Good morning.
Do we need an OPEC for coffee growers? Cartels, of course, distort the market and hurt consumers. In its heyday, OPEC diverted massive amounts of money away from everyone who drove cars to the few lucky nations sitting on oil reserves. But in the case of coffee, the money would flow downhill—to people working on coffee farms and suffering from the lowest prices in decades.
It’s not an easy thing to organize. Some 30 countries sell coffee beans, and for a cartel to be effective, most would have to agree to act in unison. Any agreement by coffee buyers, like giants Nestle and Starbucks, to pay higher prices could induce more production. But coffee growers are suffering a world of hurt. If companies have a responsibility to buy from suppliers that pay a living wage, shouldn’t they also be responsible for sourcing commodities at a price that doesn’t induce starvation?
Coffee growers are encouraged by the fact that cocoa growers from Ghana and Côte d’Ivoire got buyers to agree to pay more for the key ingredient in chocolate. “If they can reach an agreement, why can’t we?” said Vanusia Nogueira, executive director of the Brazil Specialty Coffee Association.
The World Coffee Producers Forum will meet in Brazil next week to wrestle with the issue. You can read more here. And make sure to take a minute to browse Fortune‘s 40 Under 40 List, which is online this morning. Other news below.
| Alan Murray | |
| @alansmurray | |
| alan.murray@fortune.com |
Top News
Trump Pledged to Tone It Down on Hong Kong
To get trade talks going again with China, Trump pledged to lighten criticism of Beijing's response to the protests in Hong Kong over a proposed extradition bill, according to the Financial Times. Meeting in Osaka, Japan for the G20, the state department allegedly ordered the departing U.S. consul-general to water down a speech he was giving that mentioned the protests. FT
Airbus Overtakes Boeing
The grounding of Boeing's 737 Max aircraft presented an opportunity to Airbus: to become the world's largest plane manufacturer, without doing a thing. Boeing held the top spot for seven years, but its deliveries dropped by more than a third in the first half of this year alone as a result of safety fears, with the grounding now stretching to almost four months. Wall Street Journal
Safeguarding the Strait of Hormuz
The chairman of the U.S. Joints Chief of Staff wants to create an international military coalition in the waters between Yemen and Iran—otherwise known as the Strait of Hormuz, the world's foremost oil chokepoint, which forms the gateway from the energy markets of the Gulf to buyers around the world. The push comes after a series of attacks in the strait on oil tankers this spring, which U.S. officials blamed on Iran. BBC
The Case for Cancelling Student Debt
In this editorial for Fortune, Democratic presidential candidate Bernie Sanders argues canceling all $1.6 trillion of student debt would boost the economy by around $1 trillion over the next decade, creating jobs and giving graduates the financial space to buy homes, cars, and open businesses. Sanders argues the generation that graduated after the financial crisis is still grappling with crippling debt, and that the years after WWII can provide a guide for making education affordable again. Fortune
Around the Water Cooler
Jay-Z, the Marijuana Strategist
The rapper, who already has plenty of other careers, said he has signed a multi-year deal with Caliva, a California-based cannabis company. He's not the only big name tied to the brand: the company is backed by $75 million in funding from retired NFL star Joe Montana's venture capital firm. Fortune
TV Shows With Big-Movie Budgets
Wading into the crowded streaming market now comes with a high price tag—so high, in fact, that a series might look more at home alongside big-budget blockbusters than the smaller-scale TV shows of the past. Big studios with new streaming services are shelling out up to $8-$15 million an episode, which over several seasons, can add up to $150 million—the budget of the latest Spider-Man movie. Wall Street Journal
Charges of 'Moral Harassment'
Grappling with France's tight labor laws and looking to shrink the workforce by thousands, France Télécom pursued a different strategy than direct layoffs, lawyers say: make life so miserable for employees that they left of their own accord. Instead, at least 35 employees committed suicide, and those former top executives are now on trial in France for "moral harassment." The trial runs until Friday. New York Times
Even the Dutch Are Struggling to Reduce Emissions
Here's a surprising fact: the Dutch are some of Europe's highest polluters—eclipsing Germany and Poland—due to their industry-heavy Rotterdam hub, aviation, and greenhouse agriculture. But when the country's political parties joined forces to find consensus on reducing emissions, they found some changes—like pushing the power system toward more renewable energy—were much easier than simply getting voters onboard. The Economist
This edition of CEO Daily was edited by Katherine Dunn. Find previous editions here, and sign up for other Fortune newsletters here.
