Impacts of smallholder participation in high-quality coffee markets: The Relationship Coffee Model

The Relationship Coffee Model (RCM) is an emerging business model in the coffee value chain that promotes long-term partnerships between coffee buyers and smallholder growers based on transparency, product quality and value sharing. However, to date, there are limited studies assessing outcomes for the smallholder growers participating in high-quality coffee value chains and specifically in models such as RCM. We developed a framework to examine how geography, environmental conditions, production practices and technology affect coffee quality, and consequently, grower’s ability to participate in RCM. In turn, we evaluated the impact of RCM participation on key environmental, socio-economic, and technological indicators. Using data collected from 265 Colombian smallholder growers, we examined relationships among socio-economic characteristics, soil quality indicators, coffee landscape characteristics, bird populations, and product quality scores. Our estimation based on propensity score matching indicated that RCM participants employ more environmentally-friendly resource management practices, have better understanding of the coffee business and are more optimistic about the future of the industry, relative to non-participants. Although farm gate prices did not significantly differ between the two groups, RCM participants had increased access to credit. Overall, the estimated impacts suggest that RCM contributes to integrate smallholder growers into global-coffee markets and generates socioenvironmental benefits.