Monday, October 30, 2006
¿why is it impossible to get a decent cup of coffee in a region that produces some of the world's best?
Like the vast majority of countries in the global south, Ecuador's is an export oriented economy. Since the Spanish conquest, it's resources have beeen extracted, at great expense to local populations and environments, and sent abroad. First it was gold, mined and lifted from the rivers, sent to spain, ultimately funding the industrialization of Europe and the emergence of capitalism. Because of it's great natural diversity Ecuador has produced, at one point or other, almost all of history's great cash crops: rubber, coffee, cocoa, coca, oil, bananas, flowers...
Things today aren't vastly different than they were during the mercanitle, ecomienda, or hacienda eras. Because of power inequalities reinforced by the terms of international trade, countries in the global south are forced to export raw materials (at the lowest possible price) and import finished goods (at great expense). IMF/World Bank loans and the consequent structural adjustment policies (SAPs) stipulate that countries must eliminate protective tariffs and agricultural subsidies so that a worldwide level plaving field is created. The trouble is that rich coutnries aren't dependent on loans from the global financial institutions and so aren't subject to SAPs; their protective tariffs and subsidies are left intact. So, while small farmers in the south are 'competing' for global markets with corporate agroindustry, rich states, and each other, their local markets are flooded with imported goods at prices they can't match. And so, as farming becomes a decreasingly viable option, people leave the country for the city, for other countires - the rural exodus intensifying processes of urbanization and emmigration. Wide open and unused rural spaces here indicate a region's poverty and the disutlity of organizing the world on concepts of relative advantage and global markets.
Two example from further afield are plainly illustrative. For the last few years, under pressure from the usual internatinal institutions, the government of Mali has been reducing, with the ulimate aim of eliminating, subsidies for cotton farmers. Although cotton is a relatively low capital intense crop, farmers still have to buy seed, fertilizer, transport, and for planting and harvesting equipment; for most Malian farmers this requires taking out loans. For US cotton producers on the hand, these costs are paid for by government subsidies, meaning they can sell their cotton at any price and make a profit. To compete with these prices in the global market, Malian farmers have to sell at barely above (or even blow) their cost of production, their labor left valueless, because of the loans they enter a cycle of endebtedness. This precarious existence is marginal at best and season to season survival is questionable; a dry year, locusts, or any number of factors leaving farmers with all the debt and none of the product of a 'good' year.
On the other side of Mali's southern border lies the Ivory Coast, the world's leading cocoa produce and exporter; despite that, you'd be hard pressed to find an Ivorian bar of chocolate. Because cocoa doesnt grow in Switzerland, Belgium, France etc, the chocolatiers in these countries (mom and pop outfits like Nestle and Lindt) need to import all their cocoa. To facilitate this, these countries' governments keep taxes low on the import of raw or semi-processed materials. Conversely, tariffs on finished goods (like bars of chocolate) are kept high to protect 'local' industry. The result is that even if the Ivory Coast produced chocolate (which would require capital for factories, and, if it were to compete globally, a world wide advertising campaign) there'd be nowhere to sell it. And at the same time, because SAPs keep the country's tariffs on imports low, the European giants are able to sell as much of their product (not just chocolate, but powdered milk - with its own set of problems) on local markets as possible.
So finally, to coffee. While Columbia Ecuador, Peru, and Bolivia (not to mention their Central American counterparts) produce some of the best coffee in the world (take a look at the fancy coffee section in a fancy grocery store) the morning cup here in Latin America is always Nescafe: imported from Columbia with all the revenue going to Switzerland. The same structures that affecting the cotton and cocoa trades shape the coffee trade, so all the good stuff is sent abroad and mass produced substitutes are imported. The same is true for virtually every commodity traded on 'the global level playing field' of neoliberal freetrade. This, I think, is part of the answer to the question I come face to face with every morning over my (nes)cafe-con-leche.
The Fair Trade movement ostensibly adresses some of these problems, but, it leaves the basic structure of inequality intact in doing so. So whole empowering rural communities, protecting human rights and the environment, and advocating a living wage are obviously laudable goals, it is less clear if that gourmet coffee and chocolate (as tasty as they may be) are viable means of achieving them. Fair trade placed the burden of change of individual consumers (clearing corporations of responsability) the vast majority of whom simply cannot pay gourmet prices. Ultimately fair trade functions more effectively in easing the consiences of left leaning bourgeois than in changin the nature of global trade. Even with fair trade, the global south is territorializes as a net exporter of consumer goods and placed at an overall disadvantage in power relations with the north.
and if all that's not messed up enough, they guy next to me in the cyber cafe has been singing linkin park loud for 30 minutes. urgh. globalization: pretty much sucks right now.
Things today aren't vastly different than they were during the mercanitle, ecomienda, or hacienda eras. Because of power inequalities reinforced by the terms of international trade, countries in the global south are forced to export raw materials (at the lowest possible price) and import finished goods (at great expense). IMF/World Bank loans and the consequent structural adjustment policies (SAPs) stipulate that countries must eliminate protective tariffs and agricultural subsidies so that a worldwide level plaving field is created. The trouble is that rich coutnries aren't dependent on loans from the global financial institutions and so aren't subject to SAPs; their protective tariffs and subsidies are left intact. So, while small farmers in the south are 'competing' for global markets with corporate agroindustry, rich states, and each other, their local markets are flooded with imported goods at prices they can't match. And so, as farming becomes a decreasingly viable option, people leave the country for the city, for other countires - the rural exodus intensifying processes of urbanization and emmigration. Wide open and unused rural spaces here indicate a region's poverty and the disutlity of organizing the world on concepts of relative advantage and global markets.
Two example from further afield are plainly illustrative. For the last few years, under pressure from the usual internatinal institutions, the government of Mali has been reducing, with the ulimate aim of eliminating, subsidies for cotton farmers. Although cotton is a relatively low capital intense crop, farmers still have to buy seed, fertilizer, transport, and for planting and harvesting equipment; for most Malian farmers this requires taking out loans. For US cotton producers on the hand, these costs are paid for by government subsidies, meaning they can sell their cotton at any price and make a profit. To compete with these prices in the global market, Malian farmers have to sell at barely above (or even blow) their cost of production, their labor left valueless, because of the loans they enter a cycle of endebtedness. This precarious existence is marginal at best and season to season survival is questionable; a dry year, locusts, or any number of factors leaving farmers with all the debt and none of the product of a 'good' year.
On the other side of Mali's southern border lies the Ivory Coast, the world's leading cocoa produce and exporter; despite that, you'd be hard pressed to find an Ivorian bar of chocolate. Because cocoa doesnt grow in Switzerland, Belgium, France etc, the chocolatiers in these countries (mom and pop outfits like Nestle and Lindt) need to import all their cocoa. To facilitate this, these countries' governments keep taxes low on the import of raw or semi-processed materials. Conversely, tariffs on finished goods (like bars of chocolate) are kept high to protect 'local' industry. The result is that even if the Ivory Coast produced chocolate (which would require capital for factories, and, if it were to compete globally, a world wide advertising campaign) there'd be nowhere to sell it. And at the same time, because SAPs keep the country's tariffs on imports low, the European giants are able to sell as much of their product (not just chocolate, but powdered milk - with its own set of problems) on local markets as possible.
So finally, to coffee. While Columbia Ecuador, Peru, and Bolivia (not to mention their Central American counterparts) produce some of the best coffee in the world (take a look at the fancy coffee section in a fancy grocery store) the morning cup here in Latin America is always Nescafe: imported from Columbia with all the revenue going to Switzerland. The same structures that affecting the cotton and cocoa trades shape the coffee trade, so all the good stuff is sent abroad and mass produced substitutes are imported. The same is true for virtually every commodity traded on 'the global level playing field' of neoliberal freetrade. This, I think, is part of the answer to the question I come face to face with every morning over my (nes)cafe-con-leche.
The Fair Trade movement ostensibly adresses some of these problems, but, it leaves the basic structure of inequality intact in doing so. So whole empowering rural communities, protecting human rights and the environment, and advocating a living wage are obviously laudable goals, it is less clear if that gourmet coffee and chocolate (as tasty as they may be) are viable means of achieving them. Fair trade placed the burden of change of individual consumers (clearing corporations of responsability) the vast majority of whom simply cannot pay gourmet prices. Ultimately fair trade functions more effectively in easing the consiences of left leaning bourgeois than in changin the nature of global trade. Even with fair trade, the global south is territorializes as a net exporter of consumer goods and placed at an overall disadvantage in power relations with the north.
and if all that's not messed up enough, they guy next to me in the cyber cafe has been singing linkin park loud for 30 minutes. urgh. globalization: pretty much sucks right now.
# posted by jacob @ 5:48 PM 
Comments:
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hello jacob, its your brother
i'd like to refute your argument a little bit - Madagascar
Robert Chocolate is a malagasy chocolate company that makes (delicious) chocolate (dark, super dark, milk, and white as well as thornton's style chocolates). theres one value-added good.
another - sapphires and other precious stones found in Madagascar. A current World Bank (oh god no, not them) project is working to train the malagasy in identifying and cutting gems so that they can then export them already cut, at a greater cost to the white boys buying them (or asians as the case may be, whatev).
just thought i'd let you know
i'd like to refute your argument a little bit - Madagascar
Robert Chocolate is a malagasy chocolate company that makes (delicious) chocolate (dark, super dark, milk, and white as well as thornton's style chocolates). theres one value-added good.
another - sapphires and other precious stones found in Madagascar. A current World Bank (oh god no, not them) project is working to train the malagasy in identifying and cutting gems so that they can then export them already cut, at a greater cost to the white boys buying them (or asians as the case may be, whatev).
just thought i'd let you know
# posted by 
: 3:16 AM
: 3:16 AM
there´s a difference between exceptions and refutation. also, you cant refute a little bit, either you do or you dont.
who owns robert chocolate? how much do the workers get paid? is it sustainable? who makes desicions? elites in 3rdwold countries sometimes benefit from these policies...alvaro noboa, presidential candidate in ecuador owns one of the largest banana businesses in the world, but just because he´s ecuadorian doesnt mean he respects human rights or the environment. also, wal mart still has more power than him, because if they didnt buy, hed be screwed.
the sapphire example is better, but if its supported by the world bank there is an alterior agenda. fact.
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who owns robert chocolate? how much do the workers get paid? is it sustainable? who makes desicions? elites in 3rdwold countries sometimes benefit from these policies...alvaro noboa, presidential candidate in ecuador owns one of the largest banana businesses in the world, but just because he´s ecuadorian doesnt mean he respects human rights or the environment. also, wal mart still has more power than him, because if they didnt buy, hed be screwed.
the sapphire example is better, but if its supported by the world bank there is an alterior agenda. fact.
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