Local vs. Exported Coffee

Coffee has been the staple cash crop of Costa Rica for decades. It’s production in the country began in the early 19th century and has only increased since then.  Until about the 1980’s Costa Rican coffee was sold at low prices as a raw material. About 20 years ago the country began marketing coffee and did so with the ‘Costa Rican brand’.  It was also in the mid-late 1900’s that Costa Rica began agreeing to several free trade agreements, increasing their global involvement and trade.  All of this drove up the value of their product. Coffee has been the nations cash crop, rivaled only by bananas, for decades and is arguable responsible for most of Costa Rica’s economic growth over time. Recently, specifically with the rise of tourism, coffees importance to the economy has declined, however, it is still integral to the Costa Rican economy.

Most of the good coffee, and many other products, that are produced in Costa Rica are exported to larger international markets.  This is because these markets are willing to pay more but more so because there are more consumers and greater potential for profit. This means that the products available in Costa Rica are the surplus of those exported or the inferior products.  This also means that Costa Ricans are consuming second rate goods.  To fix this problem smaller firms entered the Costa Rican market to provide goods specifically to Ticos.  For example, Cafe Britt is a large international firm that only serves Ticos inferior coffee, to compensate for this 1820 entered the coffee market and provides coffee to directly to Ticos without competing in the international market.

While firms such as 1820 or Cafe Rey, another major coffee distributor that sells exclusively to Costa Ricans, have their own plantations they do purchase some beans from larger firms.  For example, 1820 may have plantation that provides the mills and roasters with green beans, however, they suplement this supply with beans from growers such as Cafe Britt. The issue with this: the beans Cafe Britt is willing to sell to 1820 are the inferior beans being sold within Costa Rica. These beans are blended with the ones that come from their private plantations.  Therefore, popular domestic coffee producers are still not providing Costa Ricans with the quality of coffee that is being exported.  This is why these suppliers are more popular in country.  Most also provide a superior blend of coffee, however, it is for a higher price.

With the size of the Costa Rican market the people can only expect to receive so much, they do not have the power or the leverage to demand better coffee be sold to them unless legislation is passed to make the coffee producers do so.  The issue with this is it would place a burden on one of the economies most profitable industries.  I believe that the smaller producers that have developed to serve coffee directly to Ticos are a good example of how the market corrected itself to a more quality good to a willing market, the Ticos.

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