Wednesday, April 18, 2007

Coffee trade and intellectual property

The value of a brand or a manufacturing license is now far more important than a product’s physical production. Also, income from creative products (such as designs, writings or inventions) is entirely due to intangible value.

So reports the Light Years IP website, which today launched a blog on its project with Ethiopian Coffee growers. The blog will give "real-time coverage as they lead a momentous training on Intellectual Property management, bringing together fine coffee stakeholders from across Ethiopia."

This case seems to need a whole econ course. If you talk to Starbucks, the seem to think they have done a lot to help coffee and Ethiopia. If you get the other sides, Starbucks is little more than a greedy corporation. Of course, the Economist warns us of the side effects of fair trade initiatives:

Starbucks also has questions about the different standards of fairness applied by the Fair Trade brand custodians in different parts of the world. It doubts even that the strategy of the Fair Trade movement, to secure farmers a premium over the market price for their beans, is the best basic approach. Starbucks prefers a code known as the CAFE practices (Coffee and Farmer Equity), which aims to help coffee farmers develop sustainable businesses through a mixture of technical support, microfinance loans, and investment in infrastructure and community development where the farmers live.

No opinion here. But I am eager to hear a bit more from the directly affected people rather than another press release from Starbucks or an NGO working on fair trade. Perhaps the Light Years IP blog will give some insight. I will also be reading through the Poor People's Knowledge, that includes a chapter by the founders of Light Years IP. This seems like an idea worth exploring.


Heather Sarkissian said...

Point taken, however this is not about fair trade, the Ethiopian Coffee Trademarking and Licensing Initiative is focused on increasing bargaining power in the international coffee markets and managing asymmetric information- this Initiative is addressing good old market failure. Ethiopians have neither the knowledge of how much their coffee beans sell for once they leave the country nor the power to negotiate with the few heavy weight buyers. IP rights in this case are being used to overcome these two problems. This is applied economics to alleviate poverty in one of the poorest nations in the world. Contact Light Years IP for more information or check out

Pavlusha34 said...

Thanks for the thoughts. I am still exploring these issues...