The impact of fair trade certification for coffee farmers in Peru

Abstract

Smallholder farmers producing for Fair Trade market outlets are usually considered to benefit from better prices and stable market outlets. However, many empirical studies verifying this impact suffer from strong selection bias. This study uses a balanced sample of Fair Trade farmers and likewise nonFair Trade producers of organic and conventional coffee from Peru to compare the net effects on production, income and expenditures, wealth and investments, and attitudes and perceptions. After careful matching, we find only modest direct income and production effects, but significant changes in organization, input use, wealth and assets, and risk attitudes. Moreover, important differences between farmers with early and more recent FT affiliation are registered.