Reducing Inequalities in the Coffee Value Chain: Threats and Opportunities for Small-Scale Farmers in Central America and East Africa

Abstract

The global trade of agricultural commodities has increased in the last decades, creating economic growth opportunities in many areas of the world. However, for smallholder farmers producing commodities traded in global markets, there is mixed evidence of a positive economic impact, particularly in coffee production. Rural incomes in Central America have remained stagnated and for smallholder coffee producers in East Africa, farm gate prices often do not cover production costs. Poverty and food insecurity are issues impeding development in the region. Yet empirical evidence points at global value chains as a driver for income growth and development in emerging and developing countries. As pointed out in The State of Agricultural Commodity Market 2020 global trade and inclusive, well-functioning markets with lower trade barriers, opportunities for technological upgrading, and access to markets can spur sustainable development. In this chapter, a comparative analysis of the inequalities and factors hindering the economic growth of coffee farmers in Central America and East Africa will be provided.