• DOI:10.3362/0957-1329.2003.020
• Corpus ID: 154655830

Fair trade and the coffee crisis in the Nicaraguan Segovias

@article{Mendoza2003FairTA,
  title={Fair trade and the coffee crisis in the Nicaraguan Segovias},
  author={Ren{\'e} Mendoza and Johan Bastiaensen},
  journal={Small Enterprise Development},
  year={2003},
  volume={14},
  pages={36-46}
}

• René Mendoza, J. Bastiaensen
• Published 1 June 2003
• Economics
• Small Enterprise Development

Small coffee producers in Nicaragua have faced a crisis as the coffee export price has halved since the 1990s. This article examines the role of fair trade in stabilizing prices for small coffee producers, and compares the prices all along the supply chain of the instant coffees, Nestle and Cafedirect. Although Cafedirect's price guarantee has prevented producers from going bankrupt, it is clear that the processing and retail side has become more expensive since the 1990s, partly as a result of the small volumes traded. Cafedirect's high prices compared with commercial brands are likely to ensure that it remains small, and therefore only benefits a minority of producers. The authors examine the options for Nicaragua's small coffee producers and recommend that the producers upgrade their production and post-harvest technologies to produce high-quality specialty coffees which can command high prices even without a fair trade tag. They also recommend that the co-operatives be strengthened to be less ineffici...