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‘Fair’ policies for the coffee trade – protecting people or biodiversity?

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  • KITTI, MITRI
  • HEIKKILÄ, JAAKKO
  • HUHTALA, ANNI

Abstract

We investigate the role that economic instruments can play in promoting economic sustainability and the preservation of biodiversity in agroforestry management in coffee production. Most of the world's coffee producers live in poverty and manage agro-ecosystems in regions that are culturally and biologically among the most diverse on the globe. Despite the relatively recent finding that bees may augment pollination and boost coffee crop yields, the short-term revenues from intense monoculture drive land-use decisions that destroy the forest strips serving as habitats for pollinating insects. Our study investigates whether farmers specialize in environmentally detrimental (sun-grown) or sustainable (shade-grown) farming, or both practices coexist. We calibrate an empirical model to characterize the equilibria and investigate the ecological and economic impacts of three alternative policy instruments: conservation fees, price premiums, and minimum wages.

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Bibliographic Info

Article provided by Cambridge University Press in its journal Environment and Development Economics.

Volume (Year): 14 (2009)
Issue (Month): 06 (December)
Pages: 739-758

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Handle: RePEc:cup:endeec:v:14:y:2009:i:06:p:739-758_00

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  1. Laura T. Raynolds & Douglas Murray & Peter Leigh Taylor, 2004. "Fair trade coffee: building producer capacity via global networks," Journal of International Development, John Wiley & Sons, Ltd., vol. 16(8), pages 1109-1121.
  2. Pablo Benítez & Timo Kuosmanen & Roland Olschewski & G. Cornelis van Kooten, 2004. "Conservation Payments under Risk: A Stochastic Dominance Approach," Working Papers, University of Victoria, Department of Economics, Resource Economics and Policy Analysis Research Group 2004-05, University of Victoria, Department of Economics, Resource Economics and Policy Analysis Research Group.
  3. Loureiro, Maria L. & Lotade, Justus, 2005. "Do fair trade and eco-labels in coffee wake up the consumer conscience?," Ecological Economics, Elsevier, vol. 53(1), pages 129-138, April.
  4. Paul J. Ferraro & R. David Simpson, 2002. "The Cost-Effectiveness of Conservation Payments," Land Economics, University of Wisconsin Press, vol. 78(3), pages 339-353.
  5. Gindling, T.H. & Terrell, Katherine, 2005. "The effect of minimum wages on actual wages in formal and informal sectors in Costa Rica," World Development, Elsevier, vol. 33(11), pages 1905-1921, November.
  6. Lustig, N. & Mcleod, D., 1996. "Minimum Wages and Poverty in Developing Countries : Some Empirical Evidence," Papers, Brookings Institution - Working Papers 125, Brookings Institution - Working Papers.
  7. Paul Ferraro & Toshihiro Uchida & Jon Conrad, 2005. "Price Premiums for Eco-friendly Commodities: Are ‘Green’ Markets the Best Way to Protect Endangered Ecosystems?," Environmental & Resource Economics, European Association of Environmental and Resource Economists, European Association of Environmental and Resource Economists, vol. 32(3), pages 419-438, November.
  8. Gobbi, Jose A., 2000. "Is biodiversity-friendly coffee financially viable? An analysis of five different coffee production systems in western El Salvador," Ecological Economics, Elsevier, vol. 33(2), pages 267-281, May.
  9. Ninan, K.N. & Sathyapalan, Jyothis, 2005. "The economics of biodiversity conservation: a study of a coffee growing region in the Western Ghats of India," Ecological Economics, Elsevier, vol. 55(1), pages 61-72, October.
  10. Sedjo, Roger & Swallow, Stephen, 1999. "Eco-Labeling and the Price Premium," Discussion Papers, Resources For the Future dp-00-04, Resources For the Future.
  11. Bulte, E.H. & Horan, R.D., 2003. "Habitat conservation, wildlife extraction and agricultural expansion," Open Access publications from Tilburg University urn:nbn:nl:ui:12-112507, Tilburg University.
  12. Stephen K. Swallow & Roger A. Sedjo, 2000. "Eco-Labeling Consequences in General Equilibrium: A Graphical Assessment," Land Economics, University of Wisconsin Press, vol. 76(1), pages 28-36.
  13. Lall, Somik V. & Selod, Harris & Shalizi, Zmarak, 2006. "Rural-urban migration in developing countries : a survey of theoretical predictions and empirical findings," Policy Research Working Paper Series 3915, The World Bank.
  14. Perfecto, Ivette & Vandermeer, John & Mas, Alex & Pinto, Lorena Soto, 2005. "Biodiversity, yield, and shade coffee certification," Ecological Economics, Elsevier, vol. 54(4), pages 435-446, September.
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Cited by:
  1. Barham, Bradford L. & Weber, Jeremy G., 2012. "The Economic Sustainability of Certified Coffee: Recent Evidence from Mexico and Peru," World Development, Elsevier, vol. 40(6), pages 1269-1279.

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