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Fair policies for the coffee trade - protecting people or biodiversity?

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  • Kitti, Mitri
  • Heikkila, Jaakko
  • Huhtala, Anni

Abstract

We investigate the role that economic instruments can play in the eradication of poverty and preservation of biodiversity in agroforestry management in coffee production. Most of the world's coffee producers live in poverty and manage agro-ecosystems in regions that culturally and biologically are among the most diverse on the globe. Despite the relatively recent finding that bees can augment pollination and boost coffee crop yields substantially, the short-term revenues to be had from intense monoculture drive land-use decisions that destroy forest strips serving as habitats for pollinating insects. Our study investigates the possibility of multiple equilibria in the adoption of technology in coffee production; farmers specialize in environmentally detrimental (sun-grown) or sustainable (shade-grown)farming or both practices co-exist. We calibrate an empirical model to characterize the equilibria and investigate the ecological and economic impacts of alternative policy instruments, among these protection fees, price premiums and a minimum wage.

Suggested Citation

  • Kitti, Mitri & Heikkila, Jaakko & Huhtala, Anni, 2006. "Fair policies for the coffee trade - protecting people or biodiversity?," Discussion Papers 11858, MTT Agrifood Research Finland.
  • Handle: RePEc:ags:mttfdp:11858
    DOI: 10.22004/ag.econ.11858
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    References listed on IDEAS

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    Cited by:

    1. Villegas, Laura, 2017. "Shady Business: Why do Puerto Rican Coffee Farmers Adopt Conservation Agriculture Practices?," 2017 Annual Meeting, July 30-August 1, Chicago, Illinois 259136, Agricultural and Applied Economics Association.

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