the decision to abandon their coffee plots and migrate off the land. In mid-2001, more than two thousand families per month were leaving the Mexican state of Chiapas by bus to seek work in northern Mexico or to cross the border into the United States. It is evident that a direct correlation lays in the increase of illegal immigration into the United States of America and the most recent coffee crisis in 2001.

ENVIRONMENTAL IMPACT

Not only is the coffee crisis a social problem, but it also has devastating environmental impacts on the land. According to a data collected by the Food and Agriculture Organization (FAO), in 1998, “90 per cent of deforestation is caused by unsustainable agricultural practices, while logging and plantation forestry play a greater role in forest degradation” (Underlying Causes of Deforestation).  This is especially true for Mexico, where the area cultivated by coffee grew from 356,253 hectares in the 1970s to 703,341 in 2001.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The State of Chiapas, one of the largest in Mexico in terms of coffee production, traditionally grew most of the coffee under shaded agro-forests and these forests, rather than damaging the environment, sustained biodiversity due to the naturally fertile forest floor. Coffee plants grown using this practice required no additional chemical fertilizers, nor did they require any artificial irrigation, as the forest air retained moisture trapped by the abundant canopy. However, in much of the area where shade growing was common, the traditional practice has been replaced by genetically altered, “sun-grown” coffee plants. These sun plantations, in which coffee is grown directly under the sun, greatly increases the number of plants of each hectare by more than three times the original amount. The new method was enforced by the U.S. Agency for International Development (AID), which encouraged farmers to convert to a “modern” coffee agriculture. AID’s goal from the 1970s to the 1990s was ultimately to increase farmers’ incomes in developing countries. In the short run, as the coffee yield increased dramatically, the new method helped Mexican farmers and coffee importers. In the long run, however, the sun-growing plantations had many adverse effects. The soil became prone to erosion and lead to a decrease of soil fertility, and a huge drop in the number of resident bird species was observed as their habitats were

Put under strain by the plummeting prices after the second coffee crises, many farmers switched to cheaper varieties of coffee at the expense of the environment, forsaking shade grown coffee for plants that could be grown and maintained with less expense. Many producers have expanded their farms in an attempt to produce more, selling timber and other crops in order to continue making a profit in the free market. Others have abandoned their farms completely, migrating toward cities and leaving their land unattended and susceptible to conventional, less eco-friendly farming methods.

Those seeking to solve the problems caused by the oversupply of coffee on both a social and environmental level have taken to collective solutions in the form of fair trade. A small number of Arabica coffee (Coffee Originating from the Middle East) farmers who participate in fair trade, organic growing, or shade growing are promised a fair, stable minimum price for their coffee, as well as countless other benefits. These fair trade cooperatives are highly successful in transforming the farmers’ lives and protecting the environment, and the benefits received through participation in the fair trade market greatly outweigh any costs. If Ethical Coffee for Man and Land (ECML), which uses these proven, successful methods, could be created and spread across the whole country of Mexico, farmers would have an increased income and higher quality of life, which would in turn decrease migration and boost the Mexican economy.

 

PART TWO: SOLUTIONS TO THE PROBLEM

In constructing a policy to improve economical, environmental and social conditions due to the coffee crisis in Mexico, ECML drew inspiration from trading policies such as fair trade, Organic Production and Shade Growing in coffee production. Utilizing all of these will create the ideal atmosphere to repair the damage inflicted by the coffee crisis and the neglect of the world market.

FAIR TRADE

The fair trade system is an international organization that strives to create an ethically fair system for the trade of agriculture. Early fair trade organizations were small scale associations that were usually based in religious philanthropy groups. Often these were craft based, with much less focus on agriculture or mass production than there was on the selling of handmade or cultural artifacts (Jaffee). These crafts were sold via catalogue or word of mouth, or else annual markets were held to benefit the craftsmen.  Although small and generally having very little effect on the quality of life of those creating the products, these organizations were the first very small step toward consumer consideration of the ethical aspects of trade. By 1956, independent secular organizations had picked up the trend of fairly traded goods. Under the all-encompassing label of Alternative Trade Organizations (ATOs), these agencies plied the trade of impoverished or displaced peoples to consumers throughout Europe and the United States.

The first to make a breakthrough in the field of mass-produced, fairly traded agriculture was the Max Havelaar Foundation, a Dutch cooperative (Jaffee).

The Havelaar label is important in the history of fairly traded coffee because it set the standard for the ethical trade of agriculture, and coffee in particular. The label was the first to establish minimum prices for items purchased from South and Middle America. A criterion was drawn up for the production and exchange of coffee, limiting the involvement of middlemen and brokers and setting an ecological standard to prevent destruction of land (Jaffee). It is from this and other ATOs that the original concept of fair trade was drawn, and by 1989, fair trade had spread from only coffee to tea, chocolate and cocoa (Fair International Trade).

In 1989, the movement had become so popular and demand had become so high for fairly traded items that IFAT was created: the International Federation for Alternative Trade. IFAT united the independent ATOs under one internationally recognized organization. It also established universal rules for the growth and distribution of fair trade coffee, drawing from Havelaar’s example and the example of both religious and secular private ATOs that had been in existence throughout the previous decade. Now, IFAT contains 300 fair trade Organizations in 70 countries, with 65% of its members based in Africa, Asia, and South America.

Although fair trade has made significant progress in determining ethical practices for farmers, growers, and buyers of coffee and other goods, some issues remain to be sorted out. Those who help to organize the farmers and institute the local cooperatives are paid for their contributions, using money that would otherwise have gone directly to the farmer (Fair Trade Coffee). The farmer is still receiving twice the money he would in any non-Fair trade system, but some have speculated that constant redirection of money is the problem to begin with, and in attempting to solve it, fair trade is compounding it (Fair Trade Coffee). Possible questions of quality have also been raised. Farmers tend to give only a fraction of their crop to fair trade, keeping the rest to sell on the open market. In the fair trade system, growers are guaranteed a minimum price, whereas in the open market, only the best coffee will fetch a decent price (Fair Trade Coffee). Because of this, many claim that farmers are keeping the best coffee for the open market and giving sub par coffee to the fair trade buyers.  Fair trade has attempted to counter this by adding quality regulations to their list of criteria that the coffee must pass in order to be called fair trade, but critics continue to insist that fair trade is poorer quality than coffee sold in a free trade market. Others suggest that fair trade has directed its focus too specifically upon growing, and that the organization is neglecting addressing the environmental degradation that comes as a result. fair trade created its environmental policies as a result of this, but some maintain that fair trade puts human livelihood first, at the expense of the environment in which those humans live (Fair Trade Coffee).

SHADE AND ORGANIC GROWING

Traditionally, coffee was naturally grown under rainforest canopies.  Because most coffee plants are intolerant of direct sunlight, these canopies provide shade for the coffee beans, allowing them to mature more slowly while increasing natural sugars and enhancing the flavor of the coffee.  However, as the demand for coffee increased, a new method of farming was developed to increase productivity: sun grown coffee.  This method of farming required a sun-tolerant variety of hybrid coffee plants, which could be grown in large quantities and without the need for tree cover. Unfortunately, the production of sun grown coffee has had several unforeseen damaging effects; the worst of it being the deforestation of native rainforest trees to allow coffee plants to be placed closer together and increase the number of plants on each hectare (Jaffee).  Although this newer method of sun-grown coffee has increased productivity, this result comes at the expense of the local ecosystem. Worse, due to the huge increase in coffee production—20% since 1989—coffee supply is now over-exceeding the demand, causing the current fall in prices (Market for Coffee).

As a result of these damaging agricultural practices, Mexico has the third highest annual deforestation of primary forests among tropical countries, and the fourth highest among all countries.  A startling 60% of shade trees have been cleared from coffee lands since 1972, destroying the habitats of as many as 150 different bird species and other wildlife, including 100 species of plants, 793 species of insects, and 18 kinds of mammals. Many of these creatures are endemic to their forest habitat and the clearing off of these trees is extremely harmful to their well-being.  Studies have found “94-97% fewer bird species in areas of sun grown coffee than in shade grown coffee” (Migratory Birds) with an “estimated 20% decline in migratory bird populations in the last ten years” (Ruta Maya Coffee).

Incidentally, the removal of nitrogen-fixing trees to allow for sun-grown coffee also contributes to water and soil runoff, resulting in a loss of nutrients and threatening the long-term sustainability of the ecosystem.  In order to compensate for this loss of nutrients, farmers began applying chemical fertilizers to the coffee plants.  In addition to chemical fertilizers, farmers routinely spray coffee plants with herbicides and pesticides to prevent crop damage from insects and other pests. Under the shade grown system, these plants would have been protected by the birds inhabiting the forests, which act as a natural defense for the coffee trees.  As a result of the increase in agrochemicals required for sun grown coffee, it has been proven that, “Next to tobacco, coffee is sprayed with more chemicals than any other product consumed by humans” (Coffee Drinkers).

Unfortunately, the majorities of coffee farmers in Mexico are uneducated in the field of agrochemistry and are not aware that they are compromising their own physical health through the use of fertilizers and pesticides.  A coffee farmer from Pluma, Mexico stated that farmers “paid more attention to the plants to see that they produced more.  “We used to get three to five quintals (unit of weight equal to 100 kg) from one hectare, now we get 10 quintals” (Sustainable Development reporting). Worse, the water and soil runoff caused by deforestation pollutes the drinking water, exposing the whole community to poisonous chemicals, not just the farmers or those working on the farms.  These growers are simply looking to increase productivity and are completely unaware of the harmful effects that agrochemicals have on their health. The removal of these toxins will help protect the health of both the farmers and the community as a whole.

PART THREE: POLICY

IMPROVE QUALITY OF LIFE

As seen, the Coffee industry has had a catastrophic effect on the Mexican economy and if Fair Trade is enforced, organic and shade growing, enforcing ECML will be able to significantly improve both local finances and the country’s market as a whole.  Since the great Coffee Crisis, the wealth, health, and family-life of coffee workers have deteriorated rapidly.  Many have even emigrated to escape the ensuing poverty.  The goal is to protect and improve the lives of the workers, both for ethical and economic reasons.  ECML intends to accomplish this aim by helping the farmers and their communities build stronger institutions to educate and nurture their citizens, and by providing them with the rights and salaries they need to improve their quality of life.

The most apparent way for immediately helping farmers is by setting fair trade prices for coffee.  ECML intends to guarantee a price of US 1.20 for every pound of coffee. This price, represented here in US dollars, translates to approximately 12.50 in pesos: more than double what producers are currently paid.  With this money, farmers will have the ability to drastically improve their lives, and workers will be able to adequately feed their families, improve their living conditions, and save money rather than struggling to make ends meet.  Doubling a family’s income also means that the children previously forced to work will be able to attend school, rather than work alongside their parents to support the family.

The increase in salary of farmers and their hired workers will not only help on a local, community level, but will improve the Mexican economic climate overall. ECML’s hope is that by adding the security of a significant contract and a drastic increase in funds, encouraging the previously poor coffee workers to spend money, will in turn stimulate the economy.  If farmers are spending more money on food and goods, this will aid the shop owners, which will in turn aid their suppliers, creating a positive, nation-wide chain reaction.  The coffee crisis clearly illustrated the strong effect coffee can have on the nation, and by implementing this policy; it will be for the benefit of the country.

In addition to the change in income, work hours will also be made to fit fair trade standards.  Frequently coffee producers and farm laborers in particular, are made to work grueling 12-hour shifts.  Under this policy, a worker would not be permitted to suffer more than a forty-hour workweek.  Picking and growing coffee is tedious and physically difficult work performed in incredibly hot, intolerable weather.  Forcing laborers to work more than 40 hours in these conditions is inhumane.  Cutting these hours short will not only increase the health and quality of life of the laborers, it will also allow them more time to spend with their family, to raise their children, and to participate in the community; these are rights that must be addressed.

COMMUNITY IMPROVEMENT

Many fair trade organizations require a small amount of the income to be set aside in order to assist the community. Saving the farms money by eliminating expensive chemicals, machinery and fertilizers under ECML’s organic criteria will increase the amount donated to the community.  For other fair trade organizations, the usual amount is $5 per 100 pounds of coffee and this should be enlarged to $7.  The money will go into a community fund that will be used to enhance villages and neighborhoods, and the capital will serve many purposes in the community.  Much of the fund will go toward building or improving public schools, ensuring that the farmers’ children, freed from the need to work, will receive proper educations.  Implementing this policy, ECML will help to raise a new generation of informed, literate farmers, as well as offering these impoverished children greater opportunities outside of the coffee market.  One of the benefits of ECML will be a scholarship fund, allowing for some students to have a chance at higher education. This organization will also found an adult education program for the non-school-age farmers.  The intent of this program will be to teach the producers how to read and write, in order to help them keep records of their business and enrich their daily lives. An education will also serve to keep producers informed about the trends in the market, so they have a stronger platform from which to compete and advocate for their rights.  Both childhood and adult education programs will also include an environmental awareness program.

In addition to providing education and schools, money from the fair trade policy will serve to build local hospitals and to improve medical care.  In many towns in Mexico there is no form of public healthcare whatsoever, and hospitals are few and far between.  Many in the society lack the money to travel to these facilities, and poor communities in Mexico remain marked by their lack of adequate health care. By building hospitals and community clinics, ECML will be able to considerably improve the health of coffee growers.  This organization also intends to build public parks and safe play areas for children, and fund clean up teams to help sanitize and improve the environment.  Though seven dollars does not seem like an enormous amount, it adds up to infinite possibilities for community improvement.

ECML also intends to enforce a non-biased employment policy, meaning that farm owners will not be able to discriminate based on race, ethnicity, sex or sexual orientation.  This will allow equal opportunity to women and indigenous peoples who are frequently discriminated against in Mexico, as well as all other minorities.  A second clause of this policy will completely outlaw child labor.  Thanks to the reduced prices, the removal of child labor will be a viable possibility for poor families that previously needed their children in order to run their farms.  Reconstructing the schools and park systems, children will now have safe, educational environments to work and play in while their parents are working.  ECML’s policy is meant to ensure jobs for those who need them, without their being judged based on skin color or gender, as well as to protect children from lacking the benefits of childhood.

STABLIZE MARKET

In order to improve the living condition of farmers, allow for sustainable economic growth and perform the absolutely essential task of stabilizing the coffee market, ECML would insist upon implementing both organic and shade growing, as well as a nation-wide ban on pesticides and artificial fertilizers. Furthermore, the organization would follow the established ideologies of fair trade, which have economical, social and environmental impacts advantageous to the Mexican society.   These policies would be enforced through the use of a five-year contract between ECML and the coffee cooperatives. The five year contract will guarantee the farmers a certain yield and the buyers a certain amount of coffee.  The contract would be legally binding, and each member cooperative will be required to apply the following recommendations.

At the heart of the coffee crisis is the unnecessary overproduction of coffee, which is increasingly destabilizing the coffee market by creating externalities harmful to the producers and consumers.  The root cause of overproduction is the low wages that coffee pickers and farmers receive from the intermediaries; middlemen pocket profits at the expense of the farmers, and such corrupt activities force farmers to overproduce in order to receive the minimum profit needed for living expenses.  Furthermore, having excess middlemen drains the coffee industry’s profits, due to the required costs for the intermediaries’ services and the costs associated with the transportation of the coffee. One of ECML’s goals is to become the sole intermediary between consumers and producers. Under ECML, farmers will be able to sell their coffee to the organization, which in turn will sell the coffee to the foreign corporations.  The corporations will be expected to pay ECML for their services, just as they would have done with the intermediaries of the past, but as a non-profit organization, ECML has no intention of retaining any money obtained from the corporations. Rather, the profits earned will be used for transportation costs and wages for the workers in the organization.

By disposing of the unnecessary number of middlemen, and by acting as the only intermediary, ECML will ensure that farmers receive proper wages. As the only organization to have direct contact between Mexican farmers and foreign corporations, ECML will set a minimum price for the coffee sold to the corporations.  In its first year of operation ECML also intends to implement a minimum wage, beginning with $1.20 a pound and increasing this price an appropriate amount each year until the market reaches its intended equilibrium. At the point of equilibrium, ECML will allow for the market to decide the farmers’ wages, and minimum wage increases will only be applied based upon rising rates of inflation.

Due to ECML raising the minimum wage in accordance with inflation rates, farmers will be encouraged to invest, save, and spend in order to boost the Mexican economy.  A part of the investments will of course be in the form of social programs, which ECML will execute by the aforementioned method of collecting $7.00 for every one hundred pounds produced by the farmers.  Investments, under ECML, will be mandatory in order to ensure the creation of health centers and schools.

The creation of schools is also intended for raising awareness on matters such as pesticides and artificial fertilizers. Pesticides have detrimental effects on the environment and to repair these negative externalities, ECML suggests the banning of these harmful products.  Banning pesticides and artificial fertilizers will not only improve the environmental conditions, but also allow for greater economic growth. These products are heavily priced and forbidding them will increase the farmers’ profits and will provide farmers with an incentive to spend and invest. Furthermore, using the pesticides and artificial fertilizers will be unnecessary when shade and organic growing are implemented.  Under shade growing, birds in particular will act as a natural pesticide by eating the worms harmful to the growing of coffee plants, making chemicals superfluous.

As a consequence of using these two methods, coffee production will decrease, since less coffee is grown using the shade grown system.  However, the Mexican government must realize that a reduction in coffee supply can only be beneficial for the economy in the long run, considering overproduction has been the primary cause of both coffee crises.  ECML understands the concerns the Mexican government would have if required to decrease their coffee production. Common thought holds to the notion that a decrease in production implies a decrease in the work force, but such possible setbacks will be resolved under ECML’s social programs.  The children working in the cooperatives will be required to attend schools rather than work in the farms all day, and as a result the job market will be in need of any unemployed adults.

Not only will shade and organic growing create opportunities for the unemployed, but the plants will also remain more productive in the long run.  Shade grown plants will remain productive for forty years, while the sun grown plants must be replanted every ten years.  The long-term productivity will make replanting less costly and more convenient for the farmers. For these reasons, ECML is firm in its assertion that fair trade benefits far outweigh any possible costs.

One of the greatest predicaments in implementing some of these policies is the clash between fair trade and free trade in terms of quality.  The Mexican coffee industry is distinguished for its good quality coffee and for its movement towards organic coffee. “Mexico is the world’s largest producer of organic coffee” and the trend is increasingly spreading around the globe.  Despite this fact, some farmers felt the need to manipulate the fair trade system by selling poor quality coffee to fair trade organizations and premium coffee to the “free-trade” market.  These activities have lowered the demand for fair trade coffee but enabled farmers to gain the profits needed for survival. ECML aims to improve the livelihood of the farmers in order to prevent them from participating in such activities.  However, it is strongly recommended that the Mexican government initiate a program that would make all exports of coffee certified under ECML, because as an organization, regulations concerning the quality of coffee sold on the fair market will be enforced.  By acting as a world leader in organic production, and adding shade growing to this new trend, Mexico will enhance its reputation worldwide, which could lead to such benefits as an increase in Mexican coffee demand in the world market.

The demand for Mexican coffee depends on the world market, and under the unregulated free-trade market, Mexico is more prone to being dragged into a crisis than if the country were under fair trade.  While the future is typically unpredictable, history shows that the coffee market is on shaky grounds and a future crisis is plausible.  Despite Mexico having experienced a number of crises already, ECML is confident that the current Mexican government will be able to prevent the past from reoccurring by following these policies. According to Daniel Jaffee “The fair trade market and specifically its guaranteed minimum prices…afforded the largest measure of economic stability for the organization during the economic upheavals of the past fifteen years” (The bible). Historically, fair trade has given farmers the ability to resist economic ruin in past crisis, and if the entirety of Mexico’s coffee industry follows the principles of fair trade, the entire country will be able to withstand another international catastrophe.  Such crises have been a leading cause in increasing poverty within the farming community, and under ECML, the main priority will be to ensure the wellbeing of the farmers and Mexico’s economy.

CREATE A SUSTAINABLE ECOLOGICAL ENVIRONMENT/CONCLUSION

As we are all painfully aware, environmental degradation is having a disastrous affect on the world around us and is threatening our very future as a species.  Knowing this, any new organization should make it a priority to create environmentally sound policies.  Because Mexico is a developing country, experiencing all the difficulties that such a label implies, it is easy for authority to overlook any environmental atrocities and focus on terrible economic and social problems.  Such tendencies are counterproductive, however, considering that in past instances, when one fixes society, the environment tends to follow.  Society and the environment are inextricably tied, and consideration must be paid to both in order to fully maintain a country. ECML intends to examine and improve both environmental and social aspects in order to benefit Mexico’s people, the coffee market and the environment under one program.

One of the primary ways ECML will be improving the coffee market is through the implementation of shade growing.  Using the sun-grown method, trees are clear-cut to allow higher density and speed of coffee growing, and the resulting deforestation leads to a great loss of natural biodiversity.  Birds that migrate to Mexico in the fall are arriving to find their usual habitats decimated by coffee farms, and many species have either died out or evacuated the area completely. Shade growing would allow these habitats to remain intact, and therefore the bird populations, as well as certain species of insect and trees would continue to thrive.  As was mentioned earlier, sun growing also requires more chemicals, including pesticides and artificial fertilizer.  When practicing shade growing, no unnatural influences are necessary. Bananas, leaves and other mast that coat the forest floor serve as a natural fertilizer, making harmful chemical fertilizers obsolete.  As an added benefit, shade growing also decreases the level of carbon released into the air, not only because it causes a carbon sink, but also because clear-cutting requires fossil fuel burning machines that shade growing does not.  Carbon dioxide is the number one culprit in the process of global warming, so reduction of carbon emissions is vitally important.  ECML intends to enforce shade-growing in much of Mexico’s coffee industry which will greatly improve many aspects of Mexico’s environment.

In addition to shade growing, ECML’s policy of organic production will have enormously positive effects on the environment. As detailed above, pesticides and artificial fertilizers cause extremely detrimental effects within a society; however, their effect on the environment is even more sinister. Pesticides poison bugs indiscriminately, killing beneficial insects just as thoroughly as harmful ones. If pesticides were to be eliminated from the ecosystem, insects that are detrimental to the crops would be kept in check by natural or, if necessary, introduced predators, eliminating the need for harmful toxins.

Organic farming has actually been proven, by Mexico’s example in another of its staple crops, to work better. Farming chemicals also have a negative affect on the rest of the natural world, humans being no exclusion. By this ban, farmers would be protected from the ill-health associated with farming chemicals, in addition to saving a great deal of money that would otherwise be spent on fertilizers, pesticides, chemicals and machinery used for tending and spreading those.  This money could serve to simulate the economy and pad the farmer’s pockets.

Because some use of unnatural products is inevitable and because farming often leads to some level of erosion it is crucial to implement another policy to protect Mexico’s water supply.  Mexico’s clean water is already limited, and almost all of it has to be cleaned profusely.  Adding farming runoff to its streams and rivers would only increase this catastrophe.  Chemicals disrupt the river’s fragile natural ecosystems and poison the animals and people that drink from it.  Furthermore some of the synthetic fertilizers and run-off into the water cause over bloom harming the habitats more.  Deforestation coffee farms leads to significant erosion and the extra soil clogs the waterways. With the world’s fresh water supply threatened, this it is essential to protect all and any sources.   Because of that, a requirement that farms distance themselves from rivers and streams is recommended.  Coupled with a ban of harmful chemicals this will greatly improve Mexico’s water quality.

 

Lastly, but perhaps most importantly educating the farmers and other laborers of Mexico about their impact on the environment is crucial.  Nothing can be more effective in healing and protecting our natural world than teaching its inhabitants about the danger we are in, and what we can do to change it.  Education is definitely a program that should be enforced and taken seriously. Though part of this education will be economical another large part of it will teach farmers about what they can do to protect the world they live in.  The hope is that by raising awareness farmers will be encouraged to use safer, more environmentally sound practices.  Education of the rest of the community will too, include environmental awareness programs. The hope is that by raising a generation of farmers, laborers, workers and politicians that are environmentally contentious and friendly we will be able to change the world to one that protects its surroundings, not exploits it.