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‘Fair’ policies for the coffee trade – protecting people or biodiversity?

Published online by Cambridge University Press:  07 May 2009

MITRI KITTI ,
JAAKKO HEIKKILÄ  and
ANNI HUHTALA
MITRI KITTI*
Affiliation:
Department of Economics, Helsinki School of Economics, Arkadiankatu 7, 00100 Helsinki. E-mail: mitri.kitti@hse.fi
JAAKKO HEIKKILÄ
Affiliation:
MTT Economic Research, Luutnantintie 13, 00410 Helsinki. E-mail: jaakko.heikkila@mtt.fi
ANNI HUHTALA
Affiliation:
MTT Economic Research, Luutnantintie 13, 00410 Helsinki. E-mail: anni.huhtala@mtt.fi
*
*Corresponding author.
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Abstract

We investigate the role that economic instruments can play in promoting economic sustainability and the preservation of biodiversity in agroforestry management in coffee production. Most of the world's coffee producers live in poverty and manage agro-ecosystems in regions that are culturally and biologically among the most diverse on the globe. Despite the relatively recent finding that bees may augment pollination and boost coffee crop yields, the short-term revenues from intense monoculture drive land-use decisions that destroy the forest strips serving as habitats for pollinating insects. Our study investigates whether farmers specialize in environmentally detrimental (sun-grown) or sustainable (shade-grown) farming, or both practices coexist. We calibrate an empirical model to characterize the equilibria and investigate the ecological and economic impacts of three alternative policy instruments: conservation fees, price premiums, and minimum wages.

Type
Research Article
Information
Environment and Development Economics , Volume 14 , Issue 6 , December 2009 , pp. 739 - 758
Copyright
Copyright © Cambridge University Press 2009

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