Abstract
International non-profit organizations have started to implement eco-labeling for credence attributes programs aimed to inform consumers about environmentally sound or “sustainable” production standards for various products. Using coffee labeled as “shade grown” or “bird friendly” as an example, this paper describes the impact such labeling programs may have on local land use patterns in coffee producing regions. Shade grown coffee farms should provide a variety of external benefits, including the preservation of biodiversity, carbon sequestration, the prevention of soil erosion and aquifer recharge. Those externalities, however, are not expected to have observable land use impacts unless they are capitalized in the coffee market. The prospect of market capitalization of externalities suggests the extension of the conventional von Thünen model to the calculation of social location rent. Using the maximization of social location rent as a criterion allows the externality effect to play a direct role in market-based land use allocation of land between eco-labeled shade grown coffee production and other activities.
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
References
ANACAFÉ (2007) Asociación Nacional del Café. www.anacafe.org
Anas A (1988). Optimal preservation and pricing of natural public lands in general equilibrium. J Environ Econ Manage 15: 158–172
Blackman A, Albers H, Sartorio B, Crooks L (2003) Land cover in a managed forest ecosystem: Mexican shade coffee. Discussion paper 03–60, Resources for the Future, Washington
Brannstrom C (2000). Coffee labor regimes and deforestation on a Brazilian frontier, 1915–1965. Econ Geogra 76: 326–346
Bray D, Plaza Sanches J and Murphy E (2002). Social dimensions of organic coffee production in Mexico: lessons for eco-labeling initiatives. Soc Nat Resour 15: 429–446
Caswell J and Mojduszka E (1996). Using informational labeling to influence the market for quality in food products. Am J Agric Econ 78: 1248–1253
CEC (2001) Backgrounder on the potential market for sustainable coffee in North America. http://www.cec.org/files/pdf/ECONOMY/background9e_EN.PDF. Accessed 26 Sept. 2005
CREA (2004) Sustainability: the El Salvador sustainable living wage and income report. Center for Reflection, Education and Action, Inc., Hartford, CT
Cromley R and Hanink D (1989). A financial economic von Thünen model. Environ Plann A 21: 951–960
D’haeze D, Deckers J, Raes D, Phong T and Loi H (2005). Environmental and socio-economic impacts of institutional reforms in the agricultural sector of Vietnam: land suitability assessment for Robusta coffee in the Dak Gan region. Agric Ecosyst Environ 105: 59–76
Dicum G and Luttinger N (1999). The coffee book: anatomy of an industry from crop to the last drop. The New Press, New York
FLO (2005) Fairtrade labelling organizations international. http://fairtrade.net/sites/products/products.html. Accessed 26 September
Geoghegan J, Villar S, Klepeis P, Mendoza P, Ogneva-Himmelberger Y, Chowdhury R, Turner B II and Vance C (2001). Modeling tropical deforestation in the Southern Yucatán peninsular region: comparing survey and satellite data. Agric Ecosyst Environ 85: 25–46
Giménez E and González-Gómez M (2003). Optimal allocation of land between productive use and recreational use. J Reg Sci 43: 269–293
Giovannucci D (2001) Sustainable coffee survey of the North American specialty coffee industry. Commission for Environmental Cooperation, Montreal
Gobbi J (2000). Is biodiversity-friendly coffee financially viable? An analysis of five different coffee production systems in western El Salvador. Ecol Econ 33: 267–281
Hanink D and Cromley R (1998). Land-use allocation in the absence of complete market values. J Reg Sci 38: 465–480
ICO (2005) International coffee organization—Trade statistics. http://www.ico.org/asp/~trade_statistics.asp
Jones D (1984). Farm location and off-farm employment: an analysis of spatial risk strategies. Trans Inst Brit Geograph New Seri 9: 106–123
Jordan M (2004) Guatemalan coffee industry reheats. http://www.detnews.com/2004/nation/0410/27/a11-316817.htm. Accessed on 24 Sep. 2005
Karl H and Orwat C (2000). Environmental marketing and public policy. In: Folmer, H and Gabel, H (eds) Principles of environmental and resource economics, pp. Edward Elgar, Cheltenham
Kilian B, Jones C, Pratt L and Villalobos A (2006). Is sustainable agriculture a viable strategy to improve farm income in Central America? A case study on coffee. J Bus Res 59: 322–330
Klepeis P and Vance C (2003). Neoliberal policy and deforestation in Southeastern Mexico: an assessment of the PROCAMPO program. Econ Geogr 79: 221–240
Lancaster K (1966). A new approach to consumer theory. J Polit Econ 74: 132–157
Larson B (2003). Eco-labels for credence attributes: the case of shade-grown coffee. Environ Develop Econ 8: 529–547
Lewin B, Giovannucci D, Varangis P (2004) Coffee markets: new paradigms in global supply and demand. Agriculture and rural development discussion paper 3, The World Bank. http://lnweb18.worldbank.org/ESSD/ardext.nsf/11ByDocName/PublicationsCoffeeMarketsNewParadigmsinGlobalSupplyandDemand. Accessed 26 Sep. 2005
Lotter D (2003) The price, processing and production challenges of growing coffee profitably and sustainably in Guatemala. The New Farm. http://www.newfarm.org/international/guatemala/coffee.shtml. Accessed 6 June 2007
Macmillan W (1992). Risk and agricultural land use: a reformulation of the portfolio-theoretic approach to the analysis of a von Thünen economy. Geograph Anal 24: 142–158
Matoo A and Singh H (1994). Eco-labeling: policy considerations. Kyklos 47: 53–65
Norgaard R (1994). Development betrayed: the end of progress and a coevolutionary revisioning of the future. Routledge, London
Perz S (2004). Are agricultural production and forest conservation compatible? Agricultural diversity, agricultural incomes and primary forest cover among small farm colonists in the Amazon. World Develop 32: 957–977
Perfecto I, Rice R, Greenberg R and Van der Voorts M (1996). Shade coffee: a disappearing refuge for diversity. BioScience 46: 598–608
Perfecto I, Vandermeer J, Mas A and Soto Pinto L (2005). Biodiversity, yield, and shade coffee production. Ecol Econ 54: 435–446
Ponte S (2002). The ‘latte revolution’? Regulation, markets and consumption in the global coffee chain. World Develop 30: 1099–1122
Randall A and Castle E (1985). Land resources and land markets. In: Kneese, A and Sweeney, J (eds) Handbook of natural resource and energy economics, vol II, pp. Elsevier, Amsterdam
Rappole J, King D and Vega Rivera J (2003). Coffee and conservation. Conserv Biol 17: 334–336
Rice R (2007) Personal Communication. January 2007
Rice R and Ward J (1996). Coffee, conservation and commerce in the western hemisphere. Smithsonian Migratory Bird Center, Washington
Serneels S and Lambin E (2001). Proximate causes of land-use change in Narok District, Kenya: a spatial statistical model. Agric Ecosyst Environ 85: 65–81
Soto-Pinto L, Perfecto I, Castillo-Hernandez J and Caballero-Nieto J (2000). Shade effect on coffee production at the northern Tzeltal zone of the State of Chiapas, Mexico. Agric Ecosyst Environ 80: 61–69
Swallow S and Sedjo R (2000). Eco-labeling consequences in general equilibrium: a graphical assessment. Land Econ 76: 28–36
Tomich PT, Thomas DE and Noordwijk M (2004). Environmental services and land use change in Southeast Asia: from recognition to regulation or reward. Agric Ecosyst Environ 104: 229–244
TransFair (2005) Fair trade resources. http://transfairusa.org
Verburg P, Overmars K and Witte N (2004). Accessibility and land-use patterns at the forest fringe in the northeastern part of the Philippines. Geograph J 170: 238–255
Wintegens J (ed) (2004) Coffee: growing, processing, sustainable production. A guidebook for growers, processors, traders and researchers. Wiley–VCH, Weinheim
Author information
Authors and Affiliations
Corresponding author
Rights and permissions
About this article
Cite this article
Heidkamp, P., Hanink, D.M. & Cromley, R.G. A land use model of the effects of eco-labeling in coffee markets. Ann Reg Sci 42, 725–746 (2008). https://doi.org/10.1007/s00168-007-0176-9
Received:
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1007/s00168-007-0176-9