A Theoretical and Empirical Study on the Coffee Food System: Prospects of New Links between Producing Countries and Consuming Countries toward Poverty Alleviation for Coffee Producers

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The futures price of Arabica coffee bean, which is determined in the New York Coffee Exchange, is at "the record low level" as a result of oversupply in the global coffee market. This is due firstly to increased modernization and promotion of efficiency in a production-distribution system in the largest coffee producing country Brazil, and secondly due to a sharp increase in production of low quality beans in the new coffee producer Vietnam. In addition co this, the resulting loss of speculators' interest in coffee bean market has contributed to the price reduction.New York futures price has been used as a benchmark price in the world Arabica coffee trade. Therefore in small coffee producing countries including Tanzania, the lowest price as well as inefficient production-distribution system and blatant gap in bargaining power and information content between sellers/producers (including small-scale farmers and cooperatives) and buyers/exporters (such as multinational companies) has led … More to the producer price at "the record low level" in small coffee producing countries including Tanzania. As a result, 25 million coffee producers around the world have been suffering from poverty.On the contrary, the coffee industry in the consuming country Japan has enjoyed the benefit from the availability of cheap green coffee beans. However, several factors have boosted the competitiveness in Japan: a protracted recession; the boom in foreign coffee shop chains (this indicates the change of the needs towards coffee shops); the removal of intermediate stages of business such as Import Firm * Wholesaler of Green Beans * Coffee Processing Company * Business Demand/Retailers. Consequently, the market was polarized between those "seeking low price" and "seeking high quality" . In case of the latter, traders are forced to face a matter of life and death where securing high quality beans is extremely difficult due to the slump in producer prices.How should "ideal links between producing countries and consuming countries" be established, in order to solve the above mentioned issues? Firstly, they are featured in the International Coffee Agreement, which was achieved as a result of the "North-South problems movement" . This, however, has not worked since 1989 due to America' s withdrawal from the Agreement. There have been plans for establishing a fund for supporting producers, which have been much discussed by the International Coffee Organization that manages the above Agreement. This fund is yet to be realized. The only currently practiced "ideal links" can be found in Fairtrade (a trade movement which guarantees to set minimum export prices and return profits to production area). It s not, however, be widespread (Fairtrade only accounts for less than one percent in Japan). Less