“Grounds for Complaint”, by Brink Lindsey, published in the UK by the Adam Smith Institute – D2Digest

Fair trade coffee is a “politically motivated” niche, while “the fast-growing specialty coffee industry is developing and serving vibrant consumer demand”. Figure out the difference between these two products for yourselves.

Despite the fact that Fairtrade occupies only 1% of the US coffee market (it did in 2001, anyway; see below), its very existence will distort production forever.

Antiglobalisation activists are demonising the coffee producers and retailers, and this accounts for the recent decline in coffee drinking in the USA.

Works cited:

Oxfam (Sept 2002) &lt— most recent
Seattle Times (Nov 2001)
Federal Reserve Boston (Q2 2002)
Hillside Agricultural (2001-2002)
Proctor & Gamble (2002 annual report)
Coffee Assoc. of Canada (2002)
World Bank Agriculture Technology Note (June 2002) (relevant detail cited to an earlier 2001 report. More up to date numbers here
Economic Development & Cultural Change (Jan 1996)
House Committee on International Relations (July 2002)
World Bank Comodity Market Reform (2001)
Bohman & Jarvis, 1999
The Economist (Sept 2001)
World Bank PREM Note (Jan 1999)

ICO Coffee prices, change since September 2002:

Colombian Mild Arabica: +30.4%
Other Mild Arabica: +37.1%
Brazilian Natural Arabica: +51.8%
Robusta: +18.6%
Composite: +27.4%

I haven�t noticed the “coffee crisis” is the year before last�s story because I�m using a chart of coffee prices in which the scale is dominated by the 1994 and 1998 spikes to $2/pound, and didn�t use a log scale. Look out next week for my working paper on why “Dot Com Stocks Are Go! Go!”, citing only sources from 1999.

DD sez: But really, does anyone believe that paying farmers more is bad for farmers? Or that coffee producers are hanging on in a dead industry simply out of the hope of getting their hands on some of that sweeeeet Fairtrade moolah? Of course not. Lindsey is just engaging in pretty mindless epater les gauchistes. This is a real clunker from the author of “Against the Dead Hand”, which was apparently a pretty good book.


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