What Works for Fair Trade? Coffee, Cooperatives, and Governance

Abstract

Coffee is among the world’s most valuable agricultural commodities, yet a majority of the world’s estimated 25 million coffee-producing households live in impoverished conditions. Over the past 40 years, fair trade and other certifications (e.g., organic, Smithsonian Bird Friendly, Rainforest Alliance, …) have emerged with goals of improving producer incomes, encouraging environmentally friendly practices, and supporting social justice and sustainability. Cooperatives that acquire certifications to benefit their members face numerous governance challenges. They must develop local governance arrangements that fit the demands of coffee value chains and certification requirements, while simultaneously confronting market volatility, severe weather events, political and economic shocks (including the COVID-19 pandemic), and the spread of coffee pests and diseases likely associated with climate change. At the same time, international certification organizations have their own governance structures and processes that can inadvertently create difficulties for small scale producers and their cooperatives. This study draws on five years of research with Honduran small scale coffee producers and cooperatives. It explores how local-to-international governance arrangements matter for the successes and shortcomings of cooperatives that endeavor to benefit from certifications and adapt resiliently to ongoing socioeconomic, political and climatic crises.