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The Forum > General Discussion > The practical/moral implication of our chocky bar

The practical/moral implication of our chocky bar

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Pericles and others
Your perspectives please:
Should we life like… car journeys and accidents are inevitable and simply redesign the car (a flawed implement) and then move on or should we look for a better way we move people?

Likewise should we accept the stated goals of Gates Foundation World Cocoa Foundation (ADM, Mars, Hershey, Nestles etc) donation of $23 million as an act of "generosity" to increasing cocoa production as a rush of humanity? Or as I see it a symptom of what ails us, a cynical exercise in both PR and guaranteeing a cheaper price for the beans. This means cheaper costs - cheaper products - more sales (this assumes that all the price reduction in raw product isn't passed on) – more and greater profit. And the farmer...not so wow. (No free lunch syndrome?)

Refer to how the coffee market crashed because of foreign influence to grow more coffee. Nestles’ domination of the instant market forced the price down to whereby the farmer became even poorer in the end the US government had to get involved with a temporary floor price ….while the farmers diversified if they could?

I also tender Mars bar marketing (manipulation of the end user)...first a bigger size (wow) then a disproportionately bigger price after the market has been ‘desensitized’ (i.e. used to the bigger size).

Firstly who in these clearly documented scenarios really benefits? The farmer? The end user? The fat clinics, dentists, heart surgeons… you get the point. (The Corps Execs get the lunch and we/farmers all pay)

Back to our struggling cocoa farmer wouldn’t it be more equitable/effective to simply set a fairer price then let the market work from there?
Fund their ability to make informed marketability of their product? Give assistance with diversifying? Perhaps there are even better crops those that will feed that could be funded researched etc. How is this an impossible or even expensively impossible change?

Now the biggy should we accept this as ‘generosity’ (sic) on face value or see it for what it is and try to change a pipe dream into reality
Posted by examinator, Thursday, 12 March 2009 7:14:51 PM
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Examinator - (hope I'm included in the "and others"),

From a truly objective point of view any kind of benevolent intervention could be seen as disturbing the intended natural progression.

If we were to view events on this planet from the perspective of a disinterested outsider, rather in the way kids do with ant-farms, and knowing that survival of the fittest makes for a more efficent 'ant farm', we would be apalled at any intervention such as you mention. Without it, one problematic sector would disapear and make way for another, more efficient one, or be absorbed into the whole, thus strengenthing it.

Thus one could argue that any charitable move - such as overseas aid, disaster relief etc. - is actually simply counter-productive: if millions of non productive units disapear from our ant farm it would be strengthened. Hundreds of cocoa-farmers ditto.

In this view, there would be no place for ultruism. In fact, to be effective, any intervention must contain benefits for the stronger, more efficient units in order to counter the intervention to the weaker ones - whose continued survival counteracts the natural law.

Perhaps the Gateses are simply ant-farmers?
Posted by Romany, Friday, 13 March 2009 10:43:12 AM
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I am for the pipe dream. A world where Gates foundations are not necessary, where farmers receive a fair price for their produce. This is not "propping up the weakest" which has become synonymous with the distortion of "survival of the fittest".

This little excerpt may clarify where I am coming from:

"For starters, there is a lot more to evolution by natural selection than just the survival of the fittest. There must also be a population of replicating entities and variations between them that affect fitness - variation that must be heritable. By itself, survival of the fittest is a dead end. Business people are especially guilty of confusing survival of the fittest with evolution.

What's more, although the phrase conjures up an image of a violent struggle for survival, in reality the word "fittest" seldom means the strongest or the most aggressive. On the contrary, it can mean anything from the best camouflaged or the most fecund to the cleverest or the most cooperative. Forget Rambo, think Einstein or Gandhi.

What we see in the wild is not every animal for itself. Cooperation is an incredibly successful survival strategy. Indeed it has been the basis of all the most dramatic steps in the history of life. Complex cells evolved from cooperating simple cells. Multicellular organisms are made up of cooperating complex cells. Superorganisms such as bee or ant colonies consist of cooperating individuals."

http://www.newscientist.com/article/dn13671-evolution-myths-survival-of-the-fittest-justifies-everyone-for-themselves.html

Therefore I do not see a conflict between the practical and the moral in production of cocoa or anything else. For too long we have been brainwashed into the idea that it is a dog-eat-dog world. I have yet to meet a doggie cannibal. However, I may well have met human cannibals.

In fact I posit that if the entire species of homo sapiens disappeared overnight, the ecosystem known as planet earth would actually benefit. We are not so much at the top of the food chain,as we are parasites.

Now I expect to be accused of being a human-hater. Not so. I'm just very logical.
Posted by Fractelle, Friday, 13 March 2009 12:20:17 PM
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There's no easy answer examinator, as I suspect you already know.

>>Likewise should we accept the stated goals of Gates Foundation World Cocoa Foundation (ADM, Mars, Hershey, Nestles etc) donation of $23 million as an act of "generosity"<<

It must be very frustrating, being Bill Gates.

He woke up one morning with the revelation "hey, I can't spend that amount on myself in a hundred lifetimes", so he established the B&MGF. He put really good people in place - I was lucky enough in a previous life to know Patty Stonesifer - and they really try as hard as they can to get money to places where it will do the most good.

Make no mistake, over the years, he and Melinda have first-hand seen more individual and collective suffering than the vast majority of the posters here, if not all.

Think what that must do to you after a while.

Heck, those experiences alone would almost be full atonement for foisting Windows on the world.

Almost.

I did say almost.

There are so many parallels in ordinary business.

If you build a factory in Togo (or wherever) to make T-shirts, are you i) providing much-needed employment to an area where 80% of families are at or below subsistence level, or b) exploiting a third-world country to enrich your shareholders?

Where is the line between enlightened altruism, and blind charity?

Should there be a line at all?

We cannot divide the world GDP equally between 6.5 billion individuals, so we have to do the best we can, with what we've got.

Is it "fair"? No, and never will be.

When I'm not being practical, I'm in the Fractelle "pipe dream" camp. Unfortunately, human beings, poor creatures that we are, are unlikely to realize that dream before the planet boils.
Posted by Pericles, Friday, 13 March 2009 2:20:33 PM
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Interesting thread.

I don't have anything more to add to the
comments except to refer posters to
the following website which may be of
interest:

"Yes, they can."
Why altruistic firms can survive in a competitive market."
by David Vogel.

http://creativecapitalism.typepad.com/creative_capitalism/2008/07/yes-they-can.html
Posted by Foxy, Friday, 13 March 2009 4:53:38 PM
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Foxy snookums

Great piece, great link...gonna read more of it later. Need more thinking music. Hmmm Pastrol Suite or Julie London or Deep Forrest..I know 'Er hu' the chinese Violin that works.
Ta many thankums

:-)
Posted by examinator, Friday, 13 March 2009 5:22:06 PM
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Fractelle has pretty much summed up my views on this as well.

Fractelle, you always manage to write what I am thinking but can never express quite so well.
:)
Posted by pelican, Saturday, 14 March 2009 12:55:32 PM
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Fractelle

'Now I expect to be accused of being a human-hater. Not so. I'm just very logical.'

I would say very eluded actually.
Posted by runner, Saturday, 14 March 2009 3:33:54 PM
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Dear examinator,

So you're into the 500 year old Chinese 2-stringed
vertical fiddle - as your 'thinking music,?'

Why not try a book instead?

...Whatever your taste, be it ale, grape, or mead,
Be kind to yourself with a good read.
Pick up the parchment, the scroll, or the book,
A world of enchantment is worth a close look.
Settle in comfort with one, three, or four,
Once you start reading, you'll be begging for more...

Be it murder, adventure, romance, history.
A thriller, who-done-it, or dark mystery.
Science-fiction, fantasy, westerns galore.
All these await you, but wait there's much more ...

Escape through the pages to magical places,
Exciting, exotic, all different oases.
Whatever the tales, be they classics or sellers,
Female and male, or fellows and fellas.
Knights, kings, or dragons, whatever your choice,
Bring them to life, give them a voice.

Spare a few hours, what can you lose?
When you can soar like an eagle,
Not walk like a goose!"

"You're welcome Pappa Bear!"
Foxy Snookums!
Posted by Foxy, Saturday, 14 March 2009 4:30:21 PM
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Foxy
I had a neighbour from Hong Kong
Who used to play the Gong
The gong went BONG
Now the gong has gone
I know this doesn't rhyme
But I hated that bloody gong
:-\

When in Qld I bought a few CD from a brother and sister who were in some orchestra back in China
He plays the fiddle thingy and she plays this thingy that has lots of strings which she hits with long handled wooden spoons…A Chinese Dulcimer (I couldn’t remember the word). The CDs are one on traditional love songs, the other is European classics... It has an other world sound. It seems like some exotic sound fragrance that wafts into your room to willing you into a relaxed thoughtful frame. The perfect reading music.
When you get to an age I might tell you of other thing the music is good for but you’re too young now. Tee hee ;-)

Foxy, the gang and Romany too, ok Pelican and Fractelle, Bronwyn .

By the way it seems that everyone has missed my subtle (?) point. Perhaps I over thunk it.

Everyone answered in terms of today's capitalist perspective. I can't see why the rich countries simply don't agree that products like cocoa and coffee should have an agreed floor price…This would help the poor to feed themselves and advance. Also it would be a start for equable treatment… survival security…forerunner to negotiations about population control…that has to be good for ACC.
As my itallian friend puts it Cabbige?
Posted by examinator, Saturday, 14 March 2009 6:40:03 PM
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Dear examinator,

Ah, the things you can do to music -
whether it's a balalaika, a Chinese 2-stringed
fiddle, a violin, or a full orchestra playing
'Bolero.' Music does stir the body and soul.
Either in dance, like the tango, or listening
to Russian violinist - Maxim Vengerov revisiting
his roots in Siberia on his marvellous DVD, "Living
The Dream." (I highly recommend it).

But back to the subject of this thread...

I fully agree with you. It would be good if there was a
set price. But I realistically can't see it happening
while large multinational companies effectively control
the prices of products.

These retailers pay bargain basement prices. I read
somewhere that "...even Starbucks only has the capacity
to move the market one-tenth of one percent..."
Posted by Foxy, Saturday, 14 March 2009 8:31:12 PM
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Examinator

I extracted the following from Foxy's excellent link:

>>>"... Gates is correct to claim that there can be financial benefits attached to doing good works: a CSR reputation can... attract customers and build more satisfied and productive employees. But these benefits are rarely of sufficient importance to measurably affect a firm’s competitive position. With only a handful of exceptions, consumers still care much more about price, quality, and convenience than they do about a firm’s CSR reputation. ..... Most importantly, both the benefits and costs of CSR programs are rarely considered important by investors. They are typically overshadowed by business decisions and market trends that have nothing to do with a firm’s social responsibility practices. Gates can be justifiably proud of Microsoft’s global good works, but they have played little or no role in to the extraordinary returns the company has historically delivered to its investors. ....

.....As a result, while many firms are now acting, or appear to be acting, more virtuously, few of them have gained a competitive advantage from doing so. Paradoxically, the more firms that do good works, the less likely it is that any particular firm will benefit from a strong CSR reputation."<<<

It is unlikely that the majority of corporations will agree to "do the right thing" when there is little advantage for them. Public approval only works in favour of the firm if it stands out from the crowd.

This is where government regulation has to come to the party. Governments from more prosperous countries could support those in less developed, and set levels where workers are ensured decent pay, conditions and safety. Like anything, it requires a majority to ensure that equity is applied to all workers. When (if ever) this is achieved moving offshore will become a thing of the past.

BTW who owns shares in ANZ? Do you believe your vote at the AGM could've prevented ANZ's current behaviour?
Posted by Fractelle, Sunday, 15 March 2009 10:02:12 AM
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Dear Fractelle,

As always you're right on the money ...
I don't think anything could have swayed the ANZ!
Shocking move, and I really feel sorry for their employees.

Dear examinator,

I went to sleep last night dreaming of your neighbour
from Hong Kong and his gong! So I know this is off-subject
as far as your thread is concerned - and I apologise in
advance but I thought it may put a smile on everyone's
faces on this Sunday Morning. Here goes:

The rhythm of the gong
Does not appeal to many.
But it's music to my ears,
I love its beat, it's steady.

I like to move in motion,
To a slow and rhythmic beat.
However, it's the guy who beats it,
That for me, turns up the heat!

Keep smiling.
Posted by Foxy, Sunday, 15 March 2009 10:57:24 AM
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Fractelle, All
Call me idealistic but we do have to do something on all counts and we need to start now.
From a solution perspective to me the best place to start is where the control and implementation is easiest.
In the case where there is a near cartel i.e. the cocoa market could agree to pay an equitable price for a number of years.
From a self interest perspective this could easily make pr EXCLUSIVE capital.
i.e. “WE saw something that was wrong and did something about it….now the families have all the things we take for granted then run the company names. So when you eat your next ‘el Grosso’ Chocky bar you are helping children in the third world. This would give the peasants time/security to diversify. The Gates foundation et al could provide the support for this diversification. Eventually the floor price could be floated. Rather than as now all that will happen is confidence bubble… more cocoa …leading to lower prices and later greater misery for the t farmer.

Once this is seen to work then other products could be singled out for simular treatment.

Capitalism as it is practiced is based on ever higher expectation of more profits the methode d’jure (the easiest/cheapest the most short sighted [neo liberalism]) means is lesser inputs and production….lesser costing materials, lesser staff et al. Even our choices are being limited by Prado effect on steroids. Go to and shopping centres and what do you see…the chains stores who focus on what they can make the biggest profit on. Consider then 3rd world needs/diseases etc that are ignored because they’re not profitable.

I accept that we can’t attack everything at one i.e. ANZ simply devaluing inputs and study. 4 year on hecs for what a wage of $25k (local Indian grad) the cause of their brain drain.

We do have to start some where we NEED a new perspective to control the tool (Capitalism) as it was intended …help PEOPLE.
We need solutions. This is MY first step a strategy. what’s wrong with it?
Posted by examinator, Sunday, 15 March 2009 3:42:18 PM
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Examinator, I am curious about how you think a floor price on cocoa or coffee will really help. The problem with current prices of these products is supply and demand. There is more supply than there is demand. I remember a time, a couple of decades or more ago, when coffee supply was greatly reduced due to climatic events and wars. Prices climbed steeply until new supply came on line. Then there was a period of oversupply and prices declined.

Australia I seemed to remember once had a floor price for wool did it not. What was the outcome of that? If I remember correctly, it was a wool mountain of nearly 5 million bales that the Australian Wool Corporation was unable to move. In the end, the Corporation had to stop buying wool and remove the floor price as this was sending the Board and ultimately growers broke. In the end it took over a decade and a half to get rid of the wool mountain.

A floor price guarantees inefficient producers a market, even if no one wants their product. Would it not be better to allow them to restructure into another product where demand exists rather than keeping them with the hope that their current enterprise might survive into the future?

Fiddling with markets is a dangerous pastime and needs to be done carefully or you risk disaster. The best thing that could currently happen to the worlds cocoa growers is for some of them to stop growing cocoa. That will reduce supply and increase prices.
Posted by Agronomist, Sunday, 15 March 2009 5:08:04 PM
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Agronomist,
Interesting reply I'll write an answer tomorrow gotta go.
Posted by examinator, Sunday, 15 March 2009 6:17:10 PM
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Agronomist has made the critical points, examinator, but there are just a couple I'd like to expand on.

>>This is MY first step a strategy. what’s wrong with it?<<

The only problem is that it will not work.

Some of the first exercises in practical economics relate to the laws of supply and demand.

While there is absolutely no reason why you cannot put a floor under a commodity's sale price, there is no commensurate compulsion for people to continue to buy at that level.

Demand falls, product either remains unsold or the price has to be reduced until it meets the level at which folk are comfortable.

The oil cartel manipulates the price of their product using another angle on the same laws.

OPEC mandates to its members that they will limit supply. Prices go up, because demand cannot be easily reduced. Industry essentially competes for the privilege of buying - the price is not really an issue; they need oil to stay alive.

Fewer people are addicted to chocolate (surprising as this may be so some people I know) than industry is addicted to oil. Hence, a reduction in supply will not increase as sharply as oil prices.

For greater detail on this - and to prove I'm not making it all up as a part of the capitalist conspiracy - check out the zillions of articles on the elasticity of supply and demand.

Keeping prices low will actually be the greatest assistance to the poorer farmers. Increased trade will eventually solve the problem for them, as their low prices start to take the bread from the mouths of more affluent cocoa producers.
Posted by Pericles, Sunday, 15 March 2009 7:01:38 PM
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I've come across two more websites that may be of
further interest:

"What Price Fair Trade?"

http://www.developments.org.uk/articles/what-price-fair-trade/

and

http://www.hillsidecoffee.ca/fairtrade.html

The sites back up the points Fractelle made in her
posts.
Posted by Foxy, Sunday, 15 March 2009 8:28:52 PM
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I question peoples assertions here that there is more supply than demand for chocolate. If that was true a block of dairy milk would not cost upwards of $4. I wonder if it is more a case of nestle mars etc using their power to manipulate/force the price they want. The discrepancy between cocoa growers profits and the processors profits lend some weight to such a theory.
Posted by mikk, Sunday, 15 March 2009 9:31:04 PM
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examinator
How is your relasion with the mass media? You can create new needs for cocoa and keep the prices high.
wait! you can use a compination of technologies-sciencies to promote cocoa as ...a magic product! You can do it.
What is your primary goal? Farmers benefits, fair international trade of cocoa or simply your profit?
If your goal is the profit give few dollars to some hungry locals to destroy big part of cocoa trees and your profit will jump to the sky! Come on! all capitalists do the same thing. They are good when they have no other choise, but if they can pay mersinaries they will put a friendly government, just to be sure they will destroy the most of cocoa trees!
Ah! I forgot, give some money for the new church, god bless you, you are generous man!
examinator, do you know the trick? You can be good and bad progresive and conservative, fair and not fair simultaneously!
It depends on the place you are, you do business, even you can be good in different places if you can delete temporary your memory from the other places! Come on morality is for the weaks not for capitalists!
Be smart! use your relations with farmers to control the minerals from their country!
Haha, a military base in this country could be helpful to fight the socialist movement from the region!
examinator
do not you know how to steal the wealth from poor countries? use the cocoa to enter in a poor country and later do your job AS USUAL!, NO UNIONS, NO RIGHTS, NO LIMITS!
EVIVA CAPITALISM!
EVIVA BANANA DEMOCRACIES!
You are genious!
Antonis Symeonakis
Adelaide
Posted by ASymeonakis, Sunday, 15 March 2009 9:32:13 PM
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An interesting observation, mikk.

>>I question peoples assertions here that there is more supply than demand for chocolate. If that was true a block of dairy milk would not cost upwards of $4<<

A useful exercise would be to work out how much of the raw material goes into the end-product, which will give you an idea how much the price paid to the grower impacts the price on the shelf.

At my local supermarket, $4 buys you around 100g of chocolate.

The current price of cocoa is around $2250 a tonne, so the raw material content is around 22c. If a glut on the market reduced the "unimpeded" price to $800, the entire impact on the $4 bar would be 14c.

This can be an argument in favour of "fair trade" pricing, of course. If the consumer doesn't notice the difference, why not pay $2250 all the time?

To answer that, you would need to go back to the laws of supply and demand, and examine the longterm impact of maintaining high price levels in the value chain.

For a start, you make cocoa production financially viable for a larger number of people, which encourages new market entrants. Meanwhile, if you have done nothing to stimulate demand at the consumer end, sales volumes will not increase at the same rate. And you end up with a whole load of cocoa beans that you cannot on-sell.

Since you have already asked the consumer to support your high prices, a manufacturer will be reluctant to add more market-expanding marketing costs into the mix, since this will tend to dampen demand even further. Exactly what you don't want.

The other twist is that as more producers enter the supply chain, the fairtrade cooperatives themselves will need financial support, as they will be unable to shift their cocoa mountain. Either that, or they will start to limit - or even discourage - farmer participation.

Altogether, a highly risky business.
Posted by Pericles, Monday, 16 March 2009 8:41:23 AM
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Agronomist,
I think you are talking cross purposes on this post. You may have missed my reference to ‘from a solution context’.
I am well aware of economics and the associated dogma/argument around current orthodoxies. I am also aware of the wool corps attempts at floor pricing and its consequences.
Two points you seemed to have missed are that it is almost the diametric reverse.
• That was an (arrogant) unilateral attempt by one SUPPLIER nation.
• The idea I am positing was based on the almost cartel PURCHASING nature of 90% of product therefore would have more of a chance of success.

This practice has been used before and for a time was successful…The failing aspects BROADLY SPEAKING were twofold.
• It didn’t cover all the supplier countries
• Nor did it have adequate farming diversification follow up internally.
All these could be fixed with appropriate effort.
Given it is in the interests of the supplier countries I can’t see that the issue is beyond arrangement in fact is a win/win with a potential win for the world (previous post to article on population control), Pollution etc.

The problem many readers have with browsing my responses is that it’s easy to miss the context in which I write. Many simply dismiss me as an anti-capitalist, an ill informed left loony. But there is method behind my madness

Many of the arguments are spun/biased full of, labels/jargon all of which tend to confuse and/or limit the possibilities for adjustment. To me the world, the capitalist system as practiced is demonstrably in need of a new paradigm.
The solutions (plural) need to be internalized and supported by the people not imposed from above if they are to succeed. Inherent in that is my humanistic philosophy that in practical term is threefold.
• The current level of Collateral damage is unacceptable
• Circumstances are such that we need solutions to a myriad of indivisible issues. See previous posts.
• While I DON’T have all the answers I do believe I should stir up conversation for alternative solutions. All input appreciated.
Posted by examinator, Monday, 16 March 2009 10:06:23 AM
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Pericles,
Thanks for your observations. As you may remember this topic is a spin off to the Sara Murdoch topic. I refer all reader to the web link posted by you.
http://www.foodfirst.org/en/node/2371. The efforts by Gates etc will end in the ultimate glut of cocoa (supply and demand).
This rattled the memories of the coffee wars in which a similar plan to mine, if half baked solution was used.
As I pointed out to agronomist my plan is reverse of the Wool corp.’s debacle addressing the DEMAND end of the equation.

Do you really believe having spent billions on setting the price of a Chocky bar at $4 the manufactures/retailers will reduce the end price because the raw product is cheaper?
Look up the retail prices of the big instant Coffee players at the time when that raw product price crashed. They simply kept rising.

Having spent billions to set market expectation// building a brand(s) they did four things.
• Split the EXTRA profit between dividends and exec bonuses. This is well documented.
• Increased their advertising against the cheaper brands of instant (as being inferior).
• Created lesser versions and brands (lesser quality of bean) of instant (“to maximize the market”). Paying for extra shelf space to preclude smaller manufactures access to mass markets
• Then raised the prices to offset the advertising (common marketing practice).
Contrary to Yabby’s self correcting view of capitalism the reality is that the larger players distort this function to their advantage and to hell with the farmer and the consumer.

Mikk
There currently isn't a glut but it is likely see the site in the this post..it has all happened before.
Posted by examinator, Monday, 16 March 2009 11:41:20 AM
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*Contrary to Yabby’s self correcting view of capitalism the reality is that the larger players distort this function to their advantage and to hell with the farmer and the consumer.*

Ah Examinator, but that is exactly why we need global competition,
not just local competition, as you suggest with your theory.

Believe me, if you can produce chocolate of the quality of say
Lindt, at a cheaper price, consumers will flock to your door
and knock it down, to buy your product. Lindt is not exactly produced
under low wage conditions.

We have this interessting story unfolding in the WA meat industry.
For years, local processors were in the position to screw farmers,
pay them far less then other Australian farmers for their sheep/lambs,
due to the relative isolation of the WA market. Frankly it was
a total rippoff.

Now WA farmers have cut another 7 million sheep from their herd
and switched production to crops, leaving processors with a shortage
of stock and perhaps not such a bright future.

Eventually the wheel turns, but of course patience is a virtue!
Posted by Yabby, Monday, 16 March 2009 2:22:25 PM
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Examinator, I don’t know what ‘from a solution context’ actually means. It seems to be a meaningless string of words.

Maybe a short digression on the Wool Board/Wool Corporation floor price and its impacts might help make my point. The floor price was brought in initially to smooth out the effects of year to year price fluctuations on wool growers. Many wool growers did not diversify or leave the industry, because they had a guaranteed price (and subject to the ups and downs of weather a guaranteed income). When the Russian wool market collapsed, the Wool Corporation was left with a very large amount of wool and nobody to sell it to.

It wouldn’t have mattered whether other suppliers were covered by a floor price or not. The problem came to a head because demand for the goods collapsed.

No diversification of farming occurred because the scheme allowed inefficient growers to remain in the industry by guaranteeing them an income. It also distorted the relative values of other goods.

Floor prices are indeed a good example of a solution imposed from above. The participants won’t complain of course, because we all like to be given more money, but someone has to wear the cost. In Australia it was worn by growers and the public through direct costs borne by Government and by opportunity costs borne by the agricultural sector.

I see this as a salient lesson in the impacts of fiddling with markets. The outcomes may not be as desired. The Australian wool example is not alone; the EC butter mountain was another. If you artificially raise the price you create opportunities for inefficiency and inhibit growers from reacting to market signals. This is what farming subsidies in the US and EU do now.

There are other types of market intervention we should also guard against. Monopoly buyers is one. This used to be rampant, but is now receding. Dumping is another danger that comes most strongly from large suppliers, like the US and EU, which also have significant farm subsidies. Lastly, there are supply side disasters like Zimbabwe.
Posted by Agronomist, Monday, 16 March 2009 8:28:42 PM
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I think the following link is worth
looking at:

"Cameroon launches cocoa/coffee fund to boost
production, fight poverty."

Posted by African Press International (API)
on February 2, 2008.
by Tansa Musa.

And I quote:

"The government of Cameroon has launched a fund to
offer cheap credit to cocoa and coffee farmers and
increase their output as part of efforts begun
since 2005 to revive the sector and fight rural
poverty, the fund's administrator said on Friday.

Industry experts in the world's fourth biggest
cocoa grower say the National Cocoa and Coffee Fund
(NCCF) will loosen the grip of unlicensed merchants
on cocoa buying in the interior, by reducing farmers'
dependence on the ready cash they offer..."

It's an interesting article, as are the comments that
follow it.

http://africanpress.wordpress.com/2008/02/02/cameroon-launches-cocoacoffee-fund-to-boost-production-fight-poverty/
Posted by Foxy, Monday, 16 March 2009 9:28:10 PM
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Dear Foxy

You link was not found. So unfortunately I couldn't read the article.

I have been thinking about another issue which effects third world farmers and that is while they are growing crops that the multi-national wants they are unable to grow for themselves and their fellow citizens. Also there is the issue of forests and other eco-systems being turned over to large scale farming.

How do we achieve parity between these conflicting systems? Anyone?
Posted by Fractelle, Tuesday, 17 March 2009 9:16:06 AM
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Dear Fractelle,

Try the following as listed below:

africanpress - feb.2,2008 - Cameroon cocoa/coffee fund - Yaounde

Let me know if it doesn't work.
Posted by Foxy, Tuesday, 17 March 2009 10:27:28 AM
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Agronomist,
“Solution context means” the post was supposed to stir up possible solutions to the list of problems or how to make my idea better (positive). Not simply to engage in an ideological rhetoric debate.

Secondly look at the situation like this: In capitalism there are two sides to the equation supply and demand.
In the Wool corp. it was the supply side initiating the floor price. The reasons are irrelevant to the point I’m making.

In the cocoa situation there are countries that grow the stuff SUPPLY.
The World Cocoa Foundation (WCF) are default the major cocoa DEMAND (90% of output).
If the WCF as the buyers (demand) agree on a floor price then the price will level at that. in other posts I offered incentives for them.
Obviously it would take governmental support from supplier countries and other bodies to support quotas and diversifying strategies, Gates foundation etc.
Like I said it is the reverse of the normal supplier initiated floor price.
The ‘floor price’ would be independently monitored and would eventually removed after the growing countries had had sufficient time to establish diversified cropping.

A variation of this has been done with coffee but fell over because among other things it was govt to govt (corruption funds miss spent/diverted etc) and didn’t cover all growing countries.

i.e. Starting point for solutions
Posted by examinator, Tuesday, 17 March 2009 1:18:05 PM
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