Sustainability certification as a pillar to promote Indonesian coffee competitiveness

Abstract

Coffee is an important agricultural product traded in global market. Coffee exports have contributed significantly to the economic growth of Indonesia, reducing the trade deficit and partly solved the problem of poverty reduction for people, especially in rural area. The demand of high-quality coffee is growing fast. The demand from consumers for certified coffee is also growing, and the price they are willing to pay has caught the attention of traders and producers. In global scope we have some sustainable coffee certifications including: Organic, Fair Trade Certified, Rainforest Alliance, Smithsonian Bird Friendly, UTZ Certified, and 4C Common Code. The objective of this review are: (1) perspective analysis of sustainable coffee certifications, (2) analysis of Indonesia coffee industry, and (3) strategy formulation in improving practices and accountability of Indonesia coffee development in global supply chains. There is evidence for a range of social, economic, and environmental benefits of certification. These certifications have the potential to create value for smallholders, as certain certified coffee carries a market premium. In order to meet market demand, coffee farmers have had to adapt a good farming practices to qualify for certification.