By: Solomon Kronberg, BA Economics and Comparative Cultures & Politics 2022
For all four of my years in Spartan Global, coffee has been key to our organizational identity. So much of our direct trade work occurs in Guatemala that a close relationship with the magic bean was inevitable. Indeed, providing investment to localize more of the coffee processing chain with small farmers and cooperatives remains an effective way to help our partners reap more benefits from their hard work.
South American farmers grow most of the world’s coffee by far. However, other parts of the world are attempting to enter the market as global demand for beans increases. I have been living in northern Thailand for part of this Fall Semester. While I miss home dearly, I encountered a surprisingly familiar sight upon arrival in my new home, Chiang Rai. Coffee shops line every street, filled with patrons excited to sample local baristas latest creations.
Talking with my new colleagues and traveling more extensively confirmed that coffee has skyrocketed in popularity over the last decade. The Thai government introduced the plant as recently as the 1970s to provide viable alternative crops to the previously lucrative Opium Poppy, another commodity that emerged from trade with Western powers. The northern provinces’ cooler temperatures, even more temperate in its foggy mountains, are highly suitable for Arabica production. Aso, these areas are home to Thailand’s Hill Tribes, ethnic groups that core Thailand has tended to ostracize. Robusta production has also increased in the southern provinces. In both cases, coffee’s potential as a state-approved product suitable for export and open for investment has been oft-touted as the solution to poverty, especially in the north.
The truth has been more complicated. While most of the post-introduction coffee has been consumed domestically, the lion’s share of the market has gone to industrial Robusta growers in the South. The Thai government has championed an intensive agricultural regime for most southern crops, and coffee is no exception. This means monocropping, paired with the use of industrial pesticides, which inevitably leads to landscape degradation. While the North’s Arabica is high-quality, producers encounter many of the same issues as small-scale farmers elsewhere: potentially exploitative processing chains and low returns that make investment difficult.
However, the more recent boom in local cafes and specialty roasteries has begun to show movement towards a more equitable market, especially in the north. I’ve had the honor of meeting several entrepreneurs growing direct-trade coffee businesses, attempting to bridge the gap between mountain-based growers and new shops in the valleys. This is something of a unique situation; most countries currently producing high-quality coffee tend to find themselves beholden to the overwhelming demand from the West, limiting the market capacity for a domestic specialty market that would distribute benefit to more local people. In this sense, Thailand’s relatively late entry into the world of coffee may be a blessing; that is if business people like my new friends continue to do their crucial work.