|Now, Finally, Another Cup of Coffee is Not Just Another Cup of Coffee|
|Key Words||Cup of Excellence, Brazil, Fair Trade, price, coffee, commodity, specialty.|
|News Story||A competition that was created in 1999 has grown to become a way out of poverty for some farmers in developing countries. Known as the Cup of Excellence, this competition encourages farmers to engage in investment designed to stimulate quality of the bean.
Over the last fifteen years, the coffee market has seen the elimination of trade barriers, a huge jump in production, especially among the developing countries, and a tendency by some to assume that coffee is coffee, regardless of who produces it or where it is produced. Enter the competition, which has taught people that one cup of coffee is not necessarily the same as another. Beans are beginning to be identified by country, region, mountain, or even farmer, depending on the location.
As a result, the competition has helped to create a split coffee market. The market has become split between specialty coffee, where farmers look toward quality as the defining point, and commodity coffee, in which farmers look to produce as much as possible for as cheaply as possible. Specialty coffee farmers then can sell to upscale roasters, such as Starbucks and other coffee retailers. Commodity coffee farmers sell to whoever offers them the market price.
In some developing nations, though, coffee farmers are too poor to undertake the initial investment to sell in the specialty coffee market. That is where the Fair Trade movement, micro credit opportunities, and other methods can be used to give farmers the start they need to move into this potentially lucrative side of the market.
The result? Farmers are learning that investments in technology, sustainable production techniques and the like can become extremely profitable. Last year's winner of the Cup sold his coffee crop for about US$40,000 - 10 times the price of the regular commodity coffee. Not bad for a poor coffee farmer in a developing country.
|Source||"Excellence in a Cup." The Economist. January 25, 2007.|
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