Coffee Markets in East Africa: Local Responses to Global Challenges or Global Responses to Local Challenges?

By Stefano Ponte,

September 1,2001

Centre For Development Research, Copenhagen University

To what extent is global economic change mediated by national-level policies? Are global corporations adopting the same strategies in different countries or do they address varying local circumstances in different ways? Do governments in developing countries have any meaningful regulatory powers left? How can they use them to the advantage of their citizens? This paper seeks to address some of these issues by studying the dynamics of coffee market reforms in three East African countries against the background of the recent restructuring of the global coffee marketing chain. The paper focuses on two relatively neglected areas of inquiry: (1) changes in the identity, market share and organization of actors involved in commodity markets and their contractual/power relationships in the marketing chain; and (2) changes in the assessment, monitoring, and valuation of quality parameters in commodity trade. The author highlights the consequences of different trajectories of domestic market reforms and assesses the strategic choices available to producing country governments vis à vis corporate power and donor pressure towards liberalization and deregulation.