Can an agricultural commodity be de-commodified, and if so, who is to gain?
2001
R. Fitter | R. Kaplinsky
This paper stresses the imperative of directly enhancing agriculturally-based productive incomes of poor people, owing to the weaknesses of agricultural redistribution mechanisms both at a local and global level.The author uses the example of coffee farmers - generally located in the poorest countries - who have suffered badly in recent years, with the price of coffee beans at an all time low level. The paper highlights the fact that coffee product prices are becoming more differentiated, with margins for some coffee expected to increase significantly as consumers become more discriminatory in their taste.The author finds that whilst the price spread is growing in global trading markets, it is simultaneously narrowing at the farm gate. At the same time, the destruction of coffee marketing boards has had unintended effects, resulting in almost all of the margins being absorbed in the high-income importing countries.The paper concludes that left to market forces, the farmers will gain little from discriminatory final consumer tastes. It is the global branders and the supermarket chains that are likely to appropriate growing global coffee profits.However, the author highlights the fact that if consumers can be educated to recognise that better coffees are directly linked to their place of origin rather than to their brands, a more equal global distribution of income is likely to emerge in the value chain.
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