Shade Grown Indonesia: The Potential for Sustainable Coffee

This report describes how Indonesia is linked to the global economy and recommends an upgrading strategy that fits in line with economic and industrialization goals. The introduction includes a look at the country’s macroeconomics, relevant policies, and the potential for an intervention in the coffee sector. The introduction concludes with a section on how standards and certification function as a mechanism for delivering upgrading. It includes theory from both Global Value Chain (GVC) analysis and natural resource economics. Following, the case on Indonesia’s coffee value chain both describes coffee production and trade as well as analyzes for GVC governance. It demonstrates how sustainable coffee interventions have attempted to, but often failed to, upgrade in Indonesia. Shade Grown Indonesia proposes a reformed approach to sustainable coffee production based on the Chiapas coffee project. The section recommends an intervention which requires partnership from the top-down and the bottom-up. It concludes by considering potential tradeoffs and obstacles.