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Upgrading of Lowland coffee in Central America

Author

Listed:
  • Wim Pelupessy

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

  • Rafael Díaz

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

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.

Suggested Citation

  • Wim Pelupessy & Rafael Díaz, 2008. "Upgrading of Lowland coffee in Central America," Agribusiness, John Wiley & Sons, Ltd., vol. 24(1), pages 119-140.
  • Handle: RePEc:wly:agribz:v:24:y:2008:i:1:p:119-140
    DOI: 10.1002/agr.20150
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    References listed on IDEAS

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    1. Goddard, E. W. & Akiyama, T., 1989. "United States demand for coffee imports," Agricultural Economics, Blackwell, vol. 3(2), pages 147-159, May.
    2. Giuliani, Elisa & Pietrobelli, Carlo & Rabellotti, Roberta, 2005. "Upgrading in Global Value Chains: Lessons from Latin American Clusters," World Development, Elsevier, vol. 33(4), pages 549-573, April.
    3. 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.
    4. 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.
    5. Bettendorf, L & Verboven, F, 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.
    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 133-144.
    7. 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.
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    Cited by:

    1. Gava, Oriana & Galli, Francesca & Bartolini, Fabio & Brunori, Gianluca, 2014. "Sustainability of local versus global bread supply chains: a literature review," 2014 Third Congress, June 25-27, 2014, Alghero, Italy 173096, Italian Association of Agricultural and Applied Economics (AIEAA).
    2. Marisol Velazquez, 2014. "Commercialization and consumption of coffee in Mexico," ERSA conference papers ersa14p1681, European Regional Science Association.

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