Booklet 4 - Coffee

Question 1

Producers of Coffee

Answer 1

• Generally grown close to the equator in a “coffee belt”
• No.1 Brazil
• No.2 Vietnam
• South and Central America
• Some East African nations, such as Uganda, Ethiopia and Kenya
• Sometimes Southeast Asia

Question 2

Why are producers located where they are?

Answer 2

• Soil pH of 5-6
• Temperature of 18-26 degrees Celsius
• No frost
• 1,500 mm of rainfall
• Sloping land (800m above sea level)

Question 3

Two types of Coffee Bean

Answer 3

Arabica and Robusta

Arabica:
- 70% of coffee production
- Higher quality
- More expensive
- South American

Question 4

Process and Issues with Production

Answer 4

1. Grown in nurseries for 6-12 months
2. Moved to farms where they produce beans

• Disease, bacterial blight, coffee leaf rust
• Pests, Black twig borer, native to Asia
• Weather, drought can make disease and pests more likely
• Fertilisers and pesticides are very expensive

Question 5

Reasons for Price Fluctuations

Answer 5

• Limited supply, so if there is an increase in demand then price increases as more people compete to buy a limited quantity of goods
• Supply increases then price decrease

Question 6

Issues with the fluctuations of Coffee price

Answer 6

Coffee Farmers:
- Influx of demand for coffee, puts small-scale farms out of business as they cannot afford to produce coffee at a very low price

Price in Vietnam per kg:
2000 Jan - $1.20
2001 March - $0.68

Question 7

Positive Impacts of Coffee trade on producer countries

Answer 7

• Helps to develop infrastructure
• Earn “hard currency”
• Tax Revenue increases
• Provides direct and indirect jobs
• Forms links with other nations

Question 8

Negative Impacts of Coffee trade on producer countries

Answer 8

• Product is easily damaged
• Poor working conditions
• Price can change due to recessions
• Price fluctuations
• Producers must pay for Fair Trade certification, some are unable to afford it. The sliding-scale price structure makes it less costly for larger firms.
• Can cause an over reliance on monoculture, so the success of one crop greatly impacts the local economy.

Question 9

Who dominates the Global Coffee market

Answer 9

TNCs

Only 7-10% of the price of coffee in supermarkets goes to coffee farmers because farmers sell the unprocessed beans, a low value good

TNCs buy there beans and roast them to increase value

Question 10

Fair trade in the Coffee Market

Answer 10

Established in 1992, Fair Trade works with producer organisations aiming to:
- Set the fair trade minimum price
- Maintain environmental standards and prohibit forced labour and child labour
- Pays additional money into communal fund for local communities to help them develop (Fairtrade Premium)

Fair Trade approach more ethical than traditional trade

Question 11

Consumers of Coffee

Answer 11

HICs

• Largely European countries (Scandinavia)
• North America (USA and Canada)
• Brazil is the No.1 producer, but also a very large consumer

Question 12

Positive Impacts on Consumer Countries

Answer 12

• Can get access to a product not grown locally
• “Cafe Culture”
• Job opportunities in coffee shops
• Local multiplier effect and tax revenue
• Lots of consumer choice

Question 13

Negative Impacts on Consumer Countries

Answer 13

• Supply problems as price can fluctuate
• Dependent on an imported product
• Low paid jobs in coffee shops