Do farmers benefit from participating in specialty markets and cooperatives? The case of coffee marketing in Costa Rica¹

Abstract

His torically low prices in the conventional coffee market have caused financial and social hardship among coffee farmers. In the face of this crisis, specialty markets have attracted the attention of the international donor community. These market segments have shown consistent growth over the last decade and exhibit price premiums in international markets.Therefore, if higher prices are passed on to farmers, access to specialty markets could help to alleviate the crisis brought on by low prices in the conventional sector. The present study attempts to identify the factors that determine farmers' participation in specialized markets and whether participation in these markets leads to higher prices for farmers. A two-stage model is used to analyze farmers' marketing decisions and their effect on the prices received.This procedure allows us to control for the endogeneity bias introduced by the marketing choice. Our results indicate that farmers participating in the specialty coffee segment do in fact receive higher prices than those participating in conventional channels. Additionally, we find that participation in cooperatives has a positive impact on the probability that a farmer chooses to grow specialty coffee and analogously the prices that they receive. Based on these results it seems that efforts to increase participation in the specialty coffee segment and in cooperatives would help to lessen some of the hardships brought on by low prices in the conventional coffee sector.

What Determines Women's Participation in Collective Action? Evidence from a Western Ugandan Coffee Cooperative

“…One additional acre of land owned increases women's probability of becoming a member of BJC by about 30 percentage points (column 1) compared to 20 percentage points for any other cooperative members (column 2). The positive effect of smallholders' resource endowment on participation in cooperatives aligns with previous findings of Wollni and Zeller (2007), Bernard andSpielman (2009), andQaim (2012). This is plausible because women with larger farms may be more inclined to participate in collective marketing because of the larger perceived gains from improved access to markets, related inputs, and extension services.…”

“…On the other hand, skilled smallholders may be able to process the benefits and costs regarding cooperative membership more effectively, possess a greater long-term horizon, and have a better relative social position within the household. Bernard and Spielman (2009) as well as Wollni and Zeller (2007) find that the level of education and entrepreneurial experience positively influenced participation in cooperatives in Nigeria, Ethiopia, and Costa Rica respectively, whereas Weinberger and Jütting (2001) and Fischer and Qaim (2012) find contrary evidence for Eastern and Western Africa.…”

“…Numerous studies find land size positively correlated with women smallholders' decisions to join agricultural-marketing cooperatives in Ethiopia (Bernard and Spielman 2009), Kenya (Fischer and Qaim 2012), and Costa Rica (Wollni and Zeller 2007), while land-security perceptions are lower among coffee-cooperative members in Rwanda (Mujawamriya, D'Haese, and Speelman 2013) and not significantly different between women members and nonmembers in Chad (Katinka Weinberger and Johannes P. Jütting 2001). Furthermore, women with more productive resources and entrepreneurial experience in crop cultivation may expect greater benefits from participation in cooperatives.…”

Demythifying contract farming: Evidence from rural South Africa

“…The independent variables selected for the first probit model are similar to those commonly used in literature for similar models (Bolwig et al, 2009;Miyata et al, 2009;Wollni et al, 2010;Wollni and Zeller, 2007) namely (a) household characteristics (household size, age and gender of the head); (b) assets endowments (land area, size of the cattle herd) and (c) share of off-farm income in total income. The model for household i then becomes: …”

Cooperative management and its effects on shade tree diversity, soil properties and ecosystem services of coffee plantations in western El Salvador

“…Many of these small-scale growers are organized into farmer cooperatives, which can differ dramatically in terms of their history and function (Seligson 1995;Bacon 2005;Wollni and Zeller 2007;Westphal 2008). These farmers tend to maintain more diverse shade tree canopies, and dominate the certified organic and Fair Trade coffee markets (Rice and McLean 1999;Murray et al 2003;Bacon et al 2008).…”