Market Disintermediation and Producer Value Capture: The Case of Fair Trade Coffee in Nicaragua, Peru and Guatemala

Does participation in Fair Trade coffee marketing deliver added value to small-scale producers in developing countries? Is Fair Trade fair to producers as promised? The present study adopts a survey methodology designed to measure a combination of socio-economic impact indicators as well as measures particular to the Fair Trade coffee growing and marketing experience. We surveyed over 1200 small-scale coffee producers in Nicaragua, Peru, and Guatemala, of which about two-thirds participate in coffee marketing schemes sponsored by Transfair, USA. The study reports selected results related to production, marketing, material quality of life, education, health, and general wellbeing. Results show that producers participating in Transfair-supported Fair Trade cooperatives are indeed capturing more value than non-participants. This benefit transfer translates into modest but measurable improvements in quality of life, health, education, material comforts, social participation, technical and social assistance, and even sustainable agricultural practices. Consumers can have confidence that the Fair Trade scheme works. Retailers may be assured that by selling Fair Trade coffee they can defend the position that they are participating in a social change campaign