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On Coffee Smallholders, Standards and Certifications in Indonesia

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On Coffee Smallholders, Standards and Certifications in Indonesia Cover Picture: © Copyright Muhammad Ibnu, Maastricht 2017 Printing: Datawyse | Universitaire Pers Maastricht UMP UNIVERSITAIRE ISBN 978 94 6159 7434 PERS MAASTRICHT Gatekeepers of sustainability On coffee smallholders, standards and certifications in Indonesia DISSERTATION to obtain the degree of Doctor at Maastricht University, on the authority of the Rector Magnificus, Prof.dr. Rianne M. Letschert in accordance with the decision of the Board of Deans, to be defended in public on Wednesday 27 September 2017, at 10.00 hours by Muhammad Ibnu Born on 18 May 1979 in Teluk Betung Bandar Lampung, Indonesia SupervisorSupervisorssss Prof. dr. Pieter Glasbergen Prof. dr. Bustanul Arifin (Lampung University) CoCoCo-Co---supervisorsupervisor Dr. Ron CÖrvers Assessment Committee Prof. dr. Pim Martens (chair) Dr. Jacqueline Vel (University of Leiden) Prof. dr. Ruerd Ruben (Wageningen University) Dr. Surip Mawardi (ICCRI, Indonesia) Prof. dr. Wan Abbas Zakaria (Lampung University) This PhD research was funded by 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 and part of the SPIN project on ‘’Social and Economic Effects of Partnering for Sustainable Change in Agricultural Commodity Chains in Indonesia”. Table of ccontentsontents Lis of Figures………………………………………………………………………….……………………………… iv List of Tables…………………………………………………………………………………………………………. v Chapter 1………………………………………………………………………………………………………………….….…. 1 Introduction…………………Introduction…………………....………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………….….….…. 1 1.1 Background…………………………………………………………………………………………………….. 2 1.2 Profile of the Indonesian coffee smallholders…………………………………………………. 4 1.3 The Indonesian coffee sector………………………………………………………………………….. 9 1.4 The world of certifications in Indonesia………………………………………………………….. 13 1.5 The debate on sustainability standards and certifications………………………………. 16 1.6 Research aims and research questions…………………………………………………………… 19 1.7 Relevance to science and policy……………………………………………………………………… 22 1.8 Research approach: challenges in our fieldwork…………………………………………….. 23 1.9 Sustainable pathways……………………………………………………………………………………… 25 Chapter 2……………………………………………………………………………………………………2………………………………………………………………………………………………………………….……………. 272727 Farmer preferences for coffee certification: a conjoint analysis of the Indonesian smallholders………………………………………………………………………………………smallholders………………………………………………………………………………………........………………………………………… 272727 2.1 Introduction……………………………………………………………………………………………………. 28 2.2 Methods…………………………………………………………………………………………………………. 30 2.3 Farmer preferences and the ideal certification scheme………………………………….. 36 2.4 Assumptions underlying farmer’s preferences……………………………………………….. 38 2.5 Conclusion………………………………………………………………………………………………………. 41 Chapter 3………………………………………………………………………………………3………………………………………………………………………………………………….………….………….………………………………………………… 44454555 Competing explanations for Indonesian smallholder participations in sustainability coffee certifications ……………………….………………………………………….........................……………………….…………………………………………................................... 44454555 3.1 Introduction……………………………………………………………………………………………………. 46 3.2 Explanations for smallholder participation in sustainability coffee certification: a review of the literature…………………………………………………………… 47 3.3 Methods……..………………………………………………………………………………………………….. 49 3.4 Explanations for the Indonesian smallholders to participate in sustainable coffee certification…………………………………………………………………………………………. 54 i 3.5 Conclusion………………………………………………………………………………………………………. 60 Chapter 4…………………………………………………………………………………………………………………. 66636333 Perceived impacts of certification and farmer organization: benefits from the Indonesian smallholders’ pointpoint----ofofofof----view…………………………..……………………………………….view…………………………..………………………………………. 66636333 4.1 Introduction……………………………………………………………………………………………………. 64 4.2 Literature review on potential benefits of farmer organization and certification…………………………………………………………………………………………………….. 66 4.3 The landscape of farmer organizations in Indonesia………………………………………. 67 4.4 Methods…………………………………………………………………………………………………………. 70 4.5 Different organizations and their relation to certification………………………………. 73 4.6 The influence of organizations and certification schemes on perceived benefits………………………………………………………………………………………………………….. 75 4.7 Conclusion………………………………………………………………………………………………………. 80 Chapter 5…………………………………………………………………………………………………………………. 88858555 The public Indonesian standard on sustainable coffee: an exploration of its implementation capacity……………………………………………………………………………………..….. 88858555 5.1 Introduction……………………………………………………………………………………………………. 86 5.2 Indonesian Standard Coffee (ISCoffee): the main principles and criteria………… 88 5.3 Analytical framework …………………………………………………………………………………….. 93 5.4 Methods.…….………………………………………………………………………………………………….. 94 5.5 Results……………………………………………………………………………………………………………. 96 5.6 Conclusions ……………………………………………………………………………………………………. 103 Chapter 6…………………………………………………………………………………………………………………. 101010710777 Conclusions and reflection……………………………………………………………………………………….. 101010710777 6.1 Introduction……………………………………………………………………………………………………. 108 6.2 Farmers’ values regarding sustainability standards and certification schemes................................................................................................................. 109 6.3 On the relevance of farmer organizations……………………………………………………… 111 6.4 A pathway toward sustainability in the Indonesian smallholder coffee production system………………………………………………………………………………………… 112 6.5 On future studies…………………………………………………………………………………………… 119 ii References……………………………………………………………………………………………………………….. 111212221111 Appendix 1. Display of full profiles (orthogonal design)…………………………………………….design)……………………………………………. 111401404040 Appendix 2. Preliminary llliliiistst of attributes and levels of ccertificationertification ppprogramprogramrogram…………..………….. 111414442222 Appendix 3. The descriptive statistic of respondents to the conjoint survey……………. 141414314333 Appendix 4. Variable, operationalization and questionquestion item …………………………………… 141414414444 Appendix 555.5. Question items for all farmersfarmers………………………………………………………………………………………………………………….……………. 141414614666 SummarySummary……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………..……….. 111414448888 Ringkasan ……………………………………………………………………………………………………………………………………………………………………………………………………………………………………........ 151515215222 ValorizationValorization……………………………………………………………………………………………………………………………………………………………………………………………………………………….………. 1515156 15666 Acknowledgements…………………………………………………………………………………….. 161616316333 List of abbreviations and acronymsacronyms…………………………………………………………………………..………………………………………………………………………….. 161616516555 About the authorauthor……………………………………………………………………………………………………………………………………………………………………………………………………………… 111616668888 iii List of Figures Figure 1 Supply chain models for organized and independent smallholder…. 8 Figure 2 Export markets of the Indonesian coffee……………………………………….. 10 Figure 3 The fifteen most significant Robusta producers in the world…………. 12 Figure 4 Differences in perceived benefits resulting from farmers’ participation in different certification schemes……………………………… 78 Figure 5 Building blocks to analyze the implementation capacity of ISCoffee…………………………………………………………………………………………. 94 Figure 6 Five building blocks as a pathway for a more sustainable coffee production system…………………………………………………………………………. 113 iv List of Tables Table 1 Possible status of Indonesian smallholders……………………………………. 6 Table 2 Coffee production and consumption in Indonesia…………………………. 9 Table 3 Destination for Indonesian coffee exports (2006-2015)…………………. 10 Table 4 Coffee produced in the provinces of Aceh and Lampung, Sumatra… 11 Table 5 The development of coffee plantation areas in Indonesia, in hectares…………………………………………………………………………………………. 13 Table 6 Comparison of sustainability standards and certification in Indonesia……………………………………………………………………………………….. 14 Table 7 The final list of attributes and attribute levels of Certification Programs……………………………………………………………………………………….. 32 Table 8 Respondent types, location of interviews and the number of respondents………………………………………………………………………………….. 34 Table 9 The results of means comparison with One-way Anova…………………. 35 Table 10 Average part-worth (utility estimate) for key attributes of coffee certification program and relative importance of each attribute…… 37 Table 11 Attribute level summary of the most preferred certification scheme………………………………………………………………………………………….. 38 Table 12 Operationalization of the variables………………………………………………… 50 Table 13 Sample sizes and respondent distributions……………………………………. 54 Table 14 Table 14. Regression with Heckman selection model (the first step)………………………………………………………………………………….............. 55 Table 15 Table 15. Regression with Heckman selection model (the second step)………………………………………………………………………………….............. 56 Table 16 The Bonferroni test results of One Way Anova for multiple comparisons of certification schemes……………………………………………. 57 Table 17 Types of respondents, based on participation in certification and group membership………………………………………………………………………… 71 Table 18 Test of Parallel Lines………………………………………………………………………. 72 Table 19 Organizational characteristics
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