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Upgrading of Lowland coffee in Central America

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  • Wim Pelupessy

    (Development Research Institute (IVO), Tilburg University, The Netherlands, Hooistraat 14, 5025 KE Tilburg, The Netherlands)

  • Rafael D�az

    (International Center for Economic Policy (CINPE), Universidad Nacional, 3000 Heredia, Costa Rica)

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    Abstract

    A persistent fall of coffee prices in the 1990s brought the International Coffee Organisation, national governments, and coffee companies to propose the promotion of good quality highland coffee as the exclusive strategy for Central America to neutralize the negative income effects. This implies that cultivation on low- and medium-altitude lands should be discouraged, which means that 60% of the coffee growers and workers will lose their means of subsistence in this region. We have used a combined environmental-global commodity chain approach to question the new common wisdom. In buyer-driven chains, there are different quality attributes to satisfy consumers wants. As most food products, coffee receives quality premiums for both sensorial and non-sensorial credence characteristics. However, mass consumption markets in developed countries are served by powerful downstream roasters with blends that contain a major part of low sensory quality coffees. Market demand and a credence characteristic as the highly rewarded environmental friendliness should both be considered in assessments. This creates opportunities for lowland growers to stay in business and for mass coffee markets to become more sustainable. [Econlit: L660, Q170, Q560] © 2008 Wiley Periodicals, Inc.

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    Bibliographic Info

    Article provided by John Wiley & Sons, Ltd. in its journal Agribusiness.

    Volume (Year): 24 (2008)
    Issue (Month): 1 ()
    Pages: 119-140

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    Handle: RePEc:wly:agribz:v:24:y:2008:i:1:p:119-140

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    Web page: http://onlinelibrary.wiley.com/journal/10.1002/(ISSN)1520-6297

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    1. Elisa Giuliani & Carlo Pietrobelli & Roberta Rabellotti, 2004. "Upgrading in global value chains: lessons from latin american clusters," Working Papers 72, SEMEQ Department - Faculty of Economics - University of Eastern Piedmont.
    2. Feuerstein, Switgard, 2002. "Do coffee roasters benefit from high prices of green coffee?," International Journal of Industrial Organization, Elsevier, vol. 20(1), pages 89-118, January.
    3. L Bettendorf & F Verboven, 2000. "Incomplete transmission of coffee bean prices: evidence from The Netherlands," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 27(1), pages 1-16, March.
    4. Goddard, E. W. & Akiyama, T., 1989. "United States Demand for Coffee Imports," Agricultural Economics: The Journal of the International Association of Agricultural Economists, International Association of Agricultural Economists, vol. 3(2), May.
    5. Goddard, E. W. & Akiyama, T., 1989. "United States demand for coffee imports," Agricultural Economics, Blackwell, vol. 3(2), pages 147-159, May.
    6. Sellen, Daniel & Goddard, Ellen, 1997. "Weak Separability in Coffee Demand Systems," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 24(1), pages 133-44.
    7. John Humphrey & Hubert Schmitz, 2002. "How does insertion in global value chains affect upgrading in industrial clusters?," Regional Studies, Taylor & Francis Journals, vol. 36(9), pages 1017-1027.
    8. Varangis, Panos & Siegel, Paul & Giovannucci, Daniele & Lewin, Bryan, 2003. "Dealing with the coffee crisis in Central America - impacts and strategies," Policy Research Working Paper Series 2993, The World Bank.
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