Fair Trade, Agrarian Cooperatives, and Rural Livelihoods in Peru

This dissertation analyzes the fair trade (FLO) certification system for agricultural commodities in the context of the global coffee crisis and its deleterious effects on rural livelihoods, focusing on the northern Peruvian Amazon. I begin the dissertation in my introduction by outlining my theoretical framework, which analyzes markets as bundles of institutions. The dissertation proceeds to analyze the key institutions of the fair trade coffee chain: certifications, commodity trade, cooperatives, and smallholder farming communities. In my second chapter, I explain the history of the FLO certification system, examine the dynamics of certifications in general, and point out the incentive problems therein. My third chapter provides a value chain analysis of the global coffee trade, outlining the key differences between conventional and fair trade value chain structures and identifying the key forces that have increased inequality in incomes along the coffee value chain. My fourth chapter examines existing theories and empirical evidence on the efficacy of cooperatives in improving the welfare of their members, and critically reviews the debate about the role of cooperatives in rural development. My fifth chapter examines empirically the relationship between cooperatives and their member farms, based on fieldwork I conducted in Peru in 2006-7. My empirical analysis discovers that farms are better able to access cooperative benefits when they engage in non-market labor exchanges between households. I conclude the dissertation by arguing that, despite the limitations inherent in the fair trade certification movement, it has successfully expanded economic opportunities for participating growers, and that cooperative relationships among the growers improve access to these benefits