Sustainable Coffee: Increasing Income of Small-Scale Coffee Farmers in Mexico through Upgrading and Improved Transparency in the Value Chain

This microREPORT tells a story of how rural poor smallholder coffee farmers in southern Mexico achieved significant increases in their earnings as a result of sales into a higher value market channel established in cooperation between Conservation International and the Starbucks Coffee Company in a project funded by USAID. The report illustrates the importance of market leaders in linking MSEs into higher-value markets and in driving firm-level upgrading. It demonstrates that farmers living below the official poverty line will pay fees for services to upgrade in response to economic incentives, and identifies preconditions to private sector market leader investment in the value chain. It also shows that by developing a product with attributes derived from the place and method of production, the dynamics of the power relationship between the smallholder farmers and the buyer were changed in favor of the farmers, with a resultant increase in benefits to the farmers.