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Impact Evaluation of UTZ Certified Coffee Program in Colombia November, 2014 Credits

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Impact Evaluation of UTZ Certified Coffee Program in Colombia November, 2014 Credits IMPACT EVALUATION OF UTZ CERTIFieD COFFee PROGRAM IN COLOMBIA November, 2014 CREDITS Contributors: Carlos García ([email protected]), Julián García ([email protected]), Gustavo Ochoa (gochoa@ crece.org.co), Juan C. Mora ([email protected]), Juan F. Castellanos ([email protected]). Reviewers: Tessa Laan (UTZ Certified); Henk Gilhuis (UTZ Certified); Francisco Bustamante (Independent Consultant). Sessions with coffee growers were managed by the CRECE team in collaboration with Tessa Laan and Vera Espíndola Rafael. Design: Mariana Álvarez Matijašević. Photography: Patricia Rincón Mautner – David Mauricio Bonilla Abreo. © Copyright FNC 2014. Except for photos on pages 17 and 31, which are reproduced with permission of UTZ Certified. Interviewed: Iván Alvarez (Specialty Coffees Coordinator at Huila Departmental Committee of Coffee Growers), Francisco Bustamante (Former UTZ Coordinator in Colombia), Pedro F. González (Specialty Coffees Coordinator at Caldas Departmental Committee of Coffee Growers), Yaneth Peña (Specialty Coffees implementation Director at Coffee Growers Cooperative Coocentral), Carlos Rodríguez (Specialty Coffee Coordinator at Huila Coffee Growers Cooperative Cadefihuila), Coffee Growers and institutional representatives that attended Focus Groups: Caldas Department: Luis Guillermo Cortéz Jaramillo, José D’Lolo Gómez: Luis Armando Arboleda, Jairo Gómez Chica. Patricia Mejía, Pedro Felipe González, Roberto Mejía, Comité de Cafeteros: Ricardo Velázquez Gómez, Angélica María Escobar, Jorge Humberto Páez, Silvio Valdés Sánchez, Fundación Solidaridad: Carlos Isaza, Expocafé: Angela María Peláez, Hacienda Venecia: Juan Pablo Echeverri, María Hoyos de Gómez, Alberto Jaramillo Botero, Roberto Gómez, Carlos Escobar, María Teresa Delgado. Huila Department: Fredy Betancourt, José Arismendi Cuaji, Juan Cuaji Velasco, Alexander Olaya Cardozo, Ismael Perdomo Astudillo, Luis Alfredo Rojas Fierro, Yoel Trujillo Cedeño, Esther Pastrana, Orlando Figueroa, Didier Francisco Avila Castrillón. Elirio Osorio Nuñez, Nilson Yunda Bermúdez, Yolanda Guevara, Oliverio Pajoy, Marialena Dago, Marco Figueroa, Dina María Nipi, Iván Alvarez. Coocentral: Mauricio Rivera, Yaneth Peña, Amalia Muñoz. Suggested citation: García, C.; García, J.; Ochoa, G.; Mora, J. C. and Castellanos, J. F. 2014. Impact Evaluation of UTZ Certified Coffee Program in Colombia. (2008-2012). CRECE. Manizales, Colombia. About CRECE: The Centre for Regional Entrepreneurial and Coffee Studies is a nonprofit organization based in Colombia, with 28 years of experience in socio-economic research and consulting. Our work has been oriented to support decision- making processes for development by designing, collecting, processing and analyzing good quality information. The main research topics in regional development are Coffee and Agricultural economics, Social and Institutional development and Education studies. During the last decade, the Centre has been dedicated to the M&E of development programs and measuring sustainability initiatives on agricultural and coffee sector. Executive Director: Marcela Urueña Gómez This evaluation was carried out by CRECE and was commissioned and financed by UTZ Certified. TABLE OF CONTENTS 7 1. Executive Summary 9 2. Introduction 9 2.1. About this Report 9 2.2. Coee Production in Colombia 11 2.3. The UTZ Theory of Change 12 2.4. The UTZ Program Implementation in the Colombian Context 16 3. Methodology 18 4. Findings 18 4.1. Socioeconomic Characteristics of UTZ Certied Farmers 19 4.2. Performance of UTZ Certied Farmers 19 4.2.1. Farm Management 22 4.2.2. Working Conditions 24 4.2.3. Environmental Practices 25 4.3. UTZ Contribution to Long Term Sustainability 26 4.3.1. Social Sustainability 27 4.3.2. Environmental Sustainability 28 4.3.3. Economic Sustainability 32 4.4. Multi-Certication 33 5. Conclusions 35 References 36 Appendices FiGURes INDEX 10 Figure 1. Size Distribution of Coee Farms in Colombia (% of Total Farms) 11 Figure 2. Colombia´s Harvest (Million Bags of 60 Kg) and Farm Gate Prices (Cop/kg) 2005 – 2013 14 Figure 3. The Utz Theory of Change 19 Figure 4. Percentage of Farms by Size 19 Figure 5. Farm Area Dedicated to Dierent Types of Land Use (average) 19 Figure 6. Change in Coee Specialization over Time (Coee Area as % of Total Farm Area) 20 Figure 7. Percentage of Producers Keeping Records 20 Figure 8. Percentage of Farms with Resistant Varieties to Rust Infection 21 Figure 9. Percentage of Farms with Leaf Rust Infection 21 Figure 10. Average Density of Trees (Trees/Ha.) 21 Figure 11. Kilos of Fertilizers Applied 23 Figure 12. Hours of Training 24 Figure 13. Percentage of Paid Labor 24 Figure 14. Producers Adopting Water Conservation Practices 24 Figure 15. Water Consumption in Wet Milling. Year 4 (Liters/kg of Parchment Coee) 25 Figure 16. Water Filtration System Used in Milling Process. 2011 25 Figure 17. Disposal of Domestic Wastewater, Year 4 26 Figure 18. Farmers’ Perceptions on Quality of Life Issues, Year 4 27 Figure 19. Social Sustainability Index 27 Figure 20. Environmental Sustainability Index 29 Figure 21. Economic Sustainability Index 29 Figure 22. Yield (Kilos of Green Coee per Ha.) 29 Figure 23. Production Cost per Kilo (USD / Green Kilo) 30 Figure 24. Revenue per Kilo (USD / Green Kilo) 30 Figure 25. Net Income per Kilo (USD / Green Kilo) 30 Figure 26. Percentage Dierence in Price and Yield between Target and Control 31 Figure 27. Main Motivations to Obtain the UTZ Certication 32 Figure 28. Percentage of Coee Sold as Certied and Conventional 43 Figure 29. Nearest Neighbor Matching (10 neighbors) TABLes INDEX 18 Table 1. Characteristics of the Producers 22 Table 2. Implementation of Good Social Practices 36 Table 3. UTZ Certied Program Indicators 2014 43 Table 4. Matching Methods Implemented 44 Table 5. Parameters Used to Calculate Water Consumption 45 Table 6. Summary of Results From the Survey and Single Dierences by Year ABBREVIATIONS AND ACRONYMS CBB Coee Berry Borer COP Colombian Pesos COSA Committee On Sustainability Assessment CRECE Centre for Regional Entrepreneurial and Coee Studies DD or DID Double Dierence or Dierence in Dierences DDD Triple Dierence in Dierences FNC Federación Nacional de Cafeteros de Colombia (Colombian Coee Growers Federation) GAP Good Agricultural Practices GBE Green Bean Equivalent Ha. Hectares M&E Monitoring and Evaluation PO Producers Organization PSM Propensity Score Matching SENA SENA Servicio Nacional de Aprendizaje (Colombian National Learning Service) SICA Sistema de Información Cafetera (The Coee Information System) TOC Theory of Change USD US Dollars 1. EXECUTIVE SUMMARY The main aim of this study is to understand the outcomes of from the Colombian Coffea Arabica tree) compared with its UTZ certification in Colombia in relation to the objectives of main substitutes on the market. Coffee authorities, with the the program as described in the UTZ Evaluation framework, support of national government and several donors, took policy the Theory of Change and the key UTZ program indicators. It actions to help producers increase output to the levels seen at focuses on the performance of UTZ Certified coffee farmers the beginning of the century. These policies influenced both during the harvest seasons of 2008, 2009 and 2011 and assesses certified and control group farmers. the impact of the UTZ program on the social, environmental and economic performance of producers. Evidence from field interviews and other sources suggests that the UTZ farmers in this sample tend to be larger and more Study Scope advanced in terms of training, yield and adoption of good agricultural practices than average Colombian coffee farmers. The study assessed the following questions: This is because these types of farmers were more likely to be encouraged by the extension service of the Colombian Coffee y What are the outcomes and impacts of UTZ Growers Federation (FNC, by its spanish acronym) or their intervention at farm level? cooperatives to participate in the certification program. y What are the socioeconomic characteristics of UTZ farmers? Methodology y What factors influenced the implementation of the UTZ program? To construct statistical comparison groups and to estimate the y What indicators related to the UTZ program show the most impact of the program on social, environmental and economic relevant or significant changes? conditions, Propensity Score Matching (PSM) was implemented y Which of the program requirements are most effective at in combination with Difference in Difference approach (DID). influencing farmer performance? This allowed for control of selection bias and the influence y What sustainability benefits were generated by the program of independent factors. The quantitative information was in the period studied? complemented by a set of interviews with key stakeholders y Which of the expected changes have not which provided an insight into the process of implementing the yet been achieved? UTZ program. This report is based upon a set of indicators that was selected Key Findings from a broader set of COSA indicators, based on the UTZ Theory of Change. The data set was built from three longitudinal Adopting the criteria for UTZ Certification led to positive surveys covering a sample of 857 coffee farmers in the central outcomes for farmers. They scored significantly better on key and south-west departments of Caldas and Huila respectively. socioeconomic and environmental indicators than conventional The sample includes 278 UTZ producers who were certified
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