Factors that shape smallholder coffee
farmers’ livelihoods at the backdrop of a
sector in crisis
A case study on the roles of brokers and smallholder’
agency in Chanchamayo, Peru
MSc Thesis
International Development Studies
Graduate School of Social Sciences
University of Amsterdam
August 15
th, 2019
Louelle Seelmann, 10766073
louelleseelmann@gmail.com
Supervisor:
Second reader:
Acknowledgements
My gratitude goes out to all people who helped me along the path of finalizing this thesis. Without the extraordinary support and inspiration of my supervisor Anna Laven this thesis would not have been of the quality it is now. She pushed me to put my standard even higher, whilst supporting me with the challenges and lows that doing research can bring about. I would also like thank Lisanne Oonk from Cultivarperu and Rianne van der Bom from Progreso for connecting me with their kind and valuable contacts in Peru. In particular I would like to thank Edinso Villa Loayza, Carmen Peña Flores, and the managing directors of the three main coffee cooperatives in my study: Asociación Central de Productores Cafetaleros, Cooperativa Agraria Cafetalera Sostenible Valle Ubiriki, and Cooperativa Agroecológica de Café de Origen Selva Central. Through their support and hospitality, I was able to conduct my research. Then, I would like to thank the numerous staff members of the cooperatives who gave me their appreciated time and insights, driving ‘la gringa’ safely around on a motorcycle through pouring rain, landslides and burning sun, while pointing out butterflies and mountain peaks. Much gratitude also goes out to the all farmers who received me in their homes: their input is the foundation of my research.
And of course, I would like to thank my partner, friends and family for their support. You know who you are.
Abstract
The repercussions of the structural socio-economic and environmental challenges in the global coffee sector are becoming increasingly pressing at the beginning of the value chain. In particular, since the international coffee price has currently decreased to a point that smallholder across the globe produce underneath production costs. It does, however, not necessarily help to reduce smallholder coffee farmers to helpless victims. Instead, seeing farmers as active agents and thereby looking at how their agency can allow to understand possibilities for change. In practice, at a local level, coffee farmers interact with various intermediaries (‘brokers’) to improve their aspired livelihood strategies. This study focusses on the role of brokers and the agency of farmers shape coffee farmers’ livelihoods in the Chanchamayo province in Peru. Hence, this study asks how coffee farmers in Chanchamayo navigate in the current coffee crisis by combining the Sustainable Livelihoods Framework with the concepts of farmers’ agency and brokers. To answer this question, qualitative data was collected in February and March 2019 using semi-structured interviews. The data was coded using Atlas.ti software and subsequently analysed by means of a content analysis. The study found that with the current coffee price and the local structural challenges posed through the vulnerability context, making a living out of coffee is not feasible. This, despite the supporting role of cooperatives, who help farmers accessing certification, increasing the quality of coffee, and providing access to the coffee specialty market. Instead, farmers are seeking alternative livelihood strategies, beyond coffee. The thesis concludes that if the coffee price remains this low, and the market share for specialty coffee will not grow, coffee farming will no longer be a viable livelihood strategy for smallholders in Chanchamayo in Peru. Thereby, the findings imply that it is likely that farmers will choose for other livelihood options. These include alternative cash crops, to which the market access is offered by local buyers, or abandoning coffee entirely. However, this choice is not so much a sign of farmers’ agency, but more of a lack of negotiation power within the coffee value chain.
Keywords: Smallholder coffee farmers; Agency; Livelihood strategies; Brokers; Intermediaries; Cooperatives; Specialty Coffee; Peru; Chanchamayo.
Table of Contents
List of Figures and Tables ... 6
List of Acronyms and Abbreviations ... 7
1. Introduction ... 8
2. Research Question ... 10
3. Theoretical Framework ... 11
3.1 Sustainable Livelihood Framework ... 11
3.2 Agency ... 13
3.3 Brokers ... 16
3.4 Conceptual Scheme ... 18
4. Methodology and Methods ... 20
4.1 Epistemology and Ontology ... 20
4.2 Operationalisation ... 20
4.3 Research design ... 21
Sampling strategy ... 21
4.4 Methodological reflection ... 23
Internal and external reliability ... 23
Internal and external validity ... 24
Ethical reflection ... 25
5. Context ... 26
5.1 Global Coffee Market ... 26
Conventional coffee ... 26
Certified coffee ... 27
Specialty coffee ... 27
5.2 The Selva Central in Peru and its coffee sector ... 28
Geography and climate ... 28
Deforestation ... 29
Climate change ... 29
Selva Central’s cultural diversity ... 30
Coffee sector in the Selva Central ... 31
Diversification ... 33
6. Coffee farmers’ vulnerability context and (aspired) livelihood strategies ... 33
6.1 Introducing the smallholder coffee farmers in the sample ... 33
6.2 Vulnerability context ... 35
How and why costs of production exceed returns ... 37
The ecological components of the vulnerability context ... 40
Lack of financial capital ... 41
6.3 (Aspired) livelihood strategies ... 43
Join a coffee cooperative ... 44
Sell coffee to a local buyer or national processor ... 49
Sell coffee to intermediary buyers ... 52
7. (Key) brokers and their contribution to coffee farmers’ livelihood strategies ... 55
7.1 The role of cooperatives ... 56
Certification ... 56
Specialty coffee ... 59
Diversification ... 62
Reciprocal relationship with cooperative’ members and the role of trust ... 63
7.2 The role of local buyers ... 64
Reciprocal relationship between local buyers and farmers and the role of trust ... 66
7.3 The role of intermediary buyers ... 67
7.4 The role of national processers and exporters ... 67
8. Farmers’ agency ... 68
8.1 The role of the vulnerability context in affecting farmers’ agency ... 68
8.2 The role of brokers in affecting farmers’ agency ... 69
Cooperatives’ relation to farmers’ agency ... 70
Local buyers’ relation to farmers’ agency ... 72
Intermediary buyers’ relation to farmers’ agency ... 73
Exporters’ and national processors’ relation to farmers’ agency ... 73
8.3 Farmers agency in relation to their livelihood strategies and aspirations. ... 74
9. Conclusion & Discussion ... 77
9.1 Conclusion ... 77
9.2 Discussion ... 80
9.3 Final remarks ... 82
Bibliography ... 83
Annexes ... 88
Annex I: Interview guides ... 88
Annex II: Primary data list ... 92
List of Figures and Tables
Chapter 3
Figure 1: Sustainable Livelihoods Framework………..………..12
Table 1: Empirical examples of types of brokers………17
Figure 2: Conceptual scheme……….………..19
Chapter 4 Table 2: Operationalisation………21
Chapter 5 Figure 3: Map of research location………..………28
Chapter 6 Table 3: Characteristics farmers………...………34
Figure 4: Graph international arabica coffee price development 10 years………36
Figure 5: Graph international arabica coffee price development 2019………..………36
Figure 6: Costs seasonal workers……….…39
Figure 7. Agronomist shows coffee leaf rust, and the effects of the coffee borer………. on the coffee berry.……… 41
Chapter 7 Table 4: characteristics brokers………55
List of Acronyms and Abbreviations
ACPC Asociación Central de Productores Cafetaleros (General Asociasion of coffee producers)
CACSVU Cooperativa Agraria Cafetalera Sostenible Valle Ubiriki (Sustainable Agricultural Cooperative Valley Ubiriki)
CEACOS Cooperativa Agroecológica de Café de Origen Selva Central (Agroecological Coffee Cooperative from the Origin of the Selva Central)
GAP good agricultural practices
ha hectare
INEI Instituto Nacional de Estadística e Informática (National Statistical Institute of Peru)
SD Standard deviation
1. Introduction
This thesis centres around coffee, which despite being the most significant agricultural commodity traded worldwide, its sector is structurally experiencing complex and systemic socio-economic and environmental challenges (Bacon, Méndez, Gliessman, Goodman & Fox, 2008; Borella, Mataix & Carrasco-Galeggo, 2015; Panhuysen & Pierrot, 2018). These challenges pose in particular hardship at the beginning of the value chain (Basic, 2018), affecting the health of eco-systems and the well-being of around 25 million smallholders across three continents (Raynolds et al., 2007; Bacon et al., 2008; Borella, Mataix & Carrasco-Galeggo, 2015). Currently, one of the most urgent challenge is referred to as the ‘pricing crisis’ (Financial Times, 2019). Over the past years, the price of Arabica coffee on the commodities market, which in many countries has significant impact on the farmgate prices that coffee producers receive, has been steadily declining (International Coffee Organisation, 2014). Last May, the price has even dropped the lowest in a decade of $89.31 per bag1 of green arabica beans (International Coffee Organisation, 2019a). The immediacy of this global number has minor effects on coffee importing countries. However, it is of exceptional importance for millions of smallholder coffee producers who are dependent on coffee production so sustain their livelihoods (Borella, Mataix & Carrasco-Galeggo, 2015). Consequently, coffee farmers are currently producing far below cost of production (Financial Times, 2019).
This case study explores how smallholder coffee producers are able to navigate in this current pricing crisis. Thereby, it aims to contribute to the bigger societal question of the current and possible future role of coffee cultivation for coffee producers to sustain their livelihoods (International Coffee Organisation, 2016), applied to the local context of Chanchamayo province in Peru. Currently, coffee is of great importance for the economy of Peru. At a national level, coffee is Peru’s primary agricultural export product and provides income to approximately 223 thousand households, of which the majority are smallholders who cultivate between 1 and 5 ha (MINAGRI, 2017). The coffee sector in Peru is governed by the market and voluntary standards (Bitzer, Francken & Glasbergen, 2008). Consequently, many small-scale farmers experience a diversity of institutional and market barriers to sell their produce (Wanyama, 2014). In order to overcome these barriers, brokers can play a key role by bridging actors between different separate societies (Koster & Van Leynseele, 2018). Brokers can simply be defined as intermediaries.
From this perspective, the local dynamics between farmers and brokers uncovers the role of brokers in shaping coffee farmers livelihoods. In addition, the concept of agency allows to see farmers as active actors, hence, looking at their agency can allow to comprehend their capability in bringing about change (Sen, 1999). Two decades ago, Sen (1999) made a strong case in his book ‘development as freedom’ by claiming that increasing the agency of deprived people supports them to be active agents in their own process of human development. Consequently, agency is nowadays a term widely adopted in development research and practice as a relevant element tied to (the outcome of) empowerment and development processes. However, how to contribute to one’s agency and to truly empower remains a challenging question (Cornwall, 2007; Ibrahim & Alkire, 2007). Therefore, the purpose of this research is to study the role of smallholder coffee farmers’ agency in shaping their livelihoods strategies against the backdrop of the pricing crisis. In other words, this study examines a societal relevant crisis and aims to contribute to empirical deliberations of the academic concept of agency.
To answer the research question, qualitative data was collected in February and March 2019 using semi-structured interviews and field notes from observations. The data was coded using Atlas.ti software and subsequently analysed by means of a content analysis (Bryman, 2012).
The theoretical framework and additional concepts employed are as follows. The Sustainability Livelihoods (SL) Framework (Scoones, 2015) is used to describe and examine the scope and impact of the challenges, opportunities, and structures that shape the local context. Then, the concept of agency adds an additional analytical lens to the framework that allows to look at the preference of direction of change and the capability of actors to act according to these preferences (Sen, 1999). Furthermore, the concept of brokers allows to understand the relational context of the coffee producers. This concept provides more insights on how farmers organise themselves, how farmers and brokers interact, the roles of different brokers, and how the actions of brokers enable of limit coffee producers (Koster & Van Leynseele, 2018).
The structure of this thesis is as follows. First, the research question and sub-questions are discussed. Secondly, the theoretical framework is explicated. Third, the methods and methodology are presented. Fourth, the context of the global coffee sector and the coffee sector at the research site are described. Fifth, the empirical findings and analysis are presented and examined. These are spread-out over three chapters and are distinguished according to the sub-questions. Then, the conclusion and discussion are articulated, followed by recommendations for further research.
2. Research Question
The larger societal problem this study takes as background is the current international pricing crisis that affects coffee producers around the globe. The purpose of this research is to give insights on the current and possible future role of coffee cultivation for the livelihoods of smallholder coffee producers in the local context of Chanchamayo of Peru. It aims to do so by applying a local lens on the vulnerability context and livelihood strategies of these smallholders, the brokers with which they interact, and how altogether these affects the agency of the farmers and ultimately shape the livelihoods of the farmers. Furthermore, applying a local lens on the relational dynamics between coffee farmers and brokers can allow for a more in depth understanding about the underlying structures that limit or enable change. Therefore, the research question is:
What is the role of farmers’ agency in shaping smallholder coffee farmers’
livelihoods in Chanchamayo, Peru?
There are three sub-questions, all with different research objectives:
(1) What are the most dominant livelihood strategies of smallholder coffee farmers
and how do these relate to the vulnerability context and (aspired) livelihood
strategies?
Research objectives:
- To understand the local background in which the concept of agency can be analysed and brokers identified.
- To provide an overview of the vulnerability context, transforming structures and processes, livelihood strategies and aspired outcomes.
- To understand which role coffee plays within the livelihoods of the coffee farmers, looking at different markets and brokers.
- In addition, this gives a first impression on the agency of the farmer in shaping their own livelihood outcomes, in relation to their necessities and expectations of brokers, and how they interact with brokers in line with their livelihood strategies.
Research objectives:
- To identify key brokers, what they do and how they contribute to the livelihood strategies and aspired livelihood outcomes of the farmers.
- Explore possible tensions between the strategies of farmers and brokers.
- In addition, this gives a first impression on the agency of brokers in shaping their own livelihood strategies and those of the smallholders with whom they interact.
(3) What determines coffee farmers’ agency in relation to brokers, their livelihood
strategies and the vulnerability context?
Research objectives:
- To gain a deeper understanding on the relation between the vulnerability context and farmers’ agency.
- To understand the interaction between farmers and brokers and how these relations contribute to farmers’ agency and livelihood strategies.
- To gain a deeper understanding of the capacity of farmers to put their agency in practice and whether this allows them to act upon their livelihood aspirations.
3. Theoretical Framework
This chapter presents the theoretical framework and includes the SL Framework, substituted with agency, and brokers, which are brought together in the conceptual scheme.
3.1 Sustainable Livelihood Framework
Since the 1990s, the popularity of a people-centred livelihoods perspective as a means to approach rural development challenges resulted in a mushrooming of livelihoods frameworks within development practice and thinking (Scoones, 2015). When considering the contemporary nature of development approaches, sustainable livelihoods frameworks may appear out-dated, yet many components within these frameworks are still relevant today. This chapter will focus on the Sustainable Livelihoods (SL) Framework developed by the Department for International Development (DFID) in the UK, which emerged as an integrating simplified heuristic model that combines human well-being within an increasingly natural resource constrained world (Neilson & Shonk, 2014). The aim of the framework is to
comprehend the complexity of livelihoods and how components within the framework are related and interact, and is shown in figure 1 (Scoones, 2015).
Livelihoods can be defined as a combination of the resources used and the activities undertaken in order to live. Instead of focussing on people’s perceived needs, the SL Framework is inspired by Sen’s (1985) capabilities and focusses on people’s capabilities and their agency to choose livelihood strategies. These livelihood strategies and ultimately outcomes are at the same time affected by multiple factors such as: the local conditions (vulnerability context and the local transforming structures and processes); the global structural processes (global transforming structures and processes); and the livelihood assets of the household (including both material and social resources). Hereby the framework links the livelihood context with resources (livelihood assets), strategies and outcomes (Scoones, 2015). The framework gives in particular attention to the institutional structures and processes “which mediate the ability to carry out such strategies and achieve (or not) such outcomes” (Scoones, 2005: 3).
Figure 1. Sustainable Livelihoods Framework. Reprinted from “Sustainable livelihoods guidance sheets” by DFID (1999).
The livelihood asset pentagon in the framework includes social, human, financial, physical and natural capital at a household level and are neither comparable nor easily measurable (Scoones, 2015). The pentagon represents the interconnectedness of the capitals in shaping people’s livelihoods (Krantz, 2001). Social capital entails the social
resources such as networks and relationships that people utilise when aspiring livelihood strategies that require social actions. These furthermore include horizontal and vertical networks and are often based on trust, reciprocity, exchange and transparency (DFID, 1999). Human capital entails the “skills, knowledge, ability to labour and good health and physical capability” that people utilise when aspiring certain livelihood strategies (Krantz, 2001: 9). In particular these two capitals are inspired by Sen’s capabilities (Scoones, 2015). Natural capital includes the natural resource stocks and ecosystem services. Financial capital comprises the capital base including both economic stocks such as assets and savings and the regular inflow of money such as income, pensions and remittances. Lastly, physical capital denotes the basic infrastructure and producer goods that people need to sustain their livelihoods and include transport, shelter, water and sanitation, energy and access to information (DFID, 1999).
Most of the cirque on the SL Framework has been on the asset pentagon because it supposed to be too much focussed on economic assets, and that capital and political capital are underrepresented (Scoones, 2015). In addition, many scholars critique the SL Framework for being too static and overlooking patterns of power and (gender) inequality in shaping livelihoods (Krantz, 2001).
3.2 Agency
The concept of agency has been theorised over decades and therefore constitutes a rich body of contrasting literature. The interest in the concept derives from its assumed central role in development processes, defined as one of the core concepts of the Amartya Sen’s famous capability approach as: “one’s ability to pursue goals that one values” (Sen, 1999). Additional definitions of agency include: “the efficacy of human action” (Sewell, 1992: 2); and “the capacity for purposive action, the ability to make decisions and pursue goals free from violence, retribution, and fear” (Gammage, Kabeer & van der Meulen Rodgers, 2016: 6). The reoccurring component in these definitions is related to the ‘action’ of an agent. An agent in relation to agency is theorised by Sen (1999) as “someone who acts and brings about change” (p.19).
The direction of this action however varies per scholar. Therefore, Gammage, Kabeer and van der Meulen (2016) explain agency in their synthesis according to different manifestations in households, markets and the public sphere. From this reasoning, different scholars provide different manifestations in order to explain expressions of agency. Ibrahim and Alkire (2007) theorise these different manifestations of agency as ‘different domains of agency’. For this sub-chapter, I will draw upon a combination of sociological, development,
and feminist political economical literature since these relate to rural and agricultural development and markets. First, I will briefly turn to Gidden’s structuration theory in order to deepen the understanding of agency in relation to structure.
From a sociological perspective, the duality between agency and structure are seen as interconnected manifestations of power. Here, structures shape agency and in turn agency shapes structures (Gammage, Kabeer & van der Meulen Rodgers, 2016). One of the main scholars who contributed greatly to this debate by his theory of structuration is Giddens. Giddens explains the duality between agency and structure as structure being “both the medium and the outcome of the practices which constitute social systems” (Giddens, 1981: 27). In this view, agency and structure are in a continuous mutually constitutive process. Here, agency can be defined as the capacity of action a person has within the structures to reinforce, modify or transform them (Gammage, Kabeer & van der Meulen Rodgers, 2016). At the same time, structures have profound implications for the distribution of agency and power within a society. Nonetheless, there are many gaps in Giddens’s structuration theory. For instance, it fails to discriminate between different kinds of agency (Sewell, 2005). Therefore, additional literature will contribute to explicating different expressions of agency. Feminist scholars use agency to emphasise the active role of agents in the process of change and development. Hence, agency is not something passive nor fixed, but rather seen as an intrinsic process in which agents have an active role in shaping and expressing it. Thus, the manifestations of agency are a manner of agents to shape their individual or collective livelihoods (Rana, Banskota and Sharma, 2018). In addition, this brings to the fore the notion of social choice and by this “the focus shifts from problems of aggregation of unexamined individual preferences to participation and inclusion in democratic decision-making” (Peter, 2003: 24). In the process of social change, Peter (2003) argues that autonomy is the “condition of the will that makes agency possible” (p. 25). Peter (2003) argues that agency is relational since one of the conditions for effective agency is by permissions of other agents. Hence, the situatedness and restrictedness of agency are focal points of social change. An empirical example of the relational aspect of agency is provided by Rana, Banskota & Sharma (2018), who explain through their case study how agency is gendered and thereby restricted or enabled through gender roles, which in turn define women’s ownership of agricultural resources such as livestock and land. An additional interesting perspective on situatedness in relation to agency is provided by Agrawal (2005), who emphasises the ‘situatedness of practices’ explained as the relationship between context, practices and subjectivity. Hereby Agrawal (2005) argues that both contextual and relational factors should be taken into account when analysing agency and structures.
At the household level, agency is viewed with regard to access to and control over income, assets and mobility (Gammage, Kabeer & van der Meulen Rodgers, 2016). Furthermore, these scholars emphasise the importance of resource availability (often described as productive resources in land, housing, agricultural, credit and asset markets) as pre-conditions to household members in order to bargain and negotiate their preferences.
Furthermore, in ‘Voices of the Poor’ (Narayan, Patel, Schafft, Rademacher & Koch-Schulte, 2000), among other things, lack of agency is used as one of the explanations why people remain poor. Examples of constrains of agency are powerlessness, voicelessness, informal and formal institutional barriers (Narayan, 2005). Furthermore, as already hinted towards in the agency structure debate, (social) structures can limit agency (Newman & Dale, 2006).
In addition, according to Kabeer (1999) agency is more than the observable action and “also encompasses the meaning, motivation and purpose which individuals bring to their activity, their sense of agency, or `the power within’” (p. 438). Herewith she extends manifestations of agency with both tangible as intangible processes including: bargaining, negotiation, manipulation, resistance, and aspirations. In particular the intangible manifestations of agency are those that can empower people to overcome challenges, yet these psychological aspects are difficult to measure (Gammage, Kabeer & van der Meulen Rodgers, 2016).
Despite the rich literature describing agency, it also has methodological challenges. For instance, in the process of describing agency to design an indicator for empowerment, described as the outcome of agency, Ibrahim and Alkire (2007) rightfully question whether agency should be assessed universally or context specific or at an individual or collective level. Furthermore, these scholars emphasise the difficulty when it concerns describing the dynamic process of change. For that reason, they focus on the actual exercise of agency. Furthermore, Kabeer (1999) mentions the empirical difficulties when it concerns measuring and comparing agency. The section on operationalisation explains what these challenges means for this study.
In sum, agency is an intrinsic active process in which an agent expresses its individual and/or collective action in a continuous constitutive process with structures (Pesch, 2015; Rana, Banskota and Sharma, 2018). Manifestations of agency are a manner of agents to shape their individual and/or collective livelihoods and can include: bargaining, negotiation, manipulation, resistance, and aspirations (Kabeer, 1999; Gammage, Kabeer & van der Meulen Rodgers, 2016). Often, agency is gendered which either enables or restricts certain manifestations of agency (Rana, Banskota and Sharma, 2018). Then, in the process of social
change, autonomy makes agency possible and autonomy can only be expressed through situated agency, which means it is put into action in agreement with another actor. This highlights the relational aspects of agency (Peter, 2003). Aside from the relation aspects, practices also are also situated, which means contextual factors should also be considered (Agrawal, 2005).
In line with Ibrahim and Alkire (2007), this study focuses on the one hand on the actual exercise of agency (including manifestations of agency (Kabeer, 1999), situated agency (Peter, 2003) and situated practices (Agrawal, 2005)), and on the other hand on self-determined lack of agency and the structures that limit agency (Newman & Dale, 2006).
3.3 Brokers
Brokers as a research subject has been theorised by, among others, anthropological development scholars as part of ‘anthropology of brokerage’ in order to provide insights into development processes and the role of brokers in these processes. Koster and Van Leynseele (2018) provide an interesting synthesis and see brokers as assemblers who “connect disparate social worlds” (p. 803). In the process of connecting, or assembling, different worlds, brokers rely on their particular knowledge, skills and authority to bridge between often disadvantaged and advantaged actors (Koster & Van Leynseele, 2018). In these processes, brokers engender practices of alignment, coercion and resistance in relation to both local and global actors and structures. By this, they provoke both tensions and connections between actors. Here, brokering is the mediating role of the broker (Koster & van Leynseele, 2018).
While brokers can be considered important intersecting points with and between networks, not all brokers are capable to cultivate fruitful bonds. Therefore, Boissevain (1974) underscores the agency of brokers regarding their ability to negotiate and manipulate. In this regard, the broker is seen as entrepreneurial professional negotiator who aims to establish a strategic place in social networks. In addition, brokers are socially embedded in the both enabling and restricting local cultural settings and structures (Koster & Van Leynseele, 2018).
At the same time, brokers also have their own aspirations and strategy. While they are dependent of the other actors in the networks in which they intersect, brokers have their own degree of autonomy in which they ‘independently’ operate and create their own space through negotiation with different actors (Koster & Van Leynseele, 2018). Consequently, brokers can both enable and limit the aspirations of actors at both sides of their intermediating practices.
Table 1. Empirical examples of types of brokers.
The anthropological description about brokerage and brokers is encompassing in the manner that it describes the many possible different functions of a broker in development processes. It can however come across as too abstract. Therefore, empirical examples of brokers in value chains can contribute to a better understanding about the concept in relation to this study. In table 1 is shown how different scholars, departing from diverse disciplines, discuss in their research either the actor of a broker, the concept of brokerage, or the act of brokering. An overarching theme between these different types of brokers is that that they often play a certain intermediary role in the value chain with which they fulfil a certain function.
Furthermore, some authors use brokers and intermediaries interchangeably (Yang, Klerkx & Leeuwis 2014).
In sum, applied to the coffee value chain this study considers the importance of brokerage in the coffee value chain. This can be explained by brokers connecting actors from different networks (different parts of the coffee value chain) and thereby attempt to bridge different disparate social worlds (different value chain actors). Hereby, the agency of brokers influences their ability to negotiate practices of alignment, coercion and resistance in development processes (and the coffee value chain). While brokers are dependent on the actors in the network in which they intersect, they have a degree of autonomy and create a space in the network in which they operate and negotiate their own aspiration. These aspirations can either be enabling or limiting for the actors with which they collaborate. Here, ‘honest brokers’ are those who are able to empower smallholders in the supply chain. In practice, brokers are intermediaries and can for instance be (commission) agents, knowledge brokers, innovation brokers, or farmer cooperatives. Empirical examples of brokering (as shown in table 1) include bridge the knowledge gap between research and everyday farming practices, to provide market access and market opportunities to farmers, or to exploit farmers.
3.4 Conceptual Scheme
The SL Framework provides an analytical framework to look at the vulnerability context of coffee farmers and brokers and the contextual structures and processes in which they are embedded. I agree with the critique that the framework is static and overlooks issues of power, and thus, interaction with other actors. Therefore, I substitute this framework with the concepts of agency and brokers. This section explains how the SL Framework, agency and brokers conceptually interact and which components of the conceptual framework are used for this study.
As mentioned in the chapter on agency, one’s agency is influenced by its context (Agrawal, 2005), which explains the interaction between agency and the vulnerability context. Then, Newman and Dale’s (2006) research on the role of agency in in sustainable local community development provides insightful thoughts on the interaction between agency, capitals, and networks. In their research, they argue that whether an individual actor or a network of actors can utilise their social capital depends upon the level of agency that actors possess. Hence, “if social capital to be put to use, there must be agency” (p.482). Furthermore, they reason not to rely solely on social capital but “to increase access to diverse capitals, in particular, human capital, by enhancing bridging ties, both horizontal and vertical”
(p.484). Which explains the importance of the other capitals when it concerns sustainable community development. This thesis mainly focusses on the social and relational aspects that shape smallholder coffee producers’ livelihoods. Thereby this study focuses social and human capital, while not diving into the physical, financial and natural capital of the coffee producers. An additional reason why these capitals are not included in this study is due to the limited scope of a master’s thesis.
Furthermore, Newman and Dale (2006) emphasize the “dynamic interconnections between agency, social capital, and network formation” (p.484). This introduces the concept of brokers. As aforementioned, an actor’s agency is situated meaning it is expressed in agreement with other actors. Therefore, the concept of brokers allows to: analyse the function of brokers in the local context; research the how interaction between smallholders and brokers enables or limits farmers in relation to the vulnerability context and the market; and research how this interaction influences the agency of farmers. Moreover, it provides insights in the horizontal and vertical networks that shape coffee producers’ livelihood strategies and aspirations.
Figure 2. Conceptual scheme. Adapted from “Sustainable livelihoods guidance sheets” by DFID (1999)
The conceptual scheme is shown in figure 2. The following corrections are made to the original SL Framework: instead of researching livelihood outcomes this study researches livelihood aspirations (merged with livelihood strategies); this study does not describe the transforming structures and processes, only its implications for the vulnerability context. Furthermore, farmers agency is illustrated above the capitals (the capitals represent the farmer’s household), since agency is how farmers are able to put their capitals into action in interaction with their vulnerability context (situated practices) and the brokers (situated
agency). Brokers are positioned in between farmers and the market. The three colours represent the different sub-questions.
4. Methodology and Methods
In this chapter, I first present the epistemological and ontological stance of this research, followed by the operationalisation. Then, I explain the research design. Subsequently, I reflect on the methodology. To conclude, to put the findings in perspective, I reflect on the methodological limitations of this research.
4.1 Epistemology and Ontology
This research is deductive and intended is “to examine the implications of some of these theoretical and empirical deliberations in a particular research site” (Bryman, 2012: 70). The hypothesis was that the agency of farmers and brokers play a crucial role in shaping coffee farmers’ livelihoods in Chanchamayo, Peru. However, how farmers’ and brokers’ agency shape coffee farmers’ livelihoods is yet what this research meant to explore. In line with this, I adopted an interpretivism epistemology and devoted myself to grasp the subjective meaning of social action. Furthermore, I see these social phenomena in a constant process of becoming, and thereby I embrace a social constructivist ontology (Bryman, 2012).
4.2 Operationalisation
The operationalisation follows from the conceptual scheme and the research questions and is shown in table 2. The colours in the table correspond with the colours in the conceptual scheme, and with the corresponding sub-questions.
The operationalisation of the concept of agency requires some additional explanation. While the concept of agency is well established in academic literature, empirically there have been many challenges and difficulties to create comparable measurable variables in order to track changes or compare case studies. Many scholars attempt to measure agency according to ‘decision-making agency’, hence, through expression of choice, however, these decisions and therewith manifestations of agency have different values and significance to different people and are therefore difficult to measure and compare (Kabeer, 1999). Besides, for this research it is more interesting to comprehend agency in the manner that it allows to enact on decisions, strategies, and aspirations. Thus, instead of attempting to aggregate different aspects of agency into measurable variables, this study will explore “the various
manifestations of agency, or lack thereof, that can be observed in practice” (Gammage, Kabeer & van der Meulen Rodgers, 2016: 20). The various manifestations that will are taken into account are shown in table 2. In addition, there will be looked at the situated agency and situated practices which highlight the relational and contextual dimensions of agency.
Table 2. Operationalisation.
4.3 Research design
In order to answer the research questions, I have conducted an empirical study, based on a case-study design, and relying on qualitative research methods (Bryman, 2012). The qualitative methods used were semi-structured interviews that lasted between 0,5 and 2 hours. The interview guides can be found in Annex I and functioned as a guide to assure I would get a response to these topics. In addition, through open-ended questions I endeavoured to provide space for the subjects that respondents wanted to share. I have chosen for semi-structured interviews because these allow to gain an in-depth understanding of local dynamics at the research site (Bryman, 2012). After returning from the fieldwork, the primary data set, consisting of transcriptions of interviews and field notes, were coded using Atlas.ti software. Subsequently, the content of the codes was analysed employing a content analysis and guided by the sub-questions (Bernard, 2011).
Sampling strategy
The selection of the study site of the small city Pichanaki and its surroundings were chosen because it is considered an important coffee hub that provides space for processing, quality evaluation, distribution, and exportation in the Selva Central region in Peru. Furthermore, this region was chosen because the majority of the farmers who sell their coffee in Pichanaki are
smallholders that live in poor conditions (personal communication Rianne van der Bom, January 25, 2019). The persons who inspired me to conduct research in this region are the coffee experts Lisanne Oonk, a specialty coffee buyer, and Rianne van der Bom, who used to work for the Rabobank Foundation in this region and now works from Progreso. Before departing to Peru, Lisanne and Rianne put in contact with two key informants who helped me to start my research: the director of a large coffee cooperative2, and a coffee farmer, buyer, and trader. In particular, the latter introduced me to managing directors of other cooperatives and possible interesting people to interview. Consequently, through a combination snowball sampling and purposive sampling, it was relatively simple to meet new interviewees. The sampling strategy was purposive because I communicated that my study focusses on the unit of analysis of smallholder coffee producers (Bryman, 2012).
The data collection took place in February and March 2019. The primary data consists of 39 interviews, and six events in which I structurally wrote down my observations in field notes. The primary data list can be found in Annex II3. My sample consist of 23 farmers, of which 20 are organised in a cooperative and 3 are unorganised. The organised farmers were members of the following 3 different cooperatives: CAECOS; ACPC; and CACSVU. I interviewed cooperative members in their own house, to which an agronomist of one of the three cooperative brought me to. The selection of farmers was randomly based on who was home and available in regions that were accessible4. I intended to interview more unorganised farmers, yet, when I arrived at my fieldwork location it became clear it was difficult to interview unorganised farmers in the field. Firstly, because of lack of transportation. Secondly, because the chance that farmers would welcome me as a foreigner was very unlikely according to my first two key informants. Thirdly, because of safety reasons, my key informants disapproved with the idea of me walking around by myself in rural areas. Therefore, I interviewed a smaller group, consisting of three unorganised farmers, since I had to wait for the harvest season to begin, which was in my last week of fieldwork. At this point, farmers came to Pichanaki to sell their coffee to local buyers. I was able to interview four farmers at a local buyer, yet one was also a member of a cooperative. The selection of these farmers was based on whoever
2 When I refer to cooperatives in this thesis, I mean coffee cooperatives. Large or established cooperatives have more than 300 members and have been established at least ten years ago. 3 Details on respondents are found in a table in the chapter in which the primary data is explained and analysed.
4 Several times we (me and the agronomist) could not reach the farmers the agronomist decided to visit due to landslides. At these moments, we either went back to Pichanaki or drove to the next
agreed to be interviewed by me. Unfortunately, due to health reasons5, I was not able to interview more nor to continue data collection.
Besides farmers, managing directors and staff members were interviewed of the three cooperatives to which the organised farmers were a member from, complemented with managing directors of other cooperatives. For anonymisation reasons, the names of the cooperatives are not linked to any of the respondents. Furthermore, interviewed the commercial manager6 and specialty coffee project manager of a large exporter. Then, I interviewed three local buyers and an agent. As you can read, my sample is quite he
heterogeneous considering different types of actors and occupations, yet this allowed for triangulation of data and inclusion of multiple perspectives.
In addition, data was gathered through observation of the following occasions: a gender equality training for farmers at one cooperative; meetings for cooperatives by Fair Trade; interaction between farmers and agronomists of cooperatives; and the selling of coffee by farmers at local buyers. I was able to attend the first two meetings because my key informants invited me. I was able to observe interaction because I happened to be there at the moment these interactions took place. The fieldnotes of these occasions contain information on the interaction between different actors and the subjects they discussed. Since fieldnotes are critiqued for being overly subjective (Bryman, 2012), these are predominantly used to support other findings.
4.4 Methodological reflection
Assessing the methodology of qualitative research has many difficulties compared to quantitative research. Nonetheless, I choose to explain the reliability and validity of my research in a traditional manner (Bryman, 2012). Subsequently, I will reflect on the ethics of this research.
Internal and external reliability
Reliability entails the consistency of measures. For this study, internal reliability is not a matter of concern, since the study was conducted individually. Internal reliability was moreover ensured because all interviews were recorded and transcribed. Therefore, the interpretation
5 I had an intense fever for over a week, even while interviewing these farmers. In the end I left my fieldwork location a few days earlier than planned to go back to Lima because I started to feel worse, and there were no reliable doctors in Pichanaki. Luckily this happened near the ending of my
fieldwork.
of the data does not solely depend on the observations during the moment of the interview. Thereby, the data could be interpreted in a consistent manner.
Regarding external reliability, part of the study can be replicated by meeting the same or similar people and using the same interview schemes. However, part of the crucial data gathered can be attributed to my personal communication and research skills, privileged background and coincidence. Sometimes I was at the right moment at the right time and said the right things to be welcomed. Other moments I felt my western privileges contributed to easily being offered help by many people. Furthermore, the long period of time spent at the fieldwork location allowed for a deeper understanding of the complexity of the situation. Throughout the weeks, more and more things became apparent by on the one hand talking with more people, but on the other hand picking up subjects through informal contact that appeared to be relevant. Consequently, I could include these subjects in my interviews to cross-check its validity.
Internal and external validity
Internal validity is the relation between theory and observations. The conceptual scheme illustrates that farmers’ agency is influenced by the vulnerability context, social capital, human capital and brokers. Furthermore, it shows that agency is a defining factor, in combination with brokers, in shaping farmers’ livelihood strategies. The data confirms the relations between the concepts and describes in detail the implications of these relations in the case study.
External validity is the degree to which findings can be generalised across social settings. With regard to my case study, my ambition was to be able to generalise findings across the Selva Central region. Yet, while many patterns can be recognised, the sample size of this study is too small to allow for generalisation across the Selva Central. More specifically, a methodological limitation of this research is the small sample size of unorganised farmers. Furthermore, there are value chain actors I was not able to interview. For instance, only at the end of my data collection, when I was already conducting interviews with a fever, I learned farmers sell directly to national processors. Then, unfortunately, none of my respondents could put me in contact with a intermediary buyers. Furthermore, I think the findings of this study cannot easily generalised in other regions since the level of development differs in different parts of Peru, in particular with regard to infrastructure, health and education. Since these are very important aspects of the vulnerability context of the farmers, these have a large effect on firstly the livelihood strategies and secondly the agency
of the farmers. The research does not hold in other times since many components of the vulnerability context are relatively recent and are rapidly changing over time.
Nonetheless, to enhance external validity, many recurring themes and perspectives were cross-checked through triangulation of data, which allowed for a thorough analysis. Therefore, some higher-level findings can be made regarding the agency of smallholder coffee farmers in the conventional bulk market, the role of certification schemes, and the potential of the specialty coffee market. These are discussed in the conclusion.
Ethical reflection
Inspired by Gibson-Graham’s article ‘Diverse economies: performative practice for ‘other worlds’’ (2008), the performative role of the researcher is recognised in creating a different world. Therefore, this study intends to take an “open, concerned and connective stance and a readiness to explore rather than judge, giving what is nascent and not fully formed some room to move and grow” (Gibson-Graham, 2008: 8). Nonetheless, my western perspective limited me inasmuch that at some moments I find it difficult to escape from thoughts regarding what is needed for development in a specific region. Despite these thoughts, in my research, I aimed to look at empirical self-declared difficulties and opportunities.
While I conducted the interviews, the AISSR Ethical Guidelines were applied. Before the start of the interview, I explained that: I am an independent researcher and student without any business interest nor affiliation with NGOs; the objective of my research and the interview; the types of questions I was going to ask; that both participation and answering the questions was voluntary; and all respondents will be completely anonymised. When this was all clear, I asked permission to record the interview.
I recorded the interviews with an old voice recorder, opposed to a fancy iPhone, to not put too much of a focus on the monetary differences between me and the respondent. For the same reasons, during the fieldwork, I was wearing old cloths, and no jewellery nor make up. Nonetheless, I was very aware that the fact that I am a blonde European woman that is able to study and travel, puts me in a privileged position, and that those attributes at times created a distance between me and the interviewee. However, in general, I do not think this withheld people from answering questions since the nature of my questions was not sensitive nor could put people in a difficult position.
Furthermore, during the interviews, attention was given to cultural differences and gaining trust by for example asking sufficient open questions and providing a space in which interviewees felt they can share their valuable experiences. At moments at which I observed a closed attitude towards a question, I tried try to put the question in a different perspective
and ask for elaboration or explain the reason why I was interested in that particular question. Inspiration for these moments were taken from Bernard’ (2012) book ‘Social Research Methods in Anthropology’ from the chapter on probing. However, when an interviewee did not wish to elaborate, I respected that. During two interviews with farmers I noticed they were not too enthusiastic about giving an interview, but probably agreed to do this because of their relationship with the cooperative. Consequently, the answers were not elaborate, and the interviews lasted very short, which I respected.
In general, many farmers were quite shy in the beginning of the interview and it took some time for them to feel comfortable and share more elaborate answers. I discussed this with both Peruvian and foreign friends working and living in my fieldwork area, and they said this could be due to Peruvian culture in general. Because of this, I was grateful that the cooperatives introduced me to farmers. Because of this introduction, farmers easily welcomed me in their house. Furthermore, the timing of my fieldwork was perfect because it was a few weeks before the harvesting season, and therefore, many farmers were cleaning their fields, but not with a lot of time pressure.
Safety was not a big subject at my fieldwork location. To visit farmers, I joined the agronomists of the cooperatives on the back of their motorbike. The roads were very bad, but these men went into the field almost every day, so they were very experienced in driving. The only thing I took care was that I borrowed a helmet from a friend. More concerning, coca production and therewith drug trafficking and violence is a big subject relatively close to my fieldwork location (two to four hours away). I discussed this with the cooperatives before departing to the field and choose not to get close to these areas.
5. Context
5.1 Global Coffee Market
The global coffee value chain can be explained according to its distinct market segments: conventional coffee; certified coffee; and specialty coffee.
Conventional coffee
Conventional coffee comprises the bulk of the coffee produced and traded worldwide and is characterised by its lower quality. Exact data is lacking, but estimations are that it constitutes over 90 percent of all coffee worldwide (International Trade Centre, 2011). The international conventional coffee value chain is buyer-driven (Bitzer, Francken & Glasbergen, 2008) and highly concentrated by few large international coffee trading and roasting companies that
capture most of the profits (Panhuysen & Pierrot, 2018). Hence, according to the latest Coffee Barometer, the global coffee industry is consolidating and in its mature stage of its life cycle.
The two main varieties are Robusta (lower quality) and Arabica (higher quality). This study focusses on Arabica coffee and its price formation is as follows. Green Arabica beans are traded as commodity futures contracts at the Intercontinental Exchange (ICE) in New York and is generally referred to as the C price or the international or world coffee price (Bohl, Gross & Souza, 2019). The risk of trading commodities at a futures market is that producers are to a greater extent exposed to volatility shocks, while the benefits are for those who are trading the commodity. Considering coffee, the global price formation of the C price is driven by supplies from Brazil, the exchange rate between the Brazilian real and the US dollar, and the futures market (Bohl, Gross & Souza, 2019). As mentioned in the introduction, last May, the international coffee price was at its historical low in 13,5 years (Financial Times, 2019).
Certified coffee
There are many standards and certifications in the coffee sector that address a diversity of socio-economic and environmental sustainability challenges (Bitzer, Francken & Glasbergen, 2008). The strategy of this niche is product differentiation based on extrinsic attributes of the coffee (such as Fairtrade standards in the production process) and thereby provide either a price premium or other benefits to coffee producers. However, the direct impact of these standards and certifications is questioned (Ruben & Fort, 2012).
Specialty coffee
The third market segment is higher-value market segment which values coffee according to its intrinsic attribute of quality and is often referred to as the niche of specialty coffee. The quality is assessed according to the ‘Green Coffee Standards’ protocol from the Specialty Coffee Association of America (2018). The quality scale is used globally and ranges from 0 to 100. Officially, coffee can be called speciality coffee when the quality grade is above 80, yet many roasters search for coffees with a score above 847.
Speciality coffee is the fastest growing segment in the coffee sector (Gereffi, 2015). It is estimated that certified and specialty coffees combined roughly represent ten percent of the global consumption (Borrella et al., 2015)8. Depending on the quality, the price paid to producers for speciality coffee can be the double or triple of the conventional coffee price. This indicates the high-quality coffee niche is governed differently compared to the 7 Interview 38
conventional buyer-driven coffee value chain, which can contribute to the decommodification of coffee through stronger vertical integration (Marescotti & Belletti, 2016). However, cultivating and processing specialty coffee requires substantial financial, time and knowledge investments. Hence, this livelihood strategy is not accessible to all coffee producers. Moreover, in order to sell higher-quality coffee, smallholders often depend on horizontal organisation through for instance producer organisations to help them overcome initial barriers (Gereffi, 2015).
5.2 The Selva Central in Peru and its coffee sector
This section provides contextual environmental and social characteristics of the Selva Central and its smallholder coffee producers based on a combination of primary and secondary data sources. The Selva Central is located in the department Junín, and the exact research location of this study is in the province of Chanchamayo (shown in figure 3). In this section, secondary data availability defines the spatial scale at which contextual characteristics are described.
Figure 3. Chanchamayo province in Peru, with a marker at Pichanaki. Adapted from Google (n.d.)
Geography and climate
The Selva Central (‘the central jungle’) is located at the belt of the Amazonian rainforest and thereby represents an exceptional value in terms of biodiversity and ecosystem services
Central’s geography offers magnificent sceneries by bordering the eastern slopes of the Andean mountain range which provides elevation differences between 500 and 2000 metres above sea level (m.a.s.l.). Through its deep and narrow canyons, various important Amazonian rivers flow including the Paucartambo and Chanchamayo rivers that flow into the Perené river. The climate is subtropical, with intense humidity and warmth during the day and decrease of temperature during the night and with a rainy and cooler season from November to April (MVO Nederland, 2018)
Deforestation
Over the past few decades, deforestation has altered the landscape in the Selva Central. Farmer Migael9 describes that the generation of his parents cut down all the trees on the hills surrounding his village. Indeed, research indicates that throughout the entire Peruvian Selva, logging was common between the 1960s and the 1980s. Yet after this period of deforestation, the cleared land has been used for agricultural purposes. In addition, forest clearance to expand urban areas and accompanied infrastructure has been a major cause for deforestation (Ichikawa, Ricse, Ugarte, & Kobayashi, 2014). A negative side effect of deforestation is soil erosion, in particular since the region is home to many steep valleys (MVO Nederland, 2018). As a consequence, in the rainy season there are many landslides, sometimes blocking roads for days10.
Climate change
Specific research on the projected impact of climate change on coffee production in the Selva Central is scarce. General research on climate change effects in Peru predicts a higher average temperature and heavier precipitation in the rainy season (IPPC, 2014). In line with the latest IPPC report, in particular the last decade farmers have been experiencing higher temperatures in general, intense heat during the dry season, and more extreme rainfall during the rainy season11. Moreover, the rising temperatures and increased rainfall host perfect conditions for the spread of various pests and diseases, resulting in a lower production and lower quality coffee beans (Jaramillo, et al., 2009; Jaramillo, et al., 2011; Läderach, et al., 2011). An example is the coffee leaf rust fungus, which evolved into an epidemic in the year 2013 and affected around 50 per cent of the total production in Peru (Nolte, 2018) and even 60 to 70 per cent production loss in Chanchamayo (Alfaro, 2018). The reason why an already
9 Interview 6 10 Interview 9
existing fungus could spread into such a severe epidemic can to a great extend be attributed to climate change (Avelino, et al., 2015).
Selva Central’s cultural diversity
Historically, coffee has started to play and important role in the Selva Central since the second half of the twentieth century when the increased international coffee price fuelled expansion of coffee plantations and attracted many migrants from the Sierra (‘the highlands’), primarily as workers and later as land owners (Santos-Granero & Barclay, 1998). Still, relatively inexpensive land in the Selva Central is a motivation for migration12. Another important reason that drove migration flows from the Sierra in the 1980s and 1990s were social disruptions caused by national terrorist groups (Milan & Ho, 2014). A farmer that migrated for safety reasons explains that she and her family fled in the 1980s because these national terrorist groups massacred entire villages surrounding her birth ground13. More recently, water scarcity in the Sierra has become a reason for migration to the Selva Central. Since traditional rain-fed agriculture is the most important income generating activity in the highlands, lack of rainfall forges farmers to seek for opportunities elsewhere (Milan & Ho, 2014). This is illustrated by farmer Christian’s14 explanation for his recent migration:
“It was dry over there, there was no water anymore. But
here there is enough.”
15Alongside these migration flows, four indigenous communities have been living in the Selva Central for centuries and are called the Yánesha, Ashánisha, Ashénika and Nomatsiguenga (Pachao, 2011). Throughout Peru, indigenous groups can be characterised by a lower development level compared to the non-native communities (Perry, Lopez, Maloney, Arias, & Servén, 2006). Research indicates that this divergence has grown as a consequence of colonial oppression and displacement, followed by structural discrimination by the Peruvian government with regard to the provisioning of basic amenities combined with further displacement (Santos-Granero, 2005). These basic amenities include access to good quality education (D'Andrea, 2007), healthcare, housing, sanitation, water (Montenegro & Stephens, 2006) and infrastructure16.
12 Interview 12 13 Interview 17 14 Interview 41
Furthermore, these native communities have been living much more isolated and are therefore in general much more community focussed. An illustration of this communality is explained by an agronomist of one of the cooperatives17. He explains that in the indigenous communities in the region, every year a leader is chosen democratically. This leader decides upon the rules of the interference from outside of the community. Therefore, if a cooperative would like to enter a community, they need permission from the leader of the village first by establishing a good relationship. Thus, if an agronomist from a cooperative does not respect these rules, the local indigenous law system applies to him/her and is often executed by rural patrols (‘ronda campesina’) that protect the community.
Consequently, the Selva Central is true melting pot of Sierra and Selva cultures.
Coffee sector in the Selva Central
Peru produces around 4 percent of the global coffee production (MVO Nederland, 2018) and is the nation’s primary agricultural export product (Tulet, 2010; Morris, et al., 2017).
Despite the growth and potential of coffee production in the Selva Central, there are many challenges that limit its development and its principal challenges, according to the Peruvian ministry of agriculture (MINAGRI, 2017), are summarised in Annex III.
As shown, the Selva Central is located in the district Junín and is the largest coffee-producing region of Peru that represents 20% of national coffee production (MVO Nederland, 2018). Junín has approximately 62,500 ha of coffee plantations, cultivated by around 20,000 farmers (den Belder, Garcia, & Curiñaupa, 2012). The Selva Central is predominantly characterised by smallholder family farms that cultivate up to 5-6 ha (Ruben & Fort, 2012). Exact data on distribution of land among coffee producers at a regional scale is lacking, possibly because many coffee producers do not solely cultivate coffee. However, to give an impression, at a national level the average farm size is 2.3 ha (INEI, 2012).
As introduced, since the second half or the 19th century coffee started to play an important role in shaping the landscape and economy of the Selva Central. At this moment in time, large plantations were often owned by foreigners (Ruben & Fort, 2012). In the 1960s a process of land reform assigned the land that was previously owned by foreigners among the migrant workers. Subsequently, many coffee cooperatives were established with the aim to commercialise the coffee sector. However, during the 1990s Parcellation many cooperatives closed down while relatively few remained (Ruben & Fort, 2012). The last decade, coffee producer organisations mushroomed. Ruben and Fort (2012) report that at
the moment of their research, ten coffee farmers’ organisations were active. Currently, according to data from Fair Trade, this number has more than doubled18. Figures on exact numbers of coffee farmers organised according to a producer organisation in the Selva Central are lacking, but general national estimations are around 30 percent (MINAGRI, 2017) and these numbers are confirmed through primary data collection19.
Producer organisations in the Selva Central range from farmers associations to cooperatives, and the latter are more formalised and established versions than the former20. The majority of coffee cooperatives focus on differentiated market segments, since their strategy is to sell according to multiple certification schemes to obtain a higher price21. The main certification schemes producer organisations focus on are Fairtrade and Organic, followed by eco- and bird friendly certification schemes (Ruben & Fort, 2012). Because of this strategy, Peru is the number one producer of organic coffee globally. Besides the market segment of certified and sustainable coffee, many producer organisations are involved or are becoming involved in higher quality export markets, up to the speciality grade coffee market segments (Nolte, 2018). These higher value export markets are accessible because only Arabica coffee is grown in Peru, which produces higher quality coffee compared to Robusta (Nolte, 2018). Besides that, the higher altitudes in the Selva Central provide perfect potential conditions in which speciality coffee can be cultivated (den Belder, Garcia, & Curiñaupa, 2012). Yet, tapping into the niche market of speciality has its limitations: it requires the necessary skills, knowledge and investments both from the coffee producer and the cooperative; only farms located a higher altitude above 1200 m.a.s.l. comply with the climatic conditions necessary; cooperatives need to be able to comprehend the speciality coffee market and its requirements since they need to be able to sell the higher quality coffee; the higher quality varieties are susceptible to coffee leaf rust22 (MINAGRI, 2015). Due to these limitations, cooperatives advice farmers to only devote a small part of their plantation to varieties that are able to produce speciality coffee23.
The remainder and thus majority of the farmers grow conventional coffee and are not organised according to a producer organisation. These producers sell to intermediaries, local buyers and/or exporters24.
18 Field note 29 19 Interview 38 20 Interview 38 21 Interviews 1, 10, 16, 31, 32, 37 22 Interview 1 23 Interview 10
