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Diversification and Labor Market Effects of the Mexican Coffee Crisis

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  • Padrón, Benigno Rodríguez
  • Burger, Kees

Abstract

This paper analyses how coffee-producing households responded to the low coffee prices prevailing around 2003. We provide theory on differential responses in regions dedicated to coffee growing, compared to more diversified or better accessible regions. We show how labor market effects can explain why in the former regions value-adding activities (processing, certification) are undertaken while in the latter regions off-farm activities are adopted. Farm size favors value-adding activities as well as on-farm diversification. These findings call for policy responses to low prices that distinguish between specialized regions and diversified or well-connected regions.

Suggested Citation

  • Padrón, Benigno Rodríguez & Burger, Kees, 2015. "Diversification and Labor Market Effects of the Mexican Coffee Crisis," World Development, Elsevier, vol. 68(C), pages 19-29.
    • Handle: RePEc:eee:wdevel:v:68:y:2015:i:c:p:19-29
    DOI: 10.1016/j.worlddev.2014.11.005
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    References listed on IDEAS

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    1. Frank Ellis, 2000. "The Determinants of Rural Livelihood Diversification in Developing Countries," Journal of Agricultural Economics, Wiley Blackwell, vol. 51(2), pages 289-302, May.
    2. Barham, Bradford L. & Callenes, Mercedez & Gitter, Seth & Lewis, Jessa & Weber, Jeremy, 2011. "Fair Trade/Organic Coffee, Rural Livelihoods, and the "Agrarian Question": Southern Mexican Coffee Families in Transition," World Development, Elsevier, vol. 39(1), pages 134-145, January.
    3. Allen Blackman & Heidi J. Albers & Beatriz ávalos-Sartorio & Lisa Crooks Murphy, 2008. "Land Cover in a Managed Forest Ecosystem: Mexican Shade Coffee," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 90(1), pages 216-231.
    4. Ellis, Frank, 2000. "Rural Livelihoods and Diversity in Developing Countries," OUP Catalogue, Oxford University Press, number 9780198296966.
    5. Avalos-Sartorio, Beatriz, 2006. "What can we learn from past price stabilization policies and market reform in Mexico?," Food Policy, Elsevier, vol. 31(4), pages 313-327, August.
    6. Meike Wollni & Manfred Zeller, 2007. "Do farmers benefit from participating in specialty markets and cooperatives? The case of coffee marketing in Costa Rica1," Agricultural Economics, International Association of Agricultural Economists, vol. 37(2‐3), pages 243-248, September.
    7. Hallie Eakin & Catherine Tucker & Edwin Castellanos & Rafael Diaz-Porras & Juan Barrera & Helda Morales, 2014. "Adaptation in a multi-stressor environment: perceptions and responses to climatic and economic risks by coffee growers in Mesoamerica," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 16(1), pages 123-139, February.
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    Cited by:

    1. Diego Valbuena & Julien G. Chenet & Daniel Gaitán-Cremaschi, 2021. "Options to Support Sustainable Trajectories in a Rural Landscape: Drivers, Rural Processes, and Local Perceptions in a Colombian Coffee-Growing Region," Sustainability, MDPI, vol. 13(23), pages 1-20, November.
    2. Phan Thi Thuy & Le Duc Niem & Thi Minh Hop Ho & Philippe Burny & Philippe Lebailly, 2018. "Economic Analysis of Perennial Crop Systems in Dak Lak Province, Vietnam," Sustainability, MDPI, vol. 11(1), pages 1-14, December.
    3. Cabral, René & Mollick, André Varella, 2017. "Mexican real wages and the U.S. economy," Economic Modelling, Elsevier, vol. 64(C), pages 141-152.
    4. Jezeer, Rosalien E. & Santos, Maria J. & Boot, René G.A. & Junginger, Martin & Verweij, Pita A., 2018. "Effects of shade and input management on economic performance of small-scale Peruvian coffee systems," Agricultural Systems, Elsevier, vol. 162(C), pages 179-190.
    5. Nicod, T. & Bathfield, B. & Bosc, P.-M. & Promkhambut, A. & Duangta, K. & Chambon, B., 2020. "Households' livelihood strategies facing market uncertainties: How did Thai farmers adapt to a rubber price drop?," Agricultural Systems, Elsevier, vol. 182(C).
    6. Véronique Sophie Ávila-Foucat & Daniel Revollo-Fernández & Carolina Navarrete, 2021. "Determinants of Livelihood Diversification: The Case of Community-Based Ecotourism in Oaxaca, Mexico," Sustainability, MDPI, vol. 13(20), pages 1-17, October.

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