Fair Trade Certification and Livelihoods: A Panel Data Analysis of Coffee-growing Households in India

This study analyzes the participation decision and income impacts of fair-trade coffee certification on small-scale coffee producers in the Araku valley in India using panel data for 183 households and endogenous-switching and quantile regression methods. The results show that fair trade certification has a positive effect on income; the income of certified farmers is 17 percent higher on average than the income of uncertified coffee producers. Furthermore, fair trade certification has a “bottom of the pyramid” effect in that the largest income gains accrue to farmers in the poorer quantiles.