Investigative Report: Promises and poverty

from the Sacramento Bee
Starbucks calls its coffee worker-friendly -- but in Ethiopia, a day's pay is a dollar

By Tom Knudson - Bee Staff Writer

GEMADRO, Ethiopia -- Tucked inside a fancy black box, the $26-a-pound Starbucks Black Apron Exclusives coffee promised to be more than just another bag of beans.

Not only was the premium coffee from a remote plantation in Ethiopia "rare, exotic, cherished," according to Starbucks advertising, it was grown in ways that were good for the environment -- and for local people, too.

Companies routinely boast about what they're doing for the planet, in part because guilt-ridden consumers expect as much -- and are willing to pay extra for it. But, in this case, Starbucks' eco-friendly sales pitch does not begin to reflect the complex story of coffee in East Africa.

Inside the front flap of Starbucks' box are African arabica beans grown on a plantation in a threatened mountain rain forest. Behind the lofty phrases on the back label are coffee workers who make less than a dollar a day and a dispute between plantation officials and neighboring tribal people, who accuse the plantation of using their ancestral land and jeopardizing their way of life.

"We used to hunt and fish in there, and also we used to have honeybee hives in trees," one tribal member, Mikael Yatola, said through a translator. "But now we can't do that. ... When we were told to remove our beehives from there, we felt deep sorrow, deep sadness."

25 new U.S. stores per week

Few companies have so dramatically conquered the American retail landscape as Starbucks. Last year, the $7.8 billion company opened an average of 25 new stores a week in the United States alone. Nowhere is Starbucks a more common sight than in environmentally conscious California, which has 2,350 outlets, more than New York, Massachusetts, Florida, Oregon and Washington -- Starbucks' home state -- combined.

No coffee company claims to do more for the environment and Third World farmers than Starbucks either. In full-page ads in the New York Times, in brochures and on its Web page, Starbucks says that it pays premium prices for premium beans, protects tropical forests and enhances the lives of farmers by building schools, clinics and other projects.

In places, Starbucks delivers on those promises, certainly more so than other multinational coffee companies. In parts of Latin America, for instance, its work has helped improve water quality, educate children and protect biodiversity.

Inside many Starbucks outlets across America, the African décor is hard to miss. There are photographs and watercolors of quaint coffee-growing scenes from Ethiopia to Tanzania to Zimbabwe. Yet such images clash with the reality of African life.

They don't show the industrial arm of coffee -- the large farms and estates that encroach on wild forest regions. They don't reveal that even in the best of times in Ethiopia, the birthplace of wild coffee and the source of some of Starbucks' priciest offerings, there is barely enough for the peasant coffee farmers who still grow most of the nation's beans.

Even where Starbucks has built its bricks-and-mortar projects in Ethiopia, poverty remains a cornerstone of life, visible in the soot-stained cooking pots, spindly legs and ragged T-shirts, in the mad scramble of children for a visitor's cookie or empty water bottle.

"We plant coffee, harvest coffee but we never get anything out of it," said Muel Alema, a rail-thin coffee farmer who lives near a Starbucks-funded footbridge spanning a narrow chasm in Ethiopia's famous Sidamo coffee-growing region.

Alema's tattered shirt looked years old. So did his mud-splattered thongs. The red coffee berries he sold to a local buyer last fall were mixed with mountains of others, stripped of their pulp and sold as beans to distant companies -- like other farmers, he did not know which ones -- that made millions selling Sidamo coffee. Only $220 dribbled back to him.

This February, after Alema paid workers to pick the beans and bought grain for his family, just $110 remained -- not enough, he said, to feed his wife and three children, to buy them clothes until the crop ripens again.

'A marketing genius'

Starbucks conveys a different image on the white foil bags of Ethiopia Sidamo whole bean coffee it sells for $10.45 a pound. "Good coffee, doing good," says lettering on the side.

"We believe there's a connection between the farmers who grow our coffees, us and you. That's why we work together with coffee-growing communities -- paying prices that help farmers support their families ... and funding projects like building a bridge in Ethiopia's Sidamo region to help farmers get to market safely. ... By drinking this coffee, you're helping to make a difference."

And while the Sidamo footbridge does make travel safer, it is but a simple yellow-brown concrete slab, 10 paces long.

Dean Cycon, founder of Dean's Beans, an organic coffee company in Massachusetts, calls Starbucks "a marketing genius."

"They put out cleverly crafted material that makes the consumer feel they are doing everything possible," Cycon said. "But there is no institutional commitment. They do it to capture a market and shut up the activists."

Starbucks officials insist such critics have it wrong. As proof, they point to Latin America, the source of the bulk of the company's beans.

"You go to Nariño, Colombia. We built 1,800 (coffee) washing stations and sanitation facilities and homes," said Dub Hay, Starbucks senior vice president for global coffee procurement. "It's literally changed the face of that whole area."

"The same is true throughout Latin America," Hay added. "They call it the Starbucks effect."

Starbucks' dealings in Latin America have drawn some fire. Near the El Triunfo Biosphere Reserve in Chiapas, Mexico, for instance, farmers cut off relations about three years ago over a dispute about selling to an exporter instead of directly to Starbucks. The new arrangement, farmers said, would drain profits from peasant growers.

Starbucks, the farmers charged in a memo to coffee buyers, was supporting "a pseudo-fair trade system, adapted to their own neo-liberal interests, to dismantle structures and advances that we have made."

In an e-mailed response to The Bee, Starbucks vice president for global communications, Frank Kern, wrote that the Chiapas farmers were ultimately "given the opportunity to ship directly to us as they requested, but they were unable to manage it."

Sharper focus on Africa

In Ethiopia, Starbucks says, it spent $25,000 on three footbridges in 2004. The company estimates the structures are used by 70,000 farmers and family members -- about 1 percent of those who depend upon coffee for income. Some Ethiopian coffee leaders say there is a better way to help.

"If we are paid a (coffee) price which is decent, the people can make the bridge on their own," said Tadesse Meskela, general manager of the Oromia Coffee Farmers' Cooperative Union of 100,000 farmers, which has sold to Starbucks. "We don't have to be always beggars."

Starbucks won't disclose what it pays for Ethiopian coffee. Instead, it lumps its purchases together into a global average, which last year was $1.42 a pound, 16 cents more than the Fair Trade minimum. Much of that money, though, never makes it into the pockets of farmers but instead is siphoned off by buyers, processors and other middlemen.

Starbucks executives say they want to shrink that supply chain. "You end up at least five levels removed from the farmer and that's where the money goes," said Hay. "And that's a shame." Hay said that as the company buys more coffee from Africa -- it plans to double its purchases there to 36 million pounds by 2009 -- the commerce will spur more progress.

"That's our goal," Hay said. "Africa is 6 percent of our purchases. ... Seventy percent is from Latin America. So that's where our money has gone."

Making an impact in Ethiopia is undeniably a challenge. Good roads, electricity, potable water don't exist in many places. The climate is often hostile. There are ethnic conflicts, border disputes and rebel movements, and a sea of young faces that gather every time a car stops.