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Journal cover: Supply Chain Management: An International Journal

Supply Chain Management: An International Journal

ISSN: 1359-8546

Online from: 1996

Subject Area: Operations and Logistics Management

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How standards compete: comparative impact of coffee certification schemes in Northern Nicaragua

Document Information:
Title:How standards compete: comparative impact of coffee certification schemes in Northern Nicaragua
Author(s):Ruerd Ruben, (Centre for International Development Issues (CIDIN), Radboud University, Nijmegen, The Netherlands), Guillermo Zuniga, (Centro Internacional de Política Económica para el Desarrollo Sostenible (CINPE), Universidad Nacional, San Jose, Costa Rica)
Citation:Ruerd Ruben, Guillermo Zuniga, (2011) "How standards compete: comparative impact of coffee certification schemes in Northern Nicaragua", Supply Chain Management: An International Journal, Vol. 16 Iss: 2, pp.98 - 109
Keywords:Coffee, Fair trade, Nicaragua, Welfare
Article type:Research paper
DOI:10.1108/13598541111115356 (Permanent URL)
Publisher:Emerald Group Publishing Limited
Acknowledgements:This field research has been funded through the Inspection and Evaluation Department (IOB) of the Dutch Ministry of Foreign Affairs within the framework of an overall assessment of the bilateral development cooperation with Nicaragua. Support by the management and staff of PRODECOOP Coffee Consortium (Estelí, Nicaragua) and by staff of the Dutch aid agency HIVOS is gratefully acknowledged. Critical comments and suggestions by two anonymous reviewers greatly improved the manuscript. All remaining errors are the authors'. Received: 22 February 2010. Revised: 20 April 2010, 11 June 2010. Accepted: 20 August 2010

Purpose – Smallholder farmers are increasingly subject to different types of standards that offer specific conditions for their market incorporation. The proliferation of private and voluntary (civic) standards raises questions regarding their impact on farmers' welfare and their role in the upgrading of value chains. This paper aims to address this issue.

Design/methodology/approach – Based on extensive fieldwork and careful matching of 315 farmers in Northern Nicaragua who produce coffee under Fair Trade, Rainforest Alliance and Café Practices labels or deliver to independent traders, the effects on income, production and investments are compared. Moreover, the implications of different contract conditions for risk behaviour, organizational force, loyalty and gender attitudes are assessed.

Findings – The paper finds that Fair Trade provides better prices compared with independent producers, but private labels out-compete Fair Trade in terms of yield and quality performance. While Fair Trade can be helpful to support initial market incorporation, private labels offer more suitable incentives for quality upgrading.

Research limitations/implications – Civic standards exhibit major effects on local institutions' and farmers' behaviour, while B2B standards are more effective for improving production and management practices. Dynamic improvement standards may bridge the gap between both.

Practical implications – Fair Trade standards are useful to provide initial market access to small-holders, but private standards offer better prospects for subsequent quality upgrading.

Originality/value – This is the first large-scale comparative impact assessment of coffee standards that delivers unbiased empirical results.

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