Ethical Dilemma

Coffee is a valuable traded commodity with a total trade value of $50 billion dollars per year. However, there is a vast oversupply and export coffee prices have fallen by more than 70% in the last 5 years. This fall in world prices to their lowest level ever in real terms has had a dramatic impact on the 85 million people worldwide who depend on coffee for their livelihood. For many coffee farmers in majority world countries the price obtained for their crop barely provides a living income. For multinational coffee brands this provides a source of supply where prices are low, which they can then sell in Western countries where prices are higher. Is this pricing strategy ethical?

Useful links
Fairtrade Foundation
www.fairtrade.org.uk

International Coffee Organisation
www.ico.org

Points to consider

For:

• alternative brands, like fair trade Cafedirect, exist to provide competition and consumers with an alternative choice.
• such practices relate to many global and internationalisation practices.

Against:

• does not provide farmers with a fair/living wage.
• world market price fluctuations are not reflected in the prices that consumers in Western countries pay.
• cheap sourcing overseas happens for other products including clothing.
• does the price reflect the environmental cost of getting the product from the source country in terms of transportation?
• lack of awareness among consumers about the issues.