The Coffee Industry Considers Its Own OPEC: CEO Daily
Do we need an OPEC for coffee growers? Cartels, of course, distort the market and hurt consumers. In its heyday, OPEC diverted massive amounts of money away from everyone who drove cars to the few lucky nations sitting on oil reserves. But in the case of coffee, the money would flow downhill—to people working on coffee farms and suffering from the lowest prices in decades.
It’s not an easy thing to organize. Some 30 countries sell coffee beans, and for a cartel to be effective, most would have to agree to act in unison. Any agreement by coffee buyers, like giants Nestle and Starbucks, to pay higher prices could induce more production. But coffee growers are suffering a world of hurt. If companies have a responsibility to buy from suppliers that pay a living wage, shouldn’t they also be responsible for sourcing commodities at a price that doesn’t induce starvation?
Coffee growers are encouraged by the fact that cocoa growers from Ghana and Côte d’Ivoire got buyers to agree to pay more for the key ingredient in chocolate. “If they can reach an agreement, why can’t we?” said Vanusia Nogueira, executive director of the Brazil Specialty Coffee Association.