Effects of Fair Trade and organic certifications on small-scale coffee farmer households in Central America and Mexico

Abstract

We provide a review of sustainable coffee certifications and results from a quantitative analysis of the effects of Fair Trade, organic and combined Fair Trade/organic certifications on the livelihood strategies of 469 households and 18 cooperatives of Central America and Mexico. Certified households were also compared with a non-certified group in each country. To analyze the differences in coffee price, volume, gross revenue and education between certifications, we used the Kruskal–Wallis (K–W) non-parametric test and the Mann–Whitney U non-parametric test as a post-hoc procedure. Household savings, credit, food security and incidence of migration were analyzed through Pearson's chi-square test. Our study corroborated the conditions of economic poverty among small-scale coffee farmer households in Central America and Mexico. All certifications provided a higher price per pound and higher gross coffee revenue than non-certified coffee. However, the average volumes of coffee sold by individual households were low, and many certified farmers did not sell their entire production at certified prices. Certifications did not have a discernable effect on other livelihood-related variables, such as education, and incidence of migration at the household level, although they had a positive influence on savings and credit. Sales to certified markets offer farmers and cooperatives better prices, but the contribution derived from these premiums has limited effects on household livelihoods. This demonstrates that certifications will not single-handedly bring significant poverty alleviation to most coffee-farming families. Although certified coffee markets alone will not resolve the livelihood challenges faced by smallholder households, they could still contribute to broad-based sustainable livelihoods, rural development and conservation processes in coffee regions. This can be done by developing more active partnerships between farmers, cooperatives, certifications and environmental and rural development organizations and researchers in coffee regions. Certifications, especially Fair Trade/organic, have proven effective in supporting capacity building and in serving as networks that leverage global development funding for small-scale coffee-producing households.