13th
Sep
2013

Posted in Kafevend Blog

Having written about the prevalence of tea smuggling in eighteenth century Britain last month (read it here) I began to wonder if coffee had a similar story to tell. What I discovered came as a surprise to me, namely that coffee smuggling is very much a contemporary problem. Like the tea smuggling of old it boils down to market forces. Where the black market in tea was the result of people's inability to pay for legal tea because of the inordinately high tax levied on it, the black market in coffee exists today because too often farmers cannot make enough money to live on selling their crop through legitimate channels.

Many farmers feel compelled to smuggle their coffee beans in order to evade government taxes and international price agreements. However, it damages the economies of nations where smuggling is rife, particularly if coffee is the chief export crop. Tanzania is a typical example and its President, Jakaya Kikwete, has recently been attempting to tackle the problem with a plan to patent its coffee and export it with a trademark exclusive to Tanzania. It is hoped that this will garner a higher price and thus better standards of living for those involved in the country's largest export crop.

Coffee smuggling is a challenge for governments in Central America too. For instance, until fairly recently many Honduran farmers smuggled their harvest across the border to Guatemala, where it fetched a higher price due to the better reputation of Guatemalan coffee. The Honduran government have had to rise to the challenge of establishing a good name for their own coffee, thereby dissuading farmers from smuggling it.

Underlying the problem is the fact that we in the First World don't want to pay the prices that would sustain those at the bottom of the supply chain. It's difficult when we see the cost of living rising while our earnings flatline, but if we can find the extra cash to buy ethical, fairly traded coffee our consciences can remain clear while farmers can make a decent living without the need to smuggle.

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