David Navichoc

David Navichoc
© grasp
David Navichoc
Graduate School of Politics
Scharnhorststraße 100
48151 Münster
dnavichoc@gmail.com

  • Projekt

    Titel: The Economic Impact of Voluntary Sustainability Standards on Smallholder Coffee Producers Livelihood in Latin America

    During the last decades, coffee prices have been volatile. When coffee prices decrease, the economic and social effects on smallholders are intense, mostly on producers who have not had a high harvest. Nowadays, the prices of green coffee have declined by over 30% since 2016 reaching lower levels in 2018. The trends in 2019 show that further prices are declining, and are not expected to improve significantly in the short term (ICO, 2019c).
    Consequently, the income of coffee producers shrinks as prices continue to decline, in many cases the income is barely or is insufficient to cover production costs. Therefore, the livelihood of smallholder coffee producers can be compromised to secure decent living conditions. Under the pressure to cut costs, smallholders cannot invest in the maintenance of their coffee plantations, which also compromises the quality and quantity of coffee that they produce.
    Besides, the coffee supply chain is buyers-driven, where roasters, retailers, and traders capture most of the gains, which contrast with the margins made by smallholders in developing countries. Furthermore, the changes in climate, the combination of heavy rains and higher temperatures, and the frequent outbreak of pests and diseases are also factors that threaten coffee production.
    In this fluctuating environment, to what degree are VSS actually delivering on the promise of measurable economic benefits in the smallholder coffee producers’ livelihood, and poverty alleviation?
    The certification schemes seemed to offer a suitable governance tool to transform the global coffee sector into a sustainable industry (Dietz & Auffenberg, 2014). Nevertheless, it is not clear, if these VSS could be translated into an efficient system that benefits coffee producers economically, socially, and environmentally, and if it addresses adaptation to climate change. According to Giovanucci and Ponte (2005), sometimes, it is no clear exactly who receives even the most concrete benefits – such as remuneration or price premiums. Furthermore, Ponte (2004) indicates that a general problem in the realm of certified coffees is that the quantity supplied is often above the market demand. Therefore, producers may not be sure that the investment made on certification and in changing their agroecological practices will pay back. For instance, when supply is greater than demand, a considerable portion of compliant production is sold as non-compliant, meaning that producers incur the cost of adhering to standards but do not receive the benefit through premiums for that share of production (DeFries et al., 2017).

    Research questions:
    Improving the livelihoods of smallholder farmers and ensuring adequate working conditions for agricultural laborers are critical aspects of a sustainable supply chain. Empirical and rigorous data on the effectiveness of VSS is fundamental to determine their ultimate impact and success (DeFries et al., 2017). Certification of coffee producers is frequently suggested as a useful strategy for improving the position of smallholders in the market (Van Rijbergen et al., 2016). Nevertheless, in the discussion of the direct effects of certifications, certification programs struggle to account for the great diversity of production systems and social contexts by which and in which coffee is grown (Auld, 2010).
    Using evidence obtained in Colombia and Costa Rica, and using panel data of smallholders from these countries, this study is aiming to answer the following research questions:

    • Q1a. What is the economic impact of VSS on the livelihoods of smallholder producers?
    • Q1b. Are VSS the key to secure smallholder coffee farmers’ livelihoods?
    • Q2. Do VSS help to reduce the propensity of smallholder coffee farmers to poverty?


    References:

    • Auld, G. (2010). Assessing certification as governance: effects and broader consequences for coffee. The Journal of Environmental Development. SAGE Publications. 19(2) pp. 215-241.
    • Bacon, C., Mendez, E., Flores, M., Stuart, D., and Díaz, R. (2008). Are sustainable coffee certifications enough to secure farmer livelihoods? The millennium goals and Nicaragua ´s fair trade cooperatives. Globalizations Vol. 5. No. 2. pp. 259-274.
    • Bebbington, A. (1999). Capitals and capabilities: a framework for analyzing peasant viability, rural livelihoods and poverty. World Development. Vol. 27. No. 12. pp. 2021-2044.
    • Blackman, A. and Rivera, J. (2011). Producer-level benefits of sustainability certification. Bonn, Germany. Conservation Biology. Vol. 25. No. 6. pp. 1176-1185.
    • Blundell, R., and Costa Dias, M., (2007). Alternative approaches to evaluation in empirical microeconomics. University College London. Institute for Fiscal Studies. London, UK. 102 p. [On line] Available in the World Wide Web: https://www.ucl.ac.uk/~uctp39a/Blundell-CostaDias-Dec-2007.pdf
    • Brandi, C., Cabani, T., Hosang, C., Schirmbeck, S., Westermann, L., and Wiese, H. (2013). Sustainability certifications in the Indonesian palm oil sector: benefits and challenges for smallholders. Bonn, Germany. The German Institute.
    • Bray, J. and Neilson, J. (2017). Reviewing the impacts of coffee certification programs on smallholder livelihoods. International Journal of Biodiversity Science, Ecosystem Services & Management, 13:1, pp 216-232.
    • Bryson, A., Dorsett, R., and Purdon, S. (2002). The use of propensity score matching in the evaluation of active labor market policies. Policy Studies Institute and National Centre for Social Research. 49 p. ISBN: 1 84388 043 1.
    • Calcaterra, E. (2013). Defining smallholders: suggestion for RSB smallholder definition.
    • Caliendo, M., and Kopening, S. (2005). Some practical guidance for the implementation of propensity score matching. Bonn, Germany. IZA. No. 1588. 29 p.
    • Coffee Barometer. (2018). Voluntary sustainability standards. 36 p. [On line] Available in the World Wide Web: https://www.hivos.org/assets/2018/06/Coffee-Barometer-2018.pdf
    • Deaton, A. (1999). Commodity prices and growth in Africa. The Journal of Economic Perspectives. Vol. 13. pp. 23-40.
    • DeFries, R., Fanzo, J., Mondal, P., Remans, R., and Wood, S. (2017). Is voluntary certification of tropical agricultural commodities achieving sustainability goals for small-scale producers? A review of the evidence. IOP Publishing. Environmental Research Letters. Vol. 12. 033001.
    • DFDI. (1999). Sustainable livelihoods guidance sheets. Department for International Development. UK. 150 p.
    • Dietz & Auffenberg, 2014. The efficacy of Private Voluntary Certification Schemes: a governance costs approach. Zentra Center for Transnational Studies. Universitat Bremen. No. 39.
    • Dixon, J., Taniguchi, K., Wattenbach, H., and Tayeri-Arbur, A. (2004). Smallholders, globalization and policy analysis. Agricultural Management, Marketing and Finance Service (AGSF), FAO. Rome.[On line] Available in the World Wide Web: http://www.fao.org/3/y5784e/y5784e00.htm
    • Fafchamps, M. (2000). Farmers and price fluctuations in poor countries. Department of Economics. University of Oxford.
    • FNC. (2014). Distribución de la caficultura por tamaño cafetal de las upas cafeteras. Federación Nacional de Cafeteros. Sistema de Información Cafetera (SICA).
    • Foster, J., Greer, J., and Thorbecke, E. (1984). A class of decomposable poverty measures: notes and comments. Econometrica. Vol. 52. No. 3. pp. 761-766.
    • Foster, J., Greer, J., and Thorbecke, E. (2010). The Foster-Greer-Thorbecke (FGT) poverty measures: twenty-five years later. Institute for International Economic Policy Working Paper Series. The George Washington University. 58 p.
    • Giovannucci, D. & Ponte, S. (2005). Standards as a new form of social contract? Sustainability initiatives in the coffee industry. Elsevier. pp. 284-231.
    • Grabs, J. (Forthcoming). Beyond certifications? The efficacy of voluntary sustainability standards in enhancing sustainable practices in the coffee sector of Latin America.
    • Heinrich, C., Maffioli, A., and Vazquez, G. (2010). A primer for applying propensity score matching. Impact-Evaluation Guidelines: technical notes. IDB. No. IDB-TN-161. 55 p.
    • ICO. (2016). Assessing the economic sustainability of coffee growing. London, UK. 24 p.
    • ICO. (2019)a. Sustained growth in June global coffee prices. International Coffee Organization. [On line] Available in the World Wide Web: http://www.ico.org/documents/cy2018-19/cmr-0619-e.pdf
    • ICO. (2019)b. Total production by all exporting countries. [On line] Available in the World Wide Web: http://www.ico.org/prices/po-production.pdf
    • ICO. (2019)c. Price volatility and sustainability: development challenges and solutions for smallholder farmers in the coffee value chain. International Coffee Organization. [On line] Available in the World Wide Web: http://www.ico.org/documents/cy2018-19/ed-2301-r1e-consultative-event-rome.pdf
    • Jena, P., Stellmacher, T., and Grote, U. (2012). The impact of coffee certification on small-scale producer’ livelihoods: evidence from Ethiopia. Hannover, Germany.
    • Kollmar, M., and Gamper, S. (2002). The sustainable livelihoods approach. Aeschiried, Switzerland. Development Study Group, University of Zurich. 11 p.
    • Lee, M., and Kang, C., (2006). Identification for difference in difference with cross-section and panel data. 8 p. [On line] Available in the World Wide Web: http://prof.cau.ac.kr/~ckang/papers/ID%20for%20DD.pdf
    • Luna, F., and Wilson, P., (2015). An economic exploration of smallholder value chains: coffee transactions in Chiapas, Mexico. International Food and Agribusiness Management Review (IFAMA). Vol. 18. Issue 3. pp. 85-106.
    • Lewin, B., Giovanucci, D., and Varangis (2004). Coffee markets: new paradigms in global supply and demand. Agriculture and Rural Development Discussion. Paper 3. World Bank, Washington DC.
    • Ochoa, G., Garcia, J., Mora, J., Catellanos, J., Sanchez, D., Arango, S., and Garcia, C. (2013). Impact assessment of AAA sustainable quality program on small farmers in Colombia. 5 p.
    • Ponte, S. (2004). Standards and sustainability in the coffee sector: a global value chain approach. United Nations Conference on Trade and Development and the International Institute for Sustainable Development. Winnipeg, Canada.
    • Ruben, R., and Zuniga, G. (2011). How standards compete: comparative impact of coffee certification schemes in Northern Nicaragua. Emerald Group Limited. Supply Chain Management: An International Journal. 16/2. pp. 98-109.
    • Slob, B. (2006). A fair share for smallholders: a value chain analysis of the coffee sector. Centre for Research of Multinational corporations (SOMO). [On line] Available in the World Wide Web: http://www.valuechains.org/dyn/bds/docs/623/SOMO%20MA%20of%20Intl%20Coffee%20Mkt%2006.pdf.
    • Steering Committee of the State-of-Knowledge Assessment of Standards and Certification. (2012).Toward Sustainability: the roles and limitations of certification. Washington, DC. RESOLVE, Inc. 115 p.
    • Van Rijsbergesen, B., Elbers, W., Ruben, R., and Njuguna, S. (2016). The ambivalent impact of coffee certification on Farmers’ welfare: a matched panel approach for cooperatives in central Kenya. Elsevier. World Development. Vol 11. pp. 277-292.
    • Wooldridge, J. (2002). Econometric analysis of cross section and panel data. MIT Press.

  • Werdegang

    Akademische Ausbildung

    08/2013 - 05/2015 Master in Business Administration (MBA) an der INCAE Business School, Costa Rica
    08/2014 - 12/2014 Austauschprogramm mit MBA und M.Sc an der HHL Leipzig Graduate School of Management, Deutschland

    01/2007 - 12/2010

    		 Bachelor of Science in Agrarwissenschaften und Ingenieurwissenschaften an der EARTH University, Costa Rica

    Beruflicher Werdegang

    01/2019 - 05/2021 Wissenschaftlicher Mitarbeiter im TRANSSUSTAIN-Projekt, Deutschland
    03/2020 - 05/2020 Assoziierter wissenschaftlicher Mitarbeiter und Berater am Latin America Center for Competitiveness and Sustainable Development (CLACDS), Costa Rica
    06/2015 - 08/2019 Assoziierter wissenschaftlicher Mitarbeiter und Berater am Sustainable Markets Intelligence Center, Costa Rica
    06/2014 - 08/2014 Praktikum im Bereich Business Development und Markets Intelligence bei BAC-CREDOMATIC, Costa Rica
    01/2012 - 07/2013 Forscher und Berater für nachhaltige landwirtschaftliche Lieferketten am Sustainable Markets Intelligence Center (CIMS), Costa Rica
    01/2011 - 12/2011 Assistent in der Abteilung für Produktionsmanagement bei Bland Farms, USA

  • Publikationen

    Kilian, B., Rivera, L., Soto, M., and Navichoc, D. 2013. Carbon Footprint across the Coffee Supply Chain: The Case of Costa Rican Coffee. Journal of Agricultural Science and Technology B 3. P 151-170. David Publishing.

    Estrella, A., Navichoc, D., Kilian, B., and Dietz, T. 2021. Economic Impact of Voluntary Sustainability Standards on Smallholder Producers in Honduras.

  • Weiteres

    Forschungsinteressen

    • Sustainability,
    • Private sector sustainability initiatives,
    • Economic tools and sustainability,
    • Agricultural sustainable supply chain,
    • Finances for biodiversity,
    • Poverty,
    • Social Progress Index and Smallholder producers.
    • Climate change adaptation and mitigation,
    • Climate finance,
    • Renewable energy and energy efficiency