Impact of coffee sustainability schemes on rural coffee producer households’ living standard in Aceh province, Indonesia

Abstract

As the 3rd largest coffee producer globally, the gains from certified coffee trades have not significantly affected the farmers’ economy. This study aims to re-examine the impacts of coffee certification on coffee smallholders’ living standards. This study employs household survey data of 487 Aceh Gayo Arabica smallholder coffee farmers consisting of 205 fairtrade farmers, 116 organic farmers, and 166 non-certified farmers from 8 districts in Aceh Province, Indonesia, collected in 2020. A propensity score matching (PSM) approach was employed to evaluate coffee certification’s impact on coffee price, per capita income, and per capita expenditure. This study found that the effect of certification was significant on the coffee price under fairtrade and organic schemes, in which fairtrade provided higher coffee prices than organic. This price improvement was also followed by an increase in the farmers’ monthly per capita income. However, the application of the coffee standards has no impact on the daily per capita expenditures. This research suggests a deeper understanding to the certification scheme proponents to evaluate coffee farmers’ living standard in the future.