7 ms·

It's a shame an article like this doesn't tell the economic enslavement story. Ethiopia and other poor countries are unable to reap profits from the coffee they

by grecy 7y ago

It's a shame an article like this doesn't tell the economic enslavement story. Ethiopia and other poor countries are unable to reap profits from the coffee they grow thanks to extremely restrictive WTO tariffs that essentially prevent them from processing it before they export it. This means they're forced to export raw beans for pennies, and they'll never really make much money doing so. It turns out coffee growing countries only receive about 8% of the total coffee revenue annually and Germany is actually the fourth largest exporter of coffee in the world, despite never growing a single bean. Schoolyard bullying, on a global scale.

truth_be_told 7y ago
>economic enslavement story This is enraging. Please do share any articles/data/documentaries so that people can know what really is going on with this multi-billion dollar industry.
- grecy 7y ago
  Checkout this book [1]. It contains myriad of sources and footnotes about how the developed world, WTO, World Bank etc function when you live outside. I.e. Undeveloped countries are slaves to keep the rich countries rich. [1] https://www.amazon.com/Aid-Other-Dirty-Business-Intentions/dp/B00FDVMOFU?tag=dastrbl-20 https://www.amazon.com/Aid-Other-Dirty-Business-Intentions/d...
  - ntsplnkv2 7y ago
    It's true but it's always interesting how we bring this up in farmer trades often, but not often in the tech space, when a large majority of us on this site have made a lot of money off the backs of cheap labor.
Stratoscope 7y ago
> Ethiopia and other poor countries are unable to reap profits from the coffee they grow thanks to extremely restrictive WTO tariffs that essentially prevent them from processing it before they export it. This means they're forced to export raw beans for pennies, and they'll never really make much money doing so. As someone who has roasted my own coffee for 20 years, I'm confused about what you're saying. What are these "raw beans" that the Ethopians are forced to export? I do buy green coffee beans from Ethopia, and have about 25 pounds of Ethopian at home right now. Are these the raw beans you're talking about? I certainly wouldn't want to buy coffee that was roasted in Ethopia; it would be awfully stale by the time it gets here. I mostly buy dry process beans, occasionally wet process. I've just never heard the term "raw beans". Are you talking about raw unprocessed coffee cherry? I didn't know anyone exports those as is. I thought they would go bad in shipping, and no one would buy them. And the sheer bulk and weight of raw coffee cherry should make it more economical to do a dry process or wet process at the source, to separate the valuable beans from the husk. I do buy a lot of my green beans from Sweet Maria's. They have a Farm Gate program where they work directly with coffee growers to make sure they get a fair price - generally more than the "Fair Trade" pricing. If you can help educate me on what I'm missing here, I would appreciate it - thanks!
- fiblye 7y ago
  > I certainly wouldn't want to buy coffee that was roasted in Ethopia; it would be awfully stale by the time it gets here. But if Germany is the 4th largest exporter in the world as the parent comment said, apparently plenty of people have no problem buying stale coffee from them.
  - Stratoscope 7y ago
    I see that note in the comment, but I don't understand how Germany can be a coffee exporter when they don't grow coffee there. They can only export as much coffee as they import. This sounds like a warehousing and shipping operation to me. Calling Germany an exporter seems like calling an Amazon fulfillment center a "manufacturer" of the products they ship to customers. Or calling Sweet Maria's or Coffee Bean Corral or Happy Mug coffee "growers". But maybe I don't understand the terminology, and I am definitely out of the loop on mass market coffee. Actually, Tom of Sweet Maria's did try to grow his own coffee here in California, with hilarious results. Behold, Finca West Oakland: https://legacy.sweetmarias.com/library/finca-west-oakland-growing-coffee-at-home/ https://legacy.sweetmarias.com/library/finca-west-oakland-gr...
    - ohnope 7y ago
      Germany is a roasted coffee exporter. They import green coffee beans from developing countries and process them into various coffee products (roasted beans, ground coffee, soluble crystals). Because they are transforming a raw material through an industrial process, they end up with a new product which they sell to the world (export). What might be confusing is Germany also re-exports green beans to other countries, at a markup. This is a much smaller % compared to the coffee products they export. Does this clarify things?
      - Stratoscope 7y ago
        That does, thank you very much for the detailed explanation. I was only looking at part of the picture.
    - 7y ago
gpresot 7y ago
Apart from the need of roasting coffee close to where the demand is to ensure "freshness", the other main reason that most large roasting operations are in Europe and US is "mixing". Most commercial coffees that you buy at a supermarket or even at coffee shops are a mix of various varieties. The provenance and ratios in the final mix change continuously to adapt to different taste (that may vary from harvest to harvest in the same estate), yields and prices, with the aim of maintaining a stable taste year on year and a stable cost. So even large coffee producing countries can not produce the right mix, and usually choose to penalise coffee imports (with duties) to protect local farmers.
- vinay427 7y ago
  Ironically single-origin coffees (or chocolates, etc.) are vastly more interesting to most people because they are so unique and can change unpredictably. There are ones with tasting notes resembling oranges, tomatoes, etc.
  - gpresot 7y ago
    True. But that unpredictable change in tasting notes is the enemy of commercial packaged coffee: your box of illy, carte noir, maxwell house, nescafe, nespresso MUST taste the same every time, and MUST have a stable cost of raw material (apart from baseline coffee prices fluctuations). The same happens for chocolate and tea (lipton's and twining's teabags can be a mix of 20-30 tea varieties that change continuously)
  - solatic 7y ago
    Just to add to gpresot's comment, every large brand has this issue. McDonald's products need to taste exactly the same around the world and most of their brand's value lies in the ability to create a stable, unchanging product that is still attractive to their market segments. Buying single-origin, and accepting the instability that comes with it, by necessity requires microbranding.
    - frosted-flakes 7y ago
anovikov 7y ago
How are they supposed to "process" it? Every business customer (cafe, chain, large company for their office coffee makers) who knows what they are doing, buys these raw beans. In Italy, at least in proper places, coffee is roasted SAME day as it is served, or previous evening worst case. You suggest doing it months in advance, then ship roasted beans from Ethiopia? Who's going to drink what results?
- cat199 7y ago
  I would bet money that the vast majority of coffee consumed globally is purchased from another entity and already roasted more than 1 week before.
  - anovikov 7y ago
    That's totally true! That's the main reason why most coffee we drink is such a trash. But, roasting it months in advance vs days in advance will bring a whole new dimension to that.
- stephen_g 7y ago
  That’s interesting. The rule of thumb in Australia for speciality coffee is to rest it for a few days (around 2-4) in a bag or container with a one way valve, so it can degas before using it.
locuscoeruleus 7y ago
For the people that think this is a dumb take, he's got a point. There's a roaster in my town that tries to pay a more fair price for the coffee he buys. He has a list of exactly how much he pays for the coffee which everyone can read. He's written a bit on the economics of coffee here https://timwendelboe.no/2012/11/coffee-is-cheap-part-2/?v=c2f3f489a005 https://timwendelboe.no/2012/11/coffee-is-cheap-part-2/?v=c2...
pjc50 7y ago
[citation needed] on the tarriffs. The EU duty on imported roasted non-decaf coffee (code 0901 21) is 7.5%: https://ec.europa.eu/taxation_customs/dds2/taric/measures.jsp?Lang=en&SimDate=20200320&Area=ET&MeasType=&StartPub=&EndPub=&MeasText=&GoodsText=&op=&Taric=0901210000&search_text=goods&textSearch=&LangDescr=en&OrderNum=&Regulation=&measStartDat=&measEndDat= https://ec.europa.eu/taxation_customs/dds2/taric/measures.js... That's not zero, but it doesn't sound extremely restrictive either.
thoraway1010 7y ago
Don't countries like ethopia skim the foreign currency sales of things like coffee in various ways (ie, low official exchange rate, then elites can resell at higher black market rate and give farmers the less valuable local currency). This is a common issue in a lot of developing countries - and also makes investment harder because it can be very difficult to get your foreign currency profits out (elites only want to buy at fake low rate - if they had to sell at it they'd lose their profit).
throw0101a 7y ago
> It's a shame an article ... It's an article: that is not its purpose. How much can you say on the multi-century history of a topic in a few hundred words? Maybe try the book referenced, or the may dozens of other hundred books written on the topic.
- codeisawesome 7y ago
  That’s disingenuous - the article’s title makes it clear to be attempt to summarise coffee history.
  - throw0101a 7y ago
    It's coffee history summarized to under one thousand words.
indymike 7y ago
The EU and several different countries levy tariffs on processed (roasted or soluble) coffee. The US and Canada do not. (I was really expecting to see that the US and Canada did) As a result, I'm able to buy custom roasted and custom packaged at the farm beans and get them on the shelf in the US in a few days. Local roasters have zero real advantage, other than appeal to the enthusiast and perhaps some "secret process" that gives a unique taste to their product. Source: http://www.intracen.org/coffee-guide/the-markets-for-coffee/Tariff-barriers/ http://www.intracen.org/coffee-guide/the-markets-for-coffee/...
qqn 7y ago
Here's a comprehensive analysis of coffee as a product: https://bridgeit.me/coffee https://bridgeit.me/coffee. The value chain section is interesting, but the tie-in to the refugee crisis is what got me: "I became friends with an Oromo family that had to flee from Ethiopia. They were from a region close to the city Jimma in southwestern Ethiopia, the cradle of coffee. Their land and coffee plantations were taken from them and the husband and his friends were jailed when they protested[...] But of course, the coffee we consume everyday and without which ‘we can’t survive’ has to be produced somewhere…"
LeoTinnitus 7y ago
This reminds me of the scene from War Machine. The general is asking some consultant why they can't grow corn or wheat since they have loads of fertile land. The guys said the exact thing you did. The WTO disallows them from doing so by entering into the export market and competing with American farmers. So they grow heroin instead haha!
MR4D 7y ago
I don't understand - according to this article, the tariffs are non-existent for the US & Canada [0], and according to this report from the USDA, the Ethiopian government controls the coffee market and exports [1]. Further, 8% of what, exactly? I bet tree farms get only a small percentage of the revenue of printer paper or cardboard boxes. Without this being defined, your comment kinda becomes meaningless. With a definition, it would clarify your comment for many. [0] - http://www.intracen.org/coffee-guide/the-markets-for-coffee/Tariff-barriers/ http://www.intracen.org/coffee-guide/the-markets-for-coffee/... [1] - https://apps.fas.usda.gov/newgainapi/api/report/downloadreportbyfilename?filename=Coffee%20Annual_Addis%20Ababa_Ethiopia_5-29-2019.pdf https://apps.fas.usda.gov/newgainapi/api/report/downloadrepo...

by grecy 7y ago

truth_be_told 7y ago

>economic enslavement story This is enraging. Please do share any articles/data/documentaries so that people can know what really is going on with this multi-billion dollar industry.

grecy 7y ago
Checkout this book [1]. It contains myriad of sources and footnotes about how the developed world, WTO, World Bank etc function when you live outside. I.e. Undeveloped countries are slaves to keep the rich countries rich. [1] https://www.amazon.com/Aid-Other-Dirty-Business-Intentions/dp/B00FDVMOFU?tag=dastrbl-20 https://www.amazon.com/Aid-Other-Dirty-Business-Intentions/d...
- ntsplnkv2 7y ago
  It's true but it's always interesting how we bring this up in farmer trades often, but not often in the tech space, when a large majority of us on this site have made a lot of money off the backs of cheap labor.

Stratoscope 7y ago

> Ethiopia and other poor countries are unable to reap profits from the coffee they grow thanks to extremely restrictive WTO tariffs that essentially prevent them from processing it before they export it. This means they're forced to export raw beans for pennies, and they'll never really make much money doing so. As someone who has roasted my own coffee for 20 years, I'm confused about what you're saying. What are these "raw beans" that the Ethopians are forced to export? I do buy green coffee beans from Ethopia, and have about 25 pounds of Ethopian at home right now. Are these the raw beans you're talking about? I certainly wouldn't want to buy coffee that was roasted in Ethopia; it would be awfully stale by the time it gets here. I mostly buy dry process beans, occasionally wet process. I've just never heard the term "raw beans". Are you talking about raw unprocessed coffee cherry? I didn't know anyone exports those as is. I thought they would go bad in shipping, and no one would buy them. And the sheer bulk and weight of raw coffee cherry should make it more economical to do a dry process or wet process at the source, to separate the valuable beans from the husk. I do buy a lot of my green beans from Sweet Maria's. They have a Farm Gate program where they work directly with coffee growers to make sure they get a fair price - generally more than the "Fair Trade" pricing. If you can help educate me on what I'm missing here, I would appreciate it - thanks!

fiblye 7y ago
> I certainly wouldn't want to buy coffee that was roasted in Ethopia; it would be awfully stale by the time it gets here. But if Germany is the 4th largest exporter in the world as the parent comment said, apparently plenty of people have no problem buying stale coffee from them.
- Stratoscope 7y ago
  I see that note in the comment, but I don't understand how Germany can be a coffee exporter when they don't grow coffee there. They can only export as much coffee as they import. This sounds like a warehousing and shipping operation to me. Calling Germany an exporter seems like calling an Amazon fulfillment center a "manufacturer" of the products they ship to customers. Or calling Sweet Maria's or Coffee Bean Corral or Happy Mug coffee "growers". But maybe I don't understand the terminology, and I am definitely out of the loop on mass market coffee. Actually, Tom of Sweet Maria's did try to grow his own coffee here in California, with hilarious results. Behold, Finca West Oakland: https://legacy.sweetmarias.com/library/finca-west-oakland-growing-coffee-at-home/ https://legacy.sweetmarias.com/library/finca-west-oakland-gr...
  - ohnope 7y ago
    Germany is a roasted coffee exporter. They import green coffee beans from developing countries and process them into various coffee products (roasted beans, ground coffee, soluble crystals). Because they are transforming a raw material through an industrial process, they end up with a new product which they sell to the world (export). What might be confusing is Germany also re-exports green beans to other countries, at a markup. This is a much smaller % compared to the coffee products they export. Does this clarify things?
    - Stratoscope 7y ago
      That does, thank you very much for the detailed explanation. I was only looking at part of the picture.
  - 7y ago

gpresot 7y ago

Apart from the need of roasting coffee close to where the demand is to ensure "freshness", the other main reason that most large roasting operations are in Europe and US is "mixing". Most commercial coffees that you buy at a supermarket or even at coffee shops are a mix of various varieties. The provenance and ratios in the final mix change continuously to adapt to different taste (that may vary from harvest to harvest in the same estate), yields and prices, with the aim of maintaining a stable taste year on year and a stable cost. So even large coffee producing countries can not produce the right mix, and usually choose to penalise coffee imports (with duties) to protect local farmers.

vinay427 7y ago
Ironically single-origin coffees (or chocolates, etc.) are vastly more interesting to most people because they are so unique and can change unpredictably. There are ones with tasting notes resembling oranges, tomatoes, etc.
- gpresot 7y ago
  True. But that unpredictable change in tasting notes is the enemy of commercial packaged coffee: your box of illy, carte noir, maxwell house, nescafe, nespresso MUST taste the same every time, and MUST have a stable cost of raw material (apart from baseline coffee prices fluctuations). The same happens for chocolate and tea (lipton's and twining's teabags can be a mix of 20-30 tea varieties that change continuously)
- solatic 7y ago
  Just to add to gpresot's comment, every large brand has this issue. McDonald's products need to taste exactly the same around the world and most of their brand's value lies in the ability to create a stable, unchanging product that is still attractive to their market segments. Buying single-origin, and accepting the instability that comes with it, by necessity requires microbranding.
  - frosted-flakes 7y ago

anovikov 7y ago

How are they supposed to "process" it? Every business customer (cafe, chain, large company for their office coffee makers) who knows what they are doing, buys these raw beans. In Italy, at least in proper places, coffee is roasted SAME day as it is served, or previous evening worst case. You suggest doing it months in advance, then ship roasted beans from Ethiopia? Who's going to drink what results?

cat199 7y ago
I would bet money that the vast majority of coffee consumed globally is purchased from another entity and already roasted more than 1 week before.
- anovikov 7y ago
  That's totally true! That's the main reason why most coffee we drink is such a trash. But, roasting it months in advance vs days in advance will bring a whole new dimension to that.
stephen_g 7y ago
That’s interesting. The rule of thumb in Australia for speciality coffee is to rest it for a few days (around 2-4) in a bag or container with a one way valve, so it can degas before using it.

locuscoeruleus 7y ago

For the people that think this is a dumb take, he's got a point. There's a roaster in my town that tries to pay a more fair price for the coffee he buys. He has a list of exactly how much he pays for the coffee which everyone can read. He's written a bit on the economics of coffee here https://timwendelboe.no/2012/11/coffee-is-cheap-part-2/?v=c2f3f489a005 https://timwendelboe.no/2012/11/coffee-is-cheap-part-2/?v=c2...

pjc50 7y ago

[citation needed] on the tarriffs. The EU duty on imported roasted non-decaf coffee (code 0901 21) is 7.5%: https://ec.europa.eu/taxation_customs/dds2/taric/measures.jsp?Lang=en&SimDate=20200320&Area=ET&MeasType=&StartPub=&EndPub=&MeasText=&GoodsText=&op=&Taric=0901210000&search_text=goods&textSearch=&LangDescr=en&OrderNum=&Regulation=&measStartDat=&measEndDat= https://ec.europa.eu/taxation_customs/dds2/taric/measures.js... That's not zero, but it doesn't sound extremely restrictive either.

thoraway1010 7y ago

Don't countries like ethopia skim the foreign currency sales of things like coffee in various ways (ie, low official exchange rate, then elites can resell at higher black market rate and give farmers the less valuable local currency). This is a common issue in a lot of developing countries - and also makes investment harder because it can be very difficult to get your foreign currency profits out (elites only want to buy at fake low rate - if they had to sell at it they'd lose their profit).

throw0101a 7y ago

> It's a shame an article ... It's an article: that is not its purpose. How much can you say on the multi-century history of a topic in a few hundred words? Maybe try the book referenced, or the may dozens of other hundred books written on the topic.

codeisawesome 7y ago
That’s disingenuous - the article’s title makes it clear to be attempt to summarise coffee history.
- throw0101a 7y ago
  It's coffee history summarized to under one thousand words.

indymike 7y ago

The EU and several different countries levy tariffs on processed (roasted or soluble) coffee. The US and Canada do not. (I was really expecting to see that the US and Canada did) As a result, I'm able to buy custom roasted and custom packaged at the farm beans and get them on the shelf in the US in a few days. Local roasters have zero real advantage, other than appeal to the enthusiast and perhaps some "secret process" that gives a unique taste to their product. Source: http://www.intracen.org/coffee-guide/the-markets-for-coffee/Tariff-barriers/ http://www.intracen.org/coffee-guide/the-markets-for-coffee/...

qqn 7y ago

Here's a comprehensive analysis of coffee as a product: https://bridgeit.me/coffee https://bridgeit.me/coffee. The value chain section is interesting, but the tie-in to the refugee crisis is what got me: "I became friends with an Oromo family that had to flee from Ethiopia. They were from a region close to the city Jimma in southwestern Ethiopia, the cradle of coffee. Their land and coffee plantations were taken from them and the husband and his friends were jailed when they protested[...] But of course, the coffee we consume everyday and without which ‘we can’t survive’ has to be produced somewhere…"

LeoTinnitus 7y ago

This reminds me of the scene from War Machine. The general is asking some consultant why they can't grow corn or wheat since they have loads of fertile land. The guys said the exact thing you did. The WTO disallows them from doing so by entering into the export market and competing with American farmers. So they grow heroin instead haha!

MR4D 7y ago

I don't understand - according to this article, the tariffs are non-existent for the US & Canada [0], and according to this report from the USDA, the Ethiopian government controls the coffee market and exports [1]. Further, 8% of what, exactly? I bet tree farms get only a small percentage of the revenue of printer paper or cardboard boxes. Without this being defined, your comment kinda becomes meaningless. With a definition, it would clarify your comment for many. [0] - http://www.intracen.org/coffee-guide/the-markets-for-coffee/Tariff-barriers/ http://www.intracen.org/coffee-guide/the-markets-for-coffee/... [1] - https://apps.fas.usda.gov/newgainapi/api/report/downloadreportbyfilename?filename=Coffee%20Annual_Addis%20Ababa_Ethiopia_5-29-2019.pdf https://apps.fas.usda.gov/newgainapi/api/report/downloadrepo...