Small coffee producers in Nicaragua have faced a crisis as the coffee export price has halved since the 1990s. This article examines the role of fair trade in stabilizing prices for small coffee producers,
and compares the prices all along the supply chain of the instant coffees, Nestlé and Cafédirect. Although Cafédirect's price guarantee has prevented producers from going bankrupt,
it is clear that the processing and retail side has become more expensive since the 1990s, partly as a result of the small volumes traded. Cafédirect's high prices compared with commercial brands
are likely to ensure that it remains small, and therefore only benefits a minority of producers. The authors examine the options for Nicaragua's small coffee producers and recommend that the producers upgrade
their production and post-harvest technologies to produce high-quality specialty coffees which can command high prices even without a fair trade tag. They also recommend that the co-operatives be strengthened
to be less inefficient and more accountable to their membership.

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