Tropical commodity chains, forward integration strategies and international inequality: coffee, cocoa and tea1

Abstract

This paper presents a comparative analysis of three tropical commodity chains, for a set of commodities often grouped together as the tropical beverages: coffee, cocoa and tea. The analysis demonstrates the ways in which the structures of these chains reinforce the north-south dimension of international inequality and help to explain its persistence over time. It focuses on attempts by actors in the producing regions to move forward into the more advanced processing stages of the chains, in order to realize higher returns from their commodity exports. Comparisons across commodity chains identify structural features of the chains that set limits on, and open possibilities for, forward integration. Features considered include economies of scale in the early processing stages and the stage at which intermediate products first become storable and transportable. Comparisons across countries within commodity chains identify additional factors that help to explain successes or failures in individual cases: forms of state action, the strength of the local capitalist class and the size of the domestic market. Control over the consumption end of the commodity chain by transnational corporations is the most important factor limiting the benefits derived from forward integration strategies.