The Influence Of The Coffee Industry In Indonesia

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Indonesia is a country that has experienced more than enough colonization, exploitation, and the like over its extensive history. Part of what the Dutch called the “East Indies”, which Columbus mistook as being where he first landed in the New World, is now modern Indonesia. Not only has Indonesian culture and economic standing been influenced by this history, but much of its industry was also spurred by the Dutch during their over 200-year reign, leading to the development of tropical exotic cash crops for export, especially the farming and processing of coffee beans. This history has had a long legacy of influencing not only the coffee industry, but also the supply chains and stakeholders it flows through. This trapeze act that coffee undergoes …show more content…
From determining which coffee varieties to plant to transport of the good to its eventual consumption; farmers, governments, and multi-national corporations can sway far-reaching policies and prices. The trade networks in place, whether traditional or “modern”, also can have ramifications for the well-being of the farmers as well as the state of the environment. As the Indonesian government, known for being one of the most corrupt in the world, takes more interest in the coffee industry as it becomes an ever more lucrative export product (and thus source of tariff/tax income), this can eat into the price and demand for their product farmers can command. The growing displacement of traditional trade networks in favor of larger, more globalized supply chains to major purchasers such as Starbucks can lead to the impoverishment of coffee farmers and destruction of the locally organized credit-lending institutions upon which farmers rely for selling and reinvestment into their …show more content…
In many other coffee-producing regions and countries, such as Brazil, massive sun-drenched plantations are the modus operandi of large coffee agriculture. These farms are usually flush with capital, foreign-owned, and can influence the price of coffee on their own due to their sheer scale. This is not so in Indonesia. The average coffee farmer has around 1 hectare, and coffee is generally passed down a long supply chain, where it “is not uncommon for coffee to change hands three or four times before reaching processing mills or exporters” (Neilson, 1613). Surprisingly though, with so many hands in the basket, so to say; “traditional coffee marketing networks do in fact function relatively efficiently, transferring most of the export price to farmers” (Neilson, 1614). These systems, efficient as they may be, are nonetheless being ravaged by globalization and outside pressures from multi-national firms who imagine a different string of supply networks. Under the traditional system, most farmers choose to use shade-growing and organic farming methods out of practicality, low cost, and other reasons, and have done so for decades. With new market certifications, however, most farmers cannot afford to continue marketing their coffee as such. These certifications, it can be argued, are an attempt for western producers to create and even invent new premium market segments, passing along

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