Sumatra San Mateo Coffee Features introduction-Sumatran Coffee also has 4C Coffee Certification?

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Rationale

Principle

An increasing proportion of global coffee production, roughly 40% as of 2013 (Panhuysen & Pierrot, 2013) originates from farms following some form of voluntary sustainability standards (VSS). These programs are expanding into multi-billion dollar global activities, providing industry and consumers with the comfort that the coffee they trade and consume has been produced according to environmental and ethical standards. Yet there is little empirical evidence to suggest these programs have positive outcomes for smallholders. This paper quantifies the impacts of 4C certification, recognized as a relatively more accessible standard,to ascertain the capacity of VSS to improve smallholder livelihoods.

The proportion of global coffee production is growing, with about 40 per cent (Panhuysen&Pierrot,2013) in 2013 coming from farms that follow some form of voluntary sustainability standard (VSS). This voluntary sustainability standard farm is expanding into a multibillion-dollar global campaign that satisfies the industry and consumers that the coffee they trade and consume is environmentally friendly and ethically produced. However, there is not much empirical evidence to show that these have brought positive results to small farmers. This paper quantifies the impact of 4C certification and is considered to be a relatively more accessible standard to determine the extent to which voluntary sustainability criteria improve the livelihoods of smallholders.

Methods

Research methods

The paper compares two groups of farmers, one 4C certified and an uncertified control group, measuring the average treatment effect of certification on a collection of outcome variables. We use a quasi-experimental method relying on propensity score matching (PSM) to control for selection bias. We draw on extensive survey data, of over 1600 households drawn from about 100 farmer groups, covering a broad array of indicators including livelihood determinants, farming practices, market characteristicsand subjective assessments. In addition to the main cross-section from 2015, panel data can be constructed for a number of indicators through leveraging administrative records, allowing us to employ a differences-in-differences impacts estimator.

This paper compares two groups of farmers, a group of 4C certification and an uncertified control group, and measures the effect of certification on a set of outcome variables using average voluntary sustainability criteria. We use a quasi-experimental method to control the selection bias based on propensity score matching (PSM). We use extensive survey data from more than 1600 households from about 100 farmers' groups, including indicators of livelihood determinants, farming practices, market characteristics and subjective assessments. In addition to the major cross-sections for 2015, panel data can be constructed for multiple indicators using administrative records, thus enabling us to use double differential impact estimates.

Results

Result

This paper makes several contributions to knowledge within the global coffee community by, 1. Contributing empirically to the literature surrounding VSS; while several studies have examined certification qualitatively few provide a counterfactual fora causal impact evaluation;2. Advancing knowledge of 4C certification,particularly when not confounded with the introduction of specialty coffee varieties or reputable growing regions; and,3. Contributing to knowledge of the Indonesian coffee sector,which is particularly uniquedue to high smallholder density and weak internal organization (Neilson, 2015)

This paper has several contributions to the global coffee industry: 1. It provides empirical support to VSS literature; although several studies have qualitatively examined certificates, they seldom provide counterfactual causal impact assessment. Promote knowledge on 4C certification, especially not to be confused with the introduction of boutique coffee varieties or reputable growing areas; 3 promote knowledge in the Indonesian coffee sector, this is particularly unique for high and small farm density and weak internal organizations (Nielsen, 2015).

Conclusions & Perspectives

Conclusion and prospect

VSS remain a popular tool to improve smallholder livelihoods, however without proper knowledge of their effectiveness andlimitations standards will remain poorly understood and thus poorly targeted. Importantly this could lead to muted or unintended impacts onsmallholders and their communities. The insights from this paper could provide important inputs to the global debate on the continued evolution of standards.

VSS remains a popular tool for improving the livelihoods of smallholder farmers, but without a proper understanding of its effectiveness and limitations, the objectives will be unclear due to little understanding. It is important that this can lead to silent or unintentional effects on small farmers and their communities. The insights of this article can provide important support for the global debate on the continued evolution of standards.

Reference

1.Neilson, J., 2015. Towards a more competitive and dynamic value chain for Indonesian coffee: Working paper 7, Report produced under the World Bank Technical Assistance Program on Competitiveness and Sustainability of Beverage Crops

2.Panhuysen, S. & Pierrot, J., 2014. Coffee Barometer 2014, Report produced by HIVOS, IUCN Nederland, Oxfam Novib, Solidaridad, WWF.

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