On the Mexican Side of the Border

The days of confining children in tent cities on the dusty Texas side of the Rio Grande are over. Guards need no longer bar the concerned visitors who set red balloons afloat over the camps to show those inside someone cared about them.

     But migrants still cross into Mexico from Guatemala, Honduras, and
El Salvador. In the five-year span from 2010 to 2015, the UN estimates over 300,000 left Central America. The Economist magazine (March 16, 2019) mentioned 8,000 left in January and February this year.

     Mexico understands the plight of Central Americans who seek asylum from government repression of the poor, gang violence, and soldiers, like those who murdered San Salvador's Archbishop Oscar Romero and four nuns in 1980 and the environmental activist, Berta Caceres, in Honduras in 2016. Besides fleeing violence, migrants also risk the long, hot and dangerous journey north when they are displaced by mining activities and when coffee and other crop prices drop or when a lack of rainfall, heat, and a plague of insects reduce crop yields. (Also see the earlier post, "How Can Bananas Be 29 Cents A Pound?")

     Since Andres Manuel Lopez Obrador became Mexico's President in December, 2018, his humanitarian welcome has cut into the estimated $2.5 billion organized crime was used to pocketing for trafficking migrants through Mexico to the U.S. border. As requested by Washington, D.C. migrants seeking asylum in the U.S. now remain in Mexico until close to their court dates.
   

2018-2019 Struggle for Human Rights

No struggle for human rights around the world is ever complete. The record that I began in the earlier post, "Hope for the Future," needs to be updated with some  positive and negative developments.

     Archbishop Oscar Romero, who was murdered by a military death squad in 1980 because he spoke out for unions and poor peasant groups against the grip of prosperous coffee growers and capitalism in El Salvador, was declared a saint of the Catholic Church in 2018.

     Vietnam released and exiled "Mother Mushroom," Nguyen Ngoc Nhu Quynh, who had been jailed for writing about the country's corruption and pollution.

     Boko Haram continues to kill and kidnap innocent victims in Nigeria and the Cameroon.

     North Korea has re-education camps for thousands, and China also holds Muslim Uighurs in camps because their religion is said to undermine peace and security. In March, 2019, Kazakhstan would demonstrate an effort to maintain good relations with its Chinese neighbor by arresting Serikzhan Bilash for supporting Uighurs detained in Xinjiang's camps.

     Russia tried unsuccessfully to poison a spy in the UK in 2018, and it continues to hold political prisoners, such as Oleg Sentsov and Oleg and Alexei Navalny. In February, 2019, Russia would arrest Michael Calvey, a U.S financier, which is reminiscent of the expulsion of Browder, whose tax expert, sometimes called his lawyer, Sergei Magnitsky, died in a Russian prison.

     For criticizing the regime of King Salman and his son, Muhammad bin Salman (MBS), the Saudi Arabian journalist and US resident, Jamal Khashoggi, was murdered at the Saudi consulate in Turkey in October, 2018, but in the same month, a Turkish court released a US pastor, Andrew Brunson, who had been in prison there on false terrorism charges for two years.

Help Trees Work for Us

Since trees are an important means of absorbing carbon emissions, The Arbor Foundation, headquartered in Lincoln, Nebraska, engages in large-scale tree conservation projects in 27 countries, supplies trees from its Tree Nursery (arborday.org.shipping), and provides informative bulletins about trees.

Arbor Foundation projects save threatened rain forests and offer education and tree planting assistance for farm communities. For example, you can read about the Latin American farmers who grow coffee in the shade and natural nutrients of rain forest soils at shop.arborday.org/coffee. At this site, you also can purchase Arbor Day Blend coffee for yourself or as a gift. This rain-forest-saving coffee avoids the problems mentioned in earlier blog posts: "I Love Coffee, I Love Tea" and "Coffee Prices Going Up, Allowances Going Down?"

Developing hybrid trees and bushes that resist disease and insect damage, thrive in various soils and climates, and provide an abundant yield also is the work of The Arbor Foundation. One such project involves meeting the global demand for hazelnuts that now outruns the supply of this nutritious food, one that can grow on marginal soils. Although a collection of 1,899 wild hazelnut plants, some from behind the former Iron Curtain, already has been screened for this project, more plants are welcome. To learn how to help, visit arborday.org/hazelnuts.

From the Arbor Foundation, you also can obtain a copy of the publication: How to Fight the Emerald Ash Borer. The bulletin tells how this Asian insect operates and what chemical treatments prevent beetle damage. Request a copy at arborday.org/bulletins.

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.")

I

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.

   

                                                                                                     

I Love Coffee; I Love Tea

South African tea farmers, who formed the Heiveld co-operative in the Suid Bokkeveld, are among the Africans who have learned to play the game. Not satisfied with the low prices middlemen brokers paid, and the subsequent low wages they received for the long hours (up to 10-12 hour days) they worked on tea plantations, they formed a co-operative to sell directly to Fairtrade importers who pay fair prices. Their incomes tripled by dealing with companies, such as Lemonaid & Chari Tea.

     Fairtrade certified co-operatives are a good fit with companies formed to satisfy health conscious consumers who are willing: 1) to pay a slightly higher price for products that use natural ingredients and 2) to treat all farmers fairly and with dignity. In the case of Lemonaid & Chari Tea, the company also set up a foundation which uses per bottle contributions from its specialty drinks to finance solar energy and education projects for co-operative members.

     For coffee bean farmers, current conditions are not this favorable. Rising temperatures and, in some areas, unusual drenching high altitude rain associated with climate change have caused a decline in harvests and an increase in pests and widespread roya, a leaf rust fungus, in Central America and Africa. While several big coffee companies are helping farmers move to higher ground, move away from the equator, develop more resilient coffee plants, and diversify crops, most coffee growers are poor small scale farmers unable to mill and market their own coffee beans.

     Since worldwide coffee demand is growing and coffee yields are shrinking, criminal gangs in Kenya and elsewhere have an incentive to overpower private security guards, pay off police guards, steal entire harvests from storage facilities, and sell stolen bags of beans to unscrupulous or unsuspecting middlemen.

     Coffee plantations also have an incentive to scam coffee certification systems that are designed to recognize farms for good environmental, social, and economic practices. Inspectors for the Rainforest Alliance, the Netherlands' UTZ seal, and the Fairtrade International seal have failed to spot problems in Brazil, the world's largest coffee producer. When confronted, farm owners have been known to claim violations were corrected before a deadline, labor issues were resolved, and information about code non-conformities and improved conditions is confidential. Noted certification violations include: false pay deductions for absences, for pay advances and for days off and a failure to register seasonal workers and provide their required medical exams.

     In some counties, government regulations requiring coffee marketers to provide sizable bank guarantees and to obtain export licenses have hampered the formation of coffee co-operatives that can sell directly to companies, such as Starbucks.

(An earlier post, "Coffee Prices Going Up; Allowances Going Down?" also addresses the coffee shortage.)
   

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?"

   
   

Invest in Africa's Agricultural Future

Following the Battle of Waterloo, although Napoleon had been defeated, Baron Rothschild of the 18th century British banking family is said to have observed that the most profit can be made when there is no consensus about the future. His actual quote is believed to have been, "Buy when there's blood in the streets, even if the blood is your own." A potential Disney investor might have said the less gruesome, "Buy when Mickey is still a steamboat captain." When I lived in Hawaii, I often heard the quote, "Missionaries came to do good, and they did very well (financially)."

     The point is, now is the time to get in on Africa's future, especially the continent's agricultural potential. It takes time to develop a profitable African connection, and time is on the side of today's young people who have 40 or more years of work ahead of them. One option to explore is the process of putting together a supply chain that buys and brings processed African produce to markets in developed countries. Another is to process, brand, package and bring African products, such as Go Honey, to the growing African market.

     Shoppers in Madison, Wisconsin, now buy cassava flour from West Africa at the African & American Store on East Johnson Street. Thanks to Hugh Jackman of Wolverine and musical theatre fame, New Yorkers now drink his Laughing Man Ethiopian coffee at two cafes he opened in Manhattan. A film, "Dukale's Dream," which can be rented at tugg.com/titles/dukales-dream, tells the six-year story of how Jackman and Dukale met and how Dukale's family has prospered. The family that used to spend the day growing coffee and collecting firewood now has a gas system that provides light and a cooking flame. Dukale increased coffee production by buying more land, hiring workers, and training other farmers. His wife owns a small shop and his children attend school.

     As a growing continent which now has more than 1 billion mouths to feed, Africa also provides a healthy opportunity for future agricultural sales and profits. The roads and rails China built to move minerals and lumber to ports for export have improved infrastructure for distribution within Africa as well. Countries, such as Nigeria, that have seen falling oil and mineral export prices damage their economies, have been forced to rediscover their agricultural pasts and improve their farm to market road systems.

     Director Chris Isaac at the venture capital company, Agdevco, cautions that it can take a 10 to 20 year view to overcome barriers to big returns from African agriculture. He cites competing claims on land that make it difficult to lease or buy. Then, there are poorly educated farmers, poor quality seed and fertilizer, limited access to credit, a lack of infrastructure, an undeveloped marketing network, and a corrupt bureaucracy, especially at the local level. These barriers obviously also impede the progress of women who make up half of Africa's poor farmers. (Also see the earlier post, "Want An Exciting Career?")

     What's going on in Uganda suggests the kind of advantageous landscape agricultural investors should seek. Once in the grip of Joseph Kony's Lord Resistance Army (LRA), Uganda is on track to become a rice and maize success story. Millions of dollars of investment have come to the area north of Kampala from international private equity, global venture capital, and private companies, such as German-based Amatheon Agri. What these investors provide are land, high quality seed and fertilizer, leased machinery, training, a market for farmers' output, a grain processing facility, and an integrated value chain for selling grain nationally. Uganda's government has invested in roads and power and has given tax breaks to foreign investors.

     With $25, anyone can invest in Africa's agricultural future by going to kiva.org.

All I Want for Christmas Is Seeds

Who knew elves occasionally take a break from making toys to store seeds in Santa's warehouse. Although many put Syria on their naughty lists, in October, 2015 the Svalbard global seed vault half way between the north pole and Norway responded to an urgent request from the International Center for Agricultural Research in Dry Areas (Icarda) and sent the 128 crates of wheat, barley lentil, chickpea, fava bean, pea, and legume seeds Syria needed.

     After seeds for another 70,000 crops were added to the Global Seed Vault in 2018, Svalbard now stores 1,059,646 seeds. 

     Svalbard, known as the "Noah's Ark of seeds," is just one of the storehouses for the diversity of seeds needed to grow fruits, vegetables, and grains; the collections of plants, like apples and grapes, that are not cultivated from seeds; and even the genetic material essential to maintain the bees that pollinate many crops.

     Individual farmers also are essential in the process of ensuring a lasting food supply. On one of his "Parts Unknown" TV programs, David Bourdain found restaurant owners in the US South have been searching for the seeds that grew foods popular before the US Civil War. They located seeds that had come down through the families of former slaves, when war wiped out the seeds held by plantation owners. When kids start collecting and drying seeds for diverse crops, they also will be getting involved in the vital task of protecting the world's food supply.

 Why is the world's food supply in danger? There are many reasons:

• Wars destroy farms. Research stations in Lebanon and Morocco are working to produce seeds and saplings to resupply Syria's farmers.
• Globalization of agriculture has concentrated seed production in companies that abandon many plant varieties in order to produce uniform, high-yield varieties. (See the earlier post, "World (Food) Expo. Hybrid Crops & New Farming Practices.")
• Pests and diseases can wipe out crops. (See the earlier post, "The Bees and the Birds.")
• Global warming has reduced the area suitable for farming. (See the earlier post, "Coffee Prices Going Up; Allowances Going Down?")
• Farmers have moved to urban areas to find work.
• Without a market, farmers have stopped growing foods that have gone out of favor when diets shifted to wheat, rice, potatoes, maize, soybeans, and palm oil.
• Deforestation has removed forests where plants thrive and evolve.

Kids used to get oranges and apples in their Christmas stockings. To be sure these fruits continue to exist, the world is counting on Santa to bring these goodies along with toys and candy.

Coffee Prices Going Up; Allowances Going Down?

Children may be looking at a cut in their allowances, if the adults who provide them are big coffee drinkers.

     A quick lesson in economics teaches disposable income is the money people bring home from work after taxes are removed. For most people, a large portion of disposable income pays for such necessities as food, housing, transportation, and clothing. After paying for these necessities, what is left over is discretionary income that can be spent on things like a mango, doll, game system, or any other things children want.

     For those who need their morning cups of coffee, the anticipated increase in the world's price of coffee beans will reduce the amount of disposable income they have left over for discretionary spending. Is an allowance a necessity that has a claim on disposable income? If it is, it won't be affected by higher coffee prices. But a child's allowance may suffer, if the adult paying it considers an allowance in the same category as discretionary spending for a new toy. Increased coffee prices that reduce the amount of disposable income left over for discretionary income can cause a reduction in a child's allowance. If that happens, older children might decide to look for jobs that give them an income and the power to decide their own disposable and discretionary spending.

     Considering a wider economic context, kids might learn to ask why coffee, banana, soda, bus fare, and other prices go up and down. When a supply increases and demand stays the same, prices go down. But, when supplies decline and consumer demand increases, prices also increase. That explains a coffee price increase.

     In Brazil, Colombia, Costa Rica, Ethiopia, Kenya, and Tanzania, because of climate change, temperatures are rising in the high altitude tropical regions that grow high-quality Arabica coffee beans. There, coffee bean output is threatened by the pests and plant disease that flourish because of long periods of drought and short periods of heavy rainfall. The International Center for Tropical Agriculture (CIAT) in Colombia suggests survival for Arabica growers will require them to move 300 to 500 meters farther above sea level, an impossibility for Brazil's highly mechanized, commercial coffee plantations that supply 70% of the world's 1.6 billion cup daily coffee demand.

     Although growing coffee under a canopy of trees, such as shown in the photo of coffee growing in Mexico, would increase the predators that feast on insects that damage coffee beans, reduce the costs of chemical pesticides and fertilizer, and curtail polluting run-off, for all but a few specialty brands, the trend in the past 20 years has been away from shade-grown coffee. High-yield Robusta coffee, like that grown in Vietnam and Indonesia, can withstand higher temperatures, but its lower quality is used mainly for instant coffee. Wet processed coffee beans from the Indonesian island of Sumatra gives them a different taste that some coffee drinkers dislike but others enjoy, especially when, for example, McDonald's mixes them with beans from other sources.

     Whatever the coffee type, the same conflicts the palm oil and timber industries face regarding deforestation, questions of land ownership, competition among food crops, and water scarcity affect all types of coffee growers.

     While the future of coffee production is uncertain, increased demand is certain. Using Arabica grown in Ethiopia, Rwanda, and Tanzania, Starbucks, in partnership with Taste Holdings, is planning to open in Johannesburg, South Africa in 2016. Positioned as part of the fashionable, upscale urban scene in Shanghai and Beijing, coffee consumption in traditional tea-drinking China is growing faster than anywhere else in the world. Although China's four-cup-per-person-per-year is very low compared to the U.S. and Europe, Starbucks and Costa are responding to the potential for growth by planning to double and triple the number of their shops in China by 2020. Sumerian, a local company, also has entered China's coffee shop scene. Although China currently imports most of its coffee beans, domestic growers have increased their production from 60,000 to 120,000 tons in five years. Unfortunately, most Chinese coffee is grown in the sun in southern Puer, Yunnan, where more fertilizer and water are required and, at the moment, all but 30% of Yunnan's coffee is exported because it is a lower quality than what Chinese shops prefer to serve.

     With coffee consumption increasing, coffee bean growers have an incentive to solve production problems and meet high quality standards. Children who receive an allowance from coffee-drinking adults have an incentive to keep an eye on coffee prices.