It is Fairtrade Fortnight, and we are all being encouraged to pay extra for everything from coffee to bananas. Coffee, a totemic product for the development community, is a product where many producers have suffered from lowering prices. Massive overproduction, caused largely by mechanisation in Brazil and the rise of Vietnam as a major producer, has had its effect on prices.

Ideally, many coffee farmers would move up to doing more than just growing coffee - they would process and package the product, stick their own trademark on it and then sell it direct to Western supermarkets. A lot of the value in coffee is in the processing and packaging, and it would be great if that could be captured by developing country producers. And farmers would mechanise as much as possible, increasing their productivity.

But it’s not as simple as that. Franklin Cudjoe, a land economist in Accra, Ghana, says farmers find it difficult to progress like this:

The real determinants here are high import taxes on agricultural machinery. I have always argued that import taxes are indeterminate until the day you get your imported goods into your home. A best estimate on imported used saloon car is almost 100%. Port authorities demand 50% of the original value of the car, 12.5% VAT, Regional levy of 0.5%, 1% CIF value, haulage tax which varies, and bribes to facilitate speedy paper work. Imagine how much will be slammed on heavy agricultural equipment when we know in Ghana that we do not have enough rice mills, even the technologically archaic!

It is worth noting that on industrial products, developing countries average over four times the tariff rates of developed countries. Cudjoe also points out that it is difficult to get access to credit to pay for mechanisation. That poses a real problem. Some Western purchasers, like Starbucks, are starting to help farmers get access to credit, but much more needs to be done, especially in helping developing countries formalise property rights. Enlightened retailers are already getting involved and helping their developing country suppliers become more productive - this should not be seen as charity: it’s good business sense.