Abstract

Can developing countries trade their way out of poverty? International trade has grown dramatically in the last two decades in the global economy, and trade is an important source of revenue in developing countries. Yet, many low-income countries have been producing and exporting tropical commodities for a long time. They are still poor. This book is a major analytical contribution to understanding commodity production and trade, as well as putting forward policy-relevant suggestions for ‘solving’ the commodity problem. Through the study of the global value chain for coffee, the authors recast the ‘development problem’ for countries relying on commodity exports in entirely new ways. They do so by analysing the so-called coffee paradox – the coexistence of a ‘coffee boom’ in consuming countries and of a ‘coffee crisis’ in producing countries. New consumption patterns have emerged with the growing importance of specialty, fair trade and other ‘sustainable’ coffees. In consuming countries, coffee has become a fashionable drink and coffee bar chains have expanded rapidly. At the same time, international coffee prices have fallen dramatically and producers receive the lowest prices in decades. This book shows that the coffee paradox exists because what farmers sell and what consumers buy are becoming increasingly ‘different’ coffees. It is not material quality that contemporary coffee consumers pay for, but mostly symbolic quality and in-person services. As long as coffee farmers and their organizations do not control at least parts of this ‘immaterial’ production, they will keep receiving low prices. The Coffee Paradox seeks ways out from this situation by addressing some key questions: What kinds of quality attributes are combined in a coffee cup or coffee package? Who is producing these attributes? How can part of these attributes be produced by developing country farmers? To what extent are specialty and sustainable coffees achieving these objectives?
Stefano Ponte is senior researcher at the Institute for International Studies, Copenhagen. He is co-author (with Peter Gibbon) of 'Africa, Value Chains and the Global Economy' (2004) and author of 'Farmers and Markets in Tanzania: How Policy Reforms Affect Rural Livelihoods in Africa' (2002). He has published extensively on commodity trade (especially coffee) and development, global value chains, the political economy of standards, agro-food markets, and rural livelihoods in developing countries. Benoit Daviron is a French agronomist and agricultural economist at CIRAD. He is currently a visiting scholar at the University of California, Berkeley.
'An important contribution to the literature on primary products and economic development.' Diego Pizano, National Federation of Coffee Growers of Colombia 'Daviron and Ponte have done a masterful job both of showing the limits to 'free' trade in agricultural products as well as providing some concrete proposals as to what must be done to promote greater equity. The story of the global coffee trade is an essential lesson for all those concerned about international development. This volume should be read by anyone who is interested in how international trade takes place on the ground as opposed to abstract theorizing about it.' Lawrence Busch, director of the Institute for Food and Agricultural Standards, Michigan State University 'This book uses value chain analysis to go beyond the normal hand-wringing about the coffee crisis. The authors blend theory and practice (including new data) to provide all those interested in coffee with new insights, ideas and perspective.' Peter Baker, senior coffee scientist, CABI Commodities 'Ponte and Daviron bring fresh insights to the persistent difficulties of trade as a lever of development for poor nations. Their well-crafted and historically grounded arguments precisely characterize the important intangible attributes of value and market power that are often overlooked and offer some stimulating perspectives for anyone interested in development and in coffee.' Daniele Giovannucci, consultant and author of The State of Sustainable Coffee 'The Coffee Paradox offers a fascinating account of how our favourite morning cup of coffee travels from poor producer regions in the Global South to relatively affluent consumer regions in the Global North. Analyzing recent transformations in coffee quality specifications and global trade networks, Daviron and Ponte illuminate the challenges and opportunities inherent in tropical export production, global trade, and shifting consumption trends. The book is theoretically sophisticated, empirically grounded, and goes the extra mile to identify promising pathways for fuelling development.' Laura T. Raynolds, co-director of the Center for Fair and Alternative Trade Studies, Colorado State University 'Aimed at academics and researchers, the Coffee Paradox raises interesting questions, using the example of coffee to explore a complex, but important subject.' New Agriculturist '....is an intriguing study..is likely to make an important contribution to the research, debates and initiatives addressing the relationship between commodity trade and development, as well as to the future potential of more equitable North/South relations amidst the rapid changes in production, trade and consumption in the global economy.' Douglas L. Murray, Colorado State University 'Recasts the so-called coffee paradox - the coexistence of a 'coffee boom' in consuming countries and of a 'coffee crisis' in producing countries. While coffee bar chains have expanded rapidly in consuming countries international coffee prices have fallen dramatically and producers receive the lowest prices in decades.' Development Action, Nov/Dec 2005