Abstract
Abstract
Both certification and participation in farmer organizations are associated with economic and social benefits for farmers. However, knowledge about potential differences in perceived benefits resulting from participating in different forms of organization and certification schemes is limited. In this paper, we distinguish three types of farmer organizations in the Indonesian coffee sector: farmer groups, cooperatives and KUBEs. We compare the perceived benefits of farmers in these different forms of organization, including unorganized farmers, and of farmers in different certification schemes (i.e., Fairtrade, UTZ certified, Rainforest Alliance, and 4C). We found that certified farmers perceive higher benefits than uncertified farmers, and organized farmers perceive higher benefits than unorganized smallholders. Farmers with a dual membership (for example of a farmer group and a KUBE or cooperative) experience more benefits than farmers who only participate in farmer groups. Although farmers belonging to different certification schemes do significantly differ in their perceived benefits, we could not identify clear patterns based on the different schemes. We conclude that integration of the different organizational forms, and a more intense collaboration between the different ministries underlying each organizational form, may further improve the benefits perceived by farmers in the Indonesian coffee sector.
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As a service to authors and researchers we are providing this version of an accepted manuscript (AM). Copyediting, typesetting, and review of the resulting proofs will be undertaken on this manuscript before final publication of the Version of Record (VoR). During production and pre-press, errors may be discovered which could affect the content, and all legal disclaimers that apply to the journal relate to these versions also.1. Introduction
Sustainability standards and certification are regarded as tools to improve smallholders’ livelihood conditions and position in the market, and to enhance sustainability of the coffee production (Giovannucci & Ponte, 2005). However, research on the actual impacts of certification can be considered inconclusive. Some studies assign negative impacts to certification, for example in terms of lower productivity and yields, increased cost, declining prices over time, and less satisfaction with the organizational service provision (Carlson & Palmer, 2016; Ibanez & Blackman, 2016; Ruben & Fort, 2012; Valkila, 2009; van Rijsbergen et al., 2016). Other studies however, mainly find positive impacts resulting from certification including higher prices, better productivity and coffee quality, better education, improved capacity building, better sanitation and networking, and enhanced organizational capacities (Astuti et al., 2015; Bacon, 2005; Bacon et al., 2008; De Lima et al., 2005; Giovannucci et al., 2008; Reynolds et al., 2004; Ruben & Zuniga, 2011). These contrasting findings imply that the actual benefits of certification are still poorly understood and therefore worthwhile to further explore. Research on farmer benefits from certification in Indonesia occurs at the crossroad of research on certification and organization. Indonesian coffee smallholders cannot become certified without being organized (Loconto & Dankers, 2014) and farmer organizations have been promoted as important means for linking smallholders to global certified coffee markets. Organizations are believed to bring a form of collective action (e.g., internal group monitoring and training) that is essential to smallholders’ participation in certification (Narrod et al., 2009). Farmer organizations make the certification of smallholders economically feasible through offering economies of scale (Maertens & Swinnen, 2009; Mausch et al., 2009) and reducing the transaction costs of service providers working with smallholders (Thorp et al., 2005). Certification schemes therefore connect to farmer organizations rather than to individual farmers, also because the latter is considered inefficient given the large number of farmers and the farmers’ variation in terms of financial opportunities, knowledge, and skills. Variations and individual limitations can be overcome by encouraging farmers to organize and work together. Therefore, membership of a farmer organization has become de facto mandatory for smallholders to become certified (Brandi et al., 2013; Pierrot et al., 2010), which makes it methodologically difficult to separate between the effects from certification and organization. Further, and even though the literature tends to generalize farmer organizations, their manifestations are diverse. Therefore, they cannot be analyzed or compared as homogeneous entities. In Indonesia, we observe three types of farmer organizations in the coffee sector: farmer groups (kelompok tani), cooperatives and KUBEs (Kelompok Usaha Bersama) or Joined Business Groups. These organizations have different organizational characteristics since they were initiated and are managed by different ministries with different sets of rules.
In this paper, we do not apply an empirical measurement of actual impacts of certification in the field, but instead focus on the perception of benefits by smallholders. This differs from previous studies that evaluated actual impacts in the field with robust longitudinal panel data or with case studies (see Carlson & Palmer, 2016; Ibanez & Blackman, 2016; van Rijsbergen et al., 2016). We focus on the Indonesian coffee sector and analyze farmers’ perceived benefits resulting from participating in the different types of farmer organizations and in certification schemes. Most research on sustainability standards and certifications takes a managerial approach, in the sense that it studies how the schemes unfold in practice and how their performance may be improved. By adopting such an approach, researchers implicitly accept the problem definitions of the schemes as set by their northern-based initiators which do not necessarily align with the realities with which smallholders are confronted in their daily practices (Glasbergen, 2018). Besides, and especially from a social-constructivist research paradigm, the reality as measured via “objective” indicators in the field, may not always correspond with the reality as perceived by the farmers themselves (see Offermans & Glasbergen, 2017). Farmers’ perceptions on sustainability standards and certifications are often neglected and therefore present a gap of knowledge that needs to be filled (Ibnu, 2017). In this study, we therefore focus on farmers’ perceptions of benefits from organization and certification.
Our research draws from two strands of literature: certification literature focusing on evaluating farmers’ benefits from participation in certification (see for example Bray et al., 2002; Raynolds et al., 2004; Taylor et al., 2005), and organization literature focusing on farmers’ benefits of organization (e.g., Fischer & Qaim, 2012; Hellin et al., 2009; Kaganzi et al., 2009; Markelova et al., 2009). Although both strands of literature are rather rich in investigating and explaining the impacts/benefits of either certification or organization on farmer welfare and livelihood, there are very few studies that consider and further question farmers’ perceptions of the benefits. We consider perceptions important because they significantly determine farmers’ satisfaction that influences whether the farmers continue their participation in certification or not (Bravo et al., 2012; Oktami, et al., 2014; Zainura et al., 2016). Furthermore, the existing literature largely fails to comprehensively understand (differences in) potential benefits along different domains and the extent to which perceived benefits differ for farmers belonging to different organizational forms or coffee certification schemes.
More concretely, this paper contributes to knowledge as to whether farmers participating in different certification schemes and in different organizational structures perceive (different) benefits in relation to different benefit domains. The paper addresses the following research questions:
How do different forms of Indonesian farmer organizations differ and how do they relate to certification?
How do differences in perceived benefits relate to membership of different organizations and certification schemes?
What do the findings imply for a more sustainable coffee production from a smallholders’ point-of- view?
This paper is structured as follows; in the next sections, we provide a literature review on potential benefits of farmer organization and certification, including an overview of a division of potential benefits in five domains. Based on this review, we propose hypotheses on the influence of organizations and certification schemes on perceived benefits. In section three we describe our methods and we provide an overview of our respondents. In section four we present our results, followed by the conclusions and reflection in section five.
2. Literature review on potential benefits of farmer organization and certification
Although not specifically considering the role of certification, the literature is rich in presenting the benefits of farmer organizations. These benefits vary widely and differ from better job opportunities (Jena et al., 2015; Place et al., 2004; van Rijsbergen et al., 2016), to improved skills (Bitzer et al., 2013; Neilson, 2008; Ruben & Zuniga, 2011; Utting, 2008), and from better bargaining power (Bacon, 2010; Taylor et al., 2005) to better networking opportunities (Taylor et al., 2005; Raynolds et al., 2004). For this paper, we divide these benefits for farmers in 5 domains. First, economic benefits such as saving costs through collective marketing, better prices for their products, better access to inputs and production facilities, more secure land tenure, better access to credits, and the provision of options for saving money. Second, social or community benefits in the form of better education, health and housing services, access to public facilities (e.g. safe drinking water and sanitation), support for organizing social events, strengthened social relations among community members, and providing jobs. Third, benefits in the domain of representation as organizations may represent farmers in formal meetings, and negotiate their interests with external parties such as the government or firms. Fourth, benefits in the domain of capacity building referring to improved knowledge and skills, for example through training, the provision of information and technical support, and encouraging participation in decision making (Bitzer et al., 2013; Neilson, 2008; Ruben & Zuniga, 2011; Utting, 2008). Fifth, we identify benefits in terms of networking, often taking the form of collaborating with other organizations (like private companies) to enhance financial capital and secure market access.
Some of these benefits, however, are not only associated with farmers’ membership of an organization, but also with their participation in certification. In the domain of economic benefits, for example, certified farmers are found to obtain higher prices for their coffee (Astuti et al., 2015; Bacon, 2005), to have a higher productivity and a better coffee quality compared to conventional farmers (Astuti et al., 2015; Ruben and Zuniga, 2010). Certification may further bring social benefits such as improved education and sanitation (De Lima et al., 2005) and is also found to play a role in improving capacity building (Reynolds et al., 2004), enhancing organizational capabilities (Ruben and Zuniga, 2010), and improving networking capacities (Bacon et al., 2008).
In the literature it is also assumed that assets and/or (financial) capital influence an organization’s ability to provide services (e.g., cash payment, credit etc.) that in turn influence its members’ perceived benefits (Chandler & Hanks, 1998; Holagh et al., 2014). As such, organizations with larger assets and/or capital may create higher perceived benefits than organizations with lesser assets and/or capital.
2.1. The landscape of coffee certification in Indonesia
Indonesian coffee smallholders are nowadays confronted with different certifications, which differ in scope and history. The first coffee certificate in Indonesia was Rainforest Alliance (RA) which was implemented in Aceh Province in 1993, followed by Fair Trade (FT) in the same province in 1997. UTZ became involved in the coffee sector in 2002, followed by 4C in 2006 (see Appendix A). RA aims to support farmers in creating more sustainable livelihoods, improving farm productivity, and becoming more resilient to climate change. RA certification consequently concentrates on how farms are managed, with certification being awarded to farms that meet the standards of the Sustainable Agriculture Network (SAN). FT focuses on realizing a better life for farming families in the developing world through direct trade, community development, environmental stewardship, and guaranteed prices for their products. To further support farmers’ economic development, FT requires the first coffee buyers (i.e., cooperatives) to provide pre-financing for and long-term contracts with farmers (FT, 2017). UTZ aims to create transparency along the supply chain and reward responsible coffee producers (UTZ, 2017), whereas 4C aims to achieve global leadership as a baseline initiative that enhances economic, social, and environmental production, processing, and trading conditions for all actors who make a living in the coffee sector (GCP, 2017). Given its base-line character, 4C is often considered to be the least demanding private certificate. More information on coffee certification schemes in Indonesia can be found in Sri Astuti (2018).
In Indonesia, the majority of coffee smallholders are still uncertified (around 93% in 2014) (the Directorate General of Estate Crops, 2014; ICO, 2017; SCP, 2014).
2.2. The landscape of farmer organizations in Indonesia
Organizations can be defined as intelligent systems in which groups of people deliberately cooperate with each other in order to achieve shared goals (Holagh et al., 2014). Individual smallholders participate in farmer organizations to achieve these shared goals in the form of benefits. In the Indonesian coffee sector we distinguish three types of farmer organizations: farmer groups, cooperatives and KUBEs.
Farmer groups
In Indonesia, farmer groups were initiated by the central government in 1979 with the aim to facilitate the distribution of governmental aid to the farmers, and, as from 2001, to negotiate about the utilization of protected forests for coffee production (Arifin, 2010). Farmer groups have a formal status in the country (Nuryanti & Swastika, 2011), and are currently regulated by the Ministry of Agriculture. According to the ministry’s regulations, a farmer group is defined as a group of farmers formed on the basis of mutual interest, similarity in commodities, and geographical closeness (Permentan RI No. 82, 2013). On average, a farmer group consists of 30 individual members who mostly live in the same village. The main functions of a farmer group regard the enhancement of cooperation among farmers, the facilitation of learning processes, and the distribution of tools, farming inputs, and credits from the government to farmers. Cooperation between farmers in a farmer group may result in achieving economies of scale, improved coffee quality and, by providing equipment, help the members to process their coffee cherries. We see that certified Indonesian coffee farmers commonly have a dual organizational membership in which their membership of a farmer group is either combined with a KUBE or a cooperative. Uncertified farmers may be part of a farmer group, but not of a KUBE or cooperative. They commonly connect to conventional channels involving middlemen and local traders (see Astuti et al., 2015).
The establishment of a farmer group requires the participation of smallholder farmers, the village leader, community leaders, and agricultural extension officers. The members need to develop and present a formal agreement, which needs to be signed by (representatives of) the different member groups. The management of a farmer group consists of a group leader, a secretary, and a treasurer; any changes to the managerial structure need to be approved by the village leader and acknowledged by agricultural extension officers (Permentan RI No. 82, 2013). There is no need for farmers to contribute individual assets to a farmer group although some (financial) contributions are usually applied. As a non-legal entity, a farmer group may largely depend on supports from, for example, the government to build its initial assets and/or capital.
Cooperatives
Cooperatives are developed based on the principles stated in the Indonesian Cooperative Law to increase economies of scale, to improve production efficiency, and to enhance the bargaining position of its members (UU RI No. 25, 1992). In practice, we see that cooperatives often facilitate farmers in buying inputs and that they provide credits to coffee producers. According to the law, a cooperative is founded by at least twenty individuals who contribute some of their wealth to the initial capital of the organization. Their agreement to form a cooperative must be drawn up by a notary and legalized by the Ministry of Cooperative. A cooperative therefore has authorized rights and responsibilities, but can also be sanctioned if the organization performs against the law.
The management of a cooperative comprises of a general assembly, a board of directors, an audit committee, and an election committee. The assembly represents the highest policy making body and meets at least once a year to decide the organization’s policies and select the board of directors and the committees. A cooperative generally prioritizes democratic decision making through voting, although the assembly mostly tries to reach consensus. Different from other organizational types, income generated by cooperatives (for example resulting from trading activities) must be equally shared among all members. As a legal entity, cooperatives are entitled to increase their assets and/or capital by obtaining loans from various sources (e.g., banks, private creditors, other cooperatives etc.), or by issuing obligations (UU RI No. 25, 1992). Therefore, cooperatives are generally more asset and capital rich than the other organizations in the Indonesian coffee context. Legally, farmers do not have to join farmer groups to become members of cooperatives although, in practice, most cooperative members also join farmer groups. This is largely to enable them to also claim (governmental) support (e.g., tools, fertilizers, pesticides etc.) and to participate in governmental programs in rural areas.
KUBEs
KUBEs (Kelompok Usaha Bersama) or Joined Business Groups have been initiated by the Indonesian Ministry of Social Affairs as from 1983 to support the regulations on welfare services for the poor (PP RI No. 42, 1981). The underlying idea of the development of KUBEs was to strengthen existing micro businesses1 by integrating them into larger business ventures. KUBEs may differ in their size. Conceptually, a small KUBE is a collaboration of five to seven micro businesses that agree to merge their available assets. Medium and large KUBEs consist of eight to fifteen, and sixteen to thirty micro businesses respectively. KUBEs are generally smaller than cooperatives in term of their assets and/or capital, and mostly pay their farmers after receiving their payment from buyers/exporters whereas cooperatives, if required, can pay their farmers in advance (Ibnu et al., 2015). KUBEs are also considered as non-legal entities and therefore, unlike cooperatives, they much depend on the contributions of their owners for assets and/or capital, or support from external parties, particularly the government.
KUBEs take care of cleaning, drying, and transporting coffee beans from farmer groups to the roasting companies (in the case of conventional coffee) or exporters (for certified coffee) (Ibnu et al., 2015). Different from cooperatives, KUBEs always connect to individual farmers through farmer groups (Ibnu et al., 2015). This means that KUBEs require individual farmers to firstly organize themselves in farmer groups. To be formally acknowledged by the national government and to be entitled to receive additional capital investments from the Ministry of Social Affairs, KUBEs must be verified by leaders at the village and sub-district levels (Haryati, 2013; Suradi, 2012).
In Indonesia, the majority of smallholders are still unorganized (i.e., up to 75%) (the Directorate General of Estate Crops, 2014; ICO, 2017; SCP, 2014). Although most literature focuses on the effects of being organized or being certified, uncertified and unorganized farmers may also experience benefits for example through selling their coffee to local markets and maintaining long-term reciprocal connection with local traders or intermediaries (Wahyudi & Jati, 2012).
Based on the certification and organization literature referred to above, we developed three hypotheses:
Perceived impacts of certification and farmer organization: benefits from the Indonesian smallholders’ point-of-view
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15 August 2018Table
3. Methods
We used semi-structured questionnaires to randomly survey certified and conventional coffee farmers in the two most important Robusta and Arabica coffee producing provinces in Indonesia: Lampung (i.e., Tanggamus and West Lampung Districts) and Aceh (i.e., Central Aceh and Bener Meriah Districts). Lampung contributes 23.6% to the national Robusta production whereas Aceh contributes 25% to the national Arabica production (the Directorate General of Estate Crops, 2014). In the study sites, certified Arabica farmers mostly register at cooperatives and participate in Fairtrade (FT) schemes whereas certified Robusta farmers typically register at KUBEs and Utz, Rainforest Alliance (RA), or 4C. In the field - and corresponding with what we presented above-we found that most certified farmers have a dual organizational membership that either combines participation in farmer groups with KUBEs (FGKUBE) or with cooperatives (FGcooperative) (see table 1). Uncertified farmers either participate in a farmer group (IFG) or act fully independently (without organizational membership). From various villages, we indiscriminately selected 14 farmer groups that have affiliations with five KUBEs and three cooperatives. We then randomly distributed the questionnaires to 80 certified farmers who are members of the selected farmer groups. Together with the 80 uncertified smallholders our total sample equals 160 respondents that can further be grouped into: independent and uncertified farmers (N = 50), certified farmers with dual organizational memberships (N = 80), and uncertified farmers with single organizational membership (N = 30). The uncertified farmers were randomly surveyed in the same regions (but in different villages) as the certified farmers. Table 1 presents the respondents.
Perceived impacts of certification and farmer organization: benefits from the Indonesian smallholders’ point-of-view
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15 August 2018Table 1. Demographic and types of respondents, based on participation in certification and group membership
To answer the first research question on the differences among the organizational forms and the relation between organization and certification, we determined organizational characteristics based on the government’s rules and regulations for the organizations such as Permentan RI No. 82 year 2013 (farmer groups), UU RI No. 25 year 1992 (cooperatives), and PP RI No. 42 year 1981 and UU RI No. 20 year (KUBEs). We then had open discussions with farmers, ICS2 (internal control system) personnel of the certification schemes, and staff members of cooperatives and KUBEs. The aim of these discussions was to get a complete and verified overview of the characteristics of the different types of organization. We discussed organizational characteristics such as administration, focus of the activities and orientation, decision making processes, leadership, membership, and information flow.
To answer the second research question, we gathered benefits referred to in the literature (see Appendix B), classified these into five domains of perceived benefits, and operationalized the benefits in concrete question items. In this process we paid attention to the applicability of the question items to the Indonesian context. To assure a proper fit between questions and the Indonesian context we added questions on Indonesian cultural aspects such as Arisan (i.e., a form of social gathering) and gotong royong (i.e., a form of communal work). We observed that the literature does not really connect these different benefits to each other. We accordingly assume that some benefits (within each domain) would not be valued more (or more important) than others. We therefore treated all benefits (and all domains) equally by adopting equal weighting for all of them.
All question-items are directly derived from the literature (see Appendix B) and presented on a five-point-Likert-scale, ranging from 1 (strong disagreement towards perceiving the mentioned benefit) to 5 (strong agreement). We use a t-test to analyze whether differences in perceived benefits correspond to differences in organizational membership status (i.e., unorganized versus organized smallholders) and participation in certification (i.e., uncertified versus certified farmers). We use a One Way Anova test to further analyze whether different organizational memberships (i.e., IFG, FGKUBE and FG cooperative) or participation in different schemes (i.e., 4C, UTZ, FT, and RA certified) significantly contribute to differences in perceived benefits. We also applied an ordinal logistic regression model for each domain of perceived benefits (i.e. five in total) to gain knowledge on the extent to which organization, certification and demographic variables explain variation in perceived benefits. Literature shows that demographic variables such as age, education, family size, experience in farming, and landownership may explain variation in farmer perceptions (see for example Adesina & Baidu-Forson, 1995; Sherrick, et al., 2004; Somda et al., 2002; Wheeler, 2008). We will test whether this is also the case for farmers’ perceptions of benefits through the inclusion of these variables in our regression model. In our ordinal logistic model, the perceived benefits are therefore explained through participation in certification, organizational membership, age (in years), education (in years), family size (number of people in a household), experience in farming (in years), and landownership (in hectares).
To quantify the composite dependent variable of perceived benefits, we summed up farmers’ responses, resulting in N = 160 different scores per benefit domain. The higher the score, the more the farmer agrees that benefits are perceived in the respective domain. In theory, the scores could vary between 3 (three times a score of one in the domain of networking) and 75 for the domain of social benefits (covering 15 items that could in theory all be answered with a five). The results indicate that the width of potential scores is covered relatively well as the scores fluctuate between 6 (for networking) and 70 (for social benefits). We treat each sum of scores as ordinal. We justify this choice by using the test of parallel lines that is based on different chi-square tests and assesses whether there are (undesirable) significant differences in the coefficients (see Brant, 1990). Table 2 shows the results of the test of parallel lines and reveals that all domains of perceived benefits have P-values (substantially) exceeding 0.05. This means that there are no significant differences in the coefficients, indicating that the distances between the ordinal scores can be considered the same, justifying the treatment of the dependent variable as ordinal.
Perceived impacts of certification and farmer organization: benefits from the Indonesian smallholders’ point-of-view
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15 August 2018Table 2. Test of Parallel Lines
The (decomposed) perceived benefits, organization, and certification are categorical (i.e. nominal). Therefore we used dummy codes as an input to the regression model. For organization, the dummy code 0 refers to independent smallholders and 1 to organized smallholders. For certification, a score of 0 represents the uncertified smallholders and 1 the certified smallholders. The strength of the influence of certification and organization on perceived benefits is shown by an estimate (i.e., the regression coefficient) in the regression model which needs to have a P-value of 0.05 or lower to be considered significant. The value of the estimate (positive or negative) reveals the direction of the influences of a predictor variable (either organization or certification) on the perceived benefits. The interpretation of the estimate is that for a one unit change in the predictor variable (moving from being unorganized towards being organized, or from being uncertified to certified), the benefits are expected to change by the value of its estimate. The higher the estimate the stronger the variable’s contribution to the perceived benefits.
4. Different organizations and their relation to certification
Table 3 presents the organizational characteristics of farmer groups, KUBEs, and cooperatives. Here we see that the different organizations share some similarities (for example, in their decision making procedures). The cooperatives tend to be most distinctive as they differ from the other two organizations in terms of administration and administrative sanctions, member participation in decision making, leadership style, membership type, funding source, and legal status. The farmer group differs from the other two organizations regarding their focus (on production only) and their orientation (inward oriented).
Perceived impacts of certification and farmer organization: benefits from the Indonesian smallholders’ point-of-view
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15 August 2018Table 3. Organizational characteristics of farmer groups, KUBEs, and cooperatives
In practice, all certified farmers are members of FGs and either KUBEs or cooperatives. In the case of FT certification, all farmers become member of a FGCooperative. The interviews revealed that the FG’s connection with KUBEs/cooperatives, being mandatory in certification, has improved the FG’s administration in terms of recording the quantity and prices of coffee sold to KUBEs/cooperatives. FGs also broadened their focus from production only, towards also supporting post-harvest and marketing activities, with the aim to deliver good quality beans as requested by the KUBEs/cooperatives. Some FGs characteristics are not influenced by the FG’s relation with KUBEs and cooperatives. For example, FGs maintain their ways of recruiting new members, obtaining funding, and making decisions. FGs are also still considered non-legal entities and cannot be confronted with legal sanctions for administrative failures.
For cooperatives and KUBEs, certification requires management practices involving administrative tasks, such as updating a list with farmer profiles, tracking the quantity of coffee sold by every farmer to the organization, providing regular information on prices, and administering the price premium paid to farmers. Farmers realized that they no longer depend on group leaders for information but that they can also rely on ICS staff as source of information. Both certification and the dual group membership expand the farmers’ base of information. In the next section, we elaborate on the perceived benefits influenced by organizational membership and participation in different certification schemes.
4.1. The influence of organizations and certification schemes on perceived benefits
Table 4 shows the descriptive statistics of the mean scores for the perceived benefits in the five domains. If we compare the average scores with the maximum scores within each domain, we see that farmers in general perceive relatively high benefits in all domains (with an average score of 3.43 on a five-point-scale for all domains together). Differences between domains are small and vary between average scores of 3.3 for perceived benefits in the domain of networking, to a score of 3.5 for benefits in the domain of representation and capacity building. We further see that certified farmers perceive higher benefits than uncertified farmers in all benefit domains. Similarly, organized farmers perceive higher benefits, in all domains, compared to the unorganized smallholders. Overall, certified farmers have higher average benefits in all domains than the organized farmers. However, since in our sample farmers who are certified are also organized, we cannot methodologically separate the effects of organization and certification on perceived benefits.
Perceived impacts of certification and farmer organization: benefits from the Indonesian smallholders’ point-of-view
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15 August 2018Table 4. The mean score of the perceived benefits
Table 5 and 6 show the results of the t-test for certification and organization respectively. Table 5 shows that the mean scores of certified and uncertified smallholders differ significantly (sig. 0.000) in all benefit domains. Certified farmers perceive significantly higher benefits than uncertified farmers. Table 6 reveals that the mean scores in all benefit-domains are considerably higher for organized farmers than for unorganized smallholders (sig. 0.000), implying that the organized farmers perceive considerably higher benefits than the unorganized smallholders. If we compare the relative differences in mean-scores as presented in Table 5 and 6, we see that farmers evolving from unorganized to organized are likely to perceive a more profound increase in benefits compared to farmers evolving from uncertified to certified, although the latter will also experience an increase in benefits. This result is probably influenced by the perception of uncertified but organized farmers (IFG farmers, N = 30) who feel the organization (FG) provides benefits for them.
Perceived impacts of certification and farmer organization: benefits from the Indonesian smallholders’ point-of-view
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15 August 2018Table 5. Independent sample t- test for equality of means (participation in certification)
Perceived impacts of certification and farmer organization: benefits from the Indonesian smallholders’ point-of-view
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15 August 2018Table 6. Independent sample t- test for equality of means (participation in organization)
Furthermore, Table 7 and Figure 1 show differences in perceived benefits resulting from farmers’ participation in different certification schemes (Anova test). We found significant differences between the schemes, although we cannot identify clear patterns based on the schemes. In the economic domain, we see that 4C farmers perceive more benefits than FT and RA farmers, and considerably more benefits than the farmers participating in UTZ. In the social/ community domain, we see a reversed pattern in which UTZ farmers perceive more benefits than FT and 4C farmers, and considerably more than farmers participating in RA. In the third domain, representation and negotiation, participation in 4C again leads to the perception of higher benefits compared to FT and UTZ and even larger compared to RA. Although participation in RA is associated with a relatively low perception of benefits in the domain of representation and negotiation, it is also associated with a relatively high perception of benefits in the capacity building domain. In this domain, farmers participating in RA score significantly higher than FT and 4C farmers and considerably higher compared to farmers participating in UTZ. In the last domain, networking and/or partnership, we see that farmers participating in 4C perceive higher benefits than farmers who are part of FT, UTZ or RA. Overall, we conclude that participation in 4C seems to lead to higher benefits in 3 domains (economic, representation and negotiation, and networking), whereas UTZ and RA lead to higher benefits in the social community domain (UTZ) and in the domain of capacity building (RA). UTZ scores relatively low in terms of farmers’ perceived benefits in the domains of economy and capacity building, whereas RA scores rather low in the social, representation, and networking domains. Although there are significant differences in benefits between Fair trade and other schemes (see Table 7), Fair trade never scores particularly well or bad in comparison to the other schemes. Based on these findings, we cannot accept hypothesis 1 (Farmers participating in the more demanding schemes (RA, UTZ, FT) perceive more benefits than farmers participating in 4C as a less demanding scheme).
Perceived impacts of certification and farmer organization: benefits from the Indonesian smallholders’ point-of-view
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15 August 2018Figure 1. Differences in perceived benefits resulting from farmers’ participation in different certification schemes
Figure 1. Differences in perceived benefits resulting from farmers’ participation in different certification schemes
Perceived impacts of certification and farmer organization: benefits from the Indonesian smallholders’ point-of-view
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15 August 2018Table 7. Multiple comparisons of different certification schemes on the perceived benefits (Anova test)
Perceived impacts of certification and farmer organization: benefits from the Indonesian smallholders’ point-of-view
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15 August 2018Table 8. Multiple comparisons of membership of different organizations and perceived benefits (Anova test)
Next, we found that different types of organizational membership lead to differences in perceived benefits. Table 8 reveals that the members of FGKUBE and FGCooperative perceive significantly higher benefits in all domains compared to farmers who are only part of a farmer group (IFG). For all benefit-domains, the differences in perceived benefits are larger between FG and FGcooperative than between FG and FGKUBE. We could however not identify any significant differences between FGCooperative and FGKUBE. Therefore, we reject hypothesis 2 that farmers participating in organizations with larger assets and/or capital perceive more benefits than farmers participating in organizations with fewer assets and/or capital.
Table 9 presents the results of the ordinal logistic regression. The results reveal that both certification and organization significantly influence all benefit domains. We can also see that the values of all estimates are positive, meaning that one unit increase in organization (i.e., going from 0 = unorganized to 1 = organized) or certification (i.e., going from 0 = uncertified to 1 = certified) leads to higher scores on perceived benefits. Hypothesis 3 (Certified and organized farmers perceive more benefits in all domains than uncertified or unorganized farmers) can therefore be confirmed. We acknowledge that the effects of organization on perceived benefits mix with the effects of certification. These effects are more difficult to separate as certified farmers have dual organizational memberships whereas uncertified farmers have no or only a single organizational membership. We suggest not further analyzing and comparing the strengths of the estimates as they are counterfactually influenced by each other. The influence of certification and organization on benefits can therefore not be strictly separated.
Perceived impacts of certification and farmer organization: benefits from the Indonesian smallholders’ point-of-view
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15 August 2018Table 9. The results of ordinal logistic regression
Regarding the demographic variables, only family-size significantly and positively influences the perceived benefit of capacity building (P value = 0.035) (see Table 9). The value of the estimate tells us that the perceived benefit of capacity building is likely to increase by 0.229 after adding one person to a household. Although the effect can be considered relatively small, an increase in family members may enable people to share information and to learn from one another. Based on this, we conclude that capacity building processes, at least partially, may take place inside a household.
5. Conclusion
Participation in organization, as well as participation in certification, is often associated with benefits. However, both certification and organization do not represent homogeneous entities and their manifestations are diverse. In the Indonesian smallholder coffee system for example, three different organizations play a role: cooperatives, KUBEs, and farmer groups. We can also distinguish different certification schemes in the coffee sector. This paper contributes to the literature on coffee certification and organization through investigating the perceived benefits of farmers in five domains: economic, social and community, representation and negotiation, capacity building, and networking.
From our research, we observe that certification schemes seem to determine organizational structures that evolve in the coffee sector in particular regions. As observed in Aceh, FT requires the first buyers to collect coffee directly from farmers, implement floor prices, give farmers a price premium, and give payment in advance/credit if the farmers ask for it. The buyers consequently need to have sufficient financial capital and in this case, it seems that only cooperatives are feasible for doing so. The other schemes (4C, RA, and UTZ) in Lampung do not emphasize FT-like requirements, allowing KUBEs to emerge as an alternative to cooperatives in the province. Comparing Arabica and Robusta, farmers producing the former typically use a wash processing method that requires more skills than farmers cultivating the latter with a dry processing method. Indonesian Arabica is commonly produced as specialty coffee with specific attributes (tastes, origins) that further have developed a niche market with relatively loyal consumers. This differs from Indonesian Robusta that is typically produced with little qualitative differentiation from other Robusta coffees from other countries and subsequently markets prefer low prices. As the price of Robusta (mostly produced in Lampung) is generally lower than Arabica (typically produced in Aceh), this may further explain why incentives for stakeholders to develop cooperatives in the Robusta region are also low.
Regarding the benefits of certification, our conclusion is two-fold. First, we conclude that certified farmers perceive higher benefits than uncertified farmers in all five domains. Certification creates more market opportunities (economic and representation benefits) and provides training that improves the farmers’ skills and knowledge (capacity building). Trainings mostly take place in a group, which may further strengthen the feeling of belonging to a community, contributing to a higher perception of social benefits and benefits in the domain of networking. Second, we conclude that farmers participating in different certification schemes also perceive differences in benefits. Although we cannot distinguish clear patterns based on the certification schemes the farmers participate in, we can conclude that 4C, being known as one of the less strict schemes, scores relatively well in three benefit domains (economic, networking, and representation and negotiation). A plausible explanation is that, according to farmers and ICS staff, participation in 4C is less burdensome for the farmers in terms of complying with the scheme’s requirements. This feeling may result in a rather positive perception in general, which also translates into a rather positive perception of benefits. It is, however, also possible that time-frames alter perceived benefits and that farmers participating in certification for more than 5 years already (UTZ, FT, and RA) have lowered their perceived benefits compared to those who are relatively new in certification (4C).
Regarding the benefits of farmer organizations, our conclusion is also two-fold. First, we conclude that organized farmers perceive higher benefits than unorganized smallholders. The existing farmer organizations seem to perform relatively well in bringing benefits to the farmers and thus creating additional value for their members. The different types of organizations seem complimentary rather than overlapping or conflicting. FGs for example, enhance farmers’ knowledge and skills regarding the technical aspects of coffee production, whereas KUBEs and cooperatives link farmers to certified coffee markets. FGs are more product-oriented, and valued as a social organization that strengthens communal relationships (among friends and neighbors). The unique value of a KUBE, which is more market-oriented, assists the FGs to comply with certification requirements and improve their management. In contrast, cooperatives work with individual farmers and assist them on individual or cluster basis. Given the value of each form of organization, the question should therefore not so much deal with a prioritization of one farmer organization over another, but rather on how to improve their respective strengths. Second, we conclude that organizational forms in which certified farmers participate (i.e., FGCooperatives and FGKUBEs) lead to higher perceived benefits than membership of organizational forms in which uncertified farmers participate (i.e., IFG). We can explain this through the KUBEs’ and cooperatives’ efforts to connect farmers to buyers (e.g., exporters or multinational companies), and through the opportunities they provide to meet and connect with farmers outside their own FGs. However, farmers participating in FGcooperatives and FGKUBEs do not significantly differ in their perceived benefits. Therefore, we conclude that organizational differences in (financial) assets and capital have no significant influence on farmers’ perceived benefits.
Indonesian coffee farmers in Lampung and Aceh generally perceive a substantive amount of benefits. We cannot distinguish large differences in benefits among the different domains; a positive feeling regarding benefit in general, seems to translate in a balanced positive feeling in all benefit domains. Empirical and objective measurement of actual benefits in the five different domains may reveal different patterns, or may reveal that the benefits in each domain differ in intensity. However, independent from the actual benefits, the farmers perceive that they benefit from certification and organization. We consider this information to be relevant in the policy domain as, in the end, it is the farmers’ perception that at least partially drives the decision to participate in a sustainability scheme or organization, or to continue or terminate their membership thereof.
This paper is relevant from an academic point of view as it contributes to the debates on the impacts of sustainability standards and certification in the coffee sector. While some studies claimed that certification impacts are rather limited, our findings inform the debates that both certification and organization, from a farmer perspective, lead to perceived benefits in five domains. However, focusing on perceived benefits instead of actual benefits also implies that we have to acknowledge that different farmer communities may differ in their interpretation of reality. Perceived benefits may differ among groups, even when the farmers are confronted with the same realities. We noted, for example, that cultural differences influence the type of benefits farmers may value. In some farmer communities, wedding ceremonies, arisan and gotong royong (communal work) are considered cultural cornerstones and are valued for strengthening social relationships. In other communities however, wedding ceremonies, arisan and gotong royong are neither part of the culture nor considered to be important communal activities. Organizational support in organizing such ceremonies will therefore be differently valued by farmers in different communities.
Further reflecting on our research model, we realize that the Indonesian context has offered challenges to our intention to strictly separate, and therefore compare, the different groups of farmers. This applies for instance to the separation between certified and uncertified farmers because many certified farmers continue their ‘traditional’ practices (e.g., side-selling to local traders to get direct payments in cash); certified and uncertified schemes are less easily distinguishable in practice than on paper. Further, it is also impossible to isolate the influence of organization and certification on farmers’ benefits, because certified farmers are part of (dual) organizational structures whereas uncertified farmers are not organized or only participate in a single organizational membership. We acknowledge that this as a limitation of our study and, therefore, future studies should be designed to provide matching of reliable control groups to be able to distinguish the impacts or benefits resulting from participation in certification and organization. We were further able to show some differences in perceived benefits of farmers participating in different schemes. Here we have to acknowledge that our sample may have been rather small. However, and following the earlier described connection between cultural similarities and similarities in perceived benefits, farmers joining organization and certification tend to live in the same and/or neighboring villages and have similar practices and cultures. This means that increasing our sample size, by adding respondents from the same population, is likely to lead to the same results. We are therefore confident that the results derived from our sample are reliable and reflecting the general characteristics of the respective populations. However, as schemes continue expanding their regional scopes, increasing the sample size, by including coffee farmers in regions that were not covered in this study, may lead to a more complete understanding of farmer’s perceived benefits.
Another point of critique may be that farmers being part of an organizational structure or certification scheme may logically perceive benefits. Otherwise, one may reason, the farmer may have determined his/ her membership of the organizational form or certification scheme already. Even if we would ignore the fact that Indonesian smallholders tend not withdrawing from memberships easily, this reasoning would only tell part of the story. This paper did not only add information on the types of benefits perceived, but also on differences in perceived benefits resulting from different organizational memberships and certification schemes.
Finally, we want to reflect on the potential role of certification and organization in contributing to a more sustainable coffee production. Our research shows that efforts to better organize farmers may, from a farmers’ benefits point-of-view, be equally effective as attempts to involve more farmers in certification. The implication is that improvement of farmer organizations should not only be viewed as a part of the certification process but also as a direct means to achieve a more sustainable coffee production. What could also be improved is the inclusion of farmers into organizations, particularly in remote areas where thousands of farmers are not part of any form of organization yet. In some areas, farmers have access to FGs, but participation in KUBEs or cooperatives (and therefore also in certification) remains practically impossible. Farmers in these (remote) areas therefore miss out opportunities to improve their situation in relation to the five benefit domains. Establishing farmer organizations is not an easy task, because FGs, KUBEs, and cooperatives need to be acknowledged by different ministries within the government, and a dual organizational membership is required for farmers who want to become certified. The Ministry of Agriculture can take the lead in developing FGs, but to establish KUBEs and/or cooperatives, the Ministry of Agriculture needs to collaborate with the Ministry of Social Affairs and/or the Ministry of Cooperative. Establishing new KUBEs and/or cooperatives can be done, for example, by supporting prospective members (farmers) and provide them with managerial training and assistance with collecting initial capital or investors.
Acknowledgements
This research was conducted as part of the SPIN project on Social and Economic Effects of Partnering for Sustainable Change in Agricultural Commodity Chains in Indonesia. The project involves a bilateral cooperation between Maastricht University and Lampung University, with the financial support from the Royal Netherlands Academy of Arts and Sciences (KNAW) and the Directorate General of Higher Education (DIKTI) of the Ministry of Education and Culture of Indonesia. The authors thank Bustanul Arifin, Ron Cörvers, Surip Mawardi, Wan Abbas Zakaria, Hanung Ismono and Ari Damastuti for their useful comments on earlier drafts of this paper.
Appendix
Appendix A. Comparison of sustainability standards and certification in Indonesia
Perceived impacts of certification and farmer organization: benefits from the Indonesian smallholders’ point-of-view
Published online:
15 August 2018Table
Sources: Arifin (2010); FT (2017); GCP (2017); RA (2017); UTZ (2017)
Appendix B. Question items for all farmers
Perceived impacts of certification and farmer organization: benefits from the Indonesian smallholders’ point-of-view
Published online:
15 August 2018Table
*Measured by Likert scale, ranging from 1 to 5 (1 = strongly disagree; 2 = disagree; 3 = neutral; 4 = agree; 5 = strongly agree)
| Hypothesis 1 | : | Farmers participating in the more demanding schemes (RA, UTZ, FT) perceive more benefits than farmers participating in a less demanding scheme (4C). |
| Hypothesis 2 | : | Farmers participating in organizations with larger assets and/or capital perceive more benefits than farmers participating in organizations with fewer assets and/or capital. |
| Hypothesis 3 | : | Certified and organized farmers perceive more benefits in all domains than uncertified or unorganized farmers. |
| Type of respondents | Schemes | N | Average | |||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Length of participation In organization (years) | Length of participation In certification (years) | Age (years) | Educa-tion (years) | Family size (number of people) | Farming experience (years) | Land ownership (hectares) | ||||
| 20 | 5.40 | 3.00 | 40.00 | 9.50 | 5.40 | 19.25 | 1.95 | |||
| Stdr. dev. | 0.00 | 0.69 | 9.42 | 2.09 | 1.46 | 9.80 | 0.83 | |||
| UTZ | 20 | 7.40 | 5.60 | 41.05 | 9.35 | 5.60 | 21.20 | 2.15 | ||
| Stdr. dev. | 1.22 | 1.58 | 9.66 | 1.66 | 1.35 | 10.16 | 0.81 | |||
| RA | 20 | 6.90 | 5.70 | 40.65 | 9.05 | 6.15 | 19.40 | 1.85 | ||
| Stdr. dev. | 0.47 | 0.64 | 8.86 | 2.21 | 1.35 | 9.09 | 0.81 | |||
| Members of FG cooperative | FT | 20 | 8.2 | 7.8 | 40.60 | 9.60 | 5.95 | 20.60 | 2.05 | |
| Stdr. dev. | 0.83 | 0.83 | 9.67 | 1.87 | 1.32 | 9.89 | 0.94 | |||
| Uncertified smallholders | Members of independent farmer group (IFG) | - | 30 | 7.60 | 0.00 | 35.70 | 8.97 | 5.87 | 15.47 | 2.00 |
| Stdr. dev. | 1.69 | 0.00 | 9.54 | 1.90 | 1.33 | 9.92 | 0.74 | |||
| Independent smallholders (unorganized) | - | 50 | 0.00 | 0.00 | 40.74 | 9.26 | 5.70 | 20.30 | 1.92 | |
| Stdr. dev. | 0.00 | 0.00 | 8.71 | 1.94 | 1.26 | 8.89 | 0.83 | |||
| Total respondents | 160 | |||||||||
| Perceived benefit | Model* | -2 Log Likelihood | Chi-Square | df | Sig. |
|---|---|---|---|---|---|
| Economic | Null Hypothesis | 569.968 | |||
| General | 517.400 | 52.567 | 77 | 0.985 | |
| Social/Community | Null Hypothesis | 591.909 | |||
| General | 519.012 | 72.897 | 91 | 0.918 | |
| Representation and/or negotiation | Null Hypothesis | 506.194 | |||
| General | 463.147 | 43.048 | 49 | 0.712 | |
| Capacity building | Null Hypothesis | 542.581 | |||
| General | 512.209 | 30.372 | 77 | 1.000 | |
| Networking and/or partnership | Null Hypothesis | 535.675 | |||
| General | 468.006 | 67.669 | 56 | 0.137 |
*The null hypothesis states that the location parameters (slope coefficients) are the same across response domains and can be confirmed if the P-value is equal to, or higher than 0.05
| Organizational characteristics | Farmer groups (FGs) | KUBEs | Cooperatives |
|---|---|---|---|
| Administration | Rarely record financial activities | Starts to record cash-flows | Complete financial report (audited if requested) |
| Administrative sanction | No legal sanction for administrative failure | No legal sanction for administrative failure | Legal sanction for administrative failure |
| Focus of activities | Production activities | Pre-harvest activities and marketing | Pre-harvest activities and marketing |
| Orientation | Inward oriented (focus on internal relationship) | Starts to be outward oriented | Outward oriented (connect to local buyers, exporters, roasters etc.) |
| Decision making | Consensus | Consensus | Consensus, if not voting |
| Member participation in decision making | Tends to be passive, reliance on leader and other colleague farmers | Tends to be passive, reliance on business operator | Tends to be active, right to vote |
| Level of formality inside the organization | Low | Low | High |
| Leadership style | Often centralize on group leader | Often centralized around a business operator | A general assembly |
| Flow of information | Mostly through agricultural extension officer and group leader | Mostly through social worker and business operator | Through member meeting, supervisory, and executive board |
| Type of membership | Exclusive (based on many similarities such as neighborhood, type of farming, even ethnicity and language) | Rather exclusive (restricted to those in the nearby neighborhood and similarity of business type) | Inclusive (tries to include many different types of people from different regions) |
| Sources of funding | Highly dependent on internal sources (e.g., member contribution) and external sources (i.e., government funding) | Internal sources (members) but still highly dependent on additional capital from government | Independent, relies on internal (members) and external (private creditors) funding |
| Legal status | non-legal entity | non-legal entity | Legal entity |
| Group | Economic (max. Score = 45) | Social/ community (max. Score = 75) | Representation and/or negotiation (max. Score = 20) | Capacity building (max. Score = 55) | Networking and/or partnership (max. Score = 15) |
|---|---|---|---|---|---|
| Participation in certification | |||||
| Uncertified smallholders | 26.625 | 44.375 | 12.075 | 32.900 | 8.875 |
| Certified smallholders | 36.062 | 59.987 | 16.212 | 44.850 | 12.087 |
| Organizational status | |||||
| Independent smallholders | 23.100 | 38.500 | 10.600 | 28.600 | 7.700 |
| Organized smallholders | 35.091 | 58.400 | 15.754 | 43.545 | 11.745 |
| Certification schemes | |||||
| FT certified | 36.750 | 61.250 | 16.35 | 45.350 | 12.250 |
| 4C certified | 40.950 | 60.000 | 18.300 | 44.550 | 13.650 |
| UTZ certified | 30.550 | 68.250 | 16.050 | 39.900 | 12.000 |
| RA certified | 36.000 | 50.450 | 14.150 | 49.600 | 10.450 |
| Form of organizations | |||||
| IFG | 32.500 | 54.167 | 14.533 | 40.067 | 10.833 |
| FGcooperative | 36.750 | 61.250 | 16.350 | 45.350 | 12.250 |
| FGKUBE | 35.833 | 59.567 | 16.167 | 44.683 | 12.033 |
| Perceived benefits | t | df | Sig. (2-tailed) | Mean Difference | Relative Mean Difference | Std. Error Difference |
|---|---|---|---|---|---|---|
| Economic | ||||||
| Social/ community | -10.800 | 157.594 | 0.000 | -15.612 | 20.8* | 1.445 |
| Representation and/or negotiation | -10.898 | 157.129 | 0.000 | -4.137 | 20.5* | 0.379 |
| Capacity building | -11.412 | 157.875 | 0.000 | -11.950 | 21.6* | 1.047 |
| Networking and/or partnership | -11.019 | 157.308 | 0.000 | -3.212 | 21.3* | 0.291 |
*The mean difference is significant at the 0.05 level.
| Perceived benefits | t | df | Sig.(2-tailed) | Mean Difference | Relative Mean Difference | Std. Error Difference |
|---|---|---|---|---|---|---|
| Social/ community | -19.044 | 156.201 | 0.000 | -19.900 | 26.5* | 1.045 |
| Representation and/or negotiation | -18.117 | 155.120 | 0.000 | -5.154 | 26.0* | 0.284 |
| Capacity building | -19.577 | 155.873 | 0.000 | -14.945 | 21.6* | 0.763 |
| Networking and/or partnership | -19.111 | 156.795 | 0.000 | -4.045 | 27.0* | 0.211 |
*The mean difference is significant at the 0.05 level
| Dependent Variable | (I) Certification | (J) Certification | Mean Difference (I-J) | Std. Error | Sig. |
|---|---|---|---|---|---|
| Economic | 4C | FT | 4.200* | 1.113 | 0.004 |
| UTZ | 10.400* | 1.329 | 0.000 | ||
| RA | 4.950* | 1.217 | 0.002 | ||
| FT | RA | 0.750 | 1.458 | 0.955 | |
| Social/ community | UTZ | FT | 7.000* | 1.855 | 0.004 |
| 4C | 8.250* | 2.028 | 0.002 | ||
| RA | 17.800* | 1.973 | 0.000 | ||
| FT | 4C | 1.250 | 2.429 | 0.955 | |
| Representation and/or negotiation | 4C | FT | 1.950* | 0.535 | 0.005 |
| UTZ | 2.250* | 0.583 | 0.003 | ||
| RA | 4.150* | 0.604 | 0.000 | ||
| UTZ | RA | 1.900 | 0.739 | 0.065 | |
| Capacity building | RA | FT | 4.250* | 1.436 | 0.028 |
| 4C | 5.050* | 1.551 | 0.014 | ||
| UTZ | 9.700* | 1.913 | 0.000 | ||
| FT | UTZ | 5.450 | 2.115 | 0.066 | |
| Networking and/or partnership | 4C | FT | 1.400* | 0.371 | 0.004 |
| UTZ | 1.650* | 0.406 | 0.002 | ||
| RA | 3.200* | 0.496 | 0.000 | ||
| FT | UTZ | 0.250 | 0.486 | 0.955 |
*The mean difference is significant at the 0.05 level.
| Dependent Variable | Organization | Mean Difference (I-J) | Std. Error | Sig. | |
|---|---|---|---|---|---|
| (I) | (J) | ||||
| Economic | FGcooperative | IFG | 4.250* | 1.110 | 0.002 |
| FGKUBE | 0.917 | 1.251 | 0.745 | ||
| FGKUBE | IFG | 3.333* | 0.956 | 0.002 | |
| Social/community | FGcooperative | IFG | 7.083* | 1.850 | 0.002 |
| FGKUBE | 1.683 | 2.069 | 0.697 | ||
| FGKUBE | IFG | 5.400* | 1.574 | 0.003 | |
| Representation and/or negotiation | FGcooperative | IFG | 1.817* | 0.522 | 0.004 |
| FGKUBE | 0.183 | 0.568 | 0.944 | ||
| FGKUBE | IFG | 1.633* | 0.427 | 0.001 | |
| Capacity building | FGcooperative | IFG | 5.283* | 1.370 | 0.002 |
| FGKUBE | 0.667 | 1.513 | 0.899 | ||
| FGKUBE | IFG | 4.617* | 1.135 | 0.000 | |
| Networking and/or partnership | FGcooperative | IFG | 1.417* | 0.370 | 0.002 |
| FGKUBE | 0.217 | 0.417 | 0.862 | ||
| FGKUBE | IFG | 1.200* | 0.319 | 0.001 | |
*The mean difference is significant at the 0.05 level.
| Perceived Benefits | Estimate | Std. Error | Wald | df | Sig | Exp_B | Lower | Upper | |
|---|---|---|---|---|---|---|---|---|---|
| Economic (max score 45) | Certification | 1.199 | 0.401 | 8.957 | 1 | 0.003* | 3.316 | 1.512 | 7.269 |
| Organization | 4.896 | 0.735 | 44.340 | 1 | 0.000* | 133.707 | 31.647 | 564.900 | |
| Social/ community (max score 75) | Certification | 1.246 | 0.400 | 9.692 | 1 | 0.002* | 3.475 | 1.586 | 7.613 |
| Organization | 4.618 | 0.664 | 48.317 | 1 | 0.000* | 101.254 | 27.539 | 372.281 | |
| Representation and/or negotiation (max score 20) | Certification | 1.367 | 0.406 | 11.367 | 1 | 0.001* | 3.924 | 1.773 | 8.688 |
| Organization | 5.726 | 1.092 | 27.489 | 1 | 0.000* | 306.881 | 36.080 | 2610.175 | |
| Capacity building (max score 55) | Certification | 1.567 | 0.411 | 14.538 | 1 | 0.000* | 4.792 | 2.141 | 10.724 |
| Organization | 5.192 | 0.827 | 39.430 | 1 | 0.000* | 179.860 | 35.572 | 909.415 | |
| Family size | 0.229 | 0.109 | 4.439 | 1 | 0.035* | 1.257 | 1.016 | 1.555 | |
| Networking and/or partnership (max score 15) | Certification | 1.341 | 0.405 | 10.994 | 1 | 0.001* | 3.825 | 1.731 | 8.453 |
| Organization | 5.170 | 0.828 | 38.979 | 1 | 0.000* | 175.853 | 34.700 | 891.191 | |
*Significant at P value ≤ 0.05.
| Programs | RA | FT | UTZ | 4C |
| Starting year in Indonesia | 1993 | 1997 | 2002 | 2006 |
| Regions of operation | Aceh, Lampung, south Sumatra | Aceh | Lampung, Aceh | Lampung, south Sumatra |
| Coffee variety | Robusta, Arabica | Arabica, Robusta | Robusta, Arabica | Robusta |
| Main focus | Sustainability | Fairness | Sustainability | Sustainability |
| Standards | Minimum compliance threshold | Minimum and progress compliance3 | Minimum compliance threshold | Baseline common code criteria |
| Verification | Third-party auditors | Flo-Cert, third-party auditors | Third-party auditors | Third-party auditors |
| Code elements for coffee production | Best management practices; conservation of natural resources, ecosystems, and wildlife; workers’ rights and benefits; benefits to local communities | Social, economic, environmental, and democratic organization of cooperatives | Socially, environmentally, and economically conscious growing standards; food safety and quality elements | Exclude worst practices and continuously increase the sustainability of coffee production and processing in the economic, social, and environmental dimension |
| Market focus | Mainstream market | Mainstream market | Mainstream market | Mainstream market |
| Pricing system | Market price | Minimum price floor | Market price | Market price |
| Credit financing | Through local banks | Prefinancing (up to 50% of value) | Unspecified | Unspecified |
| Technical assistance/ capacity building | Provided by local NGO partners (Sustainable Agriculture Network); training of extension workers (by the program and/or by collaborating institutions) | Provided by TransFair USA for specific projects through its Global Producer Services department, and by FLO (Fairtrade Labelling Organizations International) worldwide through its Producer Business Unit | Provided by the program at very low cost to producers in alliance with other initiatives like the Coffee Support Network (CSN) | Support to 4C Units, members and other interested stakeholders through training-of-trainer workshops, educational sessions, and access to tools/manuals; cooperation with other national/international organizations, and between 4C members |
| Target groups | Smallholders and professional farms | Smallholders | Smallholders and professional farms | Smallholders and professional farms |
| Traceability/ chain of custody | Traceable from roaster to producer | Traceable from roaster to producer | Traceable from roaster to producer | Traceable from 4C Unit to producer |
| Gender equity and youth rights | Equal rights and exclusion of child labor | Equal rights and exclusion of child labor | Equal rights and exclusion of child labor | Equal rights and exclusion of child labor |
| 3 Minimum compliance represents minimum practices in social empowerment, economic development, and environmental responsibility to be met prior to initial certification. Progress criteria are fulfilled after the first year of certification, representing continuous development toward increased social, economic, and environmental responsibilities. | ||||
| The perceived benefits | Question items* |
| Economic | 1. It is easy for me to sell my coffee (Bacon, 2010; Rueda & Lambin, 2013) 2. I can sell my coffee at different places (Mujawamariya et al., 2013) 3. The prices I receive for my coffee are good (Bacon, 2010; Ruben & Zuniga, 2011; Rueda & Lambin, 2013) 4. I have good access to farming inputs (Benson, 2014; Beuchelt and Zeller, 2013) 5. I have easy access to coffee processing equipment (Ruben & Zuniga, 2011) 6. I have good access to storage facilities (Bray et al., 2002; Raynolds et al., 2004) 7. I have good access to credit (Jena et al., 2015; Ruben & Zuniga, 2011) 8. I have enough opportunities to save money (Bacon et al., 2008) 9. I feel secure regarding land tenure (Ruben & Zuniga, 2011) |
| Social/ community | 1. Access to health services is good (Bray et al., 2002; Jena et al., 2015; Raynolds et al., 2004) 2. People receive proper assistances to build their houses (Bray et al., 2002; Jena et al., 2015; Raynolds et al., 2004) 3. People receive proper assistance to renovate their houses (Bray et al., 2002; Jena et al., 2015; Raynolds et al., 2004) 4. Opportunity to have well education is high (Rueda & Lambin, 2013) 5. Working opportunity is good for people in my area (Jena et al., 2015; Valkilla, 2009) 6. Safe drinking water is available (van Rijsbergen et al., 2016) 7. Sanitary conditions are good (van Rijsbergen et al., 2016) 8. Funerals are well organized in my community (Place et al., 2004). 9. Funerals are well financed in my community (Place et al., 2004). 10. Wedding are well organized in my community (Place et al., 2004). 11. Wedding are well financed in my community (Place et al., 2004). 12. Arisan (i.e., a form of social gathering) is common in the community (Place et al., 2004). 13. Gotong royong (i.e., a form of communal work) is regular in community (Place et al., 2004). 14. We have strong social relationships in our community (Bray et al., 2002; Jena et al., 2015 15. People are willing to help one another in community (Bray et al., 2002; Jena et al., 2015) |
| Representation and/or negotiation | 1. I feel my interests are represented in governmental authorities (Bacon, 2010; Taylor et al., 2005) 2. I feel my interests are represented in firms or businesses (Bacon, 2010; Beuchelt and Zeller, 2013; Taylor et al., 2005) 3. I feel there is enough negotiation with the exporters (Bacon, 2010; Beuchelt and Zeller, 2013; Taylor et al., 2005) 4. I think I have strong bargaining power over buyers (Bacon, 2010; Rueda & Lambin, 2013; Taylor et al., 2005) |
| Capacity building | 1. I have a good opportunity to enhance my knowledge on farming practices (Bitzer et al., 2013; Raynolds et al., 2004; Ruben & Zuniga, 2011 ; Utting, 2009) 2. I have a good opportunity to develop my farming skills (Adong, 2014; Elder et al., 2012; Ruben & Zuniga, 2011; Utting, 2009) 3. I can easily find information regarding farming inputs (Adong, 2014; Bitzer et al., 2013) 4. I can easily access information regarding market price (Ruben & Zuniga, 2011; Utting, 2009) 5. I receive trainings on technical aspects (e.g., how to use chemical inputs, new tools, new technique etc.) regularly (Adong, 2014; Elder et al., 2012; Ruben & Zuniga, 2011; Rueda & Lambin, 2013) 6. I receive trainings on managerial aspects (e.g., how to make bookkeeping, how to make a plan etc.) regularly (Ruben & Zuniga, 2011; Rueda & Lambin, 2013) 7. I meet extension workers regularly (Bray et al., 2002; Raynolds et al., 2014; Ruben & Zuniga, 2011; Utting, 2009) 8. It is easy to get help from agricultural experts (Bray et al., 2002; Raynolds et al., 2004; Ruben & Zuniga, 20118) 9. Helps from agricultural experts solve my problems (Bitzer et al., 2013; Raynolds et al., 2004; Ruben & Zuniga, 2011; Utting, 2009) 10. I can freely express my opinion in a meeting (Elder et al., 2012; Jena et al., 2015) 11. I can use my rights to vote in an election (Elder et al., 2012; Jena et al., 2015; Parrish et al., et al., 2005) |
| Networking and /or partnership | 1. I know farmers from other groups pretty well (Bacon, 2010; Kilpatrick, 2007; Taylor et al, 2005; Taylor et al., 2005) 2. I can easily contact farmers from other groups (Bacon, 2010; Kilpatrick, 2007; Place et al., 2004; Taylor et al., 2005) 3. We collaborate with other groups (Bacon, 2010; Place et al., 2004; Taylor et al., 2005) |
Notes
1 A micro business is defined as a business owned by an individual or a group with assets up to 50 million Rupiahs (or less than 4000 US dollars) in total (UU RI No. 20, 2008).
2 ICS staff is hired by cooperatives and KUBEs to work as private extension officer to help farmers (mostly by trainings) to comply with the certification requirements.
3 Minimum compliance represents minimum practices in social empowerment, economic development, and environmental responsibility to be met prior to initial certification. Progress criteria are fulfilled after the first year of certification, representing continuous development toward increased social, economic, and environmental responsibilities.
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