Sustainability Programs, Livelihoods and Value Chains in Southern Sumatra, Indonesia

Abstract

This thesis examines the impact of voluntary sustainability standards (VSS) on coffee producing smallholders in southern Sumatra, Indonesia. Recent studies of VSS have found outcomes rarely mirror theories of change presented by standards organisations. Using a case study, an examination of the institutional environments of VSS roll-out, and a producer perception survey, the thesis adopts a producer centric view of VSS roll-outs, and questions whether VSS are effective beyond a means to secure quality improvements in supply of coffee to lead firms in the value chain. Training associated with VSS favours labour and capital intensive means of agricultural modernization to improve supply, and attempts to remove the worst quality coffee from the supply chain. But this does not encourage increased investment in coffee by smallholders, as their livelihood strategies are low-risk and seek to generate income from diverse sources. Coffee is valued by smallholders because it is a low-input, reliable source of income, and sacrificing off-farm work opportunities to focus on coffee is considered unfeasible.Nevertheless, training appeals to producers, as it consolidates their social capital and provides a degree of institutional support. Some less labour-intensive aspects of training are willingly adopted, but this depends on the institutional environment (i.e. different exporter roll-out strategies, government programs, trading/patronage relationships and lead-firm/producer relationships), which varies across the study area. There has been an oversight of producer interests in assessing the outcomes of VSS. This thesis addresses this shortcoming by presenting a complex picture of smallholder livelihoods in southern Sumatra’s coffee value chain, the varied nature of corporate policy with regards to VSS, and the resulting shortcomings of the overly-simplistic VSS theories of change. In doing so, it prioritises an improvement in producer engagement and smallholder livelihoods.