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The Impact of Coffee Certification on the Economic Performance of indonesian Actors

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  • Astuti, Esther Sri
  • Offermans, Astrid
  • Kemp, René
  • Cörvers, Ron

Abstract

The prevailing assumption among consumers in the North is that buying certified coffee contributes positively to the economic performance of Southern actors, particularly smallholder farmers. In this paper we examine the impact of coffee certification on the economic performance of Indonesian actors (farmers, traders, exporters, and Indonesian roasters) and analyze how economic rent is distributed among them. Questionnaire results and in-depth interviews revealed that all Indonesian actors benefit financially from certification on a price per kilogram measurement, but the differences between certified and non-certified actors are small. The paper finds that the economic rent from certification is distributed very unequally along the coffee value chain where roasters receive 95.46 percent (Robusta) and 83.66 percent (Arabica) of the total economic rent (retailers excluded). Overall, farmers enjoy a small direct benefit from certification in the form of a higher price per kilogram for their coffee, and possible benefits regarding increased productivity and quality resulting from training and advice in crop management.

Suggested Citation

  • Astuti, Esther Sri & Offermans, Astrid & Kemp, René & Cörvers, Ron, 2015. "The Impact of Coffee Certification on the Economic Performance of indonesian Actors," Asian Journal of Agriculture and Development, Southeast Asian Regional Center for Graduate Study and Research in Agriculture (SEARCA), vol. 12(2), December.
    • Handle: RePEc:ags:phajad:258826
    DOI: 10.22004/ag.econ.258826
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    1. Bustanul Arifin, 2010. "Global Sustainability Regulation and Coffee Supply Chains in Lampung Province, Indonesia," Asian Journal of Agriculture and Development, Southeast Asian Regional Center for Graduate Study and Research in Agriculture (SEARCA), vol. 7(2), pages 67-89, December.
    2. Ponte, Stefano, 2002. "The 'Latte Revolution'? Regulation, Markets and Consumption in the Global Coffee Chain," World Development, Elsevier, vol. 30(7), pages 1099-1122, July.
    3. Beuchelt, Tina D. & Zeller, Manfred, 2011. "Profits and poverty: Certification's troubled link for Nicaragua's organic and fairtrade coffee producers," Ecological Economics, Elsevier, vol. 70(7), pages 1316-1324, May.
    4. Ruben, Ruerd & Fort, Ricardo, 2012. "The Impact of Fair Trade Certification for Coffee Farmers in Peru," World Development, Elsevier, vol. 40(3), pages 570-582.
    5. Bacon, Christopher, 2005. "Confronting the Coffee Crisis: Can Fair Trade, Organic, and Specialty Coffees Reduce Small-Scale Farmer Vulnerability in Northern Nicaragua?," World Development, Elsevier, vol. 33(3), pages 497-511, March.
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    Cited by:

    1. Wijaya, Atika & Glasbergen, Pieter & Mawardi, Surip, 2017. "The mediated partnership model for sustainable coffee production: experiences from Indonesia," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 20(5).
    2. Glasbergen, Pieter, 2018. "Smallholders do not Eat Certificates," Ecological Economics, Elsevier, vol. 147(C), pages 243-252.
    3. Adi Haryono & Mohamad Syamsul Maarif & Arif Imam Suroso & Siti Jahroh, 2023. "The Design of a Contract Farming Model for Coffee Tree Replanting," Economies, MDPI, vol. 11(7), pages 1-18, July.

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    More about this item

    Keywords

    Agricultural and Food Policy; Crop Production/Industries; Production Economics;
    All these keywords.

    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness

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