According to the Indonesian Coffee and Cocoa Research Institute (ICCRI), Indonesia had about 1.2 million hectares in coffee production in 2012, 96% of which is managed by smallholder farmers (ICCRI, 2012). ICCRI estimates that the number of smallholder farmers working in the Indonesian coffee sector reached 1.97 million in 2012, with an average of 0.6 ha of land ownership per farmer. According to the 2014 State of Sustainability Initiatives Report, about 11% of Indonesia’s coffee production is certified organic or to a recognized sustainability standard (notably Starbucks C.A.F.E Practices, UTZ Certified, Fairtrade, Rainforest Alliance, or 4C).
This study is carried out in the Semendo region in South Sumatra. According to local government data (BPS, 2015), 15,440 ha of land in Semendo is currently cultivated with coffee, involving 8,698 households, mostly ethnic Semendo. Coffee farmers from 25 different Semendo villages (desa) are currently involved in the sustainability program that has been implemented by the Indonesian subsidiary of a leading international coffee trading company, since 2012. In 2012, the company also established a local buying station in Semendo and commenced enrolling farmers in a Common Code for the Coffee Community (4C) production unit. Access to the buying station provides farmers with additional returns to quality.
The company pays the cost of obtaining certification, including the cost of training farmers and undertaking required audits. It has established a Farmer Training Centre in the Semendo area and recruited a team of locally-based agronomists who manage the Internal Control Systems (ICS) for the program. This team undertakes farmer training to those groups involved in the program, and includes advice on how to apply fertilizers, composting, pruning, harvesting advice, pest management and marketing. As farmers become compliant with 4C standards and develop a trading relationship with the company through the local buying station, they may be recommended by the company to upgrade to Rainforest Alliance (RFA) certification, which imposes additional requirements, particularly around environmental practices.
The overarching goal of this research is to examine the impact on farmer livelihoods and poverty alleviation within Indonesian coffee-growing communities as a result of processes of verification or certification against different sustainability standards, with additional interest in establishing the role of access to markets in driving impacts.