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The Great Manhattan Africa Luxury Coffee Tour

Welcome to Manhattan, tourists! Today’s tour will accomplish three things: (1) you will find great coffee places, (2) you will find great coffees from Africa, and (3) you will end poverty in Africa. OK, both coffee people and aid people tend to exaggerate, so don’t take (3) literally, unless you are from the Earth Institute.

View New York Luxury Coffee Africa Tour in a larger map

What better place to begin Manhattan coffee mania than at Stumptown Coffee Shop? This place takes African coffee so seriously, there are two varieties from Burundi and two from Rwanda, and if you give up your first born child,  you can take back a pound of beans to Ohio.

Next is Café Grumpy, where they have a $10,000 machine to brew the clean, sweet, complex $12 cup of coffee from Nekisse, Ethiopia.

Down 7th Avenue to Irving Farm (Go Rwanda!). {Full disclosure: I have a personal connection to Irving, but they’re great anyway.} On to Third Rail, rated the best coffee in Manhattan by somebody, and also selling killer Yirgacheffe from the birthplace of coffee. And no, they don’t have a bathroom — this is Manhattan, you can pee when you get back to Iowa.

Moving east we get to La Colombe, accidentally discovered by coffee-illiterate Chris Blattman next to his office. They sell coffee labelled Afrique, which I am pretty sure is in Africa. Sometimes there’s a bit of a wait. What part did you not understand about “no bathroom”?

And then just a little further east is Gimmee Coffee, which turns Rwandan coffee into espresso so delicious and thick that you stir it with the hunting knife you brought from Idaho.

Even farther east is the Roasting Plant in a gentrifying former immigrant slum on the Lower East Side.  It embodies the coffee-phile obsession with fresh roasted coffee, so your $24/lb Ethiopian Harrar turned brown right before we walked in.

Now that you’ve drunk enough coffee, reach with your shaking hands for your Gold Card to buy yet more coffee beans. Whole Foods, Dean and Deluca, and even Murray’s Cheese Shop sell Fair Trade, which is almost as good as Unfair Trade for transferring income from rich NYC to Kayanza, Burundi.

If you want to keep things simple, tourists, our last stop is Porto Rico Coffee Importers, which sells many African coffees,  but no spiel on “helping the poor Africans”.

Manhattan’s pampered and discriminating coffee fanatics don’t buy from African producers out of pity, they buy from African producers because they supply wonderful coffee.

Thanks for coming, tourists, have a nice trip back to Indiana. Don’t forget mail order.

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  1. Jag wrote:

    Some Questions:
    What is the developing country coffee grower’s share of the final retail price?
    Is this share of final price higher than before and better than the share of final price from an alternate channel?
    Is the grower getting a higher price from these buyers in comparison to other potential buyers?

    Posted May 4, 2011 at 1:50 am | Permalink
  2. geckonomist wrote:

    Suppose you want do “do-good” in the coffee business, shouldn’t you ask yourself:

    Why are robusta coffee farmers never in any “fair trade” system?

    They are by default much poorer than arabica farmers, and must compete and work much harder for their smaller income.

    Posted May 4, 2011 at 5:22 am | Permalink
  3. geckonomist wrote:

    it goes without saying that if you want to “do-good”, you ought to demand free trade, not any value-destroying “fair” trade scam, giving perverse incentives to some lucky few.

    Posted May 4, 2011 at 5:26 am | Permalink
  4. Mike wrote:


    I’m not saying you’re wrong, but I really don’t think it “goes without saying”.

    The Fair Trade movement’s growing which suggests that, whatever the reality/theory, more and more people believe in it. Meanwhile free trade has become tainted in people’s minds along the following lines:

    Free trade = deregulation = boom and bust, with specific connotations to the financial crisis we’ve just seen. That’s how plenty of people are thinking in Britain anyway.

    Again, my point is not about the merits of “Fair vs free” trade, but that if you believe the case for the latter is obvious, you’ve still got plenty of people to convince.

    Posted May 4, 2011 at 6:17 am | Permalink
  5. Tom Cushman wrote:

    African coffee can be excellent and should be consumed for its flavor. If you want to help development in Africa buy more African coffee.
    Fair Trade is greenwash. Pay an agency in Germany a percentage of your gross to give you that all important 3rd party cover then charge the moon to those same suckers who send money to STC or buy Toms shoes to get that extra good feeling while spending double and building retail margins.
    Im with the Geckonomist this time. If you dont like the term free trade call it fair deal. The FLO Fair Trade model has no economic future as long as it excludes local business facilitators (those evil middlemen), insists on organizing producers into associations who are then beholden to foreign buyers for advance payment of purchases and capital and puts an irrational (usually minute) premium on generic product.
    Im a big fan of fair deals and have put my money where my mouth is for 20 years while dealing in African countries.
    Fair Trade is to my mind an ultimate Sachism. Big plans by well meaning, far away, non revenue dependent entities who know what is best for the natives. The deal crashes eventually when the the charity premium money goes away and the participants need to compete on product or service or marketing.
    The people who make out big on Fair Trade are the retailers who sell it and the NGOs who promote it.
    Even in NYC $12 for a cup of coffee is unsustainable. Cafe Grumpy’s storefront will have a new tenant next year.

    Posted May 4, 2011 at 8:57 am | Permalink
  6. Maxamed wrote:

    the fundamental thing about Fair Trade is that it tries to get around the problem of “price maker” and “price takers”. The large international companies that import coffee and the chains of coffee stores set the price. But farmers have no control over the price of their own products. free trade is a false fantasy. poor people are not empowered by free trade, especially if that trade has been going on for a long time. Its not that trade is a slave and we must set it free, its always that trade must be “freer”. Plus this is agriculture, its does not always fit the general economic assumptions. farmers aren’t going to stop farming if they get a lower price for their coffee, they are going to keep farming until they have no choice but to stop.

    Posted May 4, 2011 at 9:23 am | Permalink
  7. M wrote:

    I agree – Fair Trade is just a way to make lots of money and distorts the free market.

    And why do I have to be concerned with some guy getting paid a ‘fair wage’. If he works for it and I pay for it, aren’t we all happy? I mean, when we relied on slave labour, cotton was so cheap, while the price has now been jacked up by some pie-in-the-sky Quakers. Why can’t they just let the market set the price of labor and go on with our lives?

    You know what else gets me? Dolphin-free tuna. Where do they get off? All that does is make sure that hardworking fishermen have to work harder to keep those ridiculous mammals (what ARE they doing in those nets?) while making some do-gooder consumers feel happy that they aren’t eating something that is probably delicious anyway. It probably only benefits some guy in Switzerland who puts a stamp on these things.

    And don’t get me started on unleaded gasoline…

    Posted May 4, 2011 at 10:50 am | Permalink
  8. Katie Braden wrote:

    I think it would be great if Americans could support Africa more through buying their goods than by simply “bringing awareness.” Yes, buying Ethiopian coffee is a selfish morning delight, but in the end it does end up helping a farmer in Ethiopia. This just goes to prove that free markets help everyone. Americans should be conscious of the impact that they can make by buying commodities from developing countries, and instead of making a donation, you’re actually receiving something that you want in return. Although hedonistic, I hate to say it, but more Americans would buy a $5 coffee from Africa than give $5 to an organization. Sad but true.

    Posted May 4, 2011 at 12:41 pm | Permalink
  9. Elliot Wright wrote:

    I think most of these places are trading just as much, if not more, on the cache of “artisinal” coffee and treating it like wine with its own terrior, than on Fair Trade. It’s directed towards coffee connoisseurs. I mean look at the description on the $12 cup, the word “fair” is absent, and it could have come straight from the back of a wine bottle. And “Direct Trade Micro-Selection” is more a badge of exclusivity and authenticity than fairness, implying that the coffee shop owner travelled to Ethiopia and discovered this amazing, unique coffee from a small farmer and brought it back here just for you and all the other coffee nerds in Manhattan.

    What these prices say to me more than anything else is the small fraction commodities make up in final product prices, even things as simple as coffee. The lb of green Harrar coffee beans I bought here in Addis Ababa last week cost me ~$3.60 (it was a third of that less than a year ago, but that’s a whole other story). So the remaining services to put that bag of fresh roasted coffee on a shelf on the LES account for 85% of the price.

    Posted May 4, 2011 at 2:16 pm | Permalink
  10. Vivek Nemana wrote:

    I don’t think Fair Trade and Free Trade have to necessarily be mutually exclusive. Fair trade by nature cannot be “imposed” by a government regime, so it functions as a process within a free market framework. Fair trade consumers choose to pay a premium for ethical and environmental externalities they believe their product will have.

    I’ve criticized TOMS shoes and all, so this might seem hypocritical. However I think fair trade is different from BOGO aid and stuff like that in one crucial respect: negative externalities. Fair trade products, which are sourced directly from a specified production process, don’t have an impact on local markets the way TOMS, which essentially dumps shoes, does. It generates revenues in poor countries and, besides, is eco-friendly and particularly empowering to women. Yes I’ve heard the price distortion argument against higher-priced fair trade goods, but I don’t think it is valid as it ignores price differentiation and the lack of a competitive market between producers and intermediaries. Besides, fair trade goods are and will always continue to be a small fraction of the market as a whole.

    The most important thing that fair trade does is insure farmers against market failures — this is more helpful than the slight wage premium that fair trade farmers get, since coffee growing is slow to respond to price fluctuations and is prone to positive feedback loops.

    I also think, for the record, that it’s silly to say that farmers are “forced” into working fair trade or that fisherman are “forced” to work extra to provide dolphin-free tuna. Aren’t they choosing to do this too? And besides, it’s worth remembering that a free market does not mean equal market power.

    The point here is that, while fair trade may not generate as much additional revenue for African farmers as Western consumers like to believe, it does have a positive impact on some farmers and the environment without hurting non-fair trade producers. And since it is a market process of its own, fair trade won’t interfere with the reduction of trade barriers like tariffs and subsidies — something that is regulated by governments. Anything that provides more market diversity without bringing in too many negative externalities is a good thing, and I have yet to see convincing evidence that fair trade doesn’t fall under this umbrella.

    Posted May 4, 2011 at 2:35 pm | Permalink
  11. Melissa wrote:

    This wreaks of being another very fashionable attempt at helping people in Africa. The everyday Manhattan tourist really has no idea how their $12.00 cup of coffee really does translate to promoting development. Your entire $12.00 is not now going straight to someone in need in Africa, not even close. It is certainly a giant leap from how exploitative the coffee industry has been in the past, but selling $12.00 CUPS of coffee sold in Manhattan are not going to start building schools and houses for those who are in need in Africa. If you really want to help, find an organization that supports a cause that means something to you, do some research, and send a check.

    Posted May 4, 2011 at 4:43 pm | Permalink
  12. Maxamed wrote:

    I would like to just agree with what Vivek Nemana said. Especially the last paragraph. Small land holding farmers (which most African farmers are) do NOT have market power. In fact farmers in the United States do not have market power, look at all the dairy farmers going out of business, but Dannon however seems to be doing fine. “Free markets [DO NOT] help everyone.”.

    Posted May 4, 2011 at 5:30 pm | Permalink
  13. Jonathan wrote:

    I do not have a problem with trying to get a larger percentage of money into the hands of coffee farmers nor do I think its a bad idea to have some sort of safety net to prevent against the inevitable price shocks. What I do have a problem with is the intermediaries involved in the “Fair Trade” scheme. For one, often, Western sanctioning bodies are for profit organizations, which seems to, at least partly, defeat the purpose. The other is the fact that it is ostensibly a subsidy and generally (generally, not always) subsidies are eventually taken away and people are unhappy.

    I spoke to a director of a fair trade group in California last year that organizes cooperatives in Latin America. After her talk, I asked how they determine the fair trade price to provide to farmers. I assumed that it would be based on some sort of 12-24 month moving average, that way, while farmers may not always receive a premium, the also wouldn’t be subject to market volatility. I was told, “oh no, because if the market price starts to rise above that agreed upon price than they would be upset”. Clearly it’s tough to satisfy everyone here.

    Coffee in particular is a product with a lengthy supply chain, which makes this type of transaction even more difficult. Ideally, a coffee company would pay it’s producers a living wage, offer training, environmental education, perhaps inputs and the Western consumer would pay the difference (wishful thinking I know). As much grief as Starbucks gets, they have had some successes here. Unfortunately, fair trade seems to be more of a subsidy to me and that is probably not sustainable in the long term.

    Posted May 4, 2011 at 5:50 pm | Permalink
  14. coffeecon wrote:

    Hey everybody, several comments and observations, speaking as somebody who works in the coffee industry in the countries mentioned quite humorously above:
    1. Fair Trade does NOT guarantee a minimum price to producers — only to a cooperative organization. Management inefficiencies, graft, and overhead can reduce this premium to farmers to zero pretty quickly.
    2. Farmers are actually quite savvy price takers. Does the “coyote” model exist whereby local traders take advantage of small farmers? Absolutely, but the story is often more complex. These traders often serve as a source of cheap cash and will be crops prior to the 10-12 week harvest season far in advance, thereby assuming a fair amount of risk in exchange for paying lower prices. The story becomes even more complex in countries such as Ethiopia where coffee is such a culturally and economically dominant commodity. People will often choose to process their coffee in ways that destroy significant value due to the fact that they are unbanked and can stash the coffee under a mattress to serve as a substitute cash source 6 months down the road.
    3. Competition (free trade) does work. Areas in Rwanda with a greater number of buyers seeking to purchase a scarce good (coffee) end up paying higher prices than other less competitive areas.
    4. The industry is very cognizant of the farmers’ share of the cash in the value chain, and sees addressing this as critical to ensuring their own viability. Coffee is increasingly not a desirable crop to grow in many coffee origins these days due to historical undervaluation. Only by addressing this imbalance will roasters manage to ensure their long term success. I think some companies are more honest than others regarding how they want to address the problem, but everybody is aware of the challenge.
    5. It’s a general truth that high end specialty quality coffees receive more money than fair trade coffees do (though occasionally a top notch coffee may coincidentally be certified). Another argument in favor of the market deciding.
    6. Setting aside PPP normalization and arguments of relative poverty versus absolute poverty, I would argue that fair trade premiums often benefit farmers that need the premiums less. Look at the definition of “smallholders” in Latin America (<10HA) vs smallholders in Africa (<0.5HA), and then the proportion of Fair Trade coffee that comes from Latin America versus other origins. I think there is a slight disconnect between the (very slickly done) marketing of some of the certification schemes and the reality of the impact.

    Just a few random thoughts. Thanks for the post, Bill. Anything that gets a few Manhattanites (or Iowans) buying more African coffee helps us out in the long run! Though it sounds as if you guys could potentially use some help on the water and sanitation front…

    Posted May 5, 2011 at 4:25 am | Permalink
  15. Jeremy wrote:

    What happened when the World Bank, USAID and the Ford Foundation combined to support a very rare coffee in Uganda? Well, it didn’t end up in NYC, that’s for sure. Read about it at our blog, please.

    Posted May 5, 2011 at 5:14 am | Permalink
  16. Vivek Nemana wrote:

    Jonathan and coffeecon, thanks for your comment.s You make a good point saying that there is something wrong with the middlemen (Fair Trade Certification is troubled enterprise since it is for-profit and often too expensive for many producers who do actually provide livable wages and engage in environmentally sustainable methods). I certainly don’t mean to say it’s flawless, because it’s clearly not.

    But I don’t understand how it’s quite a subsidy, since it’s essentially consumers choosing to pay a premium, rather that it being enforced by regulation (if there ever was the freak EXTREMELY unlikely occasion of the US gov’t requiring all coffee to be fair trade, then we’d have a major problem). And sure, fair trade farmers will be upset if they have to go back to non-fair trade production and lose whatever benefits they were getting, but it’s not as though they can no longer use their skills.

    Isn’t fair trade, then, simply a niche market in the way, say, Kobe beef is a niche market? You’re paying extra because you like the way you think it’s produced. I’m certainly not arguing that fair trade is a magic solution, but I just don’t see how it’s a problem. Is anybody really hurt because of fair trade, provided that free trade still continues?

    And coffeecon, I’m starting a coop that provides ethically-sourced bottled water from the Hudson River. For just $8 a quart fresh from America’s Rhine. We take public transit to reach the river basin and fill all bottles by hand, so it’s environmentally sustainable too! Sure the water may contain radioactive waste and trace amounts of dead bodies, but please keep in mind that the proceeds go to struggling college students forced to accept unpaid internships by (non)employers greedy for profits.

    For the record, DRI isn’t one of those employers.

    Posted May 5, 2011 at 3:31 pm | Permalink
  17. joe wrote:

    Yeah. Well, I still wish those farmers could find something better to grow than cash crops, even if they can retail at $12 a cup.

    But then I’m a hypocrite. Pass the Americano.

    Posted May 5, 2011 at 4:20 pm | Permalink
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    Posted May 5, 2011 at 9:58 pm | Permalink
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  22. Fair Trade is to my mind an ultimate Sachism. Big plans by well meaning, far away, non revenue dependent entities who know what is best for the natives.

    Posted May 9, 2011 at 6:03 am | Permalink

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    The Aid Watch blog is a project of New York University's Development Research Institute (DRI). This blog is principally written by William Easterly, author of "The Elusive Quest for Growth: Economists' Adventures and Misadventures in the Tropics" and "The White Man's Burden: Why the West's Efforts to Aid the Rest Have Done So Much Ill and So Little Good," and Professor of Economics at NYU. It is co-written by Laura Freschi and by occasional guest bloggers. Our work is based on the idea that more aid will reach the poor the more people are watching aid.

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