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(FINAL CALL) Ethiopia triumphs over Starbucks; wins rights to coffee

Ethiopia triumphs over Starbucks; wins rights to coffee
By Emad Mekay and Jim Lobe
Updated Jul 18, 2007, 11:02 am

WASHINGTON (IPS/GIN) - A deal between Starbucks and Ethiopia that ends their trademark dispute and offers more benefits to Ethiopian coffee farmers has been hailed as a potential model for other poor nations to follow. The deal allows Ethiopia to better use the modern trading system and especially the system’s often-controversial intellectual property rights provisions.

“This agreement represents a business approach in step with 21st-century standards in its concern for rights rather than charity and for greater equity in supply chains rather than short-term profits,” said Raymond C. Offenheiser, president of Oxfam America, an advocacy organization that has been campaigning on behalf of Ethiopia since last October.

“Harnessing market forces and allowing poor countries to benefit from intellectual property rights are keys to creating fairer and more equitable trade. In a modern economy, companies must bring their business models in line with the demands of good corporate citizenship, which goes beyond traditional philanthropic approaches to dealing with poverty,” he added.

Activists say that developing countries can now tap intellectual property rights to increase export revenues and improve the security of that income.

The Ethiopians’ strategy of patenting their coffee could show the way to other countries that remain mired in poverty even as Western corporations get rich off their products. One key aspect of the Ethiopian experience is that they worked from within the modern intellectual property system to help poor farmers.

“Ethiopia’s initiative shines a new light on such arrangements between powerful buyers and their developing world suppliers,” said Ron Layton, founder of Light Years IP, a Washington-based nonprofit organization that is dedicated to the use of intellectual property rights to help the poorest countries.

Traditionally, intellectual property rights have been used to benefit international corporations and have been blamed for keeping life-saving medicines out of the hands of needy people. According to Light Years, between 90 percent and 95 percent of product value is taken by the distribution chain of products that come from poor nations. Only a few producers have any real control over their products.

But last year, Ethiopia set out on a mission to challenge that. Its coffee sector launched a plan to take better advantage of its intellectual property rights.

The poor African nation first applied for the trademark registrations of its specialty coffee brands in the United States, Canada, Japan and other countries. It succeeded in registering several, including Harar, Sidamo and Yirgacheffe.

The country’s leaders also began negotiating with coffee roasters to sign agreements acknowledging the right of Ethiopians to control these brands, but the U.S. coffee franchise Starbucks dragged its feet and declined to give Ethiopian coffee farmers the right to control their coffee trademarks, even though it had originally promised to do so.

This prompted aggressive campaigns against the Seattle-based company.

Anti-poverty campaigners criticized the cash-laden Starbucks for repeatedly ignoring its social responsibility pledges. The campaigners raised awareness about the issue by running newspaper ads, making phone calls and firing off mass e-mails. Thousands of activists worldwide took part in the crusade to pressure the coffee company, one of the world’s largest and most profitable.

Finally, Starbucks agreed to sign the deal, which now lets Starbucks use and promote Ethiopian coffee brands in markets both where trademarks exist for the brands as well as where they may not.

The deal is expected to generate more income for Ethiopian farmers. Currently farmers get only a fraction of the export price. Retail prices for specialty coffees can be anywhere from five to 15 times larger than export prices.

Under the new deal, farmers instead would be able to base their export prices more closely on the retail value of their coffees.

There are 15 million people in Ethiopia who are dependent on the country’s coffee sector. Coffee is among the most valuable commodities in Ethiopia, one of the world’s poorest countries. Starbucks purchases approximately 5 percent of its high-quality Arabica coffee from African countries such as Ethiopia and Kenya.

Labels: COFFEE

posted by MrK @ 8:28 PM