Economy

Coffee constitutes the backbone and driving force of the economies of most coffee producing countries. For many countries of the Greater South, the export of coffee remains one of most profitable export and income generating activities. Coffee agriculture likewise remains one of the most prolific employment sectors in many developing countries and provides a means of livelihood for millions of people. Its contributions to the national economy in general and the export sector in particular are incontestable. Not only does coffee agriculture contribute to the economic well-being and development of countries, but it also remains an integral part of the modes of manifesting peoples’ cultures, traditions, folklore, identities and values.

Although coffee was initially an ‘exotic’ beverage, today it is consumed in all countries and societies of the world. Curiously, however, its multiplying effects on the economic and social development of coffee producing countries are often neglected. It has the potential to overcome some of the most pressing development challenges and to chart a path conducive to the realisation of a just and equitable way of sustainable development.

For many developing countries, coffee is a valuable crop and a vital export commodity. More than 90% of coffee production takes place in countries of the Greater South. The top coffee producing countries are located around the Equator – in Sub-Saharan Africa, Asia, Central and South America. Coffee farming and agriculture are at the heart of coffee producing countries’ economic development and remains a major driver for job creation, generation of livelihoods, rural development, food security and self-sufficiency. Millions of people earn their daily bread cultivating the crop – and many more are affected by the positive economic side-effects of the coffee economy related to transporting, trading, processing, roasting and exportation.

The overall value of the coffee economy and the related value chain are enough to constitute a significant component of the overall GDP of a developing country, and therefore to serve as an engine for systemic, inclusive economic growth. Amount to more than USD 460 billion, one would assume that coffee producing countries would receive the lion-share of this wealth – however, the reality tells a different story, only 5% of the overall value of the coffee economy benefit the countries of the Greater South.

There should therefore be no doubt that trade in coffee must be reorganized to ensure a fair distribution of profits. At present the global distribution of wealth emanating from the coffee sector is inequitable. If we look at the global distribution of income generated from the coffee economy, we recognize the urgent need to render it more equitable so as to alleviate the socio-economic challenges faced by coffee producing countries in general and smallholder coffee farmers in particular. Smallholder farmers are one of the most vulnerable members of the coffee supply chain. Most of coffee growing agriculture and farming are undertaken on small farms in rural areas.

Owing to the instability and volatility of world coffee prices, many smallholder farmers are deprived of stable and predictable income. In times of food crisis and shortages, these matters can generate alarming and dire impacts on small farmers, especially in respect to failing harvest seasons.

Moreover, we must take into account that climate change and the related erratic and challenging weather patterns are adversely affecting the duration of raining seasons, thus contributing to worsening socio-economic conditions for smallholder coffee farmers, resulting in unpredictable agricultural outputs. The farmers are particularly at risk from the dislocations caused by global warming, due to their dependence on the environment, its resources and its harvesting. The frequent droughts, deforestation and rise of temperatures are destroying traditional foods sources and habitats, and adversely affecting their livelihoods.

It therefore remains the common interest of countries of the Global South and the Global North alike to address profit inequities which disproportionally affect producers in the former, and exponentially benefit stakeholders in the Global North. Insurance against market uncertainties, price fluctuations and climate change disruptions must be geared towards providing a price guarantee for coffee that addresses the most basic socio-economic needs of the most vulnerable and contributes to alleviate poverty. The situation cannot stay as it is today, and all countries involved in the coffee-producing, processing, exporting and consuming have an interest in constructing an economic architecture that will have safety nets and will ensure justice for all concerned. A pragmatic and implementable plan of action must be formulated, discussed and negotiated.

Against this background, ensuring a favourable socio-economic climate conducive to women’s economic empowerment, regardless of their position in social life, is a fundamental ingredient enabling them to activate their role in the society. Rural women, and particularly those in the coffee sector, constitute the majority of the rural workforce in some countries of the Greater South. Although women undertake most of the physical labour relating to cultivating and harvesting coffee, income inequality adversely affects women. According to the World Bank, in some countries of the Greater South, revenues from selling coffee is 39% lower for women-led than for men-led households.

For the economy in its integrity, the most efficient and durable way to facilitate long-term prosperity and women’s economic empowerment is to advance their socio-economic status and ensure that inequalities of opportunity and of income do not adversely affect women’s role in the coffee sector. The lack of female empowerment remains an obstacle towards enhancing progress in poverty reduction. On this matter, countries of the Greater South must remain committed to design targeted programmes and to formulate policies that are effective in enhancing women’s opportunities for building human capabilities, providing technical, entrepreneurial, and practical farming training and facilitating access to land ownership.

Foreign direct investments must be channelled into improving access to micro-finance for small-holder farmers, facilitate technical and vocational training of youth, climate-resilient coffee agriculture, promote endogenous technology solutions for coffee supply, production and distribution, and economic self-sufficiency. Enabling coffee producing countries to reap the benefits of the global coffee value chain is key to overcome the systemic challenges and asymmetrical imbalances pertaining to coffee trade as well as to achieve the 2030 Agenda for Sustainable Development

About the author
Dr. Blerim Mustafa, a Norwegian national, serves as an international civil servant. Dr. Mustafa holds a Ph.D. in International Relations and Politics from the University of Leicester (UK) and has completed his graduate and under-graduate studies in Switzerland and Norway respectively. He has over 10 years of experience in the development and non-profit sectors focused on human rights, religious diplomacy, education, diplomatic protocol and etiquette. Throughout his career, Dr. Mustafa has worked in more than 20 countries across different world continents – including Africa, Asia, the Middle East, Europe as well as Latin and North America – having engaged in policy change and advocacy related initiatives through a variety of mechanisms and institutional instruments. Dr. Mustafa regularly contributes with authored articles and op-eds and his contributions have been cited in different news media outlets in 10 countries.