Peru Sbux
Economic Conditions of Peru
The Peruvian economy is of modest size, with a GDP of $332 million that equates to a GDP per capita of $10,900. The GDP growth rate is 6.3% and this rate of growth has been slowing for the past couple of years. The country's unemployment rate is relatively low but over a quarter of the country lives below the poverty line. Agricultural accounts for 6.4% of the total economy of Peru (CIA World Factbook, 2013). Coffee is among the country's leading agricultural exports.
The Economics of Coffee in Peru
The coffee industry in Peru remains relatively unorganized, with most production coming from small landowners. The main growing areas are removed from markets and the transportation infrastructure is poor, with many farmers taking their goods to market by donkey. Such markets are often not sophisticated either, with only one or two buyers, meaning that coffee farmers often receive poor prices for their crops (EE, 2013). The market process is repeated later at the larger regional towns, before the coffee is blended with other coffees in warehouses and packed for shipping to the coast. There is a high level of disconnect between the farmers and the end product,...
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