[Futurework] RE: [Ottawadissenters] Coffee anyone?

[Harry Pollard]

Ed, Arthur, Lawry,   It’s a land problem, but then it always is.   What is delightful is that you are all condemning the controlled economy for doing a bad job.   Ed bemoaned the importation of subsidized American corn into Mexico.   This seems to assume that the importation of cheaper food for more than 100 million Mexicans is a bad thing.   Also, that dirt farmers grubbing out a miserable existence providing expensive corn to that hundred million Mexicans is a good thing.   If the gringos want to sell corn below cost to Mexicans that is something that the Mexicans should welcome.   There again, if I grew coffee and I was only getting a fifth of what I used to get, I would get out of the business.   You’ll recall that that the Taiwanese produced as many as five crops from their 12 acre plots and produced enough food for the Taiwanese – even at one point had a net export of food in a country with more than 1,300 to the square mile.   Costa Rica has a little over 200 per square mile, but it’s proportion of arable land is less than half that of Taiwan.   I suspect those coops should concentrate on getting fresh food into the cities rather than handling coffee.   But I suspect it is some kind of government policy -- as is certainly the emergence of South Vietnam into the coffee business.   The problem with government policy is that invariably it is too rigid.  If conditions change in the marketplace, then people begin to change their production to fit in with the new conditions.  High viscosity government policy maintains its direction even though things are going wrong.  The market wouldn't wait around to change things when prices were dropping from $3.80 to $.70. The government does. In fact, it maintains situations that are obviously uneconomic until a point is reached that trying to change to a more sensible policy invites disaster.   It seems to me that the major problem which inflicts modern economists and modern economies is their concentration on work rather than reward.   I've said before and will certainly say again that the sole reason for production is wages -- the return from exertion.  In addition, as we are not too keen on exertion, the more we can get for the least exertion the happier we shall be.  I can't recall the classical economists mentioning it, but time should be added to exertion.  The sooner we can finish our chores the better.   With so much that needs to be done, so many desires that remain unsatisfied, it is no less than potty for us to be worried about unemployment.   Yet, we do worry -- which reaction probably means that we are economically a bit potty.   The classical political economists said that production continued until the product was in the hands of the consumer.  So, most of the $4 paid for that steaming latte in Starbucks was compensation to labor for coffee production from the field to your table.  It's the way of things that very basic production is costing less and less and the trip to the consumer is costing more.  Thus, most of that four dollars is going to labor far from the field.  It's also the way things are that not a little in the price of anything is going to privileged monopolies along the trade path.   I'm glad I drink tea.   Harry   ********************************* Henry George School of Los Angeles Box 655  Tujunga  CA  91042 818 352-4141 *********************************     From: [EMAIL PROTECTED] [mailto:[EMAIL PROTECTED] On Behalf Of Ed Weick Sent: Wednesday, April 05, 2006 8:01 AM To: [EMAIL PROTECTED]; Futurework Subject: [Ottawadissenters] Coffee anyone?   American politicians are currently very busy trying to figure out what to do about some twelve million illegal migrants currently in the country. The overwhelming majority of these people are from Latin America. Why did they feel they had to leave their home countries to find work in the United States? Probably because they can no longer make a living at home. On my blog a few days ago, I marveled that Mexico, the mother of all corn, was now importing corn from the US. Mexican producers could not compete with highly subsidized American farmers. Then there is coffee. When I was in Costa Rica a couple of years ago, everybody seemed to be growing it on small ten acre plots and – at least where I was – processing and marketing it via local cooperatives. But were they making enough to get by? Here’s one take on the matter: It may be hard to understand how coffee growers are going hungry, when Americans willingly pay up to $4 for a steaming latte — but not if you look at the economics. ... "From that price, around one cent will go back to the grower," says Gabriel Silva of the National Federation of Colombian Coffee Growers. ... There are two reasons: Vietnam has been flooding the market with low-quality beans, and the four companies that control the world market have been pushing prices lower. ...In 1997, Colombian growers were paid $3.80 for a pound of coffee. This year, they've been getting 70 cents. (http://abcnews.go.com/WNT/story?id=287548&page=1) And here’s another: The problem began with the fall of the Berlin Wall. For years, a worldwide coffee agreement had kept prices artificially high to prevent the development of pockets of poverty that would be susceptible to communist takeover. When the agreement collapsed, the markets opened up and prices began to vary widely. Countries such as Vietnam and Brazil sharply stepped up production. Vietnam's output has soared from fewer than 2 million 132-pound bags a year in the early 1990s to 14 million bags, making it the world's second-largest coffee producer, behind Brazil. This year, worldwide coffee consumption is expected to equal about 105 million bags. ... But coffee producers are expected to harvest 10 million more bags than that. Worse, coffee-growing countries already have 40 million surplus bags stored up. ... The huge oversupply has allowed the coffee traders and big corporations to offer ever-lower prices to farmers for coffee, but the savings have not been passed on to consumers. ... The price paid to coffee farmers for a pound of coffee has dropped 75 percent since coffee briefly peaked at $1.81 per pound in May 1997. The difference has meant more profits for companies such as Procter & Gamble, Nestle, Sara Lee and Philip Morris, which together control about half the coffee market. (Despite Starbucks' ubiquity, the amount the company buys accounts for only about 1 percent of coffee purchases.) Ten years ago, coffee-producing countries got about one-third of every dollar spent on coffee. Now, they get less than 8 cents. http://www.post-gazette.com/world/20021028coffeeworld2p2.asp So, if you can’t make a living growing coffee, there are a few other things you can do. You can abandon agriculture and migrate to the city and become part of the slum population. Or, in places like Columbia, you can grow coca and produce cocaine for the American market. Or you can put together whatever savings you have, hire a coyote and get yourself to the US, where the money is. But there really aren’t very many options. Ed   SPONSORED LINKS Online social science degree Social science book Social science degree Social sciences       YAHOO! GROUPS LINKS   §          Visit your group "Ottawadissenters" on the web.   §          To unsubscribe from this group, send an email to:  [EMAIL PROTECTED]   §          Your use of Yahoo! Groups is subject to the Yahoo! Terms of Service.

_______________________________________________
Futurework mailing list
Futurework@fes.uwaterloo.ca
http://fes.uwaterloo.ca/mailman/listinfo/futurework