Impact of coffee sustainability schemes on rural coffee producer households’ living standard in Aceh province, Indonesia

Ahmad Humam HAMID, Agus NUGROHO, Tamara Husna POSPOS, Glennice SUHERMAN

Abstract


As the 3rd largest coffee producer globally, the gains from certified coffee trades have not significantly affected the farmers’ economy. This study aims to re-examine the impacts of coffee certification on coffee smallholders’ living standards. This study employs household survey data of 487 Aceh Gayo Arabica smallholder coffee farmers consisting of 205 fairtrade farmers, 116 organic farmers, and 166 non-certified farmers from 8 districts in Aceh Province, Indonesia, collected in 2020. A propensity score matching (PSM) approach was employed to evaluate coffee certification’s impact on coffee price, per capita income, and per capita expenditure. This study found that the effect of certification was significant on the coffee price under fairtrade and organic schemes, in which fairtrade provided higher coffee prices than organic. This price improvement was also followed by an increase in the farmers’ monthly per capita income. However, the application of the coffee standards has no impact on the daily per capita expenditures. This research suggests a deeper understanding to the certification scheme proponents to evaluate coffee farmers’ living standard in the future.


Keywords


coffee certification; smallholder farmer; living standards; propensity score matching; Indonesian Gayo Arabica

Full Text:

PDF

References


Abdia, Y., Kulasekera, K. B., Datta, S., Boakye, M., & Kong, M. (2017). Propensity scores based methods for estimating average treatment effect and average treatment effect among treated: A comparative study. Biometrical Journal. https://doi.org/10.1002/bimj.201600094

Arifin, B. (2010). Global sustainability regulation and coffee sdupply chains in Lampung province, Indonesia. Asian Journal of Agriculture and Development. https://doi.org/10.37801/ajad2010.7.2.5

Arnould, E. J., Plastina, A., & Ball, D. (2009). Does fair trade deliver on its core value proposition? Effects on income, educational attainment, and health in three countries. Journal of Public Policy & Marketing, 28(2), 186-201. https://doi.org/10.1509/jppm.28.2.186

Austin, P. C. (2011). An introduction to propensity score methods for reducing the effects of confounding in observational studies. Multivariate Behavioral Research. https://doi.org/10.1080/00273171.2011.568786

Azen, R., & Walker, C. M. (2011). Categorical data analysis for the behavioral and social sciences. In Categorical Data Analysis for the Behavioral and Social Sciences. https://doi.org/10.4324/9780203843611

Bacon, C. (2005). Confronting the coffee crisis: can fair trade, organic, and specialty coffees reduce small-scale farmer vulnerability in northern Nicaragua?. World Development, 33(3), 497-511. https://doi.org/10.1016/j.worlddev.2004.10.002

Blackman, A., & Naranjo, M. A. (2012). Does eco-certification have environmental benefits? Organic coffee in Costa Rica. Ecological Economics. https://doi.org/10.1016/j.ecolecon.2012.08.001

Borsellino, V., Schimmenti, E., & El Bilali, H. (2020). Agri-food markets towards sustainable patterns. In Sustainability (Switzerland). https://doi.org/10.3390/su12062193

Caliendo, M., & Kopeinig, S. (2008). Some practical guidance for the implementation of propensity score matching. Journal of Economic Surveys. https://doi.org/10.1111/j.1467-6419.2007.00527.x

Central Bureau of Statistics. (2019). Statistics of Indonesian Coffee 2019. Central Bureau of Statistics, Jakarta.

Chiputwa, B., Spielman, D. J., & Qaim, M. (2015). Food standards, certification, and poverty among coffee farmers in Uganda. World Development, 66, 400–412. https://doi.org/10.1016/j.worlddev.2014.09.006

Directorate General of Plantation (2018). Coffee Production by Province in Indonesia. Retrieved from www.pertanian.go.id

Directorate of Agriculture (2020). Coffee Production by Province in Indonesia. Retrieved from www.pertanian.go.id

Food and Agriculture Organization of the United Nations. (2018). FAOSTAT Database. Rome, Italy: FAO. Retrieved December 20, 2020 from http://faostat3.fao.org/home/E

Heinrich, C., Maffioli, A., & Vázquez, G. (2010). A Primer for Applying Propensity-Score Matching:Impact-Evaluation Guidelines. In Technical Notes, No. IDB-TN-161.

Helmsing, A. H. J. B., & Vellema, S. (2012). Value chains social inclusion and economic development: Contrasting theories and realities. In Value Chains Social Inclusion and Economic Development: Contrasting Theories and Realities. https://doi.org/10.4324/9780203816806

Henson, S., & Reardon, T. (2005). Private agri-food standards: Implications for food policy and the agri-food system. Food Policy. https://doi.org/10.1016/j.foodpol.2005.05.002

Ibanez, M., & Blackman, A. (2016). Is Eco-Certification a Win–Win for Developing Country Agriculture? Organic Coffee Certification in Colombia. World Development. https://doi.org/10.1016/j.worlddev.2016.01.004

Ibnu, M., Glasbergen, P., Offermans, A., & Arifin, B. (2015). Farmer preferences for coffee certification: A conjoint analysis of the Indonesian smallholders. Journal of Agricultural Science. https://doi.org/10.5539/jas.v7n6p20

Ibnu, M., & Marlina, L. (2019). Sustainability standards and certification dan Ppathway Menuju Produksi Kopi Berkelanjutan di Indonesia (in Bahasa). Suluh Pembangunan : Journal of Extension and Development. https://doi.org/10.23960/jsp.vol1.no2.2019.21

International Coffee Organization (2019). Monthly Export Statistics (Members & Non Members. Retrieved from http://www.ico.org/trade_statistics.asp.

Jena, P. R., Chichaibelu, B. B., Stellmacher, T., & Grote, U. (2012). The impact of coffee certification on small-scale producers’ livelihoods: A case study from the Jimma Zone, Ethiopia. Agricultural Economics (United Kingdom). https://doi.org/10.1111/j.1574-0862.2012.00594.x

Kolk, A. (2013). Mainstreaming sustainable coffee. Sustainable Development. https://doi.org/10.1002/sd.507

Loureiro, M. L., & Lotade, J. (2005). Do fairtrade and eco-labels in coffee wake up the consumer conscience? Ecological Economics. https://doi.org/10.1016/j.ecolecon.2004.11.002

Macdonald, K. (2007). Globalising justice within coffee supply chains? Fairtrade, Starbucks and the transformation of supply chain governance. In Third World Quarterly. https://doi.org/10.1080/01436590701336663

Maertens, M., & Swinnen, J. F. M. (2009). Trade, Standards, and Poverty: Evidence from Senegal. World Development. https://doi.org/10.1016/j.worlddev.2008.04.006

Meemken, E. M., Spielman, D. J., & Qaim, M. (2017). Trading off nutrition and education? A panel data analysis of the dissimilar welfare effects of Organic and Fairtrade standards. Food Policy. https://doi.org/10.1016/j.foodpol.2017.07.010

Niemuth, S., Hamann, L., Luschnat, K., Smolarz, P., & Golombek, S. (2014). CSR in the coffee industry: Sustainability issues at Nestlé-Nespresso and Starbucks. Journal of European Management & Public Affairs Studies. https://doi.org/10.15771/2199-1618_2014_2_1_5

Nugroho, A. (2014). The Impact of Food Safety Standard on Indonesia’s Coffee Exports. Procedia Environmental Sciences. https://doi.org/10.1016/j.proenv.2014.03.054

Rahmanulloh, A., & Mcdonald, G. (2020). Indonesia Coffee Annual Report 2020. USDA Foreign Agricultural Service. https://apps.fas.usda.gov/newgainapi/api/Report/

Raynolds, L. T., Murray, D., & Leigh Taylor, P. (2004). Fair trade coffee: building producer capacity via global networks. Journal of International Development: The Journal of the Development Studies Association, 16(8), 1109-1121. https://doi.org/10.1002/jid.1136

Renard, M. C. (2010). In the name of conservation: CAFE practices and fairtrade in Mexico. Journal of Business Ethics. https://doi.org/10.1007/s10551-010-0584-0

Ruben, R., & Verkaart, S. (2012). Comparing Fair and Responsible Coffee Standards in East Africa. In Value Chains Social Inclusion and Economic Development: Contrasting Theories and Realities. https://doi.org/10.4324/9780203816806

Ruben, R., & Zuniga, G. (2011). How standards compete: comparative impact of coffee certification schemes in Northern Nicaragua. Supply Chain Management: An International Journal. https://doi.org/10.1108/13598541111115356

Rosenbaum, P. R., & Rubin, D. B. (1983). The central role of the propensity score in observational studies for causal effects. Biometrika. https://doi.org/10.2307/2335942

Stuart, E. A. (2010). Matching methods for causal inference: A review and a look forward. In Statistical Science. https://doi.org/10.1214/09-STS313

Tran, N., Bailey, C., Wilson, N., & Phillips, M. (2013). Governance of global value chains in response to food safety and certification standards: The case of shrimp from Vietnam. World Development. https://doi.org/10.1016/j.worlddev.2013.01.025




DOI: http://dx.doi.org/10.14720/aas.2023.119.1.2472

Refbacks

  • There are currently no refbacks.


Copyright (c) 2023 Ahmad Humam HAMID, Agus NUGROHO, Tamara Husna POSPOS, Glennice SUHERMAN

 

Acta agriculturae Slovenica is an Open Access journal published under the terms of the Creative Commons CC BY License.

                           


eISSN 1854-1941