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Justified hopes or utopian thinking? The suitability of coffee certification schemes as a business model for small-scale producers


  • Beuchelt, Tina
  • Zeller, Manfred
  • Oberthur, Thomas


The marketing of coffee through group-based, certified market channels is often promoted by governments and donors as a viable business model for poor small-scale farmers. Organic and fairtrade coffees have become very popular among socially, environmentally and health conscious consumers in recent years. While coffee certification programs have been in place for over fifteen years, there are few studies on the welfare impacts of certification schemes. Therefore, this research seeks to analyse the impacts of certification on poverty alleviation and to identify the critical factors which explain success or failure of certification schemes. We use a combination of qualitative and quantitative research, comparing small-scale coffee producers in northern Nicaragua who are organized in conventional, organic, and organic-fairtrade certified cooperatives. Our results indicate that certification schemes have a low impact on poverty, including the aspect of food security. Reasons are seen in low yield levels, indebtedness, lack of entrepreneurial skills as well as cooperatives’ management capacities. We conclude that unfair trading conditions are not the main cause of poverty among smallholder coffee growers in Nicaragua. Thus, policies and projects need to address entrepreneurial skills of farmers and cooperative managers as well as amplify extension services.

Suggested Citation

  • Beuchelt, Tina & Zeller, Manfred & Oberthur, Thomas, 2009. "Justified hopes or utopian thinking? The suitability of coffee certification schemes as a business model for small-scale producers," 2009 Conference, August 16-22, 2009, Beijing, China 51717, International Association of Agricultural Economists.
  • Handle: RePEc:ags:iaae09:51717

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    References listed on IDEAS

    1. Meike Wollni & Manfred Zeller, 2007. "Do farmers benefit from participating in specialty markets and cooperatives? The case of coffee marketing in Costa Rica-super-1," Agricultural Economics, International Association of Agricultural Economists, vol. 37(2-3), pages 243-248, September.
    2. Varughese, George & Ostrom, Elinor, 2001. "The Contested Role of Heterogeneity in Collective Action: Some Evidence from Community Forestry in Nepal," World Development, Elsevier, vol. 29(5), pages 747-765, May.
    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.
    4. Cashin, Paul & McDermott, C. John & Scott, Alasdair, 2002. "Booms and slumps in world commodity prices," Journal of Development Economics, Elsevier, vol. 69(1), pages 277-296, October.
    5. Laura T. Raynolds & Douglas Murray & Peter Leigh Taylor, 2004. "Fair trade coffee: building producer capacity via global networks," Journal of International Development, John Wiley & Sons, Ltd., vol. 16(8), pages 1109-1121.
    6. Isabelle Huault & V. Perret & S. Charreire-Petit, 2007. "Management," Post-Print halshs-00337676, HAL.
    7. 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.
    8. Vakis, Renos & Kruger, Diana & Mason, Andrew D., 2004. "Shocks and coffee : lessons from Nicaragua," Social Protection and Labor Policy and Technical Notes 30164, The World Bank.
    9. Arnould, Eric & Plastina, Alejandro & Ball, Dwayne, 2007. "Market Disintermediation and Producer Value Capture: The Case of Fair Trade Coffee in Nicaragua, Peru and Guatemala," Staff General Research Papers Archive 39172, Iowa State University, Department of Economics.
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    More about this item


    certification; coffee; cooperatives; impact; Nicaragua; Agribusiness; Agricultural and Food Policy; Farm Management; Marketing; Q12; Q13;

    JEL classification:

    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness


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