Abstract Amid volatile coffee prices, which often result in inadequate income for smallholder farmers, this study examines the feasibility of a Fairtrade Living Income (FLI)-based shared value model. It assesses how developing shared value chains, aligned with FLI standards, can close income gaps and lower financing risks. This study employs a mixed-methods approach, collecting and analyzing data from four differentiated coffee clusters in Indonesia with distinct value chain structures and governance. The Fairtrade Living Income Reference Price (LIRP) was applied to benchmark decent income standards. The findings indicate that the FLI-based shared value modelwhether Creating Shared Value (CSV) or Inclusive Value Chain (IVC)can stabilize incomes through minimum price guarantees, institutional development, capacity building, and improved market access. Notably, the IVC model demonstrates superior performance in empowering farmers and promoting equitable value distribution compared to the CSV type. This offers a practical framework for enhancing smallholder farmer livelihoods and promoting sustainable development in the global coffee industry. A key strategy is establishing LIRP-based minimum price guarantees.
Wibowo et al. (Thu,) studied this question.