Coffee, chocolate, and equity

By Javier G. Montoya-Zumaeta

In Switzerland and other wealthy countries, coffee and chocolate are part of everyday life. They are enjoyed at breakfast tables, in offices, and in cafés around the world. Supermarket shelves and speciality shops offer an astonishing array of origins and qualities, allowing consumers to choose from single-origin coffees or artisanal chocolates with carefully curated flavour notes. From the consumer’s perspective, this abundance is pleasing.

But far away from the cafés and the chocolate boutiques, it’s a very different story.

The cost of global markets

Across the tropics, more than 30 million farmers depend on coffee and cocoa for their livelihoods. Most of them are vulnerable smallholders, working and living under precarious conditions in remote rural areas where access to healthcare, education, and infrastructure is limited.

For these farmers, participating in global markets – transitioning from traditional agriculture to commodity-based cocoa and coffee production – has its risks. These include environmental degradation, reduced food security, and the erosion of traditional livelihoods and cultural identities.

Sustainability efforts and their limits

Over the past decades, governments, companies, and development organizations have become increasingly aware of these challenges. They have sought to reverse the negative effects of cocoa and coffee production by implementing various approaches and leading many interventions across countries of the Global South. These interventions have focused mainly on increasing the productivity of farmers – by providing access to finance, technology, and training – or on introducing certification schemes that signal socially and environmentally “responsible” production to consumers.

Despite their good intentions, many of these efforts have fallen short. One reason is that they tend to overlook deep-rooted power imbalances within agri-food value chains that, inevitably, affect the sustainability of the intervention. Generally, they focus on what farmers produce and how they produce it, paying less attention to how value chains are organized and who holds power within them.

In these value chains, farmers have little influence over the conditions under which their products are traded, processed, and sold, and they are granted only a small share of the final value. As a result, participating in these markets often brings limited improvements to their livelihoods.

Why equity matters

To address these imbalances, it is essential to examine relationships among the different actors in coffee and cocoa value chains. How equitable are they? While what is considered “fair” can vary depending on the institutional, social, cultural, and environmental context, it is widely agreed that equity has at least three interrelated dimensions:

First, there is distributional equity, which looks at how benefits and costs are shared.

Second, procedural equity, which asks who can meaningfully participate in decisions that affect their livelihoods.

And third, recognitional equity, which is about whose identities, knowledge, and lived realities are acknowledged and respected.

These dimensions are widely discussed in theory but not often examined empirically – especially from the perspective of the farmer.

Evidence from Peru

In my research for the COMPASS project, I explore how current sustainability governance approaches in coffee and cocoa value chains incorporate these dimensions of equity – and whether this matters for farmers’ well-being.

My research focuses on Peru, the country of my birth and one of the most thriving players in both the coffee and cocoa sectors in recent years. In 2023, Peru ranked eighth worldwide in production volumes for both crops, with a growing share certified as organic. A large amount of this production takes place in the Amazon region, one of the most ecologically significant areas on the planet.

The expansion of coffee and cocoa in Peru has been closely tied to so-called Alternative Development programmes. These programmes aim to integrate farmers into the formal economy by replacing illegal crops with profitable agricultural commodities such as coffee and cocoa.

For nearly five months, two research teams surveyed more than 600 coffee and cocoa farmers across three major production regions. Farmers were asked not only about their production conditions, but also about how fair they perceived their relationships within the value chain to be – and how these perceptions related to their overall well-being.

Well-being was measured through a standardized, self-reported composite index covering eight dimensions: living standards, individual health, life achievements, personal relationships, community integration, present and future tranquility, and spirituality.

What farmers told us

The results are striking. The farmers’ perception of equity within the value chains emerged as a strong and significant determinant of their well-being – more influential, in fact, than access to agricultural extension services. This is noteworthy, as extension services currently dominate most development interventions in the coffee and cocoa sectors in the study sites.

We also observed differences between organizational models. Overall, farmers working with social enterprises reported higher levels of perceived equity than those affiliated with corporate sustainability programmes or local cooperatives. In general, this reflects the longer engagement that the social enterprises in our study had in their origin sites, and the greater feeling of recognition that farmers gain from their affiliation to these strategies. This feeling of recognition was lower among farmers working within corporate programmes or local cooperatives – presumably due to their orientation towards markets that don’t recognize them as one of the key actors in the value chain.

Rethinking sustainable value-chains

These findings carry important implications for investors, policymakers, and companies involved in coffee and cocoa markets. Improving farmers’ well-being requires more than technical fixes or productivity gains. It demands sustainability strategies that explicitly address power imbalances and foster fairer, more inclusive relationships over the long term.

Only by addressing equity – who benefits, who decides, and who is recognized – can the sustainability of coffee and chocolate consumption in Europe and around the world truly be ensured.