Foundations Of Economics Business Applications Sample

Understanding the Core Principles of Economics in Business

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Introduction: Foundations of Economics Business Applications

Discussing the impact of climate change on coffee production

Producers and supply chain 

Climate change is a long term change in weather and temperatures that is derived from human activities such as greenhouse emissions and chemical usage in production of crops. Deforestation also harm the nature that limits its ability to absorb these harmful gases. Climate change raises deforestation for farming expansion that mitigate large areas of plants necessary for absorbing carbon emissions and treating balance with atmosphere (Gomes et al, 2020). The relationship between coffee production as well as climate change brings undisputable sustainability issues. With climate changes farmers face major issues in growth of the coffee plants. Small farmers as well as basic grain farmers are majorly susceptible to climate changes as their crops are very delicate to altering rainfall as well as rising temperatures patterns. The continuous trend is that farms at tall altitudes harvest good coffee flavours. Light contact reduced the excellence of the coffee. The climate is impacted by factors including sunlight as well as geographical locations.

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Climate change refers as long term changes in weather and temperatures shifts. Climate change is escalating the water cycle as well as disturbing rainfall changes. Climate change is a major threat for many companies but it is reshaping the significance of coffee production. Unpredictable rainfall as well as rising temperature are changing the situations under which coffee plants are commercial, lead to moderate yields as well as improve susceptibilities coffee crops face including diseases (Chemura et al, 2021). These changes are intimidating the lives of farmers as well as also harming the quality of coffee for customers. A global coffee interchange move these beans from farms in one country to another. The major global coffee beans are exported from 10 nations (Ryu, 2023). This includes Brazil, Honduras, Ethiopia, Colombia, Guatemala, Peru, India, Indonesia, Vietnam, Uganda and others. 

With the climate change disrupt growing situations, major countries growing coffee experience changes in their plants. The rise or fall in temperature majorly affect coffee development, changing its flavour that harm both framers as well as coffee brands. Heavy rain erodes soil nutrient that are very critical for evolution of plant. Epidemic of diseases and pests after dry supplications enhance to the productions afflictions. 

The coffee sector cannot immune the influence of the climate changes, but they can adopt strategies to reduce these impacts to ensure sustainability. Coffee companies has a distinct role in this procedure because they source sprightly from the farmers around the world. They have responsibilities and resources to take a significant role in reducing climate change impacts. 

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Strategies coffee companies can take to reduce climate change:

Sustaining sustainable farming practices: Companies can support coffee manufacturers in implementing sustainable farming procedures and practices that help them in mitigating their environmental footprint (Koh et al, 2020). This also helps farmers to preserve the quality of the land. These policies and practices include cover crops, agroforestry as well as shade grown coffee. 

Infrastructure investment: Companies can also capitalise in infrastructure performs in beans manufacturing countries to make its production more successful as well as efficient. This involves investing in irrigation classification, greenhouse as well as other technological advancement for tropical farming. 

Build resilience to change: Companies can also work with various farmers to build up their skills and capabilities in respond to the negative impact of climate change on sustainability. This includes offering access to resources & training as well as helping them to adopt various technologies and tools to increase their performance. Farmers are adapting to change climate by altering their collection of crops and also the time of their field manufacture. Some farmer’s also smearing rising amount of pesticides to control the mounting pest pressure. 

Climate smart technologies: Smallholder farmers also lack the access to market where they sell their coffee beans as well as earn revenue from it (Castillo et al, 2020). These climate smart coffee plants are created to help farmers for resilient to change conditions as well as more resilient to climate change. Brands trading in coffee should invest in various research and development to analyse the market trends that will help the farmers to familiarise with climate change. 

Dynamics and Challenges of the International Coffee Trade

International coffee trade are countries with higher demand for coffee controlling import shares. Major of these importing countries also re-export coffee beans from other parts of the globe. This includes Germany, Italy, Japan, Spain, U.S., Belgium, Canada, France, United Kingdom, Russian Federation an others. United State is the major importer of coffee bean around the world (Ryu, 2023). While Colombia and Brazil are the large source of coffee bean imported from America and Asia because of good coffee culture within the country. The coffee culture within Japan has made the nation a strong player in international coffee trade. In year 2019 the country was the 4th largest coffee bean importer in the globe. Germany places 2nd around the global coffee import nation and is largest coffee roasting industry (Kath et al, 2020). They mainly import coffee from Vietnam, Brazil as well as Honduras. France lift an established coffee market with a rich culture of coffee consumption. Within this country sustainability as well as certification are the vital trends that customers are seeking for as well as value highly. 

Consumers prefer for goods that suits their pReferences and tastes that drive in development of product differentiation across the food sector. This has been founded that Colombian and Spanish customers are the major consumers of coffee are prefer great value trade coffee. Coffee beans trading value is very high because of its high demand in the world. Coffee is required in cafes, restaurants, production of coffee applications, coffee trading companies such as Nestle and many more. Products that are offered in coffee sector includes beans, espresso, pods, instant coffee as well as many more. Climate change possess an existential threat to the international coffee industry who are the major imported of coffee beans. Rise in temperatures, heat waves, droughts as well as weather patterns create a threat to major importer countries and businesses (Rhiney et al, 2021). This signifies that multinational companies of coffee can lose revenue as well as dissolve completely if the climate change endures. Coffee is the majorly imported and consumed commodity within the world. The demand of beans is also rising because of rise in demand from developing countries. Despite the huge consumption of coffee in developed nations, there is a huge demand of coffee from less developed nations. Although smallholder farmers and developing nations produce most of the coffee beans and reap limited advantages. There is also a lack of leadership within coffee industry on adaption. The innovative sustainable coffee changes requirements many years as well as leadership from companies. 

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Coffee beans manufacturing is divided into two segments that is Arabica as well as Robusta. Arabica signifies for the 60 percentage of international production which is preferable choice for customers in US and Europe. On the other hand, Robusta signifies for 40 percentage of international production which is grown in hot climate, low elevation, less gloom as well as more automated mean of manufacturing. The process of Arabica coffee cannot be mechanized so it requires intensive labour work (Grüter et al, 2022). Embracing the coffee importers from numerous geographical locations affords the chance to offer an inclusive variety of flavour profiles to discriminating customers. The distinctive agriculture methods characteristic to several coffee growing areas subsidize to various flavour as well as uplifting the sense of experience for supporters. Global coffee importing allows a planned shield against the concerns modelled by seasonal changes in production of coffee. By expanding the importing locations, countries can preserve steady inventory throughout the year that can help them to reduce vulnerability to supply chain trouble. 

Global climate alteration is impacting both on humans as well as natural systems across the world. The food and agriculture company of the UN evaluates that in between year 2003-2015 climate change caused damage to large economies. This has been affected by droughts, heat waves and extreme weather changes. Climate change incline to aggravate present issues for poor as well as relegated inhabitants (Harvey et al, 2021). Government of various countries are now committed to keep global climate change in check by chasing efforts to diminish greenhouse gas as well as carbon emissions. The helpful ways to recognize the climate change process is by analysing the risk associated with climate. Climate risk are the combination of vulnerability, exposure as well as natural hazards. Despite the financial requirements of developing nations there is a high vulnerability of change in climate. 

Figure: Climate risk

(Source: Bianco, G., 2020)

 

Impact of Climate Change on Coffee Production within Colombia

Coffee is the major traded commodity globally. Customers from all over the world buy as well as like coffee on the regular basis. The economy of many nations be influenced by the production of coffee with development and stability. Climate change have major impact on the production of coffee all around the world. 

Colombia’s coffee sector is a more than 190 years old business. The nation is well known for its good conditions because of tropical climate as well as landscape. The better superiority as made the nation a reliable producer of coffee around the world. Within Colombia the rise in rainfall has damaged the evolution of coffee plants. Growing temperatures harm the plants rapidly (Venancio et al, 2020). Within Colombia, disease as well as pests that target coffee plants has fully-grown in extensiveness. 

Unless action is taken to slow down climate change and other options helps to keep the plant alive, Columbia will being vulnerability because of implication of coffee production. Some actions that limit the negative effects the climate change comprise the immigration of coffee plants to cooler elevations, growing subsidy to safeguard the plants as well as execution of trees to block because of sun. Arabica has a lower acceptance of growing temperatures that is vulnerable to corruption as well as harvests few coffee beans. Colombia run by the National Federal of coffee farmers began increasing a range of coffee that combine Arabica flavour with elements that are made with Robusta. Farmers in Colombia are the major coffee manufacturing nation is facing challenges in achieving quality yields (Quiroga et al, 2020). This is happened by rise in average temperatures as well as unpredictable weather patterns. Local implementation as well as agricultural innovation is assisting Colombia to reduce the negative impacts of climate change.

Coffee development depends on the better climate situations within Colombia. This geographical area is facing issues in damage beans because of high temperature, droughts, weather changes, soil damage, water scarcity as well as other measures. Colombia is upset by these changes, which necessitates them to adapt agroforestry method and high elevations to grow the plants. Various factors including accessibility of alternative terrain at high elevations, rainfall patterns, dry season as well as leading coffee species regulate the consequence on Colombia (Nab and Maslin, 2020). The IDB is responsible for assisting coffee producers in Colombia. This platform encompass of private sector that offers projects that offer strength to coffee industry making it expedient them to endure in the global market. This platform also assist small manufacturers to contribute in global supply chain. From the global perspective, safeguarding the continuous supply of coffee to meet the intensifying demands as well as defending the livelihood of coffee farmers is a main concern that can be resolved by cooperation. 

Colombia’s elevation area where coffee is produced is warm. The number of hours of sunlight has reduced the percentage in the last century because of rising cloud cover as well as not sufficient sun to preserve high level of coffee beans production within some regions. Rainfall excesses are the extensive diseases that is happened by warm weather conditions in the areas. Colombia’s growing unpredictable circumstances stance the major long term threat to the country’s coffee farmers (Bastian et al, 2021). Most of the farmers continue nonmechanized as well as are using labour intensive techniques which creates a major drawback for the country and its production system. The difficulty in producing coffee in Colombia stems from its rising demand, continuous struggle in contradiction of climate changes and the drawbacks connected with small farmers. 

Colombia is taking major actions in implementing sustainable practices to reduce the carbon footprint of their coffee production (Ango, Hylande and Börjeson, 2020). The country’s coffee grower’s federation has implemented initiatives to assist farmers in applying eco-friendly methods that consequence in dropping deforestation, improve water management as well as boost health of soil. 

Recommendations

Adapt agroforestry practices: Ecological conditions highly impact the development of coffee plants. This eventually reflects upon the quality of the coffee. This is significant for the farmers to grow coffee in the suitable ecological areas to enhance the quality of coffee beans. This allows farmers of the various countries to grow trees and crops together that provide major advantages to coffee production. Trees offer shade for coffee plants that helps in reducing the requirement of pesticides, fertilizers and also helps to preserve water. They also facilitate habitat for environment such as creatures and plants that support in controlling disease and pests. 

Nutritional factors: The challenges of recognition to farmers for buying of farm inputs such as chemicals and fertilizers should be addressed properly. Use of nitrogen fertilizer raises the coffee content of beans that lead to more bitter taste. Coffee plants need continuous application of nutrients for good quality and yield of beans. Essential agronomic practices are obligatory to grow plants with more quality. Country’s government should ensure that correct education to all farmers on these practices by organizing training sessions. Moreover, employment of enough agricultural allowance employees as well as availing all the assets needed for work. 

Mitigate greenhouse gas emissions: Coffee is a vital contributor in greenhouse gas that increases deforestation as well as the use of chemicals and fertilizers. Farmers should make use of measures to mitigate greenhouse gas and should implement renewable source of energy, waste management as well as also encourage sustainable land practices. Potential sustainable solutions such as robust cultivars, modifying agrochemical efforts, altitudinal modification and agroforestry can benefit the nations to keep sustainability within their operations. 

Adopt water management: Coffee production implies for a water intensive procedure and due to the scarcity of same concern is rising for many coffee producing areas. By adapting methods to conserve water including recycle water wastage, drip irrigation and plant crops can benefit coffee farmers in dropping their water footprint. The government should also help farmers to sustain ecological practices within their coffee farms. 

REFERENCES

Books and Journals

Ango, T.G., Hylander, K. and Börjeson, L., 2020. Processes of forest cover change since 1958 in the coffee-producing areas of Southwest Ethiopia. Land9(8), p.278.

Bastian, F., Hutabarat, O.S., Dirpan, A., Nainu, F., Harapan, H., Emran, T.B. and Simal-Gandara, J., 2021. From plantation to cup: Changes in bioactive compounds during coffee processing. Foods10(11), p.2827.

Castillo, N.E.T., Melchor-Martínez, E.M., Sierra, J.S.O., Ramirez-Mendoza, R.A., Parra-Saldívar, R. and Iqbal, H.M., 2020. Impact of climate change and early development of coffee rust–An overview of control strategies to preserve organic cultivars in Mexico. Science of the Total Environment738, p.140225.

Chemura, A., Mudereri, B.T., Yalew, A.W. and Gornott, C., 2021. Climate change and specialty coffee potential in Ethiopia. Scientific Reports11(1), p.8097.

Gomes, L.C., Bianchi, F.J.J.A., Cardoso, I.M., Fernandes, R.B.A., Fernandes Filho, E.I. and Schulte, R.P.O., 2020. Agroforestry systems can mitigate the impacts of climate change on coffee production: A spatially explicit assessment in Brazil. Agriculture, Ecosystems & Environment294, p.106858.

Grüter, R., Trachsel, T., Laube, P. and Jaisli, I., 2022. Expected global suitability of coffee, cashew and avocado due to climate change. PloS one17(1), p.e0261976.

Harvey, C.A., Pritts, A.A., Zwetsloot, M.J., Jansen, K., Pulleman, M.M., Armbrecht, I., Avelino, J., Barrera, J.F., Bunn, C., García, J.H. and Isaza, C., 2021. Transformation of coffee-growing landscapes across Latin America. A review. Agronomy for sustainable development41(5), p.62.

Kath, J., Byrareddy, V.M., Craparo, A., Nguyen?Huy, T., Mushtaq, S., Cao, L. and Bossolasco, L., 2020. Not so robust: Robusta coffee production is highly sensitive to temperature. Global Change Biology26(6), pp.3677-3688.

Koh, I., Garrett, R., Janetos, A. and Mueller, N.D., 2020. Climate risks to Brazilian coffee production. Environmental Research Letters15(10), p.104015.

Nab, C. and Maslin, M., 2020. Life cycle assessment synthesis of the carbon footprint of Arabica coffee: Case study of Brazil and Vietnam conventional and sustainable coffee production and export to the United Kingdom. Geo: Geography and Environment7(2), p.e00096.

Quiroga, S., Suárez, C., Solís, J.D. and Martinez-Juarez, P., 2020. Framing vulnerability and coffee farmers’ behaviour in the context of climate change adaptation in Nicaragua. World Development126, p.104733.

Rhiney, K., Guido, Z., Knudson, C., Avelino, J., Bacon, C.M., Leclerc, G., Aime, M.C. and Bebber, D.P., 2021. Epidemics and the future of coffee production. Proceedings of the National Academy of Sciences118(27), p.e2023212118.

Venancio, L.P., Filgueiras, R., Mantovani, E.C., do Amaral, C.H., da Cunha, F.F., dos Santos Silva, F.C., Althoff, D., Dos Santos, R.A. and Cavatte, P.C., 2020. Impact of drought associated with high temperatures on Coffea canephora plantations: a case study in Espírito Santo State, Brazil. Scientific Reports10(1), p.19719.

Online 

Bianco, G., 2020. Climate risk. Online. Available through. :<https://jcsr.springeropen.com/articles/10.1186/s40991-020-00048-0#Fig1> 

Ryu, A., 2023. Visualizing the Global Coffee Trade by Country. Online. Available through. :<https://www.visualcapitalist.com/cp/global-coffee-trade/ > 

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