Nescafe Coffee

Nescafe sources their coffee beans primarily from Brazil, Indonesia, Vietnam and Colombia. Once the beans are sourced, they are sent for roasting and processing in a manufacturing plant in Cagayan de Oro, Philippines. To be produced as instant coffee, the beans are roasted and then brewed. The brewed coffee is then dehydrated and packaged for distribution.

Coffee bean farming is a labor-intensive process in which workers are hardly making a living wage. In Colombia, coffee beans are grown on the mountainous hill sides and are harvested by hand. Pickers wages are paid based on the number of kilograms they’ve picked in a given day.  “Up to 85 per cent of coffee production takes place in the informal economy, which suffers from decent work deficits such as long working hours, low and insecure wages, limited access to social security and insurance, limited inspections and lack of information for the workers (International Labour Organization, 2020, p. 2).”

Farm workers hand pick the green coffee beans and are paid per kilogram. Under good condition, farmers then sell the beans to producers, which yields the best price. In less than ideal situations, farmers sell their beans to “middlemen” who then go on to sell to producers. In the case of Nescafe, the beans are roasted and packaged in the Philippines before heading back West to the North American Shelves.

Colombia has been one of many countries who adopted structural adjustment policies in order to secure IMF loans following the 1980 debt crisis. The purpose of the policies set out by the IMF were to increase exports and trade liberalization to help support countries in obtaining foreign exchange to repay the debt (Cubillos, Julieth, Bela, & Laszlo, 2021). The Colombian economy was fully liberalized in 1995 when it became a member of the World Trade Organization. Exports increased, but so did imports, which resulted in Colombia becoming a trade deficit country. But coffee can be identified as a colonial commodity, one of which is purposely exploited for the lowest possible price, to be produced and sold as a finished good to developed countries. Major corporations such as Nestle, who is the producer of the Nescafe instant coffee, hold a giant market share in the coffee industry. The large corporations partially control the market by buying up the commodity while prices are low and supply is high, and hold out when supply drops and prices are higher. Aside from their financial power, the balance of power is in the hands of transnational corporations as trade agreements favour exports. As the coffee bean market, workers, and farmers in Columbia have struggled to gain a fair price and wage for their product, various organizations have stepped in to help advocate fair trade practices.

Many movements and initiatives have been developed to help balance the relationship between suppliers and producers, but I don’t believe a balance has yet been achieved. In addition to movements which ensure fair prices paid to farmers, I believe that countries should regain the power to control the export of commodities and processing within the country and be free from the IMF policies. This would help ensure that more of the wealth stays within in country of origin.

Basik-Treanor, N., & Saunders, J. (2021, January). Tackling (Illegal) Deforestation in Coffee Supply Chains: What Impact Can Demand-Side Regulations Have? Retrieved from Forest Trends: https://www.forest-trends.org/wp-content/uploads/2021/02/10-things-to-know-about-coffee-production.pdf

Cubillos, T., Julieth, P., Bela, S., & Laszlo, V. (2021). Bananas, Coffee and Palm Oil: The Trade of Agriculture Commodoties in the Framework of the EU-Colombia Free Trade Agreement. PLoS One, 16(8), 1-17

Degn, E. (2018, February 14). How Fair Trade Coffee in Colombia could Solve the Poverty Struggle. Retrieved from The Borgen Project: https://borgenproject.org/how-fair-trade-coffee-in-colombia

International Labour Organization. (2020). Sustainable Supply Chains to Build Forward Better. Retrieved from International Labour Organization: https://www.ilo.org/wcmsp5/groups/public/—ed_dialogue/—sector/documents/genericdocument/wcms_777245.pdf

Rampietti, A. (2018, September 21). Colombia’s Coffee Workers Despair over Low Wage. Retrieved from Aljazeera: https://www.aljazeera.com/videos/2018/9/21/colombias-coffee-workers-despair-over-low-wage