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22 October 2001

The coffee grower’s tale

A plan for the world - The coffee grower's tale

By Carlos Vargas

Did you know that coffee is the second most valuable commodity in the world after petroleum? I run a union of Fair Trade coffee producers, Coocafe, which represents the interests of nine co-operatives from the least developed regions of Costa Rica. These co-operatives are made up of numerous small-scale producers and campesino farmers. Our principal product is the raw material of coffee: unprocessed, green coffee beans. Coocafe is responsible for trading with the developed world.

Our producers own small landholdings, family plots that are simple and sustainable in the long term. They have less of an impact on the environment, and are also important socially; national development can begin on the level of the family plot. Because coffee is the major source of export income for the countries of Central America, we see the product as the most logical vehicle for development in producer countries.

Costa Rica is part of three free-trade agreements – the System of Central American Integration (SICA), its economic sister (SIECA) and the Central American Common Market. These agreements are supposed to allow free trade so that all of us in the member countries might benefit. But I see some significant problems with trade arrangements such as these. The North American Free Trade Agreement (Nafta), for example, claims to treat everyone as equals when we are not all equal at all. Our argument is that we can’t all be under the same rules when we’re not under the same conditions. When governments sign such free trade accords, they do not take into account our model of agriculture (small-scale family plots). It is of fundamental importance that they begin to appreciate that we are lots of small family holdings, not a few large landowners with many workers. By expecting to treat everyone as equal within a free trade agreement, they do not acknowledge that a small producer cannot compete against a large-scale, low-cost plantation.

Nafta claims to be a level playing field. But although it encourages a free flow of goods and services, it is not prepared to see people cross borders in search of greater job opportunities and a better quality of life.

What is the main challenge facing Latin American coffee producers at this time? Quite simply, survival. How can we think about the future if we can’t survive right now? The aims of the coffee producers are simple: enough food, a basic education, access to healthcare.

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Sometimes people ask me about the opportunities for development in our industry, and whether we could use the internet to make life easier. We see potential in information technology, but at the moment this is still beyond our reach because of the expense and the lack of training.

We would like to focus on the coffee: improving the quality, reducing our costs and raising our capacity to trade. The Fair Trade brand Cafe Direct, as well as guaranteeing a minimum fixed price for our coffee, promotes the empowerment of the producer through a support and development programme. This educates the producers in how the market works and how to obtain the best prices for their coffee.

Most coffee production is controlled by the main coffee companies. One of the things that frustrate us most is that the big roasters are interested only in ways to buy their coffee as cheaply as possible. They give no consideration to the interests of the producer, only to how coffee is selling on the world market. We understand that these companies are obliged to focus on their profitability, but a 10 per cent increase in the price paid for the raw material would not, I believe, make any great difference to their global profit margin. It would, however, greatly benefit us. Their attitude is offensive to the producer because, even if we offer coffee at our lowest possible price, they will continue to look for cheaper options.

There are certain things that we want to see. The quality of the coffee on offer must be regulated and be of a consistently high grade because, otherwise, far from attracting consumers, it will put people off the Fair Trade product lines. The lack of regulation results in low-quality, low-price products and clearly doesn’t help coffee consumption. We must look for a mechanism to regulate the coffee market, both the quality and the quantity of coffee in the market. Recently, Vietnam emerged as a new producer and is second only to Brazil. Such developments would not affect us in Costa Rica so much if the industry were regulated fairly. If I could see one major change in our industry, it would be a system of fixed prices in the market, as provided by Cafe Direct, in order to ensure that Costa Rican pickers and peasant farmers were no longer dependent on stock-market speculation in coffee futures.

In chains such as Starbucks, the main concern is with promoting their image: stylish, modern cafes and luxurious surroundings. Only 10 per cent of the price of a coffee in these types of cafe goes to the producer (around 17p from a tall cappuccino).

As a producer organisation, we believe that the consumer is our principal ally. We know that, for the most part, the consumer is an educated person, very conscious and concerned about the way in which coffee is produced. Given that there is no contact or face-to-face relation between producer and consumer, it becomes the duty of the consumer to ask, or even demand, of their suppliers: “What treatment does the producer of the raw materials receive?” The consumer needs to have a much more active attitude and ensure that the product is produced in sustainable environments, societies and economies.

In April this year, Starbucks signed a contract to sell Fair Trade certified coffee as one of its brands in more than 2,000 outlets across the US. Is this a step in the right direction? Perhaps. Or it may just be a token gesture to placate the angry human rights activists and remove them from the forecourts.

Translated and edited by Will Grant and Jon Farmer

Schemes for improving the world have become at once more urgent and more contested. It is the dual lesson of 11 September: so far, only the first part is publicly admitted.

Tony Blair’s speech to the Labour Party conference expressed the imperative for improvement. It was mocked for its vaulting ambition; and it is indeed vulnerable, though not in the way most critics assumed. It is vulnerable because, as 11 September made clear, much of the world does not share the western-reformist vision. The more western liberals try to save and reform the world, the more enmity, hatred and terror they store up for themselves.

Before 11 September, the left had two narratives on globalisation. The far left’s anti-globalist narrative was more insistent and better known. Like the radical Islamic groups, it sees the west in general, and the US in particular, playing the role of an imperial force, determined to stamp on the face of the poor and the different, for ever. It presents history not as a chronology, but as a collage. What the west did as its states ravened about the world in the 19th century or earlier is as much part of the present charge sheet as what it did more recently in Vietnam, Central America or Iraq. The west’s malignity is continuous.

It is a vision of despair and futility. Social democrats must do better. But their efforts to propose global reforms have been – until Blair’s speech – confined largely to scholars and think-tanks. Blair elevated interdependence to the status of prime fact, round which politics must be rebuilt. Globalisation is the creation of 24-hour markets, 24-hour instant communication, the opening of the world to financial markets and the spread of the leisure-entertainment-news industries almost to its every corner. It is also the huge expansion of transnational institutions such as the United Nations, the International Monetary Fund and the World Bank, the growth of non-governmental organisations and the creation of the anti-globalising movements themselves. All these overlap and depend on each other. What is lacking is a democratic framework.

Social democracy did more than any other movement to ensure that the voiceless workers, women and the poor were included in the political nation. It is time to go global on the same theme.

The post-1945 attempts to construct global justice created institutions – the IMF, the OECD and so on – that the anti-globalisers see as the source of the problems of poverty, inequality and war, not the solution to them. But these are the only centres we have for analysis and action on underdevelopment, inequality, want and economic oppression. The powerful bear too heavily on their priorities and practices. But if they did not exist at all, the powerful would have unmediated rights.

A slow and fitful movement towards creating institutions of global justice, through courts with transnational jurisdiction, is now beginning to work. The danger is that attacks on these imperfect bodies shade into attacks on their very existence. A critique that sees strategies for development as evidence of imperialism, and errors as proof of western aggression, will not tolerate the slow frustrations of justice that are inevitable when the whole world is its jurisdiction. A social democratic temper needs to assert that progress is measured in increments, and must cope with reverses.

So we need a new spurt of global institution building. The current international financial institutions have done more good than harm: they have pumped money into development that would not otherwise have gone there; they have encouraged reformers within developing countries; they have focused attention on the poorest in those societies. They have also, especially over the past two decades, been over-rigid in their approach to “structural adjustment”; they have overloaded the political systems of the developing states with demands they could not carry; and they have bent too much to the influence of the US Treasury in devising ways to bring the former Soviet states to the market.

Quarrels about how to carry out development are endless and passionate. They are beside the main point: that these institutions must give a voice to those they are purporting to serve. These will be the voices not of the NGOs, but of the governments and of the people. It is true that governments are often authoritarian and corrupt, and that the people are usually ignorant of the larger issues and resistant to change. But without some acceptance from these sources, the development “package” will have the status of either a cargo cult or a bomb, a miracle or a disaster, dropped from on high. If democracy is to be part of global justice, development itself must be democratised. It will be slower in formal terms; it may be faster in the end.

Beyond the old institutions come the new. A concept of global justice is appearing: many cases are now being taken against multinationals in their “home” countries for infringements of the law in others (see Noreena Hertz, below). Courts set up to judge the ex-Yugoslav war criminals have had modest success, encouraging hope for an international criminal court with real authority. Law that works at the global level, and which refers to shared assumptions on human and civil rights, is the essential element in creating a transnational civil space.

That law needs a police force. Inevitably, that translates into the armies of (largely) the richer countries intervening in the wars and oppressions of the poor. And that brings charges of imperialism from many quarters. But it has not deterred the German chancellor, Gerhard Schroder, from committing his country to just that kind of activity, the first time the German military has been openly committed abroad since 1945. To avoid the appearance of imperialism, these interventions need rules: Blair asked for them three years ago in a speech in Chicago during the Kosovo conflict, and they have not appeared. Their lack is now more glaring.

The construction of global democracy will have to go further. The gulf between the procedures and limits of state sovereignty and the transnational space where the most powerful actors move without the quotidian constraint of active parliaments yawns wider every passing day. The “democratic” world is structured to make international co-operation difficult. The state is rooted on its ground, and wants to control that ground. And the citizens seem to want that, too.

Getting democratic purchase on the decisions – and non-decisions – taken above our heads is the great challenge, and will need many reform acts to effect. The European Union is one kind of template for what is to come on a global level. Another is the United Nations, which at its worst can be stalemated into impotence, and at its best can posit a global interest to which all, or at least most, can assent.

None of this is easy or welcome. An example helps make the point. China is the superpower-in-waiting. It will probably accede to the WTO later this year. It was one of the great developmental success stories of the late 20th century: its growth has reduced poverty and given fuller lives to hundreds of millions. It has done so while remaining a one-party state, shooting, torturing and locking up its troublemakers, suppressing independent thought and terrorising Tibet. It stands against a great deal that the liberal west is supposed to stand for: yet if its ruling class loses its grip, the chaos that follows could be hideous. In short, the west is often in the position of one who says: I deeply disapprove of what you’re doing, but please don’t stop doing it.

China will soon have an unanswerable case for membership of the G8. It will then – unless it has undergone a revolution – be the first member that is joining not on “western” terms. The two existing non-western members, Japan and Russia, joined on the overt condition that they were liberal democracies that accepted capitalism, and on the unstated assumption that they were pleased and grateful to be there. None of this will apply to China.

Coping with China means coping with quite different assumptions about power, representation and international relations. Short of war, coping is what must happen. Coping is also what must happen with Islamic societies, which also do not share many western assumptions. Building global institutions means bringing into common jurisdictions countries – and peoples – that have quite different notions about what a jurisdiction means.

This is the largest test. It is a vast work, which will be spread over decades – just as achieving the full democratic franchise was. It will never finish, just as constitutional change never finishes. Getting democratic practice to be accepted democratically is a great conundrum. But if the left is not equal to it, it won’t be done.