Showing posts with label South India. Show all posts
Showing posts with label South India. Show all posts

Friday, 14 December 2012

The insufferable hypocrisy of Starbucks

The giant global coffee company, Starbucks Corporation, has recently been in the news for all the wrong reasons. With over 20,000 odd stores in over 60 countries from Aruba to Wales, the  Starbucks stores are ubiquitous  in high street locations, serving up all kinds of brews and blends – from coffee sourced from Ethiopia to Hawaii. Starbucks now joins the infamous rank of companies that avoid paying tax. A recent Reuters investigation found that the company reportedly paid hardly any tax in UK, despite generating over £3bn in sales over 14 years, but had paid less than 1% in corporation tax. Worse still, Starbucks often reported a loss in its UK business, yet consistently told shareholders that Starbucks was profitable. In 2011, their total annual revenue was $11.7 billion on which they hardly paid tax. Britons are now raving mad that in 2011, Starbucks did not pay a penny by way of corporate tax , despite sales of $640 million. In an attempt to regain its credibility and public image, Starbucks has now promised a £20m corporate tax pledge. But this is too little, too late.


For any business it is perfectly legitimate to make profits and therefore perfectly legitimate to pay taxes. While Starbucks may have not done anything " illegal ", to me it reeks of nothing less than rapaciousness and corporate greed - finding complex tax schemes,creating international subsidiaries, finding ways of moving money to low rate regimes, to avoid paying tax on their profits. According to Forbes,Starbucks CEO ,Mr. Howard Schultz , personal net worth is  $1.5billion.

It is estimated that 1.6 billion cups of coffee are drunk worldwide everyday. Coffee is a $80 billion business today  and it is often said that  it is the most valuable trading commodity in the world after oil. However, the share of the coffee trade enjoyed by the actual coffee grower  has fallen by two-thirds,whilst transnational coffee companies have reaped huge profits from the low price they pay to the producer.According to Anthony Wild, the average price paid to coffee producers internationally has fallen 80% since their last high in 1997. The widening gap between the have and the have-nots are illustrated in the growing inequalities of the coffee trade.Most of the coffee growers are small producers and this is specially true of Ethiopia where some of the finest coffees are produced - the coffee farmer can own as few as 20 plants. The story is no different in India - where 98.5% of coffee farmers are small holders. Since they are at the mercy of the global coffee trade which squeezes them for their own profits, coffee farmers are being forced to abandon their holdings and move to cities seeking a different  and often uncertain future.

The boom in coffee consumption means next to nothing for the coffee producer .That Starbucks creates new markets in different countries does not help the producer. Today the coffee farmer is being battered by climate change on one side and speculative trading on the other - the small farmer in the Western Ghats of South India , or in the Sidamo Province of Ethiopia faces unpredictable weather patterns,unseasonal rain, rising temperatures , periods of drought followed by periods of flooding ,is desperate to save his crop  and   his livelihood so as to provide for his family .But sadly, a  trader sitting in London or New York will  decide the price of the coffee to be paid to the farmer and the coffee farmer is lucky, if in the end ,he even gets 10% of what you just paid to Starbucks Corporation  for your Latte.
So for a company that says they strive to "strike a balance between profitability and social conscience," they have a long way to go.

Saturday, 23 April 2011

For the love of coffee


Before the Café Coffee Days, there was Baba Budan and his 7 coffee beans.
Baba Budan, a 17th century Sufi Saint, smuggled 7 coffee beans into India from Yemen, thereby, part breaking the Arab monopoly over coffee. The story goes that Baba Budan smuggled out 7 coffee beans from Al Muckha (Mocha), a port city in Yemen. Between the 15th and 17th century, Mocha was the main market place for coffee trading. It is from this Red Sea port of Mocha, that the English word mocha has its origin.

Coffee arabica plant and seed
While the earliest history of coffee goes back to antiquity - there is evidence that point to the existence of the coffee plant in 13th century Ethiopia. Till the mid 17th century or so, the Arab rulers enjoyed their monopoly over coffee. They did what they could to ensure that the cultivation did not spread – so they would strip the bean of its outer layer, roast it  and render it infertile. They banned the export of the coffee bean – it could be taken out only if it was boiled or roasted so as to prevent the bean from germinating. Coffee had been colonized.

This is why Baba Budan, an Indian pilgrim to Mecca, had to smuggle his 7 beans out of Yemen. It was not just Baba Budan who broke the coffee colonization, there was fierce competition between the European colonizers to get hold of coffee. It was the Dutch who in the late 17th century first managed to get some seeds and attempted to grow coffee in their colonies.   The Dutch were by now already growing some coffee in the Malabar region of India as well as in their other far eastern colonies.  And before you knew, the British started coffee plantations in Jamaica -the rest is cruel ,colonial  history.

There are myriads of stories of how coffee found its way out of Arabia and how it was transported by colonizers, travelers, wanderers, investors ,missionaries   and traders  – with the rise in the demand for coffee, came a rise in the demand for sugar, both becoming important commodities. Coffee was a commodity that formed part of the trade triangle – from England to Africa to the Americas. Coffee houses sprang up and became meeting places and were centers of social interaction.

But behind all this energy and movement, the story is really not sweet. The well-known coffee historian, Antony Wild, in his book “Coffee :  A Dark History”, takes us to the early days of the history of coffee, on how the, European merchants came across it in Arabia and brought it to Europe. Soon hugely popular, they quickly realized that they could make more money if they planted coffee themselves, in their plantations, using slave labour in their tropical, colonial outposts. Coffee was now on its way to becoming global – from the colonies in Caribbean to  the colonies in Java – coffee was leaving its footprint.

As Antony Wild says, this is the legacy of coffee – tropical countries produce it and rich countries drink it. Even today this legacy is almost true . Quite unlike tea – countries that produce tea mostly drink it.

Meanwhile, on his return to India, after Mecca, Baba Budan planted the Arabica  beans in the hills of Chandragiri, situated in today's Chikmagalur district of Karnataka– and thus is the story of the birth of Indian coffee. Today ,India produces almost 4.5% of the world’s coffee, grown mostly by small and medium growers, and is grown mostly in the three main Southern States of Karnataka, Tamil Nadu and Kerala, with Karnataka contributing to 72% of what is grown. (A little bit is also grown in the Northeast and Andhra Pradesh). With the rise of urban India there is a rise in coffee shops – coffee bars are becoming ubiquitous in urban India. 


The once less known South Indian filter "kaapi" , served piping hot in steel tumbler with a small dabarah (cannot find a similar word in English) for cooling, has now morphed into  cappuccinos and lattés , finding its way onto menus across India’s burgeoning cities and youth.

India’s coffee is both special and unique  - right from its planting to its traditional style of drinking.  And that is really the idea behind this blog post. It is not to re-tell the well known but bitter history of coffee but more to inform about its current crisis and uncertain future.

Indian coffee is the finest shade growing coffee in the world and it is rare because all the coffee grown in India ,is grown in natural conditions , is dependant on monsoon rain and thrives in shade growing areas. There are close to 250,000 coffee planters in India – of which 98% are small farmers, cultivating on less than 10 hectares. There is almost no mechanization – it is labour intensive , employing about 2 million people  directly thereby generating rural livelihood.

Drive through any coffee growing district in South India – From Coorg to Chikmagalur and what you will discover are verdant coffee forests, acres of coffee estates full of all kinds of   trees with coffee growing under a thick canopy of natural shade, often mixed with ginger, pepper and vanilla . With most of the  coffee estates located in the Western Ghats, coffee forests are located in biodiversity hotspots that have a high level of endemism, bio diversity and wide array of flora and fauna. From Indian mahogany, to teak and  sandalwood , to the silver oak, and white cedar, trees stand majestically  tall . It is almost as if the forests nurture and protect the coffee berries  . Maintaining forests ensure a healthy coffee crop and the coffee planters almost has a sacred relationship with nature. There are wide species of  butterflies and birds . Protected wildlife parks often dot the region. Elephants wander about, sometimes destroying coffee plants  - the  famous langur, slender loris, ,spotted deer are some of the animals that live in the region.

And here’s the other thing – five major South Indian rivers have its origin in coffee estates, the most popular one being the  River Cauvery -that starts in the coffee growing region of Coorg.  Here the river is venerated and worshipped as Goddess Cauvery – as a protector of their land.  Coffee is so closely linked to the elements – and over time the coffee growers have developed  a deep tradition to preserve   rivers and forests.

But the picture is not  about the sweet fragrance of the coffee plant in bloom or misty rolling mountains. It is about a rapid change in climate that has resulted in rising temperatures and unseasonal  rains , sometimes heavier rainfalls , periods of   drought and flooding ,prolonged higher day time temperatures and sudden drop in night time temperature – all climatic impacts  that have resulted in lowered yields that are making coffee cultivation almost economically unviable.  There is a growing need to invest in technology to adapt to changing and unpredictable weather patterns but since the farmer is small, these are not always accessible or possible. There is a shift that is taking place. Slowly growers are selling their estates, part by part, the price the land fetches for the timber it holds, is more profitable than cultivating coffee in a climate changing world. More worrying is that there are no takers in the next generation as high profits on coffee cultivation start to dim.



So is coffee all about  about cash and commerce ? Is its  value limited to   commodity indices  and high menu prices? Does no one recognize its intrinsic value and its role in maintaining  biodiversity, acting as a carbon sink, globally sequestering about 6 billion kgs of carbon,  and  conserving wildlife and ecosystems ?The value of coffee lies way beyond  its economic price tag – its value in providing ecological services is indeed priceless.

During my recent visit to Chikmagalur, I met a coffee planter who said that he himself had personally planted over 100,000 trees in his life time –  this was way before the world was hot on climate change , carbon trading and clean development mechanism. And standing on his coffee estate I thought to myself - indeed these small planters are not Gordon Gekko s children !

The silent coffee planter that protects India s rich biodiversity and forests, does not need   a trading mechanism to protect our natural resources and create a better world. What he needs is for his voice to be heard while a different crisis brews.
It is indeed time to wake up and smell the coffee.