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Have coffee reforms and coffee supply chains affected farmers' income? The case of coffee growers in Rwanda

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  • Murekezi, Abdoul Karim
  • Loveridge, Scott

Abstract

Low prices in the international coffee markets have worsened the economic well-being among coffee farmers. In the face of this situation, the Government of Rwanda has introduced coffee sector reforms that aimed to transform the sector in a way that targets the high quality market and moves away from the bulk coffee market. The high quality coffee market has shown consistent growth over time and exhibits price premiums in international market. If these high prices are passed on to farmers who take advantage of the benefits of the new high quality market by selling coffee cherries, access to this new market could help alleviate poverty brought on by low prices in the conventional sector. However, the majority of coffee farmers in Rwanda rely on the conventional market by selling parchment coffee. The present study analyzes the effects of coffee sector reforms in terms of household expenditures, a proxy of income, on farmers selling coffee to two supply chains: parchment coffee channel and coffee cherry channel. Results from the random effects model on the two year panel data indicate that farmers benefited from coffee reforms by increasing their consumption over time. Farmers selling coffee cherries have gained from the coffee sector reforms in comparison to farmers selling parchment coffee. Based on these results, it seems that efforts to promote the production of high quality coffee would improve food security and the overall consumption expenditures of coffee growers.

Suggested Citation

  • Murekezi, Abdoul Karim & Loveridge, Scott, 2009. "Have coffee reforms and coffee supply chains affected farmers' income? The case of coffee growers in Rwanda," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49597, Agricultural and Applied Economics Association.
  • Handle: RePEc:ags:aaea09:49597
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    File URL: http://purl.umn.edu/49597
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    References listed on IDEAS

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    1. L. ALAN WINTERS & NEIL McCULLOCH & ANDREW McKAY, 2015. "Trade Liberalization and Poverty: The Evidence So Far," World Scientific Book Chapters,in: Non-Tariff Barriers, Regionalism and Poverty Essays in Applied International Trade Analysis, chapter 14, pages 271-314 World Scientific Publishing Co. Pte. Ltd..
    2. Maurizio Bussolo & Olivier Godart & Jann Lay & Rainer Thiele, 2007. "The impact of coffee price changes on rural households in Uganda," Agricultural Economics, International Association of Agricultural Economists, vol. 37(2-3), pages 293-303, September.
    3. 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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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Rwanda’s coffee success story
      by William Easterly and Laura Freschi in Aid Watch on 2010-05-12 09:01:41

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    Cited by:

    1. World Bank, 2011. "Rwanda Economic Update, April 2011," World Bank Other Operational Studies 27250, The World Bank.
    2. Elder, Sara D. & Zerriffi, Hisham & Le Billon, Philippe, 2012. "Effects of Fair Trade Certification on Social Capital: The Case of Rwandan Coffee Producers," World Development, Elsevier, vol. 40(11), pages 2355-2367.

    More about this item

    Keywords

    Rwanda; market reforms; coffee supply chains; farmers’ income; Agricultural and Food Policy; Crop Production/Industries;

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