Coffee Production and Marketing - Essay Example

Coffee Production and Marketing Insert Insert Coffee is a kind of plantation that is grown by farmers as a cash crop commodity. The seeds that are harvested from the plant are processed and are used to make a coffee drink. The crop is mainly grown in large tropical parts of America. To the farmers of the coffee, they experience and face some challenges (Gillespie, 2014). To guarantee an excellent production of coffee, each stage has to be taken care keenly and with observations. The initial phase is the right selection seeds for planting. When it happens that the farmer selects bad seeds, it may result too badly to later stages of the product. The problems that farmers face are typically the same irrespective of the size of the producer. The most familiar and universal challenge to this crop is the weather. Weather causes some fungal, pests and borer beetle diseases to this plant. The eventual risk by disease is the frequent rust. The presence of rain gives the farmers a complete disaster during the time of harvesting (OUP, 2001). Sound Quality of the product is measured on how it was dried. As the presence of the torrential rains during rainy seasons, it makes it harder for the producers to dry their coffee. The rising of the moisture above 12 percent is another threat to the product and may lead to rejection when it comes to marketing. As the result of this, many wastes are witnessed and in the process, the farmer is one going at losing (Fairtrade Foundation, 2011). The speeding of the drying process results from the fact that most farmers especially small scale, lack enough funds to hire people who will pick the product from the farm. In some divisions of the world such as in Central America, it experiences too much sun during the season of harvest and raises the temperature beyond the standard needed by the buyer. Quality and longevity of coffee is affected because the area that they use to dry it lacks even airflow. When coffee is picked from the farm, it undergoes the process of washing. When weather becomes too dry during harvesting, it makes water scarce and complicates the entire process of washing (Collier, 2010). Another problem that farmer encounter is the shortage of labor. To stages of coffee farming, it is labor intensive. Even the when a breakdown of the total production cost is done, more than 50 percent goes to the labor charges. Lack of proper knowledge by farmers is another challenge that producers face (DFID, 2004). From generations to generations, coffee farming had been a tradition that was being practiced it was affected when older generation acquired knowledge on how to process. Terminal market manipulation is another aspect that poses a challenge to coffee production. Bankers dominate the reflection of this id that one-quarter of the market is made of traders and the rest (Winter, 2010). The other threat to the topic is the lack of investment by farmers. The challenge is both financial and educational. The disadvantage causes problems to not only the coffee industry but also agricultural land that has been passed out for many generations. Lack regeneration of the coffee tree by the farmers is the main reason for underproduction because the coffee tree might have been planting more than five decades ago. To eliminate and reduce this challenge, greater education concerning how beset the plant can be regenerated to produce more crops. Probably, financial investment is the core principal for the challenge (OUP, 2013). Urbanization is also another threat to coffee production. As towns expand the approach to farmers and offered money to sell their land. From this approach, it directly affects the amount of the earth that is having coffee. In some regions of the area, the best coffee producing farms are being sold to off and redeveloped, this leads to some uncertainties as the future of coffee production is concerned (OUP, 2013). Marketing of coffee products is oversupplied. With a comparison of the prices in the period over a century, in the long run, there will be advantaged and disadvantaged in the severe export competition. To achieve the benefits aspect to the producer and earn value in the commodity is the act that has worked upon by the producers. In the art of commonly producing and achieving a proposed solution, it is somehow complex and to many farmers, unrealistic. The suffering that has been caused too many exporting countries has been brought by the collapse of the worlds coffee prices leading to the worst economy over a period of years (www.eiti.org ICO, 2013). The question that farmers and other associates of the commodity are asking is that the means that this falling of prices happened to world’s largest commodity. The oversupply aspect came because of many factors. Among these factors are; rapid expansion of production in Vietnam, new plantations in Brazil, increased yields and higher efficiency (Fairtrade Foundation, 2012). The rise in the farmer’s share of the export price came because of the liberation of the in the 1990s. Despite the farmers having more than enough supply, there was under demand in the market. The analyst had a full and detailed concentration on the point of oversupply, and they never overlooked the aspect that was brought in by the marketing trends. The emerging of the new technologies in the international supply gave rise to demand debates (Pearce, 2012). The defining factor when dealing with coffee is that it is not a uniform product. Some product in coffee such as Arabica is excellent flavored, aromatic and frequently acquires the highest prices. The other type of the Robusta coffee is in most markets, cheaper. According to the analysis, the share of the market of the Robusta coffee has been growing over the period of last ten years. The factor that trade parameters have for years is the product quality, production cost, and the relationship between the international partners (Norton and Alwang, 1993). To survive in the industry will depend entirely on the complying market requirements for higher quality for most of the producers and exporters. The measure of consistency, higher quality, traceability of origin and transparency is performed to make sure that there is equitability in the pricing strategy (UNCTAD, 2012). To eradicate the little demand and oversupply problem, some solutions have to look for. Techno serve is the non-profit agency that works to support rural business in the present developing world. The company works to promote and to achieve a sustainable impact. Some of the objectives that the organization dealt with include; Promote coffee consumption in the producing countries and emerging markets. Support specialty coffee producers to the secure pricing premiums Encourage diversification for marginal coffee farmers without the potential to specialty or the niche markets (World Bank, 2008). The irony behind the coffee production is that poorest countries are the one producing the richest countries consume this commodity and it. The immediate example is the United States, which buys more than 22 percent of the imports globally. The standardization of this product is done it has been broken down into grades. The specialty of coffee is sold because of its distinctive characteristic of flavor. The grading is done because the highest grade is categorized to having higher prices. To understand how all these pricing problems, one must have in mind that little consumer demand for trade for the commodity so that they can better that production (Otter, 2014). In conclusion, the crop is mainly grown in large tropical parts of America. To the farmers of the coffee, they experience and face some challenges. The eventual risk by disease is the frequent rust. The presence of rain gives the farmers a complete disaster during the time of harvesting. As the result of this, many wastes are witnessed and in the process, the farmer is one going at losing. The speeding of the drying process results from the fact that most farmers especially small scale, lack enough funds to hire people who will pick the product from the farm. When coffee is picked from the farm, it undergoes the process of washing. When weather becomes too dry during harvesting, it makes water scarce and complicates the entire process of washing. Terminal market manipulation is another aspect that poses a challenge to coffee production. Bankers dominate the reflection of this id that one-quarter of the market is made of traders and the rest. To eliminate and reduce this challenge, greater education concerning how beset the plant can be regenerated to produce more crops. Probably, financial investment is the core principal for the challenge. The best coffee producing farms are being sold to off and redeveloped, this leads to some uncertainties as the future of coffee production is concerned. The suffering that has been caused too many exporting countries has been brought by the collapse of the worlds coffee prices leading to the worst economy over a period of years (Seitz and Nelson, 1994). The specialty of coffee is sold because of its distinctive characteristic of flavor. The grading is done because the highest grade is categorized to having higher prices. List of References Gillespie A (2014) Foundations in Economics, Oxford: OUP ODI (2001) World Commodity Prices: Still a problem for developing countries (available at http://www.odi.org/sites/odi.org.uk/files/odi-assets/publications-opinion-files/2420.pdf) Collier P (2010a) The Political Economy of Natural Resources, Social Research, Vol 77 No 4: Winter (2010b) The Plundered Planet, New York: OUP (2013) Undoing the resource curse, IMF Podcast available at https://soundcloud.com/#imf-podcasts/paul-collier-on-undoing-the Extractive Industries Initiative available at www.eiti.org ICO (2013) Coffee Market Report March (accessed April 6th 2013) www.ico.org/documents/cy2012-13/cmr-0313-e.pdf Pearce F (2012) The Land Grabbers- The New Fight over Who Owns the Earth, London: TransWorld Publishers UNCTAD (2012b) Enabling the Graduation of LDCs: Enhancing the Role of Commodities and Improving Agricultural Productivity, United Nations, New York and Geneva (accessed April 10th 2013) www.unctad.org/en/PublicationsLibrary/aldc2012d1_en.pdf Otter D.W (2014) The Economic Environment in Wetherly P and Otter D (2014) The Business Environment- themes and issues: Oxford, Oxford University Press (chapter 2). Seitz W.D and Nelson G.C (1994) Economics of Resources, Agriculture and Food, New York:McGraw Hill Norton G.W and Alwang J (1993) An Introduction to the Economics of Agricultural Development, London:McGraw DFID (2004) Making Agricultural Markets Work For the Poor available at http://dfid-agriculture-consultation.nri.org/summaries/dfidwp2.pdf Fairtrade Foundation (2011) Fair and Local: Famers of the World Unite available at http://www.fairtrade.org.uk/includes/documents/cm_docs/2011/F/Fair%20and%20local%20-%20Farmers%20of%20the%20world%20unite.pdf Fairtrade Foundation (2013) Powering Up Smallholder Famers to Make Food Fair- A Five Point Agenda available at http://www.fairtrade.org.uk/includes/documents/cm_docs/2013/F/FT_smallholder%20report_2013_lo-res.pdf Fairtrade Foundation (2012) Cocoa Commodity Report available at http://www.fairtrade.org.uk/includes/documents/cm_docs/2011/C/Cocoa%20Briefing%20FINAL%208Sept11.pdf Fairtrade Foundation (2012) Coffee Commodity Report available at http://www.fairtrade.org.uk/includes/documents/cm_docs/2012/F/FT_Coffee_Report_May2012.pdf Fairtrade Foundation (2009) Unpeeling the Banana Trade available at http://www.fairtrade.org.uk/includes/documents/cm_docs/2009/f/1_ft_banana_reportweb.pdf World Bank (2008) Agriculture for Development , World Development Report 2008, New York: World Bank available at http://siteresources.worldbank.org/INTWDRS/Resources/477365-1327599046334/8394679-1327614067045/WDROver2008-ENG.pdf Read More