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Government Role in Americans Favorite Morning Pick Me Up
In America most households' kitchens start off morning with the smell and sounds of coffee
being brewed. Thanks to the coffee industry that keeps a steady flow of importation of beans to
ensure that Americans have their morning cup of joe. As with any major industry within the
United States the government has been involved in the coffee industry by imposing quality
controls measures to ensure the coffee beans being imported are not going to harm people. The
government has also put taxation and set certain locations on where the import of coffee beans
can occur. By the government impose taxes on the import of coffee beans could protentional
harm the supply chain for this highly desired import by sitting down and coming to common
grounds with those countries that export coffee through treaties.
Government role during imposing restrictions or bans is caused by either political
disagreements or due to heath concerns and the government is trying to gain some sort of quality
control. While these may affect the supply chain and the demand of coffee beans and the prices
as well. The government views this as a necessary risk to ensure that people will not be harmed
by bad or dangerous coffee beans. But one thing to keep in mind when it comes to restrictions
and bans is that they are not always put in place to stay and usually get taken away or lifted once
proper corrective actions have been taken. But this is not always so easily done for example most
of the areas where coffee beans are grown are not as developed as those countries that import the
beans which makes taken some of the actions required to lifted bans harder than one might think.
One example of this would be pest control measures “they lack the capacity to acquire
alternative chemicals to control pests and diseases. Often, the proposed pest control chemicals
are way too expensive making compliance a big challenge.” (R. Caretti, 2016). The result of
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these challenges the coffee bean farmers face is that it will affect the supply chain which in
return will cause prices to go up for everyone trying to enjoy that morning cup of coffee to get
them ready to take on the day. Another area that the government had to set regulations on the
coffee industry is when the prices fall so low that the farmers of these beans cannot afford to
maintain the cost of processing the beans and maintain their way of life. “All these scaled
companies will have pay more or none of them will, starting with the biggest commodity
purchasers. And the only way to make them act in a way counter to their financial interests—a
way they claim to agree with—is to make them. And that means regulation (Z. Cadwalader,
2019).
The government tries to gain control over industries through trade control one of the
ways the government does this is by trade bans and vetting processes during importation of
products. What this would look like for the coffee industry is keep up with which farmers or
countries have trade bans imposed on them and should refrain from working with those people.
Due to the nature of bans can be removed or could be written in a way that they stay for the
foreseeable future. For example, “They can be lifted anytime as long as it can be demonstrated
that governments in power are no longer a threat to global security and wellbeing (R. Caretti,
2016). Another way that governments can try to gain some control over the trade of coffee is
through treaties or agreements between the exporting countries and the importing countries. The
agreements involved both importing and exporting countries and helped to limite excess supplies
using a quota system and price controls (Peped,2022). Treaties are only good if everyone
involved still agrees on the treaties and keeps to their word. As for the coffee industry when the
agreements
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fell apart the affect cause the prices to drop to the point that framers could not produce enough to
cover the cost of produce the beans. As a result of the price drop being so drastic the government
went to their next step and tried to create regulations for fair trade to help gain control over the
prices reduced in prices to help the farmers be able to produce the beans and trade them for a
price that will allow them to cover their cost of production of the beans but also to help aid in the
area of helping them make enough money to sustain their way of life and provide for their
families as well. Some examples of how fair-trade policies could help the farmers of coffee
beans would be “Fair trade measures guarantee farmers a fixed minimum price for their coffee.
Fair trade prices can be as much as two or three times the unsubsidized market price
(Peped,2022). Another additional benefit of fair trade to the famers would that they could skip a
step in the normal process of exporting the product. That step they could skip would be instead
of selling to a middleman which buys the beans from the farmers then resells the major
companies that try to import coffee beans. The farmers could just sell directly to the companies
or people who look to import the beans.
With the United States being one of the biggest if not the biggest importers of coffee the
government feels the need to manage the trade and try to keep them rate of import of these
highly desirable beans more than the consumption. The reason for this is without control the
prices of coffee beans would like to reduce to those dangerous lows. If that happened again most
of the farmers would be forced to either try to make enough to cover their cost or they would
move on and start producing another crop that would make better profit for them “If the
producers yield, their returns reduce significantly and this affects the farmers. When low global
prices persist over time, farmers get discouraged and opt to grow other crops (R. Caretti, 2016).
This will cause a huge supply chain issue and based on basic cause and effect would drive the
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prices for not only the importer but also the consumer to skyrocket. Then if nothing else is done
there will eventually be no more coffee beans due to the farmers in the areas where the beans are
grown have all move on to other crops that they can trade for export at a price that allows them
to cover their cost of production and provide for their family.
Through some help from the government with their regulations over vetting the importation of
coffee beans and ensuring they are not going to harm people has helped keep a steady flow
keeping Americans desire for these beans. To long with this the government involvement in the
trade control has allowed for prices to remain in a range where most are content with how much
they are either paying in importation or exporting. Americans can rest at ease that with polices
and regulations in place there will continue to be those highly desirable beans to help keep
people going through the busy lifestyles and long days.
References:
How Government’s Role in Coffee Import Influences Coffee Production and Supply
Chains?
https://www.economicjournal.co.uk/2016/08/how-governments-role-in-coffee-import-
influences-coffee-production-and-supply-chains/
It’s Time To Regulate The Coffee Market
https://sprudge.com/its-time-to-regulate-the-coffee-market-146879.html
The Coffee Market
http://peped.org/economicinvestigations/the-coffee-market/
