It is high time that the government in Addis and its Embassy here in the US must talk about the trademark issue openly to the public. Enough for the silence! The anti-poverty organizations’ innovative and sophisticated approach to eradicate poverty in Ethiopia is admirable. Utilizing the IP initiative for development will undoubtedly have a lasting positive impact on the coffee sector in Ethiopia.
However, the coffee sector as we know it is composed of the poor farmers, a chain of rural merchants, middlemen, and exporters. The proportionate size of the revenue realized by those farmers, who travel bare foot for hours through ruthless situations only to end up selling their coffees to the roadside merchants at the nearby rural village, is at the bottom end of the coffee trade chain even at local standards. The farmers are exploited not only by the world’s giant coffee roasters but also by the greedy and merciless middlemen that do not have sympathy for the producers. Coffee farmers in Ethiopia are subject to exploitation locally in more ways than one. They are taken advantage of when they sell their crop; they are also exploited when they purchase their inputs and the necessities.
Through out history, Ethiopian coffee farmers have always been deceived by their own governments in addition to corporations in the West. Government policies have always favored traders more than the farmers. The government, for instance, sends its troops to intercept contraband goods at border towns with a pretext of protecting local manufacturing businesses and its own tax revenues while it turns its face away from the coffee marketing system which is controlled by few individuals, in most cases close to incumbent government officials. There are no infrastructures, such as paved roads, necessary to bring the coffee out to local markets and this leaves the farmers’ income at the mercy of local merchants. The government relies on coffee export for over 50% of its foreign currency earnings and yet it is not doing anything meaningful to support farmers of the very crop its parasitic marketing channel and itself depend on. The world’s best coffee is produced by family labors including that of children who can not afford to go to school. These families are deprived of clean water, healthcare, electricity, ... you name it.
I wholeheartedly support the IP initiative as it shifts the price bargaining power to the balance. I believe that the farmers will still make extra money, regardless of what that government does, when the leverage is shifted to the country with the ownership of the trademarks for the fine coffees. I have supported and voiced my concerns, as thousands of people across the globe did, to ask Starbucks to do its business responsibly. I tell Starbucks to stop bullying us by talking nonsense and that deciding on what is good for the farmers is none of its business. As a customer, what I urge Starbucks to do is just keep its books clean and pay a fair price for the produce it buys from the poor farmers - nothing more! I ask Starbucks to clear the way for this initiative. This does not mean that I will let the government to take the farmers for a free ride! No, that is impossible.
This government has to take a lesson from the civilized world where over 70,000 people acted in response to a single call by Oxfam for fairness. Assuming it has learned that this world functions transparently, I call on the government to stop these closed-door talks on matters that affect the farmers. The government needs to adapt to the rules of the game in the civilized world at least when it comes to playing it here in the free world. Enough for the secret discussions over the trademark issue that it had with Starbucks for the past several months; it is time for the representatives in Washington DC to tell the public what is going on now. I am tired of the conspiracies and deception by this government.
The Embassy in Washington DC posted information related to the trademark issue on its website only a month after the Oxfam media campaign and about two years after the fact. Why the wait? How come a government hides problems of such magnitude holding potentially grave consequences to its people for such a long time? What are the reasons behind the secrecy? It may be ok for this government not to speak on behalf of the farmers but negotiating in a closed door meeting on matters that affect the lives of the poor is unacceptable.
After it is forced by Oxfam to come to the table to discuss, Starbucks said, in its press release dated November 21, 2006, that it is “committed to working collaboratively and continuing dialogue with key stakeholders to find a solution that benefits Ethiopian coffee farmers.” Previously, Oxfam said on its November 16, 2006 press release, “"We hope that Starbucks and the Ethiopian government will be able to find a mutually agreeable solution that would truly benefit small coffee farmers…” No word from the Ethiopian government to date.
I need to know what the Ethiopian government and Starbucks are negotiating about. What is agreeable for the government and the “socially responsible” corporate greed may not necessarily be beneficial and “agreeable” to the farmers. The Ethiopian people in general and coffee farmers in particular have the right to know about the government’s decisions that will eventually affect their lives. We need to know what is “agreeable” before agreed upon. The people should be given the opportunity to know about the deal, forget the right, when the negotiation is carried on in a free land - at least.
I call on the government and its representatives here in the US to publicize their courses of actions before striking a deal with Starbucks over the people’s blood.
However, the coffee sector as we know it is composed of the poor farmers, a chain of rural merchants, middlemen, and exporters. The proportionate size of the revenue realized by those farmers, who travel bare foot for hours through ruthless situations only to end up selling their coffees to the roadside merchants at the nearby rural village, is at the bottom end of the coffee trade chain even at local standards. The farmers are exploited not only by the world’s giant coffee roasters but also by the greedy and merciless middlemen that do not have sympathy for the producers. Coffee farmers in Ethiopia are subject to exploitation locally in more ways than one. They are taken advantage of when they sell their crop; they are also exploited when they purchase their inputs and the necessities.
Through out history, Ethiopian coffee farmers have always been deceived by their own governments in addition to corporations in the West. Government policies have always favored traders more than the farmers. The government, for instance, sends its troops to intercept contraband goods at border towns with a pretext of protecting local manufacturing businesses and its own tax revenues while it turns its face away from the coffee marketing system which is controlled by few individuals, in most cases close to incumbent government officials. There are no infrastructures, such as paved roads, necessary to bring the coffee out to local markets and this leaves the farmers’ income at the mercy of local merchants. The government relies on coffee export for over 50% of its foreign currency earnings and yet it is not doing anything meaningful to support farmers of the very crop its parasitic marketing channel and itself depend on. The world’s best coffee is produced by family labors including that of children who can not afford to go to school. These families are deprived of clean water, healthcare, electricity, ... you name it.I wholeheartedly support the IP initiative as it shifts the price bargaining power to the balance. I believe that the farmers will still make extra money, regardless of what that government does, when the leverage is shifted to the country with the ownership of the trademarks for the fine coffees. I have supported and voiced my concerns, as thousands of people across the globe did, to ask Starbucks to do its business responsibly. I tell Starbucks to stop bullying us by talking nonsense and that deciding on what is good for the farmers is none of its business. As a customer, what I urge Starbucks to do is just keep its books clean and pay a fair price for the produce it buys from the poor farmers - nothing more! I ask Starbucks to clear the way for this initiative. This does not mean that I will let the government to take the farmers for a free ride! No, that is impossible.
This government has to take a lesson from the civilized world where over 70,000 people acted in response to a single call by Oxfam for fairness. Assuming it has learned that this world functions transparently, I call on the government to stop these closed-door talks on matters that affect the farmers. The government needs to adapt to the rules of the game in the civilized world at least when it comes to playing it here in the free world. Enough for the secret discussions over the trademark issue that it had with Starbucks for the past several months; it is time for the representatives in Washington DC to tell the public what is going on now. I am tired of the conspiracies and deception by this government.
The Embassy in Washington DC posted information related to the trademark issue on its website only a month after the Oxfam media campaign and about two years after the fact. Why the wait? How come a government hides problems of such magnitude holding potentially grave consequences to its people for such a long time? What are the reasons behind the secrecy? It may be ok for this government not to speak on behalf of the farmers but negotiating in a closed door meeting on matters that affect the lives of the poor is unacceptable.
After it is forced by Oxfam to come to the table to discuss, Starbucks said, in its press release dated November 21, 2006, that it is “committed to working collaboratively and continuing dialogue with key stakeholders to find a solution that benefits Ethiopian coffee farmers.” Previously, Oxfam said on its November 16, 2006 press release, “"We hope that Starbucks and the Ethiopian government will be able to find a mutually agreeable solution that would truly benefit small coffee farmers…” No word from the Ethiopian government to date.
I need to know what the Ethiopian government and Starbucks are negotiating about. What is agreeable for the government and the “socially responsible” corporate greed may not necessarily be beneficial and “agreeable” to the farmers. The Ethiopian people in general and coffee farmers in particular have the right to know about the government’s decisions that will eventually affect their lives. We need to know what is “agreeable” before agreed upon. The people should be given the opportunity to know about the deal, forget the right, when the negotiation is carried on in a free land - at least.
I call on the government and its representatives here in the US to publicize their courses of actions before striking a deal with Starbucks over the people’s blood.
I really do not see the point of fighting with Starbucks when the govt does nothing even minimal to help the coffee farmers at a local level.
ReplyDeleteWhy should the govt. be allowed to own the trademark when the govt. does not even allow the coffee farmers to own their land?
I don't trust our government is working for the benefit of the Ethiopian farmer. In fact, I am concerned that this battle will now encourage Starbucks ot not increase their sale of Ethiopian coffee.
Thank you for your very useful and informative blog about the Starbucks brouhaha. I honestly I'm having a hard time figuring out all the twists and turns in the arguments as far as all parties are concerned. But I do have some preliminary comments/questions:
ReplyDelete1)I agree that this is a good move on the part of the government to shift the balance of power - at the same time I wonder what steps are being taken to guarantee the money gets to who is suppose to get to.
2) What do you have in mind when you say "fair price?" and also how easy will it be for the poor farmer (who is suppose to be the main beneficiary) to negotiate the better price against the middleman and traders? etc.
3) I heard someone on the radio say that trademarking the coffee brands will actually lower the demand for premium Ethiopian coffee - what is your opinion on this?
4) I do like the idea of the IP for African because this is a concept that we are not very familiar with. If you think about it Ethiopians don't even like putting their names on their anything let alone trade marks...!
Anonym.1 & 2: The fact that the gov’t is not doing anything to help the farmers should not be an excuse for Starbucks to oppose Ethiopia’s ownership of the names. The farmers’ exploitation dates back to the origination of the crop itself but that should not justify the roasters’ greed in present day. We do not hold Starbucks accountable for purchasing Ethiopian coffee during the Red Terror. The farmers are still there despite the deteriorating living standard and that is why they deserve a better pay regardless of how ruthless their present government is. I do not see why Starbucks punishes the farmers because of the request to own the names. In fact, the farmers will be encouraged to produce a consistently better coffee, which benefits Starbucks, when they get paid for their labor and trademarking does just that – it is a win-win situation.
ReplyDeleteA fair price, for me, is a price that takes into consideration costs of production and a reasonable profit margin for the farmers (not just for exporters). Ideally, the profit margin should reflect the far end margin realized by the retailers as well. The gap between $27/lp and $1.20/lp does not represent a fair trade. Something is wrong somewhere and that should be scrutinized.
Technically, a central body has to manage and maintain the brand and I read that this body will consist of all the parties that have a stake in the initiative including farmers, exporters, etc. Farmers’ coops will obviously have a voice because of their organization; my concern is for those farmers that are not organized in coops. The farmers should be the primary and direct beneficiaries of this initiative and it is reasonable that we ask make sure that the planned mechanism should be designed from the individual farmers’ perspective.
I agree with Anonym 2’s point on an individual basis but I am sure most of us are proud of those trademarks like ETIOPIAN and it is my hope that Harar Specialty Coffee will stand out soon.
Friends, enjoy the rest of the weekend!
If the Ethiopian government is indeed NOT going to charge Starbucks or other companies like Starbucks for royalties – then the assumption is that the increased profit is simply going to be generated from the potential price increase…correct? If that is the case, then whom are you referring to when you say “Meanwhile the party who sells to an importer licensed to use the trade marked names will be the one with the negotiation power.” (In other words, who is this “licensed importer?”, when you refer to importers are you talking about the likes of Starbucks? Others?
ReplyDeleteAlso, are you saying the Eth government right now is proposing to simply be an issuer of licenses and charge no fee?! It may be so but I am having a hard time believing that. My point is sooner or later, and if indeed this is an $88 million dollar increase (not exactly small change) the small farmer, with no capital, no power, little say and very little clout is going to get pushed aside. On the best side I would hope this doesn’t happen but realistically speaking I have my doubts/concerns.
Either way, I want to thank you again for taking your time to educate me and get this important dialog going.
Mariam, these are great questions, thank you!
ReplyDeleteYes, increased profit is going to be generated from the potential price increase. My concern is that while this price is going to be negotiated between the exporters (not necessarily producers, such as small household farmer) and importers (like Starbucks), an increased price at the exporters’ level does not necessarily mean an increased income for the farmers.
The gov’t is actually proposing to issue the licenses, free of charge to coffee companies, and secure a network of licensed distributors that work with their Ethiopian counterparts. It is also proposing that the brand management policies will be set by a stakeholder grouping including coops, exporters and others. In technical terms, this sounds a good plan but my question for the gov’t and all parties involved is whether there is a transparent system designed to guarantee an equitable role and due share for individual farmers. A status quo is unacceptable.
I hope someone from that end will be willing to participate in this dialogue.
Wondwossen -
ReplyDeleteInteresting comments about the stakeholder idea. That's what I was trying to get to - how much clout the farmer would have on the long run.
Also, just read your posting of the article by Douglas Holt. The arguments stated reinforce how important it is to understand the whole debate that is currently going on with Starbucks.
Specifically, I was thinking about the potential impact of Ethiopia trademarking her premium products
and what that would do to her relationship with the outside world or outside buyers. Also, what caught my eye was the implication of this move for other coffee exporters such as Kenya and Costa Rica as mentioned in the article.
The idea of a third world country such as Ethiopia, using something like IP/trademarking to fight the giants of the coffee world and trying to crawl out of its poverty is intriguing. If indeed, this would have a "domino" effect, what is the impact of a move like this for a company like Starbucks and is Starbucks unique as far as this issue is concerned? Does Ethiopia sell her premium brands to other importers?
Mariam – thanks for the excellent points again!
ReplyDeleteIndeed, the project is sophisticated but not unmanageable. I think, the three questions crying for our attentions are: 1) which kind of IP protection to pursue: GI or trademark, 2) what sorts of marketing techniques should the gov’t adopt to successfully increase the products’ commercial value, and 3) how do we ensure that farmers do benefit directly. SBUX has made dehumanizing comments on all these three without giving any details. I’m convinced that trademarking benefits Ethiopia better than GI (to be explained in the future). Though the issue is stalled now in the US, we still need to continue to study the questions while giving a lesson to the greedy corporations. Ethiopian farmers are not alone in this fighting with the SBUX; thousands of consumers are taking the unfair business ethics at their hearts.
Of course, Starbucks has a stake here as a tiny portion of its profit is rightly questioned. Whether it is Eth or Rwandan coffee, it is not fair that the company continues to profit at the expense of farmers’ livelihood. True, the co. has invested in its marketing efforts to position its brand comfortably in this market. But that should not be a matter dictating a negotiation; since SBUX does not own the people who are producing the product behind the brands, it should not force them to live in poverty until its return on investment (ROI) reaches a certain level.
SBUX is unique in that it is a Specialty coffee giant and also a roaster; otherwise, there are several companies whom Goliath wishes them something like going away. Ethiopian commodity coffee sells literally through all brands of the major roasters – Sara Lee, Procter & Gamble, Nestle’, and Kraft – and these companies determine the prices at the NY stock exchange mkt. SBUX and other companies buy the world’s finest coffees (along with some commodity coffee.) Whether trademarked or not, the specialty coffees will continue to be marketed though facing an unfair and artificial competition. The market is flooded with commodity coffees, be it Arabica or Vietnam’s Robusta – not the specialty coffees. Specialty coffees can be sold at commodity price but not vice versa.
I am sure we agree that if we were to predict the domino effect, our assumptions should be based on our understanding of the three dimensions of the issue mentioned above and not on who wins between David and Goliath. This argument applies to all countries that feel exploited. Jamaica’s Blue Mountain Coffee has not only succeeded but also set the precedent for a successful independence driven by quality. Brand management and marketing are acquired skills that help one be wealthy; they are means – not an end by themselves as SBUX wants to tell us. I will not be surprised if other producing counties follow these steps as well. By the way, the time and resources it takes for item 2 above determines the speed with which the project reaches its climax. Meaning, SBUX is now fighting a future war that may take tens of years to come. Can we fight the war at hand?