Sunday, May 29, 2011

Peak Coffee?

Guatemalans grow some of the best coffee in the world, but most can't buy it at home. Neither can tourists. When I was there last I had to wake up on freeze-dried Mexican Nescafe, even though I can buy bags of freshly roasted Guatemalan coffee beans two blocks from my house in Seattle. Less well known than the story of how Europe carved out global empires is how the way Europeans treated their soils helped launch the exploration and history of the New World. Today's globalized agriculture that ships local produce overseas to wealthier markets reflects the legacy of colonial plantations established to help feed European cities.
from Dirt: The Erosion of Civilizations by David Montgomery

There is an article in the Toronto Globe and Mail about the troubles beseiging the worldwide coffee trade. If Peak Oil, Peak Copper, Peak Phosphorus and Peak Water haven't got you down, it looks like we've reached Peak Coffee:

Coffee, with it's cousins sugar, tobacco, tea and chocolate, are the ultimate export food crops. They are desired in wealthy European countires but can only be grown in the tropics. The appetite for these foodstuffs (and cotton), drove European mercantalism leading to the first global economy powered by wind. Basically, the best agricultural land in tropical countries is devoted to growing export crops for Europe and North America, which is why the people in these countries are starving and dependant upon foreign aid, i.e. imported grain. Basically, they send us coffee and chocolate and we dump on them all the excess grain US farmers are paid to grow. Imported subsidized grain puts local small farmers out of business, and their land is bought up by multinational corporations to grow food for the export market. Because the land is owned by foreign corporations, governments of these countries cannot even derive tax revenue from the productivity of their own land. Any foreign leader questioning this arrangment will find himself summarily overthrown. They are called Banana Republics for a reason.

In any case, the reason coffee is getting rarer is the same reason every resource on earth is getting rarer. Get used to hearing the following factors for every commodity, with different items being substituted:

1. Lowered supplies due to Climate Change.
2. Increased demand from China, India, and Brazil (among others).
3. Speculative bubbles driven by wealthy investors looking for high returns.

How long can this continue? As Jeremy Grantham proclaimed, we need to wake up, the era of cheap commodities is over forever. We are up against the earth's limits, and it's likely we will need to adjust our lifestyles accordingly.

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