Dynamics of social capital and economic outcomes of two farmer cooperatives in the presence or absence of fair trade

Social Capital (SC) refers to the nature and extent of one\u27s participation in various informal networks and formal civic organizations. SC include network access and forms of partifipation, namely: bonding social capital-ties to people who are similar in terms of their demographic characteristics, such as family members, neighbors, close friends and work colleagues-and bridging social capital-ties to people who do not share many of these characteristics (Putnam, 2000). The primary contribution of this paper is to share insights on the relationship of SC and its manifestations and perceived economic performance among coffee farmers. This study adapts Putnam\u27s definition of SC and the research proceeded via a three-step rpocess. First, I gathered demographic and SC manifestations data. Second, I conducted Focus Group Discussions (FGD) among farmers. Finally, I tested Putnam\u27s propositions whether these are valid in local context. I adapted the Social Capital Questionnaire of World Bank, which was tested for reliability and validity by previous researches. I also did two rounds of pre-testing to ensure the questionnaire is applicable in the local setting. I surveyed and conducted FGDs in two cooperatives, one was in Atok, a cooperative that supply to FT organization and the other was in Tublay, a cooperative that does not supply to FT organization. There were a total of 97 respondents from Atok and 96 from Tublay for the survey and 10 participants from each group for the FGD. Major findings of the research are for most manifestations of SC, cooperatives that supply FT organizations derive numerous benefits from the business transactions. Among the emerging themes of the research are first, education, age and marital status have compounding influence on trust, collective action and willingness to help. Second, bonding social capital (relationship among members) that leads to increase in trust, solidarity and collective action within a group, needs to be supplemented by bridging social capital (relationship outside the cooperative). Bridging social capital results to higher trust to other institutions and can facilitate access to greater resources and opportunities. Third, the frequency of partifipation in community activities has a positive relationship with level of trust, consequently increases cohesion and collective action among members and finally, economically disadvantage groups tend to be more distrusting