What are some interesting illustrations of the adage "There is no ethical consumption in late capitalism"?

Arguably everything we consume, i.e., eat, wear and use, our habitations and everything within them, offer undeniable illustrations of 'There is no ethical consumption in late capitalism'.

• Coffee, tea, tin, coltan offer easily digestible parables.
• The first two, most of us drink one or other or both.
• The latter two? Anyone with an electronic device of any kind, meaning practically everyone in developed countries and increasing numbers in developing countries, uses them.
• After all, electronic devices include cell phones (basic/smart), computers (desktop/laptop/tablet), iPod/MP3 music players, e-readers, video game systems, internet streaming devices, smart TVs, DVD/Blu-ray players, VCRs, home wireless Internet.
• As the faddish-sounding Internet of Things takes off, our dependence on coltan and tin mined largely in 'resource cursed' conflict zones in the Third World only increases.
• Niobium and tantalum extracted from coltan are used in electronic device capacitors.
• As for tin? Used in the ubiquitous solder in circuit boards.
• Both largely mined in the Third World (For e.g., China, Malaysia, Peru, Indonesia, Brazil for tin).

A brief rendition of recent coffee history follows. Moral? Indulging in a cuppa joe could be among the furthest from ethical consumption we've yet managed to contrive.

Coffee

• First, some coffee numbers.
• A non-essential food item, coffee is the world's second leading trade commodity after petroleum.
• Coffee trees need elevation, which means hillsides and rough terrain become heavily planted so automation and mechanization are obviously difficult. Result? With few economies of scale, coffee is largely the purview of small-holders (1).
• Even with its attendant vagaries, small-holding is actually an improvement over the slave-holding plantations of the past.
• Globally, more people are involved in growing coffee than any other crop.
• Exclusively tropical, a crop that grows in very warm, humid climates, ~25 million farmers grow coffee, almost all of them in the 3rd world, with ~125 million earning their livelihood from the coffee business.
• OTOH, abundant coffee consumption is almost exclusively the purview of the 1st World (see figures below from 2, 3).
• ~60 producer countries and ~ 20 key consumer countries.

• Originally discovered in Africa, the Arabica and Robusta coffee varieties are today grown the world over, inevitable result of colonial tentacles relentlessly seeking out apt ecological niches for commercial exploitation of coffee.
  
  • Arabica? Higher altitudes in Latin America, Southeast Asian island nations, West Africa.
  • Robusta? Lower altitudes in East and sub-Saharan Africa, and mainland Asian countries such as Vietnam.
  • Considered to have a superior taste and thus netting higher prices on the world market, Arabica is more commonly found in upscale US coffee chains like Starbucks. Needing more stringent growing conditions, its production is more labor-intensive 'because the coffee cherries must be picked when they are perfectly ripe to maximize quality, which requires numerous passes through the same patch of coffee' (4).

I gave up drinking coffee cold turkey in 2004. As self-respecting Tamils would be quick to point out, coffee is in my blood. Witness that Indian filter coffee has its own Wikipedia entry. An indelible part of my childhood, mom used to buy raw coffee beans. She had a roaster, a contraption rigged by a local neighborhood handyman. So did other 'mamis' (housewives) around us. She'd roast the beans about once a month. My nightly chore to grind the beans using a hand-held grinder, ready for the next morning's classic South Indian dabarah (saucer)-tumbler (cup)-style fresh filter coffee. We didn't grow the beans, harvest it or bring it to market but all the other parts of the process, especially the so-called value added roasting and grinding bits, were quite sustainable, dint of our own labor, the consumers. Still sitting in the family pantry, how swiftly the roaster and grinder have become relics. Should they have? Falling in the category of what-price-so-called progress, that's a question for the ages.

The cold turkey bit. After coming to the US, I became addicted to the Starbucks routine. The grotesque amount of money I was spending on my coffee habit was already chafing when I came across the 2002 Oxfam report on coffee (5). Titled 'Mugged: Poverty in your coffee cup', I devoured the 60-page report over a week-end. That was it. What I learned made it impossible for me to blithely continue gulping my cuppa joe. Three weeks of blinding headaches later, I'm now coffee-free for 11 years and counting. Of course, giving up coffee drinking is no panacea to global inequity. After all, I still drink tea, which comes with its own particular embedded inequities. No ethical consumption in late capitalism indeed.

How coffee became steeped in inequity

• Until 1989, coffee was traded in a managed market regulated by the International Coffee Agreement (ICA), administered by the International Coffee Organization (ICO).
  
  • Set up in London in 1963 under the auspices of the UN, the ICO's member governments represented 94% of world coffee production and >75% of world consumption.
  • Producing and consuming nation governments managed supply-demand using export quotas for producing countries.
  • This kept coffee price relatively stable and reasonably high, i.e., equitable for the growers.
  • Producing countries agreed to not exceed their 'fair' share of coffee exports.
  • If prices rose above a ceiling level, producers were allowed to exceed their quotas to meet unmet demand.
  • The ICA worked well in setting prices, at least for the poorer producer countries (6, 7).
• The ICA broke down in 1989, mainly due to opposition from the USA, which walked away from it.
  
  • 'the (U.S.) State Department saw the ICA as primarily a geopolitical agreement designed to provide aid to the Third World countries' (8).
  • The US was using the ICA as a tool for political influence (6, 9).
  • In 1989, the US geo-political focus was shifting away from Brazil to Central America.
  • The quota system also limited the extent to which coffee could be used for political influence.
  • The air was thick with free-trade aroma. Along with pretty much everything else, coffee too became subsumed in the ensuing, inexorable tidal wave of free-market nostrum prevailing since the 1990s (8).
• No longer empowered to regulate coffee supply using quotas and price setting (called 'corsets'), today the ICA survives as a toothless tiger.
• Instead coffee prices are set by two large futures markets in London (for robusta coffee) and New York (for arabica coffee).
• Hand in glove with the ICA debacle, higher value processes of roasting, packaging, marketing and selling moved from developing to developed countries, specifically to Multinational corporation.
• Meanwhile, spread with evangelizing intensity through relentless advertising campaigns, the explosive worldwide growth of upscale coffee chains such as the US-based Starbucks made coffee a poster child of Leslie Sklair's culture-ideology of consumerism, namely, 'you are what you consume' (10).
• The pre-1989 process was somewhat more equitable to growers. A predictable, strict hierarchy of value grew out of its ashes.
  
  • Now value rises up the coffee chain, producers harvesting minimal, processors maximal of the value. How?
    
    • Supplier-managed inventory reduced working stock by outsourcing stock management.
    • Roasters hold minimum quantity of stock predicated on projected roasted coffee sales and adjusted actual sales.
    • Traders also hold and own a greater proportion of coffee stock.
    • Thus, mobilizable coffee stocks, i.e., coffee immediately available on the market, have increased.
  • As a result, price volatility has become even more inherently a part of the coffee trade since much more than ever of coffee stocks are now readily mobilizable with resultant stronger-than-ever impact on price (11).
• Coffee price volatility mirrors its supply-demand dynamics while futures market trading is essentially risk management, i.e., hedging, rather than actual physical trade of goods. Speculative activity thus hugely amplifies price volatility, driven in part by the fact that investment funds are 'extremely active in commodity markets' (12).
• Result? Generally hefty profits for the world's biggest coffee roasters. In 2002, those were Kraft Jacobs-Suchard, the food sector of the huge Philip Morris corporation; Nestlé with its Nescafé brand number one in instant coffee; Folger Coffee, a branch of Procter & Gamble; the Douwe Egberts group, the European coffee split-off of the erstwhile Sara Lee (now Hillshire Farms); Tchibo, the giant German roaster, all 1st world multinationals. After all, they buy the bulk of the coffee beans on the market.
• 3rd World coffee farmers? Unsurprisingly, short end of the stick. Prices all too frequently below the cost of production. This, even though the entire global coffee trade depends principally and primarily on the arduous work of small-holder coffee farmers (8, 13, 14).
• Careful analyses reveal the most labor-intense parts of coffee production remain the exclusive purview of the 3rd world (1, 8, 15).
• High levels of dependence on coffee production and export also go hand in hand with persistent poverty and dependency (5, 8, 16; see figures below from 5 and 16).

• Late 1980s, early 1990s, the World Bank and IMF were also key in tilting balance in favor of consumers, and away from producers. Vietnam offers the clearest illustration of this policy. 
• In 1989, Vietnam was nowhere on the world coffee production stage, producing ~1 million 60kg bags of coffee. By 2005, it was 2nd, only behind Brazil, making ~ 11 million 60kg bags.
• Vietnam's coffee story is a mix of serendipity and pity.
• Serendipity? Pushed into coffee growing through specific World Bank and IMF structural adjustment programs, the historic Brazilian freeze of 1994 spurred Vietnamese coffee growers as an unseasonal and severe cold snap in Brazil's coffee growing plantations put paid to a vast swath of their harvest that year.
• Pity? Vietnamese farmers expanded too much too soon into coffee growing. Meantime, the much more experienced Brazilian farmers rapidly regrouped and replanted in frost-resistant areas in record time, handily outcompeting their new Vietnamese competitors. Vicious cycle of World Bank/IMF indebtedness continues to fuel ongoing supply.
• Coffee's become the classic boom-and-bust crop.
  
  • As world coffee prices rose due to the 1994 Brazilian coffee crop debacle, raw (pun intended), inexperienced Vietnamese coffee growers needed little convincing to plant a lot of coffee.
  • Problem is a coffee tree takes 3 to 5 years to bear harvestable cherries, and even then a mature tree on average yields <1 pound of roasted coffee (4).
  • Inevitably, over-planting leads to over-supply a few years down the road.
  • In turn, this depresses world market coffee prices for several years.
  • This in turn initially triggers classic Loss aversion on the part of the growers who continue to harvest and grow trees even as prices start falling.
  • Yet as low prices linger over several seasons, inevitably farms foreclose and production declines. Eventually, demand exceeds supply.
• Fair trade coffee has grown in fits and starts but is still a minuscule part of total coffee sold in developed countries. Only ~5% for example in USA, the world's largest coffee consumer. Lack of consensus definition for 'sustainable coffee' and 'sustainable production of coffee' emphasizes the inherent structural weaknesses of such non-governmental, non-profit consumer movements (17).
• The Fair Trade certification business only became murkier when the US chapter split from the worldwide body in 2011 to pursue its own agenda (18). At best in coffee, the notion of fair trade, i.e., trade as a vehicle for social justice, sputters (19).

Further, inequities in coffee trade drive practices that wreak environmental havoc

• High yield coffee seed varieties are particularly damaging to the environment (14).
• Traditional coffee trees grow in semi-shade. This preserves forest, encourages mixed-cultivation of other trees, vegetables, etc. In other words, preserves biodiversity.
• High yield coffee trees are most productive in full sunlight.
• Predictable change? Shift from mixed cultivation to coffee mono-crops where as many coffee trees as possible are planted to maximize yields (20, 21, 22, 23) and attendant economic benefits to those higher up the coffee value chain, namely, the roasters, packagers, marketers and sellers of the finished product.
  
  • High yield coffee crops can be planted more densely.
  • Harvest-ready in fewer years.
• Problem is the local ecological costs outweigh distant economic benefits.
  
  • Shorter life-span of high yield coffee plantations.
  • Higher agrochemical (fertilizers, herbicides, fungicides, nematocides) use.
  • Higher year-round labor need and higher soil erosion.
  • Loss of biodiversity.
• Predictable result? Increased deforestation rates reported in Brazil (24), Indonesia (25), Cameroon (26), Ghana (27) in tandem with high yield coffee growing.
• A recent news media article summarizes the deleterious impact of these destructive market force-driven trends in coffee production (28). Also see figures below from 28 and 22, respectively, summarizing these effects.

A case study analyzing satellite imagery of forest cover in El Salvador shows that boom-and-bust coffee cycles also drive deforestation (29).

Similar trend of rapid deforestation also seen in heavily coffee-planted southwest Sumatra (30).

Bibliography

1. Talbot, John M. "The coffee commodity chain in the world-economy: Arrighi’s systemic cycles and Braudel’s layers of analysis." Journal of World-Systems Research 17.1 (2011): 58-88. Page on jwsr.org
2. A coffee addict’s guide to the universe
3. Where the world’s biggest coffee drinkers live
4. Austin, Kelly F. "Coffee exports as ecological, social, and physical unequal exchange: A cross-national investigation of the java trade." International Journal of Comparative Sociology (2012): 0020715212455350. Page on researchgate.net
5. Gresser, Charis, and Sophia Tickell. Mugged: Poverty in your coffee cup. Oxfam, 2002. Page on oxfamamerica.org
6. Robert H Bates, Open-Economy Politics: The Political Economy of the World Coffee Trade (New Jersey: Princeton University Press, 1997), 159.
7. Gregory Dicum and Nina Luttinger, The Coffee Book: Anatomy of and Industry, From Crop to the Last Drop (New York: The New Press, 1999), 91-92.
8. Talbot, John M. Grounds for agreement: The political economy of the coffee commodity chain. Rowman & Littlefield Publishers, 2004. p.89.
9. Gregory Dicum and Nina Luttinger, The Coffee Book: Anatomy of and Industry, From Crop to the Last Drop (New York: The New Press, 1999), 121-122.
10. Leslie, Sklair. "Globalization. Capitalism and its alternatives." (2002).
11. Daviron, Benoit, and Stefano Ponte. The coffee paradox: Global markets, commodity trade and the elusive promise of development. Zed books, 2005.
12. Borzoni, Matteo. "The Green Coffee Purchasing Policies of Italian Roasters." Page on isnie.org
13. Ponte, Stefano. "The latte revolution'? Regulation, markets and consumption in the global coffee chain." World development 30.7 (2002): 1099-1122. Page on uky.edu
14. Waridel, Laure. Coffee with pleasure: Just java and world trade. Black Rose Books Ltd., 2002.
15. Bacon, Christopher M. Confronting the coffee crisis: fair trade, sustainable livelihoods and ecosystems in Mexico and Central America. MIT Press, 2008.
16. http://ourworldindata.org/wp-content/uploads/2013/05/ourworldindata_poverty-world-map-poor-square-in-total-square.png
17. Pavlovskaia, Evgenia. "Environmental Sustainability Criteria in the Coffee Sector–Lessons that Can be Learnt." Environment and Ecology Research 2.3 (2014): 138-148. Page on hrpub.org
18. Lyon, Sarah. "The Hidden Labor of Fair Trade." Labor 12.1-2 (2015): 159-176. Page on researchgate.net; Fair Trade, Free Markets, and the Bitter Fight Behind Your Morning Cup of Coffee | VICE News)
19. The Paradox of Fair Trade (SSIR)
20. Gillison, Andrew N., et al. "Impact of cropping methods on biodiversity in coffee agroecosystems in Sumatra, Indonesia." Ecology and Society 9.2 (2004): 7. Page on cbmglobe.org
21. Blackman, Allen, Beatriz Ávalos-Sartorio, and Jeffrey Chow. "Shade coffee & tree cover loss: lessons from El Salvador." Environment: Science and Policy for Sustainable Development 49.7 (2007): 22-33
22. Perfecto, Ivette, et al. "Shade coffee: a disappearing refuge for biodiversity." BioScience (1996): 598-608. http://www.researchgate.net/prof...
23. Jaffee, Daniel. Brewing justice: Fair trade coffee, sustainability, and survival. Univ of California Press, 2014.
24. Simon, Marcelo Fragomeni, and Fernando Luis Garagorry. "The expansion of agriculture in the Brazilian Amazon." Environmental Conservation 32.03 (2005): 203-212.
25. Gaveau, David LA, et al. "Three decades of deforestation in southwest Sumatra: effects of coffee prices, law enforcement and rural poverty." Biological Conservation 142.3 (2009): 597-605. Page on researchgate.net
26. Gbetnkom, Daniel. "Deforestation in Cameroon: immediate causes and consequences." Environment and Development Economics 10.04 (2005): 557-572.
27. Appiah, Mark, et al. "Dependence on forest resources and tropical deforestation in Ghana." Environment, Development and Sustainability 11.3 (2009): 471-487. Page on researchgate.net
28. The dark side of coffee: an unequal social and environmental exchange
29. Blackman, Allen, Beatriz Ávalos-Sartorio, and Jeffrey Chow. "Shade coffee & tree cover loss: lessons from El Salvador." Environment: Science and Policy for Sustainable Development 49.7 (2007): 22-33.
30. Gaveau, David LA, et al. "Three decades of deforestation in southwest Sumatra: effects of coffee prices, law enforcement and rural poverty." Biological Conservation 142.3 (2009): 597-605. Page on researchgate.net

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