The local payoffs of coffee certification: evidences from smallholder cooperative farmers in Jinotega, Nicaragua

Abstract

This paper concerns the local payoffs of coffee certification in a case study region in Jinotega, Northern Nicaragua. It aims to answer two questions. First, does certification significantly improve the income of smallholder coffee farmers in Nicaragua? Second, if yes, how far do these income improvements help coffee farmers to find a sustainable livelihood above the poverty line? In order to answer these questions, we carried out empirical field research in which we conducted a semi-structured household survey in the Jinotega Municipality of North-central Nicaragua. A total of 238 certified and noncertified coffee farmers were selected through a stratified random sampling procedure and interviewed. Certified farmers were taken as the treatment group and non-certified ones as the control group. Both the gross margin analysis and regression analysis are employed to show the likely income and poverty differences between the treatment and control groups controlling for other relevant factors. The results reveal that the coffee certification program of Jinotega municipality does indeed improve the income of the participating farmers. However, these income improvements are not sufficient to sustainably lift the poor farmers above the poverty line.