Global Economic Geographies 103 Assignment. Business & Marketing Essay

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Locational Theories
Coffee is one of the products that facilitated the globalization of trade or business transactions as it connected various countries through its processing chain even without the use of advanced information and communication technology that drives the current internationalization of economies around the globe. However, unstable market conditions resulting from price manipulations by corporate organizations and lack of an effective regulatory authority deems coffee production to be a costly endeavor to the producing countries. The locals of such nations continue to languish in poverty, illiteracy, and increased social disorder owing to the below minimum wages paid to the workers to sustain the production of the export commodity. Several factors contribute to the continuous devaluation of the important commodity at the expense of the producing countries. The film, Black Gold and the market mogul’s article, The economics of coffee, by Sam Courtney-Guy provide some of the underlying factors affecting the production of coffee in the developing world and its corresponding adverse impacts on the lives of the local farmers. The outlined sources further provide a focal basis upon which a correlation between their outcomes and the locational theories of production can be established.
Coffee makes for one of the leading export commodities in the developing countries and thus a source of livelihood for millions of people around the world. Nevertheless, the coffee producing countries face pricing challenges from the precious commodity as intermediaries dictate their buying prices with utter disregard for the local farmers involved in the production of the highly valued bean. Black Gold gives detailed background information on the deterioration of the coffee trade from being one of the most valued commodities in the global market economy to becoming a source of despair among the local farmers in the developing countries. The early 1960’s have seen a relative moderate trade between the exporters and importers of the precious bean thanks to the intervention of the United Nations through the International Coffee Organization (Francis). The agreements signed by all the involved stakeholders controlled the supply of coffee in the market and thus regulating or rather standardizing the market prices. Consequently, the economies of developing countries dependent on the commodity’s export improved as the local farmers profited from their returns on investment from their farming activities. The United States was instrumental in ensuring that all stakeholders in the agreement complied with the set market regulatory terms and thus maintained the sanity of the market. Its withdrawal from the ICO in 1989 was th...