The impact of coffee certification on production costs and price paid to the rural producers: a discussion from the viewpoint of transaction cost economics

Abstract

Producers recognize the benefits of certification of specialty coffees as a differentiation strategy but point out the increase in production costs. This case study sought to characterize the reflections of certifications on production costs and the price paid to rural producers. Analysis and comparison of data regarding production costs, amount sold and price paid to the producer was used, for a period of 20 years (10 years before and 10 years after certification) and the content analysis of an interview carried out on a property Rainforest and UTZ certified coffee producer. Statistical results showed an increase in costs and prices after certifications. However, the disproportionate increase in the amounts sold in relation to the rise in prices suggests that the increase in sales may be associated with factors such as the expansion of land, or increased planting. The rise in prices is not directly related to the aforementioned factors and may be linked to certifications. The content analysis showed gains in the prices of certified coffee, offsetting costs, in addition to gains in management, awareness and preservation of the environment, improvement in working conditions and closer relations with the local community.