Poor Farmer

By Paul Smith OGB Online March 29, 2007 Coffee. It brings many thoughts to people’s minds: caffeine fix, daily ritual, yuck, jittery, Starbucks. I hope there’s another thought that comes to mind: structural injustice. Increasingly, the coffee trade demands us to look at the plight of many coffee growers and their continual, cyclical bondage of poverty in the current market system. My concern arises from what I have learned from the coffee industry and my experiences studying abroad in Ethiopia, the “birthplace of coffee.” The disparity between the price of coffee that goes to the producer (3-5 cents per cup or an average of $1 per pound) and the price we pay for a cup of coffee ($1-5) is undeniably large. Coffee prices paid to producers were at a 30-year low a couple years back. Currently, coffee is the second most traded commodity in the world, next to oil. And 25 million people are directly involved in coffee production. The repercussions of our actions in regards to coffee-buyi...

In this caffeine-addled corner of the world, the bean and its brew are both blessing and curse, swirled together in a single cup. By Colleen Mastony Chicago Tribune staff reporter March 29, 2007 JIMMA, Ethiopia -- Inside the coffee plant's corrugated metal fence, men look more like mules as they lug 100-pound sacks of coffee on their backs. But as midday nears, a heavenly scent wafts from the corner, where Ahmed Achoumeto, 25, pounds a pile of black coffee beans in preparation for the noontime break. "I am terribly addicted. If I don't get coffee, I can't see properly," he said, standing barefoot in the dirt, grinding the beans with a primitive 3-foot-long wooden pestle and a mortar made of a hollowed tree stump. "Almost everyone here is addicted." Ethiopia is the birthplace of coffee. And in this caffeine-addled corner of the world, coffee is a blessing and a curse swirled together in a cup. Amid the lush hills and misty valleys, peasants endure bleak c...

The United States Patent and Trademark Office (USPTO) refused registration of SIDAMO as a trademark, for a second time, on March 27, 2007. In an electronic mail sent to Arnold & Porter LLP, a Washington based law firm representing the Ethiopian government (the applicant), the examining attorney said, “the refusal of registration under Section 2(e)(1) is continued, notwithstanding applicant’s claim of acquired distinctiveness under Section 2(f), 15 U.S.C. §1052(f). In a communication dated January 17, 2007, the Ethiopian government argued against the generic refusal under section 2(e)(1) and also argued that the geographical term is registrable under section 2(f). Basically, the USPTO is convinced, because it believes the mark is generic, that registering Sidamo “would grant the owner of the mark a monopoly, since a competitor could not describe his goods as what they are.” The argument regarding registrability of the mark Sidamo under section 2(f) does not seem to have had much imp...

Also, The Motley Fool talks about the fear of avoiding losses and advises investors to "stay the course" but gives no explannation for "why": “We feel the pain of a stock's loss more keenly than we do the elation of a gain, so we strive harder to avoid losses than to achieve gains. That leads to investing too conservatively, putting our money in Treasury bills instead of Starbucks stock, or under the mattress instead of in the market at all.” Read full story here . --------- McDonald's to Serve Changing Tastes in Coffee Reuters By Nichola Groom Mar 28, 2007 LOS ANGELES (Reuters) - Leonor Gavina-Valls's father began selling dark roast coffee to Vietnamese and Armenian immigrants in the late 1960s, seeing a niche market for strong coffee when weaker brands ruled the United States. Decades later, the coffee is still strong, and her biggest client is McDonald's. Sales of high-end coffee to the fast-food chain known for affordable burgers have expanded ...

EDITORIAL The Daily Free Press March 27, 2007 Starbucks customers may want to rethink where their money is going the next time they order a grande roasted Shirkina Sun-Dried Sidamo coffee. Coffee farming is primarily a third-world industry that markets its product in first-world countries. Starbucks would be lost without the hard work of subsistence farmers in developing nations like Ethiopia. In March 2005, the Ethiopian growers tried to get into the capitalist game by applying for patents on beans produced from three separate regions: Harrar, Sidamo and Yirgacheffe. If Ethiopia receives these trademarks, the farmers -- who earn less than $2 per pound while Starbucks earns as much as $26 per pound it sells -- would see a little more money come their way. But Starbucks had already patented beans from Sidamo and refused to allow the Ethiopian requests to go through. The Seattle-based company suggested the farmers apply for a geographic certification. This type of protection, similar to ...

By Amitava Basu Financial Express March 25, 2007 IT is amazing the way wild berries in one corner of Africa grew to transform into a popular, international beverage. Coffee plants were first located growing wild in the highland forests of Kaffe in Ethiopia, from where it derived its name. No one knows when exactly coffee was discovered. However, there is evidence to suggest that sometime between 575 A.D. and 850 A.D., a nomadic mountain tribe called Galla used to ground coffee seeds and mix with animal fat and ate it. From its birthplace in Ethiopia, coffee berries were transported to the Arab world. From there, coffee travelled to Turkey. It was here that coffee beans were roasted for the first time over open fires. The roasted beans were crushed and then boiled in water, creating a crude version of the beverage enjoyed today. Later, the Venetian merchants brought coffee to Europe. It was only in the 18th century that coffee found its way to the Americas, when a French infantry captai...

Seeking Alpha Mar 26th, 2007 with stocks: SBUX Profit Margin Man submits: Starbucks' ( SBUX ) growth engine is the 'be all and end all'. The Founder has made a commitment to the market, so all staff is directed to pursue growth. While management says 'only good deals', folks get rewarded for deal numbers and there is no penalty for underperforming stores or bad growth forecasts. There is no penalty for underestimating how much a new unit might cannibalize another existing one; in fact, no one even tracks cannibalization in any serious manner. Why should they? Comparable store sales continue to increase, so how could there be a problem? Well, consider this: Suppose a given market area has 300 existing Starbucks and 30 new stores open during the year so, at year's end, the area has 330 stores. Those stores came on line over the 12 month period. The typical store 'ramps up', hitting on all cylinders 5 to 9 months after opening. Looking at comparable store...

Starbucks Coffee Company hosted its 2007 Annual Meeting of Shareholders on Wednesday, March 21, 2007 in Seattle, Washington at the Marion Oliver McCaw Hall at the Seattle Center. Following is an unedited script (prepared by myself) of a portion of the Q&A session that is directly related to the coffee trademark dispute between Starbucks and Ethiopia. Another investor, Bruce Herbat, President of Newground Social Investment, also expressed his concerns over Starbucks’ influence of the National Coffee Association to oppose Ethiopia’s trademark application. Herbat mentioned this in relation to his question about Starbucks’ transparency with respect to spending company finances for political contribution but it was not addressed by the executives. According to Starbucks' website, the audio webcast will be in archive until April 25th at: http://investor.starbucks.com/phoenix.zhtml?p=irol-eventDetails&c=99518&eventID=1403060 ------------------ Q. Thank you, my name is Wond...

The Boston based anti-poverty organization, Oxfam America, recently sent a letter to investment analysts, with a carbon copy to Starbucks’s Investor Relations department, to inform them about “a pressing dispute between Starbucks and the Government of Ethiopia” and urging them to raise the issue with company management. The following is extracted from the letter; it provides a quick synopsis of the public dispute over Ethiopia’s trademark initiative and its impact on the Starbucks brand. I think the material fits the My Starbucks Story theme , so I took the liberty of naming it accordingly. What is your Starbucks story? Email it to me at poorfarmer@gmail.com . ----------------------------- " My Starbucks Story" of Oxfam America This conflict [between Starbucks and Ethiopia over coffee trademarks] could well constitute a brand risk for Starbucks, affect employee morale, and jeopardize its relationship with key suppliers—all of which may affect long-term shareholder value. ...

~ My Starbucks Story ~ I attended the Annual Starbucks Shareholders Meeting held in Seattle on March 22, 2007. Tagline of the event, "My Starbucks Story," was repeatedly told by every performer and speaker, except the Rwandan President Paul Kagame and the former Beatle Paul McCartney who was linked via live video from London. At the start of the Q & A session, I had a chance to ask Chairman Howard Schultz and President & CEO Jim Donald two questions regarding the trademark dispute between Starbucks and Ethiopia. A day before that, I visited company headquarters and briefly conferred with senior VPs Sandra Taylor and Dub Hay; also, I met with six experts in their fields. I will soon post my observations and analyses of the information I gathered ... and that will be My Story of Starbucks. Stay tuned. ------------------- Emad Mekay Washington, United States 22 March 2007 11:59 The international advocacy group Oxfam is taking on United States coffee retailer Starbucks ...

Puget Sound Business Journal (Seattle) Wednesday, March 21, 2007 On the day of its annual shareholders meeting in Seattle, Starbucks Corp. has been targeted by a Boston-based nonprofit that's working to help Ethiopian coffee farmers trademark their coffees. In full-page ads Wednesday in The Seattle Times and the Seattle Post-Intelligencer, Oxfam America of Boston said Seattle coffee giant Starbucks (NASDAQ: SBUX) "refuses to sign an agreement recognizing Ethiopia's ownership of the trademarks of the country's coffees." Oxfam says it's working with the farmers to obtain trademarks of famous Ethiopian coffees, including Sidamo, Harar and Yirgacheffe. Obtaining the trademarks, Oxfam officials said, would give "farmers a greater share of the retail value of their coffees." "If Starbucks is seriously committed to humanity, it needs to change its position and agree to negotiate a licensing agreement with Ethiopia that respects its ownership of its u...

SEATTLE (Reuters) - Starbucks said on Wednesday it remained in talks with the Ethiopian government to settle a dispute over the trademarking of the nation's coffee beans. "We had two meetings with the Ethiopian government and we are now in fruitful discussions with them," said Starbucks Chief Executive Jim Donald. "This is a complex issue." Starbucks advocates a regional certification program to assure the quality and origin of the coffee beans. It has also called for a transparent system that shows the money is going back to impoverished farmers. Though Starbucks said last month that it would not oppose Ethiopia's efforts to trademark its Sidamo and Harar coffees, for instance, coffee farmers and exporters last week accused the company of using delaying tactics. In theory, trademark agreements would bolster incomes for Ethiopia's farmers by allowing the country to negotiate purchasing conditions for coffee roasters or retailers who want to use the names...

By Associated Press Mar 21, 2007 SEATTLE (AP) - Starbucks Corp. doesn't plan to slow its aggressive growth, despite recently publicized worries about weakening the coffeehouse titan's brand, Chairman Howard Schultz told investors Wednesday. Starbucks, which has more than 13,500 stores worldwide, plans to add 10,000 more on its way to doubling in size over the next four to five years, Schultz announced at the company's annual shareholders meeting. Company leaders reiterated financial targets for 2007 and reinforced a long-term commitment to 40,000 stores worldwide, half of them outside the U.S. Wednesday's meeting also featured two special appearances: Rwandan President Paul Kagame, who praised Starbucks' efforts to help coffee farmers, and former Beatle Paul McCartney, who was introduced as the first artist signed to Starbucks' new record label. Schultz, who lamented a nearly 10 percent slide in the company's stock in the past year, asked shareholders not to...

Here is a balanced, well researched report from the Seattle PI. Please visit the paper by clicking here . Coming up is a report on my express visit to Starbucks headquarters today; I had the pleasure of meeting with two Starbucks senior Vice Presidents and six other experts and Directors - all within one hour. ---------- By CRAIG HARRIS P-I REPORTER March 20, 2007 Like other investors in Starbucks Corp., Elizabeth Moon hasn't been thrilled with the company's traditionally high-flying stock taking a considerable slide this year. Yet the retired Seattle insurance adjuster views the 11 percent drop since the end of 2006 as a blip in the road and says she's looking forward to today's annual meeting in McCaw Hall. "The stock has gone up the past couple three days, and that is good, because we had a down trend for a while," said Moon, whose investment in the past six years has increased more than 200 percent. "But I think it's a well-run company and one of...

In their report, " Justice from Bean to Cup," IWW Starbucks Workers Union ask, " Can Starbucks provide "an uplifting experience that enriches people's lives one moment, one human being, one extraordinary cup of coffee at a time" when its farmers' families are starving, and its baristas require public assistance?" The Union and their supporter along with supporters of the Ethiopian farmers are preparing to hold protests during Starbucks Annual Meeting of Shareholders . As part of their call for protest, Union leaders held a Press Conference at Labor Temple today. The following is extracted from the booklet "Starbucks 2006 Corporate IRRESPONSIBILITY Report," which they say will be distributed to participants of the Annual Shareholders Meeting. The full text (.pdf) is found here. --------------- Starbucks 2006 IRRESPONSIBILITY Report JUSTICE--fairness to all parties, as dictated by reason and conscience... Can Starbucks provide "an up...