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How much more do growers receive for Fair Trade-organic coffee?

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  • Weber, Jeremy G.

Abstract

I use a representative sample of coffee growing households in southern Mexico to estimate the price premium and gross income gain from participating in Fair Trade-organic markets through grower cooperatives. For the 2004-2005 season, FT-organic growers received an average premium of 12.8 cents per pound, yielding a gross income gain of 5% of total household income or about 26 dollars per household member. The gain is net of the costs of cooperative participation but not of other costs incurred to become certified and suggests that price premiums alone have a limited potential to increase household returns from growing coffee. More broadly speaking, the finding raises questions about the persistence of substantial price premiums associated with social or environmental labeling initiatives.

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Bibliographic Info

Article provided by Elsevier in its journal Food Policy.

Volume (Year): 36 (2011)
Issue (Month): 5 (October)
Pages: 677-684

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Handle: RePEc:eee:jfpoli:v:36:y:2011:i:5:p:677-684

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Web page: http://www.elsevier.com/locate/foodpol

Related research

Keywords: Fair Trade Organic Coffee Premiums Certification Cooperatives;

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Cited by:
  1. Barham, Bradford L. & Callenes, Mercedez & Gitter, Seth & Lewis, Jessa & Weber, Jeremy, 2011. "Fair Trade/Organic Coffee, Rural Livelihoods, and the "Agrarian Question": Southern Mexican Coffee Families in Transition," World Development, Elsevier, vol. 39(1), pages 134-145, January.
  2. Kleemann, Linda & Abdulai, Awudu, 2013. "Organic certification, agro-ecological practices and return on investment: Evidence from pineapple producers in Ghana," Ecological Economics, Elsevier, vol. 93(C), pages 330-341.
  3. Donovan, Jason & Poole, Nigel, 2014. "Changing asset endowments and smallholder participation in higher value markets: Evidence from certified coffee producers in Nicaragua," Food Policy, Elsevier, vol. 44(C), pages 1-13.
  4. 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.
  5. Dammert, Ana C. & Mohan, Sarah, 2014. "A Survey of the Economics of Fair Trade," IZA Discussion Papers 8167, Institute for the Study of Labor (IZA).
  6. Balineau, Gaƫlle, 2013. "Disentangling the Effects of Fair Trade on the Quality of Malian Cotton," World Development, Elsevier, vol. 44(C), pages 241-255.

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