In response to increasing public demand for corporate social responsibility, Starbucks has undergone an image makeover. The company has recently publicized its commitment to supporting the communities that grow its coffee in Latin America, Asia and Africa, and has included one fair-trade coffee option in its menu (although I have not seen this coffee in the New Haven store for some time). Fair-trade organizations reduce the intermediary suppliers between the coffee growers and the retailers, allowing growers to receive a larger share of the profits. Fair trade is not simply an abstract concept — it requires a rigorous certification process in which producers must receive a living wage according to their local environments, engage in participatory decision-making, employ sustainable environmental practices and the like.
It is important for consumers to discriminate between genuine commitment to ethical practice and corporate advertising campaigns that are meant only to attract progressive coffee drinkers. To its credit, Starbucks has taken steps to reduce environmental waste by producing all of its cups and sleeves with post-consumer material. But the company has strayed far from its purported mission to support the coffee farmers who underlie their booming business.
By sourcing only one fair-trade coffee, Starbucks sends the message that fair trade is merely a charitable gesture. More recently, Starbucks has deviated even further from its socially conscious image by denying Ethiopian coffee farmers licensing rights over their own coffee brand name, which has prevented these farmers from earning a living wage.
In order to understand the relationship between Starbucks and Ethiopian coffee farmers, it is crucial to understand the inequalities of the coffee industry. Beginning in the 12th century, coffee was traded from its native source in Ethiopia throughout the Middle East and into Europe. During the colonial era, Europeans brought coffee production to their colonies in Latin America, Africa and Asia, where they set up plantations. Although that era is long gone, coffee production today is still under Western control. World coffee prices are fixed by brokers in New York and London. Although coffee retailers such as Starbucks have representatives at these negotiations, coffee farmers do not.
In 2001, the world coffee price hit rock bottom, and since then has rebounded only slightly. Retail coffee prices, however, have not fallen in turn. Over the last 20 years, farmers have received a decreasing share of retail coffee prices. Small farmers and plantation workers cannot bargain for increased payment because they are isolated from buyers by six or more degrees of separation. In the case of small farmers, they often have just one option for selling their product: the local middleman, who then sells it to the processor, then to the exporter, then to the broker, then to the importer, and so on. The end result of this systematic disempowerment of coffee workers is an extreme disparity in income: The average coffee farmer makes between $1 and $3 a day — poverty-level wages — while profits are skyrocketing for corporations. Farmer poverty persists despite the high demand for coffee.
In Ethiopia, the disparity is particularly severe. Ethiopian coffees are considered top-quality in the international market, fetching as much as $26 a pound at Starbucks. At the same time, Ethiopia is one of the five poorest countries in the world. Last year, Ethiopian coffee producers asked that Starbucks, one of their retailers, enter into a royalty-free trademark agreement in which Ethiopian farmers would own the names of their coffees. This arrangement would give farmers more control over distribution, a greater bargaining position and ultimately more money for their goods. One expert has estimated that this would return $80 million to Ethiopia, allowing farmers to lead healthy lives and provide basic needs to their families. Despite the collective action of Ethiopian farmers, the Ethiopian government, Oxfam International and 89,000 petition signees, Starbucks refuses to budge.
The proposal of Ethiopian coffee farmers represents a much-needed step toward reducing the power imbalance in coffee production and ensures that farmers can truly enjoy the fruits of their own labor. If Starbucks is, as its CEO says, the “quintessential people-based business,” it will respect Ethiopian farmers and farmers around the world and end its exploitative practices.
Michelle Castaneda is a sophomore in Ezra Stiles College.