The effect of specialty coffee certification on household livelihood strategies and specialisation

Abstract

Farm certification is rapidly becoming a sine qua non for access to specialty coffee markets. At the centre of these changes are smallholder coffee producers, responsible for 80% of global coffee production. Although rural households are known to depend on more than agricultural production alone, the literature on specialty coffee and certification has rather narrowly focused on coffee income and production. In this study, broader impacts are explicitly taken into account. Household income was decomposed into categories corresponding to specific income-generating activities and coffee income was broken down into price, yield and area effects. Results show that coffee certification encourages farmers to specialise in coffee production, increasing coffee income but not total household income, at least not in the short run. The time and effort required to attain the higher coffee income offered by certified production means farmers have to give up other activities. This substitution effect cancels out the income effect, such that there is no increase in total household income. The lack of an effect on total household income suggests the return to the additional labour effort required for certified coffee production is not higher than in other activities, questioning the benefits of certification for small-scale producers.