When local customs meet the market: an analysis of coffee value chain in Tebat Benawa customary community, Indonesia

ABSTRACT

Using Tebat Benawa customary community in Indonesia as a case study, this paper aims to understand how non-specialty Robusta coffee value chain operates at the farmer-trader level and see if and how customary setting influences the relationships between actors. We employed a mixed-methods research design combining qualitative and quantitative analyses of primary and secondary data collected through group discussions, interviews, and participant observations. The social network analysis results showed that customary settings represented by clan-based familial relationships influenced farmer-trader relations, but it was not dominating. Coffee prices seem to be the major driver of the farmer-trader relations in Tebat Benawa. We argue that the relatively early stage of customary community consolidation indicates a weak social capital that makes economic rationale dominate farmers’ business decisions. This study contributes to the limited literature on the contemporary smallholder value chain of non-specialty Robusta coffee.

KEYWORDS:

• Customary community
• coffee farmers
• agricultural value chain
• social network analysis
• Robusta coffee
• Indonesia

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1 Relationship coffee or third wave coffee is characterized by the direct trading relationship with the farmers who grow specialty coffee. Meanwhile, the first wave coffee is characterized by the earliest, basic form of coffee trade and the second wave emerged when chain coffeeshops started developing. Both have yet to explore the unique taste of coffee beans resulting from different roasting and brewing methods that specialty or relationship coffee offers.

2 Pagar Alam District where Tebat Benawa Customary Community lives was part of Lahat District before it split up and became an independent district in 2001.

3 The estimate was obtained from a survey data of Tebat Benawa customary community conducted by WRI Indonesia’s South Sumatra regional office in 2019. We have obtained the permission to use the figure for the purpose of this article.

4 Second traders are travelling salespersons who are not originally from the village.

5 Most of the farmers in Tebat Benawa grew Robusta coffee while only a small fraction who grew Arabica due to the absence of specific market access and price difference, in addition to easier maintenance. In the coffee market, the price of Arabica beans can be two to three times higher than Robusta.

Additional information

Funding

The data gathering and initial analysis of this work were funded by the Norway’s International Climate and Forest Initiative (NICFI) for the World Resources Institute.