Technology and globalisation: Who gains when commodities are de-commodified?

By Raphael Kaplinsky and Robert Fitter,
July 1, 2002
Institute of Development Studies
University of Sussex


Like many primary products, coffee has long been characterised as a commodity with falling terms of trade and volatile prices. Yet, in recent years, there has been growing product differentiation in final markets, with premium prices being earned and high and sustainable incomes being provided. So far, these product rents have been almost entirely appropriated by residents of high-income economies. However, to the extent that growers can learn to improve their product through the systematic application of knowledge throughout the value chain, and consumers are taught to recognise that product variety and quality are determined in the growing rather than the roasting stage of the chain, an alternative outcome is possible. This paper outlines the necessary knowledge flows and concludes with an assessment of who needs to do what if this more favourable outcome for growers is to be realised.