Building assets through access to specialty coffee markets: lessons from smallholders and cooperatives in Nicaragua

Linking smallholders to value chains for specialty agricultural products, such as certified coffee, has formed an important element of rural development strategies in Latin America and elsewhere. However, little is known about the viability of these linkages or their impact on smallholders and their business organizations. This study focuses on the outcomes of efforts to link coffee farmers and their cooperative Soppexcca in Nicaragua to markets for certified fair-trade and organic coffee. During 1999-2005, Soppexcca received considerable support from NGOs, buyers and others for upgrading its capacities and those of its members. Outcomes are considered in terms the ability of Soppexcca and its members to build different types of productive assets. Results suggest that Soppexcca made significant advances in building its endowments of physical, human and financial capital. However, important gaps remained, and it continued to depend heavily on external support. At the household level, most farmers built specific elements of their asset base and generally increased their resilience to shocks. However, many households struggled to make effective use of their gains to intensify or diversify production. Significant differences in asset building across the households highlighted the role of preexisting assets in determining outcomes. This case underscores the need for deeper discussions about the role of different stakeholders, the ultimate goals of development interventions and the need for increased coordination and mutual learning as part of the process. Particular attention should be paid to variations in asset endowments at the onset of value chain interventions to account for differences across households

J.A Donovan, 'Building assets through access to specialty coffee markets: lessons from smallholders and cooperatives in Nicaragua', In: Sheck, Donovan, and Stoian (eds.) Assessing impacts of value chain development on poverty: a case-study companion to the 5 Capitals tool. CATIE Technical Series 396, Rural Enterprise Development Collection 8. Turrialba: CATIE / ICRAF / Bioversity Inte, pp.15-35, 2013