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Coversheet for Thesis in Sussex Research Online A University of Sussex PhD thesis Available online via Sussex Research Online: http://sro.sussex.ac.uk/ This thesis is protected by copyright which belongs to the author. This thesis cannot be reproduced or quoted extensively from without first obtaining permission in writing from the Author The content must not be changed in any way or sold commercially in any format or medium without the formal permission of the Author When referring to this work, full bibliographic details including the author, title, awarding institution and date of the thesis must be given Please visit Sussex Research Online for more information and further details Value-added Initiatives: Distributional impacts on the global value chain for Colombia's coffee Thesis submitted for the degree of Doctor of Philosophy Julián García-Cardona Institute of Development Studies University of Sussex Brighton August 2016 ii DECLARATION I hereby declare that this thesis has not been submitted, either in the same or different form, to this or any other university for any degree. iii UNIVERSITY OF SUSSEX JULIAN GARCIA-CARDONA DPHIL DEVELOPMENT STUDIES VALUE-ADDED INITIATIVES: DISTRIBUTIONAL IMPACTS ON THE GLOBAL VALUE CHAIN FOR COLOMBIA’S COFFEE SUMMARY This thesis discusses whether participation in two voluntary sustainability standards (VSS) has improved the capacity of coffee producers to upgrade, and the extent to which it has brought economic benefits and reduced their exposure to risk and vulnerability. These debates are addressed using the Global Value Chain (GVC) perspective, including recent contributions that integrate poverty considerations, to assess the implications for coffee growers of participating in the specialty coffee value chain. In this analysis, particular emphasis is given to differences according to farm size. The study focuses on the Nespresso AAA Sustainable QualityTM programme and Fairtrade certification in Colombia, comparing the two treatment groups with a control sample of similar conventional producers. In addition to this, a comparison between two groups of AAA producers was carried out. The data comes from three rounds of surveys and two periods of field work. To assess differences over time and construct a robust counterfactual this thesis combines Propensity Score Matching (PSM) with the difference-in- difference (DID) analytic approach. VSS initiatives have been promoted as a way of improving the livelihoods of small producers, with extensive implementation in coffee production. The analysis shows that interventions to facilitate upgrading and support the involvement of producers in VSS do not produce consistent improvements over time for most of the indicators analysed. Therefore, the potential of VSS to generate significant improvements in livelihoods for certified producers, could take both a longer time and require greater institutional efforts to build capacities. This finding needs to be considered in light of strong institutional support for all coffee producers in Colombia, which could offset the impact of VSS support. In terms of livelihood-related variables, the analysis shows that participating producers became more dependent on coffee revenues (as there was no significant expansion of cash production), reduced their share of haired labour during the period of study and paid these workers less than the minimum wage. These trends are similar to those of the conventional producers, since the analysis did not find significant differences over time. The outcomes of the analysis by farm size draws a bleak picture for smallholders below one hectare. The main conclusion that can be drawn from the evidence is that the farm size constrained both the potential upgrading opportunities from VSS and their chances of gaining sustainable incomes. The political economy effects of these disappointing results, both for certified producers and producers thinking about certification, must be analysed carefully, as growers’ expectations of improving their economic and social viability through the adoption VSS are lower than expected. As such, VSS initiatives cannot be the only strategy for helping very small coffee producers to overcome the structural restrictions and limitations they have faced for decades. iv ACKNOWLEDGEMENTS I would like to express my gratitude to my supervisor, John Humphrey. He allowed me to explore the academic issues I was passionate about and guided me out of the many dead ends where my initial enthusiasm often led me. He provided valuable intellectual and moral support and is largely responsible for curing my ‘writer’s block’. Spencer Henson and Stefano Ponte, the examiners, provided valuable advice at the final stage of the DPhil process. I feel honoured to have been guided by such talent, dedicated and supportive people. Their perspectives were crucial in my thinking about the outcomes on upgrading strategies of coffee producers participating in specialty value chains. As my scholarship was only for two years meant that I had to work throughout my studies. I have to admit it was hard. Fortunately, the colleagues at the CRECE in Colombia provided research work and consultancy that help me with my finances. I was privileged to work with excellent professionals and in many occasions my DPhil also benefited from my interaction with colleagues. In particular I would like to express my sincere gratitude to Carlos Ariel and Gustavo. I am particularly indebted to Jose Leibovich who brought me to the CRECE, as this organization provided me the fascinating panel data about sustainability initiatives in the coffee sector that was the cornerstone of the empirical analysis of my thesis. From the National Federation of Coffee Growers, I am particularly grateful to Carlos Alberto González and Rodrigo Calderón for their advice and support. They also enriched my way of thinking. Marcela Urueña and Carmenza Suarez gave a lot of support to find help inside of this institution. My fieldwork involved extensive interviewing of producers, entrepreneurs and institutions in Colombia. I am very grateful to all those respondents that shared with me their experiences and knowledge, those that generously spent hours talking to me, traveling with me through their regions and introducing me to coffee producers and their organizations. In particular, managers of the Almacafé Manizales, Neiva and Pasto, personnel of extension service and managers of the Committees of Coffee Growers from Huila, Caldas, Nariño and Risaralda. I am also indebted to coffee cooperatives officials from La Unión and Pasto - Nariño, Riosucio and Aguadas – Caldas, Garzón and Neiva – Huila, for their support and hospitality. I am also indebted to Santiago Arango who introduced me to the initiative such as Nespresso´s Sustainability Quality Programme. Many friends and colleagues have also provided precious support over the years. Special thanks to Marly Tatiana for all her help and patience, Ana Milena, Nancy, Andrés, Cecilia Maria, Marcela, Pontus, Carolina, Oscar, Juan Carlos, Yudy, Alba Rocio and Estelita. Giant thanks to Angela Dowman from the IDS teaching area, who has always gone beyond the call of duty and been crucial for me finishing my DPhil. I have to thank my good friend v Natascha for her patient, dedication and excellent proofreading and editing work. She quickly and ruthlessly edited many of my drafts. Last but not least, this would not have been possible without the unfailing support of my family. They were very patient and encouraging throughout the years. My wife Alejandra has shared my trials and tribulations while at the same time providing essential emotional, intellectual and financial support without which this thesis could have not been completed. I cannot begin to say how grateful I am to her. This thesis is dedicated to her. vi TABLE OF CONTENTS SUMMARY ..................................................................................................................................... iii ACKNOWLEDGEMENTS ................................................................................................................. iv LIST OF ACRONYMS ..................................................................................................................... xiv CHAPTER ONE ................................................................................................................................1 Introduction ...................................................................................................................................1 1.1. Main theoretical issues ..................................................................................................5 1.2. Structure of the thesis ...................................................................................................6 CHAPTER TWO ............................................................................................................................ 10 Prospects for economic upgrading in agri-food value chains: background for the analysis of specialty coffee value chains ...................................................................................................... 10 2.1 Introduction ................................................................................................................ 10 2.2 Global value chain analysis applied to the agri-food sector ....................................... 13 2.2.1 Governance and upgrading ..................................................................................... 14 2.3 Trends in agri-food value chains
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