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Examination and Discussion

Discuss about the Agriculture and Environmental Challenges.

Latin American coffee industry is highly potential and profitable. It is important to discuss that Latin American countries are the leading producers and distributors of coffee beans across the globe. However, the cultivation and distribution process of coffee beans used to follow different important methods. Now-a-days, the farmers and different organizations in the Latin American countries used to focus on effective and significant cost as well as time effective approaches in the cultivation as well as distribution of coffee beans. There are several negative consequences of the cost effective manufacturing processes of the coffee beans. Soil erosion, lack of disposable income of farmers, and unemployment are referred as the most critical negative consequences of the cost effective coffee manufacturing processes. This report will critically examine and discuss the corporate responsibility in the coffee industry of Latin America. In an addition, this particular report will also analyse and explain the best suitable practices for the entire coffee industry in Latin America to maintain the sustainability within the industry. Lastly, the report will provide some valuable recommendations to the associated organizations, farmers, and government agencies to take care of the social as well as environmental sustainability.

It is important to mention that Latin American countries are considered as the major coffee producers in this world apart from the East African regions across the globe. It is true that coffee industry plays an important role in the economic GDP growth rate of the countries in Latin America. Brazil is the one of the leading coffee producers across the globe based in Latin America. However, the governments of Latin American countries generally consider organizational sustainability, employees’ sustainability, environmental sustainability, social sustainability, economic sustainability, and overall country’s sustainability in order to ensure effective corporate responsibility.

It is clear from the above diagram that the countries of Latin America always ensures effective and significant integration of stakeholders, such as government, communities, and enterprises in maintaining corporate responsibility. The governments also have similar approach towards the coffee industry, but the production process and business operation approaches of the farmers and organizations have faced several types of sustainability and corporate social responsibility related issues that are discussed below

ICA used to govern the global coffee industry from the year 1962 and the year 1989. On the other hand, ICA was management by ICO. However, it is also important to mention that the Latin American coffee industry was also governed by ICA. Several critiques and industry experts have stated that the coffee sector faced huge problems during this period, but the industry and farmers did not face any kind of economic challenge (Topik, 2003, p.16). However, in the year 1989 several parties associated with the governor denied to make an agreement regarding export and important. As a result, the agreement got collapsed in the year 1989 as the countries did not agree with the newly developed export quota (Mobner, 2014, p.9). It is true that different types of pricing challenges appeared in between 1962 and 1989, but in the year 1989 and after the year 1989 the demand as well as price of the coffee products failed suddenly. Apart from that the economic inflation also hit the profitability as well as sustainability of the industry (Sims, 2007, p.204). Most importantly, farmers as well as distributors failed to sell the coffee products at fixed price rate as they did in the previous years. As a result, it has created economic crisis within the Latin American coffee industry as the demand as well as price of the products were less, but the supply was more comparing to demand (Pearson, 2008, p.26).

Coffee Production and Economic Sustainability Issues

It is quite important to mention that farmers failed to give proper basic facilities to the family members. On the other hand, they used to face difficulty in terms of the giving the educational opportunities to their children. These aspects clearly can state that the dispute and conflict in agreement caused economic challenges within the industry and in the lives of farmers and their family members.

There are several important facts and aspects regarding coffee plantation and cultivation. Now-a-days, several organizations as well as famers in the Latin American countries consider high volume of coffee plantation instead through the help of advanced technological instruments (Kirby, 2003, p.51). However, it is also important to mention that there are some firms that used to focus on effective as well as significant traditional cultivation activities. Still coffee is considered as a traded commodity across the globe. However, business orientation and high profitability interest are influencing the firms to product coffee in huge volume through the help of advanced technological applications. These aspects are usually affecting the business profitability as well as social sustainability of small trader ad farmers. Production in high volume by organizations and large traders is causing over supply comparing to the actual demand (Biswas, 2015, p.62). This particular over supply aspect is actually hampering the demand for high quality goods and premium pricing aspect. These aspects have reduced the coffee price across the globe, which has created social crisis.

Now-a-days, consumers facing difficulty to consume high quality coffee products as the farmers of large farms are focusing on technology-oriented manufacturing process. Moreover, they are directly dealing with the organizations (Oliveria, 2012, p.138). On the other hand, it is also important to mention that decrease in coffee price and demand also affected the social sustainability of the lives of common farmers, who are in traditional farming business. They faced huge loss. On the other hand, they also got de-motivated to cultivate coffee-beans according to the tradition process. Especially, the crackdown of ICA in the year 1989, affected that sustainability and systematic approach and procedure within the coffee manufacturing industry (Williams, 2014, p.12).

It is already discussed in the above part that several farmers and farming organizations have become business oriented as they are strongly focusing on the cost as well as time effective technologically advanced manufacturing options (Mol, 2006, p.81). It is true that the farmers can get high quality as well as sustainable coffee beans through shade-grown cultivation process. This particular process helps the farmers to maintain environmental sustainability as the coffee plantation and cultivation can sustain for 30 long years through this shade-grown cultivation process. Traditionally, according to the shade-grown cultivation process the coffee plants used to grow under the shade of banana trees. On the other hand, it is also important to discuss that shade grown plantation process helps to overcome soil erosion problem as the plantation and cultivation process used to take a longer time. However, this particular process is time as well as cost consuming, but it helps the farmers to maintain high quality aspect of the coffee beans (Srivastava, 2013, p.28). On the other hand, it also helps the farmers to maintain effective environmental sustainability as it helps to overcome soil erosion problem.

Coffee Production and Social Sustainability Issues

Now-a-days, farmers are used to consider sun-grown manufacturing process. In this particular cultivation process, the farmers use advanced technological applications. Moreover, this sun-grown cultivation process is time as well as cost effective as the entire plantation or life cycle of tress used to complete within 15 years, which is lower comparing to the shade-grown process (Hertel, 2015, p.43). This process may increase the problems like soil erosion and earthquake. Last but not the least; it is also important to discuss that several farmers used to focus on chemical sprays and medicines in order to ensure rapid growth of plants and coffee beans (Patil, 2015, p.28). These aspects can affect the environmental sustainability in near future as these may cause environmental pollution and critical human diseases.

It is clear from the above discussion that organizational leaders as well as farmers within the coffee industry in Latin America faced economic challenges. On the other hand, it is also transparent that the farmers are approaching for cost as well as time effective manufacturing options in order to gain potential as well as significant competitive advantages through the use of technologically advanced solutions. In an addition, it is also important to mention that governments of the Latin American countries are also not that much bothered about maintaining economic, social, as well as environmental sustainability within the coffee production industry. Consideration of following strategic option and Kant’s Deontology ethical theory can help to ensure best practices to maintain social, economic, and environmental sustainability of the entire industry.

Kant’s deontology ethical theory is based on five different important aspects that need to be considered in this analysis and explanation process. These five aspects are primary domain, philosophy, method, control, and source of value (USAK, 2016, p.1).

In terms of primary domain, the farmers and important stakeholders should focus on specific actions that can help to maintain economic, environmental, and social sustain ability. It is clear from the above discussion that how time as well as cost effective cultivation approaches are affecting the economic as well as social sustainability of the small farmers. Moreover, use of chemicals and short-cut process in the cultivation also can hamper the environmental sustainability (Sugarman, 2001, p.37). Therefore, the primary domain and fundamental actions would be to focus on the, limitation of sun-grown manufacturing process and concentrating on the shade-grown cultivation process as it will help in maintaining both the social and environmental sustainability.

Coffee Production and Environmental Sustainability Issues

In terms of principle, it can be mentioned that all the important stakeholders associated with the industry should try to focus on maintaining transparency and effective corporate governance. Corporate governance of the particular industry can be maintained as well as enhanced through effective integration of stakeholder engagement approach. In this approach, NGOs, government agencies, consumers, and farmers will participate in the strategy development and decision making process regarding maintaining sustainability. It is highly essential to mention that the farmers are finding it difficult to maintain social as well as economic sustainability. On the other hand, consumers are facing it difficult to consume high quality coffee beans due to increase in technologically advanced sun-grown cultivation process. On the other hand, limited coffee price is also affecting the profitability of the industry (Wood, 2009, p.114). Therefore, it would be effective for the stakeholders to come together and decide that they should focus on the effective and significant shade-grown coffee cultivation activities. Moreover, it is also important for the NGOs and other government agencies to focus on the limitation of the usage of chemical sprays in the manufacturing process in order to enhance environmental sustainability.

In terms of source of value, it will be effective for the government, industry experts, and other public legal agencies to ensure farmer empowerment aspect. It is true that coffee industry plays an important role in the sustainable economic GDP growth of the Latin American countries. Therefore, it would be highly effective for the government as well as different important public agencies to take care of the growth and sustainability of this particular industry. Farmers can be referred as the real growth drivers as well as major assets of this particular industry. On the other hand, traditional cultivation process only can ensure high quality as well as effective coffee beans. However, small scale farmers who used to focus on this traditional cultivation process are suffering from economic challenges due to lack of demand and low price of the coffee beans. Therefore, it will be highly effective to give appropriate value to these small scale farmers as they are the major stakeholders and they are real contributors to the GDP growth of the country. Empowerment to those farmers will help them both socially as well as financially as they can find it easy to lead a sustainable life (Reidy, 2013, p.549).

In terms of method, the consumers should be knowledgeable enough to understand the quality of coffee beans and related products. Now-a-days, the price of coffee beans has been reduced due to consideration of cost as well as time effective cultivation activities. Therefore, it would be effective for the

In terms of control, the government as well as important public agencies need to take care of the overall sustainability of the industry. It is highly important to discuss that important strategic approaches can be adopted and implemented to maintain sustainability if government takes any action as government can be referred as the most important stakeholder of a particular industry. The coffee industry in Latin America is suffering from the economic, social, as well as environmental challenges and sustainability issues. Therefore, the government should control the cultivation as well as different business operation activities of this particular industry.  Moreover, it is also important to discuss that different types of legislative orientations should be developed to ensure effective traditional shade-grown cultivation process, as this particular cultivation process helps the farmers to maintain environmental sustainability (Cummiskey, 2016, p.8). On the other hand, it also helps in maintaining effective and significant transparency within the business operation process of the particular industry.

Therefore, it can be stated that the farmers should focus on effective and sustainable cultivation and farming approaches to maintain environmental and social sustainability. On the other hand, it is also important to maintain economic sustainability of the industry through this approach. Most importantly, government and other important stakeholders should try to focus on significant farmer empowerment aspect as this particular aspect will help to ensure sustainable growth rate of the entire industry as the farmer are considered as real growth drivers of this particular industry.

Conclusion

It6 is clear from above discussion, examination, analysis, and explanation that Latin American coffee industry is highly potential as this particular industry used to play an important role in the economic development of the country. The coffee production industry in the Latin American countries were considered as profitable industry, but currently te industry is going through a lean patch due to some critical issues, such as poor pricing issues, inadequate farming challenges, lack of corporate governance, inadequate stakeholder engagement issue, and poor strategy development issues. Therefore, the industry is suffering from economic sustainability, social sustainability, and environmental sustainability related challenges. It is highly important for the important decision makers and government to focus on following recommendation plans to overcome the ongoing challenges.

First of all, it is highly important for government to focus on effective corporate governance, transparency, and strong business ethics within the business operation process. Huge numbers of individuals has chosen coffee plantation and cultivation as profession. Therefore, it is highly essential for the governments of the respective countries in Latin America to interfere in the ongoing conflicts. The government should bring farmer empowerment aspect within the sector as the farmers are the major and important stakeholders of this industry. A strong centralization is going on within the industry. Lack of government interference and too much centralization can affect the business growth rate of the industry as it may hamper the motivation and productivity of the farmers (Gallaghar, 2010, p.223). Apart from all these things, effective farmer empowerment will help to bring decentralization within the overall system that can help to maintain economic as well as social sustainability of the industry.

Last but not the least; it is recommended that government and farmers should prioritize effective stakeholder engagement in the strategy development and decision making process. It is clear from the above discussion that chemical products have been used in the production process to improve the growth of the plants and coffee beans (Bacon, 2008, p.209). However, integration of community members as well as government agencies in the strategy development and implementation process will help to maintain effective environmental sustainability throughout the cultivation and distribution process.

References

Bacon, C., 2008. Confronting the Coffee Crisis. London: Rowman and Littlefield.

Baiasu, S., 2011. Kant and Satre. London: Sage.

Biswas, A., 2015. Sustainability in Coffee Production. London: Routledge.

Cummiskey, D., 2016. Kantian Consequentialism. New York: Springer.

Gallagher, K., 2010. Handbook and Trade and the Environment. New York: Springer.

Haslam, A. P., 2004. The Corporate Social Responsibility System in Latin America and the Caribbean. [PDF]. Available at: https://www.focal.ca/pdf/csr_04.pdf. [Accessed on December 16, 2016].

Hertel, W. T., 2015. Global Changes and Challenges of Sustainability. New Jersey: Pearson.

Kirby, P., 2003. Introduction to Latin America. London: Cambridge University Press.

Mobner, K. A., 2014. Corporate Social Responsibility in the Coffee Sector. [PDF]. Available at: https://projekter.aau.dk/projekter/files/195927591/CSR_in_the_Coffee_Sector.pdf. [Accessed on December 16, 2016].

Mol, A., 2006. Governing Environmental Flows. Stamford Cengage Learning.

Oliveria, J., 2012. Upgrading Clusters and Small Enterprises. New York: Oxford University Press.

Patil, S., 2015. Nutraceuticals and Functional Foods. New York: Springer.

Pearson, L., 2008. Ethics and Environment in the Coffee Sector – Linking CSR to the Consumer's Power in the Context of Sustainable Development. [PDF]. Available at: https://hj.diva-portal.org/smash/get/diva2:5391/FULLTEXT01.pdf. [Accessed on December 16, 2016].

Reidy, D., 2013. A Companion to Rawls. New Jersey: John Wiley & Sons.

Sims, G. B., 2007. Addressing the Challenges facing Agricultural Mechanization. New Jersey: John Wiley & Sons.

Srivastava, J., 2013. Agriculture and Environmental Challenges. New York: McGraw-Hill.

Topik, S., 2003. The Global Coffee Economy in Africa, Asia, and Latin America. Stamford: Cengage Learning.

USAK., 2016. Six Ethical Theories Rough Overview. [Online]. Available at: https://homepage.usask.ca/~wiebeb/Etheory.html [Accessed on December 18, 2016].

Williams, G. R., 2014. Social Evolution and States. New Jersey: Pearson.

Wood, W. A., 2009. Kant’s Ethical Thought. London: Kogan Page.

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