No abstract

In the Eastern DRC, coffee farmers combine the different sales outlets available to them. Cooperative members sell coffee to the cooperatives they belong to as well as to informal markets, which include a channel of illegal cross-border smuggling. In this conflict affected region, the informal cross-border markets persist irrespective of the presence of cooperatives. This paper seeks to understand the motivating factors of the sideselling behavior of coffee cooperative members. We study the coffee production and sales of 339 cooperative members in the region and use a double hurdle model to understand which farm characteristics relate to the side-selling behavior. The omnipresence of side-selling in the cooperatives suggest that the unstable political and economic environment is conducive to this co-existence of informal trade and cooperative membership. Side-selling seems a deliberate strategy by the farmers that is tolerated by the cooperatives. The results suggest that farmers who are in a more precarious situation are more inclined to engage with informal markets. This is further underscored by the effect of food insecurity and lack of credit. Hence, the informal market is a safety net that allows immediate payment of coffee in contrast to cooperatives that are more formally organized.

The paper investigates the benefits of certification of cooperatives in conflict‐affected areas. We study whether and how certification may contribute to attenuate the impact of conflicts on the members of coffee cooperatives in the Eastern DRC. We use an inverse probability weighted difference‐in‐difference approach to study data collected between December 2017 and October 2019 from four NGO‐supported cooperatives. Two of these cooperatives got organic certification in 2018, of which one got an additional Small Producers Symbol (SPP) certification in 2018. Certified cooperatives allow Arabica coffee producers to access markets and buffer against drops in market prices. Results indicate that certified cooperatives were better able to resist the international price drop than non‐certified cooperatives and the alternative informal markets. The results also suggest that certified cooperative members increased their sales to the cooperative instead of turning to informal side‐selling. We find a decrease in reported food deficits by the members of certified cooperatives and an increase in the importance of coffee in their household's income. We conclude that certification is an effective way forward for smallholder coffee producers and cooperatives in unstable regions.