THE CONVENTIONAL COFFEE ROUTE
In conventional trade, large producers and transnational corporations have access to markets, capital
and technology, while plantation workers and small coffee farmers are isolated from the market and
unable to gain the full benefits of “free” trade.
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SMALL FARMERS
Over 50% of the world’s coffee is grown by small family farmers. Most small farmers, who are not organized into marketing cooperatives, are at the mercy of middlemen or estate owners to sell their product, capturing a mere 2%-4% of the retail price of coffee. Low prices and lack of control over the processing, exporting and marketing of the beans trap farmers in a cycle of poverty and debt.
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PROCESSING MILL
Processing of coffee is generally carried out on large farms or in coffee mills. Most coffee mills are privately owned, though occasionally they may be owned by small farmer cooperatives or government agencies.
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ESTATE WORKERS
Millions of people are employed as workers on coffee plantations and estates, many of whom are migrants. In the plantation sector, low wages, poor working conditions, and lack of housing, education, nutrition, and healthcare prevail.
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COFFEE ESTATES
Plantations or estates vary in size and can be as large as thousands of acres. Estate owners control the majority of available processing facilities and often manage the export process, which enables them to reap more of the profits in the coffee chain. Many coffee estates are highly mechanized and rely on regular applications of agrochemicals.
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LOCAL MIDDLEMAN
Middlemen are intermediary traders who buy coffee from small farmers. These middlemen frequently take advantage of the farmers’ lack of access to credit, transportation and information. They commonly act as bankers, local shopkeepers and often control local transportation systems. This virtual monopoly allows them to offer loans on the condition that farmers sell their coffee at greatly reduced prices and repay their loans at extremely high rates of interest.
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EXPORTERS
Exporters are either independent companies or subsidiaries of multinational corporations that export coffee beans to importers in other countries. The primary goal of the conventional exporter is to buy coffee at the lowest possible price and resell it for the highest possible profit, while maintaining the quality demanded by their customers.
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BROKERS
Brokers buy and sell coffee on commission without ever officially owning the coffee that they trade. They act as intermediaries between exporters and importers. Multinational corporations have their own brokers and have enormous buying and selling power which allows them to speculate and exercise great influence on the New York and London coffee exchanges.
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IMPORTERS
Importers purchase raw green coffee beans either from brokers or exporters, which they subsequently sell to roasters.
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ROASTERS
Most roasters buy their coffee from importers. After roasting and packaging the coffee, roasters then sell either to distributors or directly to retail and institutional accounts. Some roasters have their own retail stores.
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DISTRIBUTORS
Distributors are sometimes involved in channeling roasters’ coffee to retail and institutional accounts such as universities, hotels, hospitals, and airlines.
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RETAILERS
Retailers are grocery stores, restaurants, cafés, and institutional accounts that sell coffee to consumers.
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CONSUMERS
Consumers buy and drink coffee in cafés and restaurants, from grocery stores, at home and at the work place. Most coffee is still
purchased at grocery stores. Consumers are usually unaware of the conditions under which the coffee was produced and traded.
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