Improving Export Quality and What Else? Nespresso in Colombia · 2018. 4. 4. · Track coffee sales...

Improving Export Quality and What Else?:Nespresso in Colombia

Rocco Macchiavello - LSE & IGCJosepa (Pepita) Miquel-Florensa - TSE

Roma 3 GVC - March 2018

Very Preliminary

Macchiavello Miquel-Florensa Export quality March 2018 1 / 23

Motivation

"For agriculture to deliver on its full potential as a poverty reduction toolvalue chains must be strengthened, smallholders linkages to marketsimproved, and agribusiness expanded" (WB 2017)

⇒ Access to GVC requires quality upgrading:

Input: Failures in input/credit/insurance markets and extension services

Output: Difficulties in transmitting price signals from export to farmers’ gate

Welfare: Distributional concerns (across and within the supply chain)

X This paper: impact evaluation of the AAA Program in Colombia:I A buyer-driven quality-upgrading programI (Industry equilibrium) Farmers’ investments, marketing

arrangements and welfare; price pass-through along the chain


Motivation: This paper – The AAA Program

A. Intrinsic interest

I Coffee is one of the most valuable agricultural commodities, sustains livelihoods ofapprox. 30 million smallholders

I Quality-upgrading program introduced by world’s largest coffee buyerI Radically different approach from social/environmental certifications

B. Methodological interest: Administrative data

1. Implement Multiple Identification Strategies: DID at plot level, Border Discontinuity2. Track coffee sales from farm to export gate


Colombian Coffee Value Chain

FARMERS

PrivateMill

Coopera3veBuyer

(FNC)Mill

PrivateBuyer

Exporter/ForeignBuyer



Sustainable Quality Program: Question 1

FARMERS

PrivateMill

Coopera3veBuyer

(FNC)Mill

PrivateBuyer



Q1 Do farmers invest in upgrading quality? If so, which farmers?Does quality improve?



FARMERS

PrivateMill

Coopera3veBuyer

(FNC)Mill

PrivateBuyer



Q1 Do farmers invest in upgrading quality? If so, which farmers?Does quality improve?

I Yes, (larger) eligible farmers take-up the program, upgrade andexpand farms. Aggregate quality improves



FARMERS

PrivateMill

Coopera.veBuyer

(FNC)Mill

PrivateBuyer



Q2 Does program translate into higher sales, at higher (unit) prices,under more loyal arrangements?



FARMERS

PrivateMill

Coopera.veBuyer

(FNC)Mill

PrivateBuyer



Q2 Does program translate into higher sales, at higher (unit) prices,under more loyal arrangements?

I Yes, certified farmers get ∼7% higher prices, and increase sharesold to main buyer (coop)



FARMERS

PrivateMill

Coopera3veBuyer

(FNC)Mill

PrivateBuyer



Q3 How much of the export price premium is transmitted along thechain?



FARMERS

PrivateMill

Coopera3veBuyer

(FNC)Mill

PrivateBuyer



Q3 How much of the export price premium is transmitted along thechain?

I Most, certified export contracts have higher prices (3-5%) aftercontrolling for contract conditions and detail product characteristics



FARMERS

PrivateMill

Coopera3veBuyer

(FNC)Mill

PrivateBuyer



Q4 What is the overall welfare impact of the program?



FARMERS

PrivateMill

Coopera3veBuyer

(FNC)Mill

PrivateBuyer



Q4 What is the overall welfare impact of the program?

I W.I.P. calibration of a simple model + infer welfare weights impliedby the price premium


Roadmap

1 Background

I Colombian Coffee MarketI Sustainable Quality Program

2 Farm(er)-Level Impact

I Investments, Quality, Sales, Prices and Loyalty

3 Market-Level Impact

I Price transmission along the chain

4 Conclusions and Future Work


Setting: Colombian Coffee Market

Coffee Production in Colombia

I First-processing done by farmers, mostly small-holders

Institutionality: Federación Nacional de Cafeteros (FNC)

I Former monopolist before the break of the International CoffeeCartel in 1989. Nowadays manages around 40% of the exports

I Main Voluntary Sustainability Standards (Ex. Fair Trade, Rainforest,Nespresso, 4C) implemented with FNC involvement

I Existence of "Garantía de compra": Commitment to buy coffeefrom farmers at "fair market price"


Setting: Colombian Coffee Market

Formula−Based Price differential on the NY Arabica C Price

Regional adjustments based on, e.g., transport costs

Approx. 560 buying points


Sustainable Quality Program

Voluntary Sustainability Standard implemented by big private company

I Add quality and productivity dimensions to sustainability concerns ofnon-company certifications

I Started in 2003 in several countries in LAC

? Need to provide consistent (high) quality to downstream clients ... with avoluntary program

I "Non-written contract" with: farmers - 1st stage buyers - processors

? The program looks out for regions where: (CRECE 2011)

I Coffee has the same global characteristics (altitude, soil, varieties, etc.)⇒ Coffee meets the required quality and aroma standards

I Coffee can be fully traced⇒ Implementer has a direct relationship with farmers


Sustainable Quality Program: In Colombia

Program implemented (extension and commercialization) byFederación Nacional de Cafeteros

Cer$fiedFarmers

PrivateMill

(FNC)Coopera$ve

Buyer

(FNC)Mill

PrivateBuyer

Exporters/ForeignBuyers

Non-cer$fiedFarmers

Coffeeflow Cer$fiedCoffeeflow


Sustainable Quality Program: In Colombia

Program implemented (extension and commercialization) byFederación Nacional de Cafeteros

Regional expansion:

1. Caldas and Huila roll-out started in 20062. Cauca and Nariño Departments roll-out started in 20073. Santander roll-out started in 2013

Focus on [2.], which accounts for 84.5% of certified farmers

for 1 Very different, and eventually aborted, pilotfor 3 Different part of the country, farmers sales data available only pre roll out


Sustainable Quality Program: Sales

I To local FNC CooperativeF Permanent buying points in all locations

I Premium: COP 40/kg (5-9 % over daily FNC price for standardquality)


Sustainable Quality Program: Roll-Out

1. A region (set of municipalities) is identified that satisfies relevantterroir conditions

2. Within the region, eligible veredas are identifiedF Average of 25 farmers- 30 Ha.

3. All plots within selected veredas are potentially eligible, providedthey meet TASQ requirements

(TASQ - Tool for the assessment of sustainable quality)F All farmers receive training and extensionF Voluntary Program: farmers chose if / when to upgrade and get

certified


Sustainable Quality Program: Roll-OutThree sources of time variation:

Staggered roll−out across DepartmentsStaggered roll−out across Veredas within DepartmentsWithin Vereda, farmers’ (endogenous) take-up

Graph 13/03/18 10:13

020

0040

0060

0080

00N

umbe

r of f

arm

ers

ente

ring

the

prog

ram

2008 2010 2012 2014 2016Year of entry in the program

Farmer entry



Given focus on quality, program wasn’t rolled out randomly. Twomain sources of selection:

A. Eligible locations are different along geographic dimensions

I Selected veredas are different in terrain conditions Table (but not insocioeconomic and conflict incidence Table )

⇒ DID with Plot Fixed Effects, Border discontinuity

B. Within eligible veredas, farmers endogenously chose whether toget certified

I Certified farmers are different in farm characteristics Table

⇒ Various "ITT" strategies

Data sources


Roadmap

1 Background








Plot-Level Impact: Upgrading

Do farmers upgrade their plots as they get certified?

Ypvmy = β0 + β1 × Tpvmy + γp + γmy + εpvmy

⇒ Plot Index: z-score of tree age, density, resistant varieties.

z-score plantation characteristics

OLS ITT

Treated plot 0.0738*** 0.2035***(0.003) (0.005)

Vereda treated 0.1310***(0.004)

Not yet treated 0.1489***(0.005)

Never treated (eligible) 0.1149***(0.004)

Observations 780,047 780,047 780,047Number of plots 84,907 84,907 84,907Plot FE Yes Yes YesMun-Year FE Yes Yes YesRobust standard errors in parentheses.*** p<0.01, ** p<0.05, * p<0.1, + p<0.15

Parallel trends ( Go ); robustness to border-year FE


Plot-Level Impact: Other Outcomes

Do farmers upgrade their plots as they get certified?

(1) (2) (3) (4) (5) (6)

Plot improvement Log area coffee Plot ending activity

Treated plot -0.0815*** 0.0585*** -0.0088***(0.007) (0.003) (0.000)

Vereda treated 0.4324*** 0.1022*** -0.0694***(0.010) (0.004) (0.001)

Observations 737,881 737,881 766,987 766,987 780,049 780,049Number of plots 82,650 82,650 84,256 84,256 84,907 84,907Plot FE Yes Yes Yes Yes Yes YesMun-Year FE Yes Yes Yes Yes Yes Yes

Notes: Robust standard errors in parentheses.*** p<0.01, ** p<0.05, * p<0.1, + p<0.15. Time period is 2006 - 2016.

Other programs (placebos) Go

Land Transactions


Plot-Level Impact: Quality⇒ Did program increased quality?

We do not observe plot-level output quality (but see timing of sales Go )

We do observe extremely detailed quality testing of batches by sourcing location:

Qspcomy = β0 + β1 × CSspcomy + γoy + γmy + γpc + εspcomy

Quality Q of sale s btw. mill p and coop c for coffee from origin o in month m of year y

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10)

Gr. Almendra Sana Gr. Pasilla Quality Index Sample Accepted Defects Reportedin Sample in Sample (neg.)

Cert. Sale 0.0543** 0.0443+ 0.2083+ 0.0436* 0.1313* 0.0439* 0.0085** 0.0080** -0.0371** -0.0338*(0.024) (0.027) (0.135) (0.023) (0.072) (0.022) (0.003) (0.003) (0.018) (0.019)

Observations 223,674 126,507 223,674 126,507 223,674 126,507 223,385 126,369 223,385 126,369R2 0.911 0.936 0.726 0.783 0.538 0.753 0.265 0.333 0.144 0.185

Mean dep. var 0.951 0.959 0.090 0.066Sample All Non-standard All Non-standard All Non-standard All Non-standard All Non-standardMill (buyer) FE Yes Yes Yes Yes Yes Yes Yes Yes Yes YesCoop (seller) FE Yes Yes Yes Yes Yes Yes Yes Yes Yes YesAgency - Year FE Yes Yes Yes Yes Yes Yes Yes Yes Yes YesYear-Month FE Yes Yes Yes Yes Yes Yes Yes Yes Yes YesRobust standard errors in parentheses, cluster product. *** p<0.01, ** p<0.05, * p<0.1, + p<0.15. Data: 2009-2014.Quality index calculated as average of pasilla and almendra sana indicators.

NB: Aggregate quality increases, no reduction in the quality of non-certified coffee sourced

from a given origin Go


Plot-Level Impact: Quality⇒ Did program increased quality?

We do not observe plot-level output quality (but see timing of sales Go )

We do observe extremely detailed quality testing of batches by sourcing location:

Qspcomy = β0 + β1 × CSspcomy + γoy + γmy + γpc + εspcomy

Quality Q of sale s btw. mill p and coop c for coffee from origin o in month m of year y(1) (2) (3) (4) (5) (6) (7) (8) (9) (10)

Gr. Almendra Sana Gr. Pasilla Quality Index Sample Accepted Defects Reportedin Sample in Sample (neg.)

Cert. Sale 0.0543** 0.0443+ 0.2083+ 0.0436* 0.1313* 0.0439* 0.0085** 0.0080** -0.0371** -0.0338*(0.024) (0.027) (0.135) (0.023) (0.072) (0.022) (0.003) (0.003) (0.018) (0.019)

Observations 223,674 126,507 223,674 126,507 223,674 126,507 223,385 126,369 223,385 126,369R2 0.911 0.936 0.726 0.783 0.538 0.753 0.265 0.333 0.144 0.185

Mean dep. var 0.951 0.959 0.090 0.066Sample All Non-standard All Non-standard All Non-standard All Non-standard All Non-standardMill (buyer) FE Yes Yes Yes Yes Yes Yes Yes Yes Yes YesCoop (seller) FE Yes Yes Yes Yes Yes Yes Yes Yes Yes YesAgency - Year FE Yes Yes Yes Yes Yes Yes Yes Yes Yes YesYear-Month FE Yes Yes Yes Yes Yes Yes Yes Yes Yes YesRobust standard errors in parentheses, cluster product. *** p<0.01, ** p<0.05, * p<0.1, + p<0.15. Data: 2009-2014.Quality index calculated as average of pasilla and almendra sana indicators.

NB: Aggregate quality increases, no reduction in the quality of non-certified coffee sourced

from a given origin Go


Plot-Level Impact: Sales, Prices and Loyalty

⇒ Did the program impact farmers sales?

We consider three outcomes:

1. Volumes2. Prices3. Buyer’s composition

I Transaction-level data of all farmers sales of coffeeI Caveat:I Data only for two years, late in the sample, farmer FE not feasible→ border discontinuity design

I Do not know which sales belong to the program→ Additionaldetailed data from one of the two coops


Plot-Level Impact: Sales

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10)

ln Q Share sold to Coop

OLS BDD OLS BDD

Treated farmer 0.6155*** 0.4149*** 0.6217*** 0.6522*** 0.2704*** 0.3022*** 0.2387*** 0.1607**(0.040) (0.097) (0.037) (0.159) (0.031) (0.031) (0.034) (0.056)

Vereda treated -0.0391 0.0935***(0.094) (0.026)

Will be treated -0.3829*** -0.0191 0.1108*** -0.0439(0.093) (0.157) (0.031) (0.055)

Not treated (eligible) -0.1867* 0.0344 0.0248 -0.0814*(0.094) (0.146) (0.030) (0.045)

Observations 67,184 67,184 67,184 6,402 6,402 67,184 67,184 67,184 6,402 6,402R2 0.347 0.324 0.348 0.465 0.465 0.174 0.127 0.175 0.335 0.335Farmer Controls Yes Yes Yes Yes Yes Yes Yes Yes Yes YesMunicipio FE Yes Yes Yes - - Yes Yes Yes - -Border (5km.) FE - - - Yes Yes - - - Yes YesRobust standard errors (cluster municipio) in parentheses *** p<0.01, ** p<0.05, * p<0.1, + p<0.15

i) Evidence consistent with all the increase in production being sold to the cooperative

ii) But approximately only 2/3 of production meets quality standard

Balance Condition appears to be satisfied Table


Plot-Level Impact: Price

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10)

ln P ln P (Coop)

OLS BDD OLS BDD

Treated farmer 0.0294*** 0.0227*** 0.0300*** 0.0289** 0.0389*** 0.0296*** 0.0346*** 0.0509*(0.004) (0.005) (0.004) (0.010) (0.004) (0.006) (0.005) (0.026)

Vereda treated 0.0002 0.0016(0.004) (0.004)

Will be treated -0.0028 -0.0006 -0.0092 0.0077(0.010) (0.013) (0.010) (0.024)

Not treated (eligible) -0.0072* -0.0011 -0.0095** 0.0172(0.004) (0.010) (0.004) (0.025)


i) No price spillover on non-treated farmers

ii) No price spillover from other buyers and higher loyalty ( Go )

iii) Robustness to Border Distance ( Go & Go )


Plot-Level Impact: Sales, Prices and Loyalty

Panel of yearly (t) farmer (f) sales to the different programs (p), with farmer FE

Ypfmy = β0 + β1 × Tpfmy + β2 × Xfy + γf + γmy + εpfmy

Outcome Y of sale from farmer f under program p in municipality m of year y

(1) (2) (3) (4) (5) (6)

ln price per Kg. - pergamino ln quantity

Certified Sales 0.0846*** 0.0691*** 0.0709*** 1.4048*** 1.2525*** 1.3114***(0.009) (0.014) (0.014) (0.103) (0.125) (0.123)

Observations 35,182 29,296 29,201 35,485 29,314 29,314Number of farmers 10,087 9,950 9,950 10,087 9,950 9,950R2 0.378 0.342 0.346 0.559 0.566 0.603

Sample All Non-standard Non-standard All Non-standard Non-standardLocation-Year FE Yes Yes Yes Yes Yes YesFarmer FE Yes Yes Yes Yes Yes YesFarmer-Year controls No No Yes No No YesRobust standard errors in parentheses. *** p<0.01, ** p<0.05, * p<0.1, + p<0.15Farmer-year controls include share sold certified, yearly total quantity produced and its square. Time period: 2015-2017

NB: Average share of certified sales is 78% (median 90%)


Roadmap

1 Background








Price premium along the chain

⇒ How much of the export price premium is transmitted along thechain?




Cer$fiedFarmers

PrivateMill

(FNC)Coopera$ve

Buyer

(FNC)Mill

PrivateBuyer


Non-cer$fiedFarmers


5-7%priceincrease




Cer$fiedFarmers

PrivateMill

(FNC)Coopera$ve

Buyer

(FNC)Mill

PrivateBuyer


Non-cer$fiedFarmers


Pricedifferen$alexplainedbyquality


Price Premium at Processing Stage

(1) (2) (3) (4) (5) (6)

ln Price per Kg. - pergamino ln Quantity Future sale

Cert. Sale 0.0670*** 0.0475*** 0.0473*** 0.0057 0.4090*** -0.0429***(0.015) (0.005) (0.005) (0.004) (0.061) (0.010)

Observations 207,895 116,545 116,545 116,545 120,993 120,993R2 0.999 0.999 0.999 0.999 0.333 0.304

Sample All Non-std. Non-std. Non-std. Non-std. Non-std.Mill (buyer) FE Yes Yes Yes Yes Yes YesCoop (seller) FE Yes Yes Yes Yes Yes YesAgency - Year FE Yes Yes Yes Yes Yes YesYear-Month FE Yes Yes Yes Yes Yes YesQuantity control No Yes Yes Yes No NoQuality control No No No Yes No NoRobust standard errors in parentheses. Cluster product (Columns (1)-(4)), Year-month (Columns (5)-(6)).*** p<0.01, ** p<0.05, * p<0.1, + p<0.15 Data: 2006-2014Future sale takes value 0 when the agreement is made at the moment of the delivery, and 1 otherwise.


Price premium along the chain⇒ How much of the export price premium is transmitted along the

chain?

Cer$fiedFarmers

PrivateMill

(FNC)Coopera$ve

Buyer

(FNC)Mill

PrivateBuyer


Non-cer$fiedFarmers


3-5%pricedifferen$alwhenaccoun$ngforcontractcondi$ons


Price Premium at Export Gate

(1) (2) (3) (4) (5) (6)

ln price per Kg. - green coffee

Certified Contract 0.0049 0.0342*** 0.0238+ 0.0345*** 0.0514*** 0.0422**(0.009) (0.012) (0.015) (0.012) (0.015) (0.017)

Observations 56,766 24,921 5,211 56,766 24,921 5,211R2 0.836 0.829 0.876 0.843 0.839 0.892

Sample All Non-standard Supremo All Non-standard SupremoPort & Destination country Yes Yes Yes Yes Yes YesYear-Month FE Yes Yes Yes Yes Yes YesContract conditions No No No Yes Yes YesRobust standard errors (cluster year-month-destination country) in parentheses. *** p<0.01, ** p<0.05, * p<0.1, + p<0.15Contract conditions: Quantity, payment terms, type of coffee. Daily exchange rate included in all specifications.

⇒ Supremo: Beans of size > 17 and minimal defaults.

⇒ Certified contracts have more delayed payment conditions and smaller volumes.


Conclusions and future work

Very Preliminary !Comprehensive analysis of buyer-driven quality-upgradingprogram

1. Evidence suggests that the programI Incentivized (larger) farmers to invest and upgrade farmI Quantity, Quality and Prices increased

2. Price TransmissionI Program successfully transmitted export price premium to farmersI Price premia hidden under contractual termsI "No double marginalization from FNC"I No evidence of spillover (possibly due to garantia de compra)

3. Future work:I Explore take-ups and costs,I Model calibration, CBA and welfare (function)


Gracias!

Thank You!


Comparison of municipality characteristicsNever treated Treated T-test

N Mean/SE N Mean/SE (1)-(2)

Official Area (Km2) 35 453.086(92.036)

34 379.382(61.297)

73.703

Altitude 35 1745.371(127.926)

34 1687.412(109.646)

57.960

Distance to district capital 35 52.692(4.457)

34 53.619(3.522)

-0.928

Rurality Index (Rural/ Total Population) 35 0.747(0.032)

34 0.769(0.028)

-0.021

Poverty Index (SISBEN) 35 93.199(2.799)

33 97.560(0.418)

-4.361

Land Gini Index 35 0.765(0.015)

33 0.744(0.014)

0.020

Land Gini Index (Ownership) 35 0.752(0.013)

33 0.720(0.010)

0.032*

Literacy rate in 2005 35 84.475(1.892)

33 85.531(0.775)

-1.056

Spanish ocupied land (1510 - 1561) 35 0.371(0.083)

34 0.265(0.077)

0.107

Presence of land conflics (1901 - 1917) 35 0.057(0.040)

34 0.059(0.041)

-0.002

Presence of land conflicts (1918 - 1931) 35 0.086(0.048)

34 0.118(0.056)

-0.032

Violence 1948 to 1953 35 0.143(0.060)

34 0.059(0.041)

0.084

Presence of Guerrilla groups 36 3.361(0.326)

33 2.242(0.342)

1.119**

Presence of ELN 36 1.528(0.307)

33 1.758(0.323)

-0.230

Presence of FARC 36 5.194(0.479)

33 2.727(0.451)

2.467***

Presence of Paramilitar groups 36 0.333(0.138)

33 0.242(0.098)

0.091

Presence of Coca cultivation 36 2.583(0.619)

33 2.606(0.617)

-0.023

Mean homicide rate 34 13.908(3.457)

33 9.458(3.202)

4.451

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Terrain conditions comparison

Not-Certified Ver. Certified Ver. T-testDifference


Total Land (Ha.) 396 109.847(10.068)

354 91.105(10.674)

18.742

Agro-climatically attainable yield 1961-90, kg DW/ha 416 1039.913(21.879)

359 1006.997(22.307)

32.916

Altitude (mean), metres 416 1728.530(26.925)

359 1894.322(24.372)

-165.793***

Altitude (std), metres 416 156.548(5.653)

359 184.112(5.252)

-27.564***

Slope (mean), degrees 416 15.968(0.359)

359 19.303(0.247)

-3.335***

Slope (std), degrees 416 6.412(0.112)

359 7.260(0.103)

-0.848***

Terrain ruggedness index (mean) 416 76.000(1.722)

359 91.248(1.210)

-15.248***

Notes: The value displayed for t-tests are the differences in the means across the groups. ***, **, and * indicatesignificance at the 1, 5, and 10 percent critical level.

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Data Sources

Analysis relies on a uniquely rich combination of administrative data.

A. Plot-level (treatment and) outcomes:I SICA (Sistema de Información Cafetera): Coffee census

F Geocoded 2006-2016 panel of all coffee plots in the country.F Farm characteristics, improvements, certifications, extension, etc.

B. Farmer-level sales and prices:I PIC (Protección del Ingreso Caferero) program:

F All coffee sales from farmers to any buyer (2012-2014 only)I Internal records from the largest Coop

F More detailed information on quality and certifications

C. Quality and Price Premia along the chain:I Transaction level sales from FNC Cooperatives to processors

F Including all sales under the program, with detailed information on quality andorigin

I Transaction Level Export DataF Allows for tracking of coffee lots, detailed info on quality, origin, etc.

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Farmer characteristics

Panel A: Municipalities comparison

Not-certified Certified T-test


Total plot area 58338 1.787(0.010)

48002 1.356(0.008)

0.431***

Year last plot update 58338 1996.717(0.041)

48002 1996.281(0.045)

0.435***

Altitude 58338 1665.304(0.686)

48002 1740.324(0.880)

-75.021***

Panel B: Plots inside certified municipalities

Not-certified Certified T-test


Total plot area 26318 1.298(0.011)

21684 1.425(0.013)

-0.127***

Yaear last plot update 26318 1994.532(0.064)

21684 1998.404(0.059)

-3.872***

Altitude 26318 1726.577(1.265)

21684 1757.010(1.190)

-30.433***

Panel C: Early adopters of certification

Cert. after 2008 Cert. before 2008 T-test


Total plot area 10152 1.538(0.020)

11532 1.326(0.016)

0.212***

Year last plot update 10152 1996.886(0.096)

11532 1999.740(0.069)

-2.854***

Altitude 10152 1750.293(1.747)

11532 1762.923(1.624)

-12.630***

Notes: The value displayed for t-tests are the differences in the means across the groups.***, **, and * indicate significance at the 1, 5, and 10 percent critical level.Notes: Comparison on 2006 Census.

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Appendix: Farmer impactX Parallel pre-trends condition appears to be satisfied (ITT)

Bla BlaBla Bla

-.2-.1

0.1

-5 -4 -3 -2 -1 +1 +2 +3 +4 +5

z-score of tree age, density, resistant varieties

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Coverage and Participation in FNC programs

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10)

Any propgram Individual program Credit program Technical program Farmer ID program

Treated plot -0.0588*** -0.0351*** 0.0129*** -0.0471*** -0.0050***(0.006) (0.006) (0.005) (0.009) (0.001)

Treated vereda -0.0075 -0.0013 0.0042 -0.0157 0.0009(0.008) (0.008) (0.005) (0.011) (0.002)

Observations 66,221 66,221 66,221 66,221 66,221 66,221 66,221 66,221 66,221 66,221Number of Farmers 12,894 12,894 12,894 12,894 12,894 12,894 12,894 12,894 12,894 12,894Farmer FE Yes Yes Yes Yes Yes Yes Yes Yes Yes YesBorder-Year FE Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes

Notes: Robust standard errors in parentheses. *** p<0.01, ** p<0.05, * p<0.1, + p<0.15. Time period is 2007 to 2016.Border with is 10 Km.

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Balance Condition – BDD

(1) (2) (3) (4) (5) (6)Elevation Longitude Latitude

Treated Vereda 9.39 303.9 -224.0(31.75) (401.8) (195.3)

Treated Farmer 16.19 299.6 -247.0(31.45) (399.3) (202.3)

Will be treated 32.7 229.4 -355.5*(29.9) (340.7) (193.6)

Not-Treated 7.999 301.6 -222.4(31.24) (340.7) (195.5)

Observations 6,645 6,645 6,645 6,645 6,645 6,645

Border FE Yes Yes Yes Yes Yes YesRobust standard errors (cluster municipality) in parentheses.

*** p<0.01, ** p<0.05, * p<0.1, + p<0.15

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Border distance robustness: Treated farmersLocal spillover might invalidate BDD (particularly for prices)

⇒ Check robustness varying distance definition of border

-.05

0.0

5.1

.15

Estim

ated

Coe

ffici

ent

0 5 10 15 20 25Distance from Vereda Border (Kms)

Coop Price (ln)Private Buyers Price (ln)

Treated Farmers

X Limited spillover possibly due to garantia de compra and competitivefringe

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Border distance robustness: Eligible not treatedfarmers

Local spillover might invalidate BDD (particularly for prices)⇒ Check robustness varying distance definition of border

-.04

-.02

0.0

2.0

4.0

6Es

timat

ed C

oeffi

cien

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0 5 10 15 20 25Distance from Vereda Border (Kms)

Coop Price (ln)Private Buyers Price (ln)

Eligible, Never Certified, Farmers

X Limited spillover possibly due to garantia de compra and competitivefringe

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Quality sorting

(1) (2) (3) (4) (5) (6)

Quality non-certified buying point sales

Certified point 0.0465* -0.0567***(0.025) (0.009)

Cert. Sales (month) 0.0348** 0.0144(0.017) (0.011)

Share Cert. Sales (month) 0.0512* 0.0128(0.030) (0.021)

Observations 26,254 26,254 26,254 14,555 14,555 14,555R2 0.714 0.714 0.714 0.763 0.853 0.853Sample All All All Non-std. Non-std. Non-std.Year-Month FE Yes Yes Yes Yes Yes YesYear-Origin FE Yes Yes Yes Yes Yes YesRobust standard errors (clusted buying point) in parentheses *** p<0.01, ** p<0.05, * p<0.1, + p<0.15

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Plot-level Impact: Timing of sales

Farmers process coffee at home before selling

⇒ Quality deteriorates with inadequate storage

0.2

.4.6

.81

Shar

e to

tal c

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e so

urce

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0 10 20 30 40 50Week_ From start main harvest

Coop sales - Non-cert. farmers Coop sales - Cert. Farmers


Plot-level Impact: Timing of sales

Let W xfm be the week (from start main harvest) when farmer f in municipality m

has sold x% of her harvest:

W xfm = β0 + β1 ∗ Tf + β2 ∗ Xf + γm + εfm

(1) (2) (3) (4) (5) (6) (7) (8) (9)

25% sold 50% sold 75% sold

Treated farmer -1.3479*** -1.3190*** -1.2147*** -1.1805*** -1.7337*** -1.7954***(0.176) (0.168) (0.230) (0.214) (0.307) (0.315)

Vereda treated -0.9499** -0.4108 0.0898(0.472) (0.495) (0.510)

Will be treated 0.3429 0.4064 -0.7309**(0.277) (0.455) (0.322)

Observations 74,364 74,364 74,364 74,364 74,364 74,364 74,364 74,364 74,364R2 0.420 0.417 0.420 0.412 0.410 0.412 0.322 0.320 0.322Farmer Controls Yes Yes Yes Yes Yes Yes Yes Yes YesMunicipio FE Yes Yes Yes Yes Yes Yes Yes Yes YesRobust standard errors in parentheses. *** p<0.01, ** p<0.05, * p<0.1, + p<0.15

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Plot-level Impact: Buyer composition

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10)

Exclusivity to one buyer ln P (Non-coop)

OLS BDD OLS BDD

Treated farmer 0.1648*** 0.1789*** 0.1495*** 0.0523 0.0045** 0.0029 0.0056+ 0.0057(0.020) (0.027) (0.014) (0.056) (0.002) (0.009) (0.003) (0.006)

Vereda treated 0.0496* -0.0004(0.028) (0.008)

Will be treated 0.0906*** -0.0646 -0.0049 0.0065(0.028) (0.060) (0.007) (0.013)

Not treated (eligible) 0.0070 -0.1007* -0.0013 -0.0003(0.030) (0.055) (0.008) (0.008)


i) Half farmers are exclusive with the cooperative.

ii) Average number of non-coop buyers is 1.2 – max. 16

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Improving Export Quality and What Else? Nespresso in Colombia · 2018. 4. 4. · Track coffee sales...

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