Negative Impact of Globalization
- Pages: 23
- Word count: 5614
- Category: Economics Globalisation
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Interest in globalisation is world wide, although globalisation is often viewed only in the context of economics. In its broadest sense globalisation affects crosscutting lifetime choices of people everywhere. It includes democracy, human rights, and international commitments to reduce poverty and induce economic progress in many developing countries of the world. Just as there are large numbers of proponents of globalisation, there are hundreds of thousands of critics of as well across the globe. Globalisation is indeed a force to reckon with. This conclusion was clearly stated at the Communiqué of the Lyon Summit of the G7 in June 1996: “ In an increasingly interdependent world, we must all recognize that we have an interest in spreading the benefits of economic growth as widely as possible and in diminishing the risk either of excluding individuals or groups in our own economies or excluding countries or regions from the benefits of globalisation.” This paper outlines the major historical developments of globalisation and specifically describes the effects of globalisation on coffee, the most important item in Uganda’s international trade.
In particular, this report attempts to analyse the impact of liberalization on the production, marketing (supply), demand as well as prices and revenues from coffee in Uganda. Central to this report is the impact of globalisation on the lives of needy rural farmers whose main source of income is coffee. This paper also points to some elements of the biblical basis for needed action. Key definitions. Globalisation has been defined in various ways, but there is no standard definition. It may be best to describe globalisation by its characteristics such as those found in the UN Secretary General’s report on globalisation1: “What is globalisation? The Secretary-General’s preliminary report on globalisation (A/55/342) sets out a framework definition of globalisation. It assumed that globalisation is multi-dimensional and that it can be broken down into numerous complex and interrelated processes that have dynamism of their own, resulting in both varied and often unpredictable effects.
The preliminary report notes that, while there have been previous eras that have experienced globalisation; the present era has certain distinctive features. These include, although they are not limited to: § trade liberalisation; § increasing and changing patterns of financial flows; § cheaper and quicker transport; § the growth in the size and power of corporations; and, § impressive advances in new technology, in particular information and communications technology. Generally, these processes are evolving, partly through their own dynamism and partly through the implementation of international, regional and national rules, standards and policies – in particular, the rules of the WTO, and the policies of the IMF and the World Bank”
Key Assumptions. In its ideal form the promotion of globalisation was initially based on the economic principle of comparative advantage (CA) and a free movements of goods between borders in a market that is free from governmental involvement. CA assumes that as countries concentrate on producing the kinds of goods and services in which they have a relative advantage over other states, the total effect will be an increased volume of trade from which all trading partners benefit. This gain or advantage would result in more consumption and economic growth because the economy will be doing what is most efficient. Additional results include more employment opportunities, improved household incomes and ultimately a better quality of life. The other major assumption of globalisation is borderless marketing arrangements that will facilitate freedom of movement of investment resources as well as goods and services based on the forces of demand and supply.
In reality, globalisation is propelled by far more complex forces such as friction in the movements of goods and time lag from the time of policy implementation and the effect on the market and numerous other conditionalities in addition to the theory of comparative advantage. Most observers would say that what happens under globalisation is the product of very complex economic, political and social considerations. Yet, there is a spiritual dimension of globalisation, too. In various parts of scripture, it is apparent that genuine prosperity is closely linked to personal and corporate love for God as evidenced by love for one’s neighbour, justice, righteous living and concern for the poor. In Deuteronomy, 28: 1-67 and 29:11-16, the prosperity of Israel was to be inextricably linked to obedience to God’s commandments of love and righteous living. The very survival of the nation of Israel was subject to obedience to God and his ways of justice. (1 Kings 9: 2-9 and II Chronicles 7: 12-22). This raises important ethical issues and spiritual dimensions about globalisation, specifically, and human well being in general. How is the pursuit for profit aligned with love for God and for neighbour? How does globalisation impact the poor? How is justice protected or affected by globalisation and the free market? How wholesome are the benefits of globalisation as seen through the lenses of scripture? Above all, what responsibilities do Christians have in the face of globalisation?
Overview of the effects of globalisation on world trade From an economic perspective, the primary engine that is driving the complex effects of globalisation on trade is liberalisation. Globalisation emphasises that trading among member countries should open up their markets and that trade in goods and services should be “borderless.” According to Killick (2000)2, a significant part of the world and a large numbers of countries are now effectively participating in the processes of integration and globalisation. In this regard globalisation may be thought of as the integration of economies through trade, capital flows and information technology. A key assumptions underlying the trade liberalisation drive is that once markets are free from trade restrictions, factors of production will be directed by the unrestricted forces of demand and supply, leading to efficient investment by producers.
Other assumptions include the free movements of factors of productions such as capital and labour and that there are instantaneous adjustments. That is, labour would move from one sector into another with smooth transition and that goods move from one market to another without friction. It is also argued that the ultimate result will be an increase in total output for all trading partners, based on the principle of comparative advantage. These economic gains are shown in Table 1. Table 1: Foreign Exchange Markets (in billions of US dollars and percentages) Foreign exchange Markets Estimated daily global turnover, of which percentage trade in: Total world exports (goods and services) Total global reserves (minus gold)
The rapid growth of Foreign Direct Investment (FDI) has also been an important element of economic integration. Overall world trade has grown two or three times faster than global GNP (gross national product) in the last decade. Sadly enough, however, Africa has consistently fallen behind in this trade growth to the extent that today Africa’s total exports hardly makes two percent of total world exports. This is apparently due to the relatively slow pace at which Africa has opened up its borders to world trade. “The paradox of under achievement in Africa is that although Africa depends fairly heavily on trade, it has continued to maintain less open economies than in any other of the world’s major regions, hence the related loss of the world market”
Rapid expansion of multinational companies from developed or rich countries operating globally and impacting FDI is another important effect of globalisation. There is a clear trend towards increasing FDI across most major regions of the world. However, the figures in Table 3 show that Africa has attracted the lowest portion of FDI. Apparently this is largely due to lack of supportive infrastructure, questions about the credibility of its policies and institutional risks and uncertainties surrounding the domestic environments in most African economies. The situation in Africa has limited Africa’s benefits from globalisation to date.
Other impacts of globalisation on the global scale include the overall reduction of communication costs associated with the information technology revolution. E-commerce is one of the outstanding aspects of trade that has grown tremendously due to globalisation. In addition there have been trends towards the convergence of governments’ approaches to economic policy making in Africa. Evidence of this is the emergence of regional groupings such as SADC (Southern African Development Community), the revival of the East African Community, NEPAD (New Partnership for Africa’s Development) and the African Union (AU).
In particular, a positive effect of globalisation is the emerging trend towards trade in production components. As developing countries opened their markets, manufacturers from industrialized countries identified the benefit of relocating part of their manufacturing processes to new locations especially among developing countries. The attractions towards this could include proximity to cheaper labour and sometimes to final consumer markets. Other factors include a reduction or even absence of tariffs and tax exemptions offered by host countries of the subsidiary-manufacturing firms. Developing countries have particularly benefited from this in terms of the resultant employment opportunities for their people. Similarly, these relocations of manufacturing firms (or parts of them) have introduced new technologies to developing countries. With these technology transfers come training opportunities for local employees. Quite often manufacturing subsidiaries have also been linked to establishment of distribution networks that expand employment even further.
This aspect of trade has impacted entire regions in some cases, causing their benefits to transcend national borders. “Developing countries would derive large gains from an easing of barriers to agricultural products and to labour-intensive construction and maritime services”5. Specific effects of globalisation on the world coffee trade De-regularization of coffee trade and its effects. The main effect of globalisation on the coffee trade is due to trade liberalisation that led to the collapse of the International Coffee Organization (IOC). This meant that coffee-producing countries no longer had guaranteed quotas in the coffee market. According to the World Trade Organization (WTO) protocols, the coffee market was opened to unlimited supply. It is a well-known fact that demand for most agricultural products (including coffee) is mostly inelastic. Moreover, the greatest demand for coffee is in Western Countries where population growth is low. Consequently, globalisation, coupled with the World Bank’s lending money to Vietnam to produce coffee, has led to over-supply leading to reduction in prices to the farmer. This may be seen by comparing Tables 4 and 5 regarding the global production versus the falling world prices.
Falling world prices. Other related developments on the global scene include the phasing out of the cold war that saw many former and current communist countries join the Western market system. Notable among these was Vietnam, which quickly rose through the ranks of coffee producing countries to become the fourth largest producer by 1999. Even though the Vietnamese have been somewhat discouraged from coffee production due to falling world market prices, they still contribute significantly to oversupply of coffee that continues to push world prices lower. Other countries such as Angola witnessed the end of its civil war, which allowed communities to concentrate more on coffee production among other things. There was also a short-lived boom in world market prices, which rose to US $4.00 per kilogram (Kg) in 1994/95, mainly due to the drastic fall in coffee supply by Brazil.
Reductions in government revenues. Transnational corporations and customers in the West, particularly, benefit from declining coffee prices. In contrast, millions of people in developing countries such as Uganda have suffered immensely from the resultant reduction of government revenues as well as the fall in household income. The affected governments have been increasingly constrained in their effort to provide essential services for their people due to reduced incomes. This has significant implications on the government’s credibility and even raises critical questions about the sovereignty of entire states that cannot meet the basic needs of their people. Important ethical questions include, “Is the world really unable to do anything about the falling prices? Does a sufficient level of political or human will exist to limit the fall in world coffee prices for the sake of the poor? Does the church understand the issues and/or its obligation enough to speak out and advocate for the voiceless caught up in the apparent endless drama?
Specific impacts of globalisation on coffee trade in Uganda: positive effects Positive effects of changes in the policy framework Influences of globalisation in Uganda initially started in the early 1980s in an attempt to stabilize the Ugandan economy that had been severely damaged during the rule of Idi Amin from 1971-1979. In 1980, the IMF and the World Bank tried to support a stabilisation programme that included introduction of a more flexible exchange rate policy, the deregulation of many prices, and a regular review of producer prices. However, these economic stabilisation attempts collapsed completely following the political instability and the civil war of 1980-1985 that eventually ushered the current National Resistance Government (NRM) into power. Following the change in government, the period 1987-1994 was characterized by major structural adjustment and economic recovery programmes. As some IMF researchers 7
have observed, “…substantial structural reforms have taken place in the economy in the areas of price liberalization, exchange and payment liberalization, public enterprise reform, financial sector reform, civil service reform and army demobilization”6. During 1993/94, Uganda completed the liberalization of its exchange and trade system. On 5 April 1994, the Government accepted the obligations of Article VIII, Section 2, 3 and 4, of the IMF’s Articles of Agreement, expressing its commitment to a free and open exchange system. The period of 1996-2003 has also witnessed continued economic growth averaging 6% per annum, relatively controlled inflation at about 5.5 per annum as well as significant political changes for the better. Despite these changes, GDP remains low. According to the Ministry of Finance, Uganda’s economy is estimated to grow at 4.9% of GDP in 2003/04 – a reduction from 5.6% in 2002/03. The population growth rate stands at 3.4%7. Major improvements towards GDP growth are still required. In particular, improvements are needed in efficiency of resource allocation; increases in public and private savings rates as well as investment-GDP ratio.
Like elsewhere in Africa, infrastructure investments and investments in human capital as well as upgrading the social well being of Ugandan citizens remain key areas of improvement. In Uganda, globalisation is illustrated in part by the kind of policy framework that Uganda has pursued over the last one and a half decades. In line with the commitments that Uganda made towards the WTO protocols, Uganda’s broad policy objectives have continued to focus on: (i) The need to stabilise the economy, partly through restoring the fiscal and monetary discipline; (ii) The liberalisation of consumer and producer prices in order to align prices in favour of export-oriented production and import substitution; (iii)
Progressive movement towards a realistic, market-determined exchange rate within a system of restrictions; (iv) The strengthening of the balance of payments and the normalisation of relations with creditors; (v) The removal of trade restrictions; (vi) The privatisation of and rationalisation of state enterprises; (vii) The downsizing of the civil service and the army; and (viii) The liberalisation of interest rates within a structured and more efficient financial system capable of mobilizing savings and increasing investments so as to increase the rate of economic growth. The major positive effect of globalisation was the monetary policy framework that in many ways been the vehicle for the few positive impacts of globalisation on coffee trade in Uganda.
The liberalisation of agricultural commodity prices and the abolition of various marketing boards have had the short-term effect of increasing revenues to farmers as well as lowering marketing costs, thus significantly raising the profitability of agricultural production, coffee included. This was a positive development. Coffee remains the leading export sector in Uganda’s economy, accounting for over US $100 million in export sales in the 2000/01-market year. Over 500,000 small farmers produce coffee across the country with an average farm size of less than one hectare (ha). The sector provides income to over 2 million people who live and work on these farms and in the related support and downstream businesses. The coffee-producing communities in Uganda are shown on the enclosed map. Better liquidity for the farmer Another positive effect of liberalisation is related to better liquidity.
In case of Uganda, before liberalisation, many farmers would sell their coffee and were given a type of promissory notes from the Coffee Marketing Board. They would often wait for months before actually receiving cash for the coffee they sold. Under the liberalised trading arrangements, coffee buyers pay readily. In that sense the liberalised framework is more beneficial to the farmer, even though there are increased uncertainties in the price that farmers can expect. There are a few other indirect effects of globalisation, such as improved telephone communication, greater radio coverage and rural electrification programmes. These are not specific to the coffee sector but which the rural coffee farmer benefits like other citizens.
Negative effects Reduced incomes Even though the percentage of the world coffee price earned by the farmer is greater under liberalisation (1993-2003), in real terms the earnings by the farmer have been reduced 6.25 times. This is due to the impact of globalisation on over supply. For all their labour, coffee farmers earn much less as evidenced by their reduced household incomes. As a result, coffee-farming families are no longer able to afford a wide range of basic necessities.
Increased vulnerability of the rural farmer to world events Before liberalisation, the Coffee Marketing Board (CMB) traded in coffee with foreign coffee buyers on behalf of the government. The CMB operated in a way that guaranteed coffee prices to the farmer based on the assured quotas that CMB negotiated on the world market on behalf of the Uganda government. Even though the cost of the CMB staff and infrastructure, as well as the coffee tax, reduced the farmer’s net pay, the farmer was assured of a particular price when he/she decided to produce coffee. After liberalisation and abolishment of the CMB, the farmer is more vulnerable to price change shocks in the world market. This is a negative effect of globalisation. As an expert at Makerere University’s Economic Policy and Research Centre (EPRC) stated, “ …under globalisation, the rural farmer is like a tender plant that has been exposed to the full vagaries of nature. This farmer must be protected otherwise he is bound to wither”. Impact of Price reductions During the pre-liberalisation period Ugandan farmers were earning approximately 30% of the international coffee price.
Under the liberalised coffee trade period, farmers today earn approximately 50% of the world coffee price. Unfortunately, in real terms, the actual has drastically fallen from about US $2.5 in 1994 to US $0.4 in May 2003. (For example as of May 2003, the indicative farm gate price published by the Central Bank in Uganda for Robusta US $0.20 per Kg which is approximately 50% of the world market price that stood at about US $0.45 per Kg). Mismatched Information systems An important assumption under globalisation is the existence of a good information system. In case of Uganda, the Uganda Coffee Development Authority has made attempts to link with a private telecommunications firm, MTN, through which indicative prices are communicated to farmers. Besides the information that is accessible through MTN, the Central Bank (Bank of Uganda) publishes monthly price trends for different coffee types. Yet access to this information by the farmers is still very low. Additional efforts by government to facilitate information availability are via the District Agricultural Training & Information Centres through the Agriculture Sector Programme Support (ASPS).
Under this initiative, each district is expected to create an information hub with access to the Internet. These attempts appear to be steps in the right direction. However, this effort is still new and has not yet proved effective. The overall reality is that the rural coffee farmer in Uganda is not yet effectively connected to any effective information systems to be able to benefit from globalisation – hence the perpetual vulnerability that continues among Ugandan coffee farmers. Inadequate Transport systems Another basic assumption under globalisation is that there is presumed ease of conveyance to facilitate easy transportation of factors of production as well as the products themselves. In case of Uganda, transport facilities in rural areas where coffee is produced are too inadequate to effectively contribute to the improvement of the farmers’ benefits from globalisation. Approximately 50% of the cost of marketing coffee is spent on transportation costs8. Moreover, because the farmers in Uganda mainly sell unprocessed coffee, their product is usually bulky.
Unfair WTO conditionalities in the midst of weaknesses among national negotiators According to officials from Economic Policy Research Centre located in Makerere University in Kampala, another important factor that eventually aggravates the impacts of globalisation on the Ugandan farmer is the failure of the Ugandan national negotiators. The WTO sets conditionalities to which member countries are supposed to abide by. The process of arriving at these conditionalities involves consultations of sorts. The biggest constraint facing poor countries in this connection is that they have few qualified negotiators that are able to articulate a favourable position for their countries. To illustrate the weakness of negotiators from poor countries such as Uganda, the officials dramatized it as follows: “The placenta in the mother’s womb has failed the unborn baby. How can countries like Uganda build the kinds of systems that can play the ‘placenta role’ effectively?” Often the negotiations follow several simultaneous tracks where countries as Uganda are not effectively represented both in numbers and in terms of competency of negotiators.
The result includes poor interpretation of the WTO protocols, which leads to poor policy formulation. (Today Uganda actually lacks a clear trade policy, yet issues of regulation cannot be left to the private sector). Quite often, Uganda relies on civil society activists to push her case, although these civil society members often have non-cohesive agendas and do not have voting rights in WTO forums. Unfair trading arrangements enslaving the majority and benefiting the minority powerful The first is the negative impact on local manufacturing firms that compete against international importers. Since the larger manufacturing companies are already enjoying economies of large-scale production, these giants easily force small manufacturing firms in less developed countries out of business once they enter the markets where the small firms operate. Without external assistance, small firms are unable to reorganise and some end up bankrupt. According to OXFAM, “In more than 50 countries around the world, 25 million coffee farmers and their families face poverty and misery due to a drastic fall in world prices. The price paid to farmers fell more than 70% over the last five years. Taking inflation into account, families are earning less from their product than their ancestors did 100 years ago! This crisis has been brought on by a world wide over supply of coffee that allows coffee corporations to buy at rock bottom prices – prices so low that they don’t even cover the cost of production”.
Uganda is caught up in the same cycle. OXFAM goes further to quote the story of Salome Kafuluzi from Uganda: “ Salome Kafuluzi lives in Uganda with her husband Peter and 13 of their children and grand children. They have planted and lived off coffee since 1945. Salome says, ‘ We’re not happy. We’re failing in everything. We can’t buy essentials. We can’t have meals like rice – just potatoes, beans and matooke10… We can’t send the children to school.’”11 A final illustration of the unfairness in the coffee trade: “While the price paid for coffee to producers has bottomed out, coffee processing corporations are making huge profits. Four major coffee roasting companies – Nestle, Kraft, Sarah Lee and Procter & Gamble – control nearly 50% percent of the world’s coffee market.
They have to be part of the solution to the coffee crisis”12. Limited benefits from Foreign Direct Investment (FDI) Under globalisation, FDI is assumed to easily flow towards low cost areas of production. It is argued that when liberalisation is permitted to work, then producers are likely to move their production capital to countries where labour is cheaper. In the case of coffee production, locating processing industries in the coffee producing countries such as like Uganda would attract additional benefits of creating employment and by reducing the cost of transporting raw coffee, which tends to be bulky and robs the farmer of additional income. Unfortunately, the liberalisation policies of the government of Uganda have not yet attracted any significant FDI. The few new companies that were set up focused only on ‘trade’ and not on the production aspects probably because of the uncertainty of the world prices, which continue to plummet. The much-hyped increased promise of FDI has not happened in Uganda’s case.
Unrealistic expectations in human capital movements Globalisation promoters also extend the argument of free movement of factors of production to include labour. In Uganda approximately 50% do not read or write. The majority of coffee farmers are rural-based and live below the poverty line. Such people lack what it takes to cross national borders to engage in credible trade due to language barriers, knowledge and skills deficiencies. They have therefore not benefited from globalisation by way of human capital movements. Other negative factors impacting the rural farmer in the face of globalisation There are a number of additional factors that affect the rural coffee farmer making it doubly difficult for them to benefit from globalisation. · Coffee wilt disease – In 1995 coffee wilt disease was identified in Uganda and has spread to almost all coffee producing districts. According to the Annual Report of the Masaka District Agriculture Officer, the farmers’ critical problems include: “ diseases and pests notably the coffee wilt disease which is threatening the coffee industry in some parts of the district.”13 This is a double blow in light of the falling world prices.
· Weak National Policies – Officials from the EPRC contend that weaknesses in policy formulation contributed to the spreading of coffee wilt disease to many parts of Uganda. With weak policy formulation frameworks, rural farmers in countries like Uganda are bound to suffer immensely. EPRC estimates that up to 50% of the coffee trees have been affected by the coffee wilt disease in Luwero District, a traditional coffeeproducing area. A necessary condition, therefore, before needy communities can truly benefit from globalisation is a sound policy framework that is able to minimize the negative impacts of globalisation while maximizing the positive effects there from. Furthermore, EPRC argues that the absence of an effective “regulator,” that is, an appropriate policy and the technical human resource that can enforce it, the wilt disease cannot be contained.
Withdrawal of government technicians and over reliance on non-Governmental organisations (NGOs) is very presumptuous since NGOs generally lack the technically competent people both in quality as well as in numbers necessary to deal with such specialized fields. A final example of the weak policies is with regard to efforts by government to liberalise the provision of services even further via the National Agriculture Advisory Development Services programme (NAADS). This initiative is intended to ultimately commercialise extension service delivery. Farmers who request services will have to pay directly for them. This raises the question of the most vulnerable farmers who may not afford let alone know exactly what knowledge gaps they have. There is a dilemma of how such farmers can be served. Just as negative effects of globalisation are alarming, it is equally disturbing to see that the church in Uganda has generally been silent or unable to speak out against the political and economic injustices arising from globalisation in Uganda.
The church has not been able to tap its far reaching network and even the goodwill that it still enjoys among the masses to voice the concerns of the farmers. This is like a double tragedy for the rural coffee farmer. The challenging message that the church leadership needs to articulate for the powerful who perpetuate the negative effects of globalisation among the poor is summarized in the words of Psalm 82:2-4, “How long will you judge unjustly and show partiality to the wicked? … Do justice to the weak (poor) and fatherless; maintain the rights of the afflicted and needy. Deliver the poor and needy; rescue them out of the hand of the wicked”. While this is not to criminalise the powerful transnational corporations that control the global coffee trade, there is a clear call to them to take steps to relieve the suffering of the poor. The church has the duty to voice this message clearly.
Recommendations Renegotiate terms Generally, globalisation may have some positive effects. To enhance some of these positive effects, renegotiation of terms with the WTO and other trade partners is needed. In this respect, requests for grace periods during which necessary safety nets, appropriate policies and infrastructure can be worked on. These are particularly relevant to the transport and communication sectors. This will however require benevolent, patriotic Ugandan technicians who can study the WTO protocols. These should be people who can adequately interpret Uganda’s reality and help to negotiate appropriately with Uganda’s development partners. Besides, they should help to develop appropriate policies that meet the requirements of the renegotiated protocols in ways that benefit the poor farmers. For the long-term, consideration should be given to the following recommendations. Special attention on International Communications Technology (ICT) Build on the small efforts towards improving information communication technology to expand the coverage. Place vital information and knowledge in the hands of farmers countrywide. Do not simply avail information to farmers.
Train them on how best to use it for their advantage in the coffee trade. As farmers cut down their costs of marketing through better information available to them, they may earn more and be encouraged to produce even more. Expand rural electrification system An enlarged electric net will contribute towards adding value to both coffee and other agricultural products, placing the farmer in a better position to earn a higher income from his/her labours. This is one of the areas for negotiation with development partners, along side hydroelectricity development. Solar energy also needs to be developed as part of government policy to improve the living condition and production environment of the majority of the people who live in rural areas.
Review institutional frameworks Policies hang on institutional frameworks. Without appropriate structures for implementation, the best of ideas can never be realized. The policies that govern the Plan for Modernisation of Agriculture (PMA), for example, need to be backed by effective institutional frameworks. For example, as long as the extension service providers operate like business people or are simply NGO staff who do not cover all farmers effectively, chances of PMA succeeding are minimal. Globalisation will not benefit the coffee industry without an effective institutional framework for policy development and implementation. Uganda needs to review the current institutional framework that is expected to facilitate the implementation of the PMA to ensure effectiveness especially for the Coffee industry, which is the backbone of the Ugandan economy. Special attention should be on developing technical capacities necessary in the areas of policy formulation and technical back up for the large rural farming community. Do not just encourage more production: focus on better quality brands that fetch better prices Promote growing of new Arabica coffee trees in areas that can produce high-value coffees (appellations, specialty, organic biodiversity).
Arabica coffee still has greater demand and attracts better price than Robusta coffee. Promote coffee more intentionally and actively; develop special Uganda brands Given the over supply on the world market, Uganda seriously needs to distinguish her coffee brand through aggressive promotion activities. A few countries have made great gains via this route. Strengthen production and marketing network Encourage and expand the recent revitalization of farmers’ cooperatives through training and information, support towards processing, biodiversity, business skills, understanding markets, input sourcing and selling the final products. Civil society advocacy Civil society, especially the church, must work towards a united front and speak out in defence of rural coffee farmers who are currently stuck under the shackles of the falling coffee prices perpetuated by actions of the powerful political and economic institutions. Conclusion Globalisation has had a number of effects on the coffee industry in general.
Most of the positive effects of globalisation on the coffee trade in Uganda are still only in “potential terms”. There still remain major reforms, beginning on the global level and include much-needed renegotiations of selected WTO terms and conditionalities. New aid packages are needed with development partners, fostering activities that can address the tremendous infrastructure improvements needed to enable Uganda to benefit from globalisation. On the domestic scene, important policy reforms have to be undertaken especially to cater for technical requirements necessary to backstop the production efforts by the farmers. Lastly, for Uganda to benefit more from globalisation, fundamental changes must be made in the capacity of political leaders, as well as that of technicians (public servants), who play a big role in determining the economic decisions that are made on the coffee industry.
Massive investments into education are necessary to uplift the overall human capital so as to prepare a stage for greater value addition to the coffee products at all stages within Uganda, so as to earn better incomes at family and national levels. Similar to governments that are challenged to review their policies and strengthen their capacity to negotiate with the powerful advocates of globalisation, civil society needs to rediscover parts of its vocation, especially the important role to advocate for the poor in the face of virtually irreversible forces like globalisation.