This article presents a systematic comparison between conventional and ‘differentiated’ coffee value chains, paying attention to (micro and macro) economic performance and environmental outcomes at different midstream segments of the Honduran coffee value chains. Growth has been strong in the Honduran coffee sector, especially among coffee cooperatives and commercial enterprises devoted to the production of ‘differentiated’ coffees at premium prices. We rely on a systematic data inventory of input use, costs, and benefits of all agents involved at different midstream stages of the coffee value chains to compare their performance. We find that midstream integration is critical for yield and quality improvement of Honduran coffee. This can be reinforced through voluntary certification (mainly for organic produce) and branding. Moreover, upgrading of conventional coffee for sales at local and regional markets offers some promising prospects for inclusion and sustainability.
Voluntary commodity standards are widely used to enhance the performance of tropical agro-food chains and to support the welfare and sustainability of smallholder farmers. Different methods and approaches are used to assess the effectiveness and impact of these certification schemes at farm-household, village, cooperative, and regional level. We provide an overview of the results from robust impact studies on coffee, tea, banana, cocoa, and cotton certification programmes. Overall outcomes show rather modest net revenue effects for farmers, small direct income effect for wage workers, and contested sustainability effects. Most impact studies focus on primary sourcing, but devote less attention to changes in trust and governance throughout the value chain. Moreover, implications for gender issues and supply chain trust are not always fully addressed. In order to better understand these somewhat disappointing effects, we discuss different fallacies and drawbacks that affect impact studies concerning commodity certification programmes. Main attention is given to perverse incentives for intensification and specialization that arise from certification. Moreover, spillovers to other (non-certified) farmers and spatial externalities at landscape level may reduce net effects. Important secondary effects related to behavioural change (risk, trust) and local innovation dynamics are usually overlooked. Current practices in value chain development programmes should focus increasingly on dynamic effects of upgrading and improved market integration. New interactive impact assessment approaches (gaming, multi-agency simulation) that address integrated value chain relationships offer promising perspectives for real-time and systematic analysis of alternatives for smallholder value chain inclusion beyond certification.