Unemployment Breeds Poor Choices

Without a job, people realize how much their lives lack, not only money, but also structure and a community of friends and associates. From this perspective, preparing students to be entrepreneurs or to move into the careers of the future becomes a priority when traditional jobs are declining and the global population of young job seekers is increasing.

     Patrick Cook-Deegan, co-director and designer of Project Wayfinder (projectwayfinder.com), has been thinking about how to help high school students develop a sense of purpose that will motivate them to prepare for the future. Being told what to do and taking tests for four years fail to connect students to their work in the future. Asking students to consider what the world needs and what their interests and strengths are can lead to the conclusion that life requires a broad outline that accommodates twists and turns rather than a narrow path. There is a need to connect students with mentors from local industries so that they begin to see how their natural instincts to listen to music, play video games, build with LEGOs, study fashion magazines, or read detective stories apply to solutions for real world problems. There also is the need to ask students to think about how to resist being pressured into a career they know they will quit.

     In developed and less developed countries, resilient people can avoid becoming a target for opportunists, because they know what their goals are (they keep their eyes on the prize) even when they are young, old, fat, black, uneducated, poor, disabled, working at a fast food counter, or tending bar.

     During the 2008 crisis in the United States, families could not afford the mortgages on their homes and manufacturing jobs continued to disappear. The Governor of Wisconsin promised to return 250,000 jobs to the State. With his promise still unfulfilled in 2017, the Chinese firm, Foxconn, offered to bring 13,000 jobs to Wisconsin. In exchange, the State agreed to provide financial incentives totaling $3 billion worth of taxpayer revenue and to exempt the company from environmental laws and the need to gain approval to build or relocate power transmission lines.

     The story in Ghana is similar. Traditionally, non-citizens were prohibited from the practice, known as "galamsey," that allows small scale gold mining by licensed local residents using hand tools on their own land. With half the 15-24 year-old population unemployed, Ghana's farmers willing allowed Chinese miners to work their land with excavators and heavy duty dredging machines, to reduce export revenue by smuggling gold out of the country, to pollute rivers, and to encroach upon land farmed for cocoa. As the number of foreign gold miners increased so did trafficking in the cocaine and other narcotics miners use to help them work long hours in mud-soaked, dangerous conditions.

     In the 19th century, China itself was a victim of drug trafficking, when its society fell prey to an opium addition from British imports its inefficient. militarily weak government could not stop.

     Seeing how unemployment creates a climate for poor choices by individuals, States, and countries reinforces the need to prepare young people for the careers, global careers, that will employ them in the future.

(Additional information about gold mining in Ghana is covered in the earlier post, "Africans Learn to Play the Game".
 

Meet the Farmer Behind the Produce Label

A label on your banana tells its country of origin, but the UK's Fairtrade Foundation (fairtrade.org) site tells you about the farmers who grow and harvest your bananas, what benefits they receive, and where you can buy Fairtrade certified bananas.

The Fairtrade site also provides the background of other produce: cocoa, coffee, cotton, flowers, sugar, and tea. Something to read while enjoying your banana.

Commodity Crush Careers

Commodity traders keep an eye on prices like the following every day.

Per day prices

____________________________________________________________________ 

Commodities            1/18                1/24               1/31                   2/1                   2/3

____________________________________________________________________

Cotton                     72.3                                                                                        76.3

Corn                                                363.5

Coffee                    149.5                152.2             149.6                                       146.8

Cocoa                     2229                 2202              2091                                        2063

Rough rice               9.94                  9.98              9.54                9.53                   9.51

Soybeans                                                              33.83

Sugar                      20.95                20.55            20.49                                        21.3

_______________________________________________________________________________

But commodity traders are not the only ones whose careers involve commodity prices. Whether we live in Toronto or Timbuktu, trading money for goods and bartering goods for goods are what we do all our lives. On the global level there are careers in shipping agricultural commodities that go into what we eat and the mineral commodities that go into what we use. Crude oil is the most traded commodity in the world and coffee is the second. 

The prices buyers are willing to sign a contract to pay for commodities roll across the bottom of the CNBC station every trading day. You also can find commodity prices on the internet. I like to check them occasionally to see if there is an up trend or down trend, like the above prices show for cocoa, or up and down volatility.

What each quoted price means is complex. The price quoted for coffee beans applies to 37,500 pounds and the price for sugar applies to 112,000 pounds. These are the amounts that fit in one overseas shipping container. Since a ship might carry 18,000 containers, you can figure how much a company would pay for one shipload of a given amount of pounds.

Commodity prices are also important to those who price consumer goods. In the case of coffee beans, there are the additional costs of roasting the beans, repackaging the 250 bags that carry 37,5000 pounds of coffee on ships into the smaller bags or cans a consumer wants, distributing the coffee to thousands of stores, and advertising a brand.

How to increase prices

When a crop is harvested in countries that produce agricultural commodities, such as coffee, farmers will be offered lower prices if a harvest is large and marketed at one time. If a harvest is smaller because of drought or disease or because it is stored and sold gradually, prices will increase. Countries also can increase coffee export revenue, if they develop roasting facilities. Consequently, there are potential careers in water and pest control, storage, and processing. Some of these same subjects are covered in the earlier posts, "I Love Coffee, I Love Tea" and "Become a Discriminating Chocolate Consumer.")

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Worldwide booms and recessions are a matter of concern to those whose careers in companies and countries depend on demand for the mineral commodities used in industrial production. Politicians in mineral-rich countries are tempted to take out loans in good times that voters will not want to repay with higher taxes in bad economic times. (The earlier post, "Falling Commodity Prices Spur Diversification in Emerging Markets," lists some of the counties affected by demand for certain mineral commodities.)

Commodities offer a vast field of career opportunities now and probably even more in the future as AI, robotics, and sensors are incorporated. For those interested in investing, the site, investopedia.com, covers the basics and more.

   

                                                                                                     

Become A Discriminating Chocolate Consumer

Buy a chocolate bar and only 3% of the price usually pays for the raw ingredients (cocoa, butter, milk, and sugar). Buy a chocolate bar that comes from one country, such as Madagascar, where the cocoa is processed and the bar is manufactured and more people are employed, companies make more money, and countries collect more taxes.

     When there is more money to be made, why don't the many cocoa growers in Ghana, Ivory Coast, Madagascar, Sao Tome and Principe, Papua New Guinea, Grenada, Venezuela, Colombia, Peru, Ecuador, Brazil, and Vietnam become single origin chocolate producers for the chocolate bar, bulk cocoa, and fine chocolates market?

     The obstacles are many. Dedicated people have to prune, deliver, and peel cocoa beans. Since the manufacturing process determines the finished chocolate product's taste, setting up a factory requires a major amount of investment and production expertise. Current labeling doesn't help consumers determine if the raw cocoa and the finished chocolate product come from the same country. Finally, there is the challenge of breaking into European and US markets dominated by companies, such as Hershey.

     Nonetheless, kids search for Pokemon Go characters, why not look for African stores that carry Chocolat Madagascar chocolate bars?

Africans Learn to Play the Game

Whether a child is playing Candy Land or trading Pokemon cards, an innocent young child can be tricked into trading a valuable card for one less useful. But as they learn how to play the game this kind of trickery no longer works. Africa has a lot of valuable "cards," and Africa will learn, and is learning, not to be fooled by those who take advantage of corruption, questionable land titles, promises of employment, and pretend friendships.

     Since Africa has valuable mineral deposits, the continent has been a target of questionable mining deals. After the Democratic Republic of the Congo seized First Quantum Minerals, the close relationship of an Eurasian Natural Resources Corporation (ENRC) partner with Congo President Joseph Kabila caused First Quantum to question the financial deal that enabled ENRC to purchase its seized copper assets. The legal dispute did not end after Luxembourg-based Eurasian Resources Group (ERG) acquired ENRC and strengthened its position in Africa's copper belt. In fact, ERG's stake in the former ENRC became even more valuable after the Industrial & Commercial Bank of China (ICBC) and China's Export-Import Bank provided $700 million to build the copper and cobalt project that made ERG the world's largest producer of the cobalt used in batteries. The UK's Serious Fraud Office (SFO) continues to investigate ENRC's original deal with the Democratic Republic of the Congo.

     In Hia, Ghana, Bishop Afoakwah walked through mounds of dirt and deep puddles to do his own investigation of a gold mine digging a massive pit on church land. Earlier, after one of the mine's earthmoving machines cut an electrical line that left the town without power, Bishop Afoakwah had met with local chiefs. He understood the church held a legal deed to the land that had been donated by a chief for the purpose of building a clinic and nursing school. During his meeting, the bishop learned various chiefs claimed to protect land for other chiefs and, taking advantage of the interwovern land rights and the high per ounce price of gold, a Chinese mine owner provided a payoff to secure a mining concession on the church's land. At the gold mine, workers said a "Mr. Kumar" owned the Hia site. Two Chinese engineers dashed into the bush, when they saw the bishop approaching. Ghana's Minerals Commission only has eight officials to investigate the country's illegal mining and an incomplete database of mining concessions. President Nana Akufo-Addo, who took office in January, 2017, put Ghana's Chinese miners on notice that he intends to enforce laws governing gold mining.

     Not only have gold mining operations destroyed agricultural land that has fed local farmers for generations, but heavy machinery has buried and severely injured untrained workers and health-damaging cyanide and mercury used to extract gold from stone have contaminated air and water. Farmers who sell their land to miners enjoy only a short-term gain that lasts a few years. Even if the land is returned to them after the mine is exhausted, the three feet of top soil are destroyed and the poor quality clay soil underneath cannot support a family. Yet, workers who fear losing salaries from mining jobs willingly risk their health and ignore environmental consequences. In fact, miners have thrown rocks at inspectors and even killed a fleeing official by rolling over him with a car.

     The path to legal mining in Ghana and in other developing countries is a difficult one. It requires learning "to play the game" without corruption and payoffs, with only those foreign investors willing to train employees and commit to some community development, and with activists like Bishop Afoakwah who are willing to take on lengthy court battles for damages done to the land by illegal miners. In the end, Africans will come to the same conclusion that Cardinal Peter Turkson, archbishop emeritus of Cape Coast, Ghana, did. "It is...unjustifiable for developing countries to fuel the development of richer countries at the cost of their own present and future."

     While Ghana continues to sort out land ownership issues affecting local gold miners, a group of 33 illegal gold miners in Uganda spent four years forming the first gold mine the UK's Fairtrade organization certified in Africa. The Syanyonja Artisan Miners Alliance (SAMA) now boasts: 1) a timbered pit unlike the dangerous open pits where dirt walls collapse, when heavy downpours swamp quarries and whole families of miners, and 2) gold extraction processes that employ proper handling of mercury and cyanide. SAMA's certified gold mine offers small-scale coop members the prospect of premium prices, savings, a local health center, and subsidized school fees. Now that the association pays taxes SAMA members find they have more government influence. SAMA also benefits from the "I Do" campaign sponsored by the Fairtrade Foundation's focus on commodities campaign in the UK, which alerts couples to choose Fairtrade Gold wedding bands.

Earlier posts involving Africa's resources include:

• Wood: Don't Take Any Wooden Nickels, Uncover the Economic Value of Wood
• Coffee: Invest in Africa's Agricultural Future; Coffee Prices Going Up; Allowances Going Down?
• Cocoa: Become A Discriminating Chocolate Consumer, Chocolate Tasting Party and More; Chocolate's Sweet Deals
• Palm oil: Can Small Farms End Poverty?
• Oil: Nigeria's New Beginning
• Diamonds: Diamond Flaws

Also see the earlier post: Why Will Africa Overcome Poverty?"

   
   

Chocolate Tasting Party and More

Controversy about the taste of $10 chocolate bars produced by Rick and Michael Mast in the Bronx, USA, suggests kids throughout the globe might enjoy their own chance to sample the world's chocolate.

     Mast's chocolates claim to be made from paste of melted chocolate from Valrhona, a company chef Alberic Guironnet founded in France in 1922. The Mast bars come in three flavors: dark, almond, and goat's milk.

     Other expensive chocolates, often found at airport newspaper shops, are Scharffen Berger Extra Dark and Green & Black's Dark.

     Less expensive chocolates can be found in a bag of Nestle's morsels used to make chocolate chip cookies, Hershey's bars, and Mars bars.

     Serrv (serrv.org/chocolate), a fair trade nonprofit organization, provides a wide variety (dark, dark with mint, dark with raspberries, milk chocolate with hazelnuts, etc.) of Kosher-certified, 3 and a half oz. $3 bars. Serrv bars use cocoa produced by the Kuapa Kokoo cooperative in Ghana, Africa, which strives to increase the earnings of cocoa farmers and to run programs designed to bolster the confidence of women cocoa farmers.

     While sampling a piece or two of chocolate candy or building replicas of the Leaning Tower of
Pisa or Great Wall of China out of chocolate (like those shown in the February, 2016 issue of National Geographic Kids), there are a few things about chocolate to consider. Chocolate was a popular food of the Maya people who lived in what is now Mexico and Central America over a thousand years ago. The Mast brothers say they learned small-batch chocolate making by studying methods used by Mayans.

     Fast forward to 2015. Ghana and the Cote d' Ivoire account for at least half of the world's cocoa that goes into chocolate. Much of the rest comes from Brazil, Nigeria, and Cameroon. In Africa cocoa bean farmers are not being replaced by younger farmers, because the income they earn keeps them below the $2 a day global poverty level. Ghana's cocoa farmers can earn as little as 84 cents a day; in the Ivory Coast, earnings may be 50 cents a day. A video produced in mid-2014 showed how excited cocoa farmers in the Ivory Coast were when, for the first time in their lives, they tried chocolate made from the beans they grew and harvested.

     The 2015 Cocoa Barometer report (cocoabarometer.org) issued by non-governmental organizations describes how the concentration of 80% of the cocoa-to-chocolate retail chain in a few companies provides no incentive to raise cocoa farmer incomes, to end child labor, to increase crop diversification, to improve infrastructure, or to provide market information for farmers.

             (Chocolate also is the subject of the earlier post, "Chocolate's Sweet Deals.")

   

An Army Moves on Its Stomach

Napoleon was right. Whether its the army of ISIS, the French Foreign Legion, or the US Marine Corps, food fuels military operations. I remember reading about an incident in the US Civil War, when General Lee's army arrived at a supply depot, found it completely empty, and knew the South's cause was doomed. Hunger (and thirst) saps energy and morale.

     Countries, causes, and individuals that underestimate agriculture's value are in trouble. Mohsin Hamid describes the misdirected rural to urban rush in his book, How to Get Filthy Rich in Rising Asia. The billion dollars worth of items Alibaba sold on Singles Day are no more able to feed a single person than King Midas' gold. It is a great misfortune that Pakistan, with 180 million people, has only 20% of its GDP devoted to agriculture and that in Nigeria, with 170 million people, agriculture produces only 23% of its $510 billion GDP.

     Considering food's importance for everyone, not just armies, agriculture merits the attention of every country's best and brightest. Indeed, modern agriculture is every bit as dependent on skilled techies as fields that now employ digital whiz kids. To help kids discover the challenge of moving food around the world, draw or find a picture of a farmer on the right side of a paper or board and a grocery store on the left side. Start writing down all that needs to happen in between.

     What does it take in Uganda, Africa, to go from the gift of a $500 heifer from Heifer International (heifer.org) that produces three gallons of milk a day to the sale, in a local market, of some of the milk the family does not use? Consider all the steps between the woman growing cocoa for the Kuapa Kokoo cooperative in Ghana, Africa, and the retailers selling chocolate bars in Europe. Here are just some possibilities:

• Ask local farmers or Peace Corps volunteers to provide training for raising animals
• Grow feed crops
• Buy disease-resistant seed
• Cool milk
• Buy a truck
• Produce fertilizer from compost to increase crop yields
• Contract shipping space on a cargo ship
• Form a 4H chapter to interest the younger generation in farming
• Pass land use laws to protect small farms from encroachment by corporate plantations
• Lease an acre of land
• Provide police and security measures to protect farmers from gang violence and terrorists
• Build a warehouse to store cocoa beans rather than selling them all at once for a lower price than the revenue that could be earned by selling them over a period of a year
• Install irrigation and water pumps

Nowadays, the "Moo monitors" that dairy farmers attach to their cows' collars produce data about the health of their herds. Machines can pick almost every crop. GPS satellite technology enables farmers to monitor weather, judge the health of their crops, pin point the application of pesticide sprays and fertilizers, spot weeds, and measure yields as crops are being cut. Satellites even monitor the temperature and humidity of produce carried by sea in shipping containers in order to predict its condition for sale on arrival. Thanks to government funding and developers in companies like Planet Labs in San Francisco, which has developed small earth observation satellites that can fit in a shoebox, subsistence farmers will be able to utilize this up-to-date technology.

     Already, in countries with impassible roads that subject supplies and produce shipments to long delays, the widespread use of mobile phones enables farmers and fishermen to arrange trades, sales, and payment transfers.

     Since we all move on our stomachs, we pray, "Give us this day our daily bread." The world is depending on kids to get involved in producing and distributing the food we all need to live.

                          Also, check out a few of the earlier posts on food and farming:

• Can Small Farms End Poverty?
• Nigeria's New Beginning
• World (Food) Expo, Hybrid Crops & New Farming Practices
• Back to the Land
• Dairy Cows on the Moove
• The Bees and the Birds
• Chocolate's Sweet Deals
• Coffee Prices Going Up, Allowances Going Down?

     

Chocolate's Sweet Deals

In addition to giving boxes of chocolates as gifts this holiday season, consider giving stocks in cocoa processing plants. But keep an eye on the competition, since the growing demand for chocolate among billions of people in emerging markets, which is expected to increase cocoa processing by 15% in the next ten years, can raise prices on the supply of cocoa beans which has suffered from drought conditions, and it will put a squeeze on profits.

     As an example of increased competition, check out how Olam International, headquartered in Singapore, has just become a major competitor with Barry Callebaut AG and Cargill Inc. In addition to shelling out $176 million to a U.S. peanut processor, Olam, which recently purchased the cocoa unit of Archer-Daniels-Midland for $1.3 billion, now has eight cocoa processing plants, including one in the Ivory Coast. The U.S. recently acted to block imports of the UK's Cadbury chocolate which has a higher fat content and creamier taste than Hershey's chocolate. Hershey claimed Cadbury's product names and packaging infringed on their trademark rights and licensing agreements.

     Based on projections of a growing demand for chocolate in emerging markets, there is an opportunity for cocoa bean growers in developing countries, by themselves or in conjunction with major processors, to set up their own plants to satisfy local demand. Further, since chocolate can melt when transported in warm weather, local producers have a major incentive to supply emerging markets with locally-produced chocolate products.

     The Kuapa Kokoo Cocoa Cooperative in Ghana, Africa, is already a working model of how cocoa growers can benefit by developing a relationship with processors and distributors. Before selling to the cooperative, growers were at the mercy of a state cocoa buying company that did not always pay on time and sometimes cheated when weighing their cocoa beans. Now, the cooperative, working with Divine Chocolate and the fair trade company, SERRV, (serrv.org/divine), participates in the profits generated from the production and marketing of a wide variety of gourmet chocolate bars, chocolate mint thins, Kosher certified milk and dark chocolate coins, and a day-by-day, chocolate heart-filled Advent calendar.

     For other ideas of how to make a profit in Africa, see the earlier blog posts, "Never Too Young to Invest in the Future" and "Discover Africa."