Sustainable coffee needs more than certification

Unique in-depth study reveals only modest impact on farmers incomes

The most recent impact study by CIDIN, which was commissioned by Solidaridad, shows that East African coffee farmers receive only marginally more income as a result of certification. Although they tend to improve yields, enhance product quality and get better prices when they join certification programmes, the increase in income does not lift them out of poverty. This five-year study concludes that the bargaining position of farmers has not changed significantly, that they cannot easily get pre-finance and that they still have few incentives for making long-term investments.

Paul Hoebink, director of CIDIN, emphasizes the value of the study: ‘It is unique – the first rigorous quantitative impact study with balanced panel data and a five-year scope.’
Karugu Macharia, director of Solidaridad East-Africa, outlines its conclusions: ‘Certification and training alone won’t help African coffee farmers build a better future. We need a broader strategy to ensure that coffee growing becomes more sustainable and to make it more attractive for young farmers. This important study has implications for the coffee sector worldwide.’

Urgent need for a better coffee business infrastructure

Karugu continues: ‘With its new coffee strategy, Solidaridad aims to tackle the complex issues farmers need to deal with, including getting access to credit, knowledge and agricultural inputs as well as better markets and greater food security, while coping with the ever increasing frequency of droughts and floods due to climate change. Apart from building strong farmer organisations and local training partners, we need a coffee business infrastructure that provides farmers with all of their needs. In cooperation with government ministries, national coffee boards, NGOs, research institutions and companies working in the coffee and financial sector, we hope to build that enabling environment and create a more viable coffee sector for the future.’

Impact on incomes

On average coffee sales represent just one third of the income of Kenyan coffee farmers and farmers sell only about one third of their produce as certified. This makes the impact on incomes very limited, even though Kenyan auctions recognize the added value of certification as a quality mark. Farmers in remote areas depend more on coffee and so the effects on their incomes tend to be greater.
The study shows that training in good agricultural practices and well organized farmer cooperatives are crucial. What's more, diversification of farmers' incomes, for example by growing food for local markets, makes farmers more resilient. Multi-certification is a successful strategy for improving cooperatives' market position. Certified farmers in Kenya get better prices than in Uganda, where the free market creates prices for certified coffee that are closer to those of conventional coffee.
Important spill-over effects of farmer support programmes include non-certified neighbours in the programme region catching up due to spin-off learning effects and the adoption of better agricultural practices for other crops, leading to higher – and more diversified – incomes.

Unique research approach

The CIDIN study, which is entitled ‘Impact of Coffee Certification on Smallholder Farmers in Kenya, Uganda and Ethiopia’ covered Utz and Fair Trade certified groups of farmers in Kenya and Uganda with their non-certified neighbours acting as a control group. In Ethiopia cooperatives with single and multi-certification (Utz Certified, Fair Trade and Organic) were compared. In addition, levels of trust among members and gender relations within households were examined. Wageningen Academic Publishers will publish the report in book form later this year.

External conditions vary considerably between the countries in terms of prices and legal regimes. There are stringent regulations in Ethiopia, auctions in Kenya and a free market in Uganda. The cooperatives differ in the level of service they offer farmers as well as access to markets for coffee and other produce. Farmers differ in how much they depend on coffee sales. Last, but not least, the international coffee price fell substantially towards the end of the research period. These factors make such research a rich source of comparison between coffee systems and types of development intervention.