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COFFEE MARKET AND ITS CRISIS 2
Coffee production is already a giant industry with exports going worldwide totaling to
billions of profits. It’s one the few international crops that are recently produced by both small
and large-scale farmers. The industry is currently facing some challenges which mainly started
when there was a breakdown of the international coffee agreement leading to oversupply in the
market due to changes in land-use policy and technological development. The impact of the
coffee crisis on social sustainability is always evident as high transactions cost do not facilitate
cooperation, and as seen broadly, social sustainability concerns the development and
maintenance of social capital (Docherty, 2009). Some problems that affect the social viability of
coffee farmers are brought about by a large number of small-scale and peasant farmers producing
the product making it viewed as a primary source of hard currency. These situations bring about
a conclusion that most poor coffee farmers are currently struggling to survive without an
alternative. Also, the recent developments have led to environmental sustainability in the coffee
industry. Due to the high production cost and the rise of technology the firm is facing a severe
challenge in both quality of the coffee and the environment (Jaffee, 2014).
Sustainability issues affecting the firm are brought about by market failure. The cause is
based on some values such as inequitable market power, market instability, inequitable market
power, and the mismatch between supply and demand. Some suggested a solution to the remedy
including product differentiation, promotion strategies to increase coffee sales and price risk and
validity management should be implemented to reduce the coffee crisis. Apart from the specialty
of the coffee farm, some different certified labels differ with the regards of the scope of labeling
(Kolk, 2005). They include shade-grown, bird-friendly, organic, Fairtrade and sustainable coffee.
In conclusion, once sustainability in the coffee sector becomes the standard operating procedure
COFFEE MARKET AND ITS CRISIS 3
and its defined by dominating actors, competition may erode the incentive for regulatory and fear
of some farmers.
COFFEE MARKET AND ITS CRISIS 4
References
Docherty, P., Kira, M., & Shani, A. R. (2009). What the world needs now is sustainable work
Jaffee, D. (2014). Brewing justice: Fair trade coffee, sustainability, and survival. Univ of
California Press.
Kolk, A. (2005). Corporate Social Responsibility in the Coffee Sector: The Dynamics of MNC