Reality Of Value Chain

A coffee cup may cost you 200 rupees at a cafe but have you ever wondered how much of the 200 rupees actually reaches the main producer(farmers) of the coffee beans. The answer may surprise you but less than 10% of the 200 rupees is earned by the farmers, majorly dominated by middleme, traders etc: the actuality behind the value chain.

A value chain of a product refers to the steps the product goes through before reaching the consumer, each step adding value to the product. The journey of value chain for coffee starts at the coffee farms mainly of Brazil and Ethiopia where the beans are harvested. These are then sold to middlemen and exporters for very low prices. These are then roasted and packaged by companies who sell and export these beans to the market consumers earning exorbitant profits. The end conclusion of this value of chain is that the producer(hardest worker), heavily exploited, receives the least profits.

The value chain adds value but not necessarily fairness reflecting the problem of economic inequality in the global supply chain. Understanding this concept changes our viewpoint of the commodity we purchase.