Size distribution of estates, inequality and poverty: evidence for India’s household coffee farmers

Abstract

Using the newly collected data from 575 household coffee farmers in the traditional coffee-growing regions of India, this paper measures inequality in size distribution of coffee estates. Inequality is linked to poverty by modelling the determinants of probability of abject poverty of farmers with reference to inequality measures, social caste, human capital endowments, income from coffee cultivations and types and varieties of coffee grown. Empirical results show remarkable variations in levels of inequality across regions and social groups. Binary Logit estimates show that inequality elasticity of poverty is positive and biggest. Other significant determinants of poverty imply that farmers who belong to socially disadvantaged groups, who are lower educated, who have lesser gross returns, who grow mono-type coffee or cultivate Selection.9 and Selection.6 varieties are more vulnerable to poverty. These new and crop-specific results have implications for redistributive-oriented and inclusive promotional policies for household coffee farmers in India and applicable for other coffee-growing developing countries in Asia.