pursuit of happiness
Chapter 4 assignment
International Businesses
Coffee is the resource I chose which is in high demand in north America and is primary resource produced in Ethiopia. The Ethiopian economy is heavily dependent on the trade of its primary products. Coffee is one of them which alone generates about 60 percent of Ethiopia’s total export earnings. Indeed, coffee is closely tied to the culture and society of Ethiopia and an estimated 15 million people are directly or indirectly involved in the Ethiopian coffee industry. Some of the world’s finest coffees originate in Ethiopia. These coffees have a unique flavor that distinguishes them from coffees of other countries or even from other coffees of Ethiopia. This African nation enjoys a strong reputation for its heritage coffees which command a very high retail price in the international market. However, only 5 to 10 percent of the retail price actually goes back to Ethiopia; most of the profit is shared by distributors and middlemen in the marketing sector. In wealthy countries, a cup of cappuccino may be sold at US$ 4, but many coffee growers in Ethiopia and other developing countries earn less than a dollar a day. There are instances where farmers abandoned coffee production due to low returns and engaged in growing more profitable narcotic plants.
Solutions that have been done to narrow down this gap between the retail price and the return to the producers, the Ethiopian government is trying to use a range of intellectual property rights (IPRs) to differentiate their coffee in the market place and achieve higher returns. In 2004, the government launched the Ethiopian Coffee Trademarking and Licensing Initiative to provide a practical solution to overcome the longstanding divide between what coffee farmers receive for a sack of their beans and what retailers charge for that coffee when they sell it in retail outlets in different countries. solutions that have been done by the producers is stop the production of
International Businesses
Coffee is the resource I chose which is in high demand in north America and is primary resource produced in Ethiopia. The Ethiopian economy is heavily dependent on the trade of its primary products. Coffee is one of them which alone generates about 60 percent of Ethiopia’s total export earnings. Indeed, coffee is closely tied to the culture and society of Ethiopia and an estimated 15 million people are directly or indirectly involved in the Ethiopian coffee industry. Some of the world’s finest coffees originate in Ethiopia. These coffees have a unique flavor that distinguishes them from coffees of other countries or even from other coffees of Ethiopia. This African nation enjoys a strong reputation for its heritage coffees which command a very high retail price in the international market. However, only 5 to 10 percent of the retail price actually goes back to Ethiopia; most of the profit is shared by distributors and middlemen in the marketing sector. In wealthy countries, a cup of cappuccino may be sold at US$ 4, but many coffee growers in Ethiopia and other developing countries earn less than a dollar a day. There are instances where farmers abandoned coffee production due to low returns and engaged in growing more profitable narcotic plants.
Solutions that have been done to narrow down this gap between the retail price and the return to the producers, the Ethiopian government is trying to use a range of intellectual property rights (IPRs) to differentiate their coffee in the market place and achieve higher returns. In 2004, the government launched the Ethiopian Coffee Trademarking and Licensing Initiative to provide a practical solution to overcome the longstanding divide between what coffee farmers receive for a sack of their beans and what retailers charge for that coffee when they sell it in retail outlets in different countries. solutions that have been done by the producers is stop the production of