Value Chain Study Explores How to Make Coffee Work for Smallholder Farmers

Published March 5, 2024
Categories: News

Newly published research has reinforced the notion that involvement in the specialty coffee market has the potential to improve the livelihoods and incomes of small holder  farmers. However, it should be noted that participation in the specialty coffee market requires significant economic and social capital to begin with.

The research shows that farmers participating in specialty coffee value chains, particularly those involved in direct-trading schemes or who roast and sell their coffee on national markets, can experience positive income effects. However, the study also highlights that many farmers may face significant barriers to participating in specialty coffee markets.

Since specialty coffee value chains tend to be exclusive and require significant livelihood capitals to begin with, marginalized coffee producers and poor families may not benefit automatically from them. The research used a participatory market chain approach (PMCA) and action research methods to engage smallholder farmers and measure interventions within the study. The study’s findings, particularly the “social-ecological outcomes from production to consumption,” should be taken into account by governments or NGOs involved in coffee sector development.

The research team has provided ample evidence of coffee farmers abandoning coffee farms elsewhere or turning to illicit crops such as coca due to sustained low prices on the commodities market combined with environmental threats. Thus, the study focuses on potential “value chain improvements” in the coffee sector to keep farmers engaged in coffee through livelihood enhancements.

Overall, the study states that the participation of small farmers in specialty markets remains a niche. The producers’ organizations, which represent the largest share of production, are more concerned with established certified markets for export. Private enterprises (both national and international) dominate most of the specialty markets, though many of them source at least part of their coffee from small farmers.

The study also suggests that cup quality definitions, such as those created by Specialty Coffee Association protocols, play a significant role in value chain development, particularly as it relates to smallholder farmers. The researchers note that “for specialty coffee value chains to work for family farmers, cup quality definitions must consider social and ecological impacts from production to consumption.”Newly published research reinforces the idea that participation in the specialty coffee market has greater potential to improve small family farmers’ incomes and livelihoods.

The catch is that participation in the specialty coffee market requires significant economic and social capital to begin with, 

The study shows that positive income effects for farmers participating in specialty coffee value chains, particularly those involved in direct-trading schemes or who roast and sell their coffee on national markets,” the researchers wrote.

However, the research team also noted the many farmers may face barriers to participating in specialty coffee markets.

Source – daily coffee news by Roast Magazine