Innovation Trajectories in Honduras’ Coffee Value Chain. Public and Private Influence on the Use of New Knowledge and Technology among Coffee Growers



Frank Hartwich et al. / Int. J. Food System Dynamics 3 (2010) 237-251

Some upgrading strategies available to producers in developing countries aim at identifying and targeting
niche markets (i.e. specialty, gourmet, organic, fair trade coffee) or acquiring new functions in the chain.
Ponte and Gibbon (2005) point out that in coffee trade there are great discrepancies between the prices
paid to coffee producers in developing countries and the retail price paid in importing countries.
However, one of the paths to sustainable income growth lies in the capacity to upgrade (Kaplinsky, 2006;
Pietrobelli, Rabellotti, 2007).

In conclusion, various agents in the community itself, in the value chain as well as in the field of
government support and development cooperation influence the farmers’ decision making process with
regard to innovation. Within the value chain context, two main types of agents have been instrumental to
help farmers upgrade and follow innovation strategies: On one side, research, extension and development
agents as well as NGOs have catered knowledge and technologies to farmers in a way that can be
considered as “knowledge and technology push”. On the other side, local and international buyers of raw
and processed coffee have provided information to farmers on best options to improve production,
productivity and quality in a form that can be considered as a process in which “product pull” is paired
with “knowledge and technology push”. Likewise, commercial providers of inputs may also be
contributing to technology and knowledge push through the technology embodied in the product they sell
and through spreading knowledge associated with the use of the technology. In fact, some input providers
have gone far in recent years even organizing training events on how to properly use fertilizers or
pesticides and providing individual consultations on optimal fertilizer and pesticide use, e.g. based on soil
samples.

3 Innovation trajectories in Honduras’ coffee sector

First, it is important to define what is meant by innovation in coffee production. In general innovations
are referred to as anything new successfully applied into economic and or social processes. In coffee
production this would refer to the way the manage their coffee plantations including the management of
nurseries, pruning and weeding procedures, the use of fertilizers and pesticides, the planting of new
varieties and the harvesting methods. The value of an innovation must be measured with regard to its
potential to generate benefits, e.g. to increase yields, stabilize incomes or and contribute to sustainable
development, just to mention some. The value of the innovation is also a major factor determining the
process of adopting an innovation (Hartwich, Scheidegger, 2010).

In the following section, various schemes on how such innovations are transferred to coffee growers are
revised. Coffee producers may or may not have access to a mix of these schemes. Additionally, it is not
only the schemes which determine the producers’ sources of information; there are also other producers
and peers in the community who pass on information to producers and determine their trust and interest
in innovation opportunities. Clearly, it is not assumed that the innovation process is one in which
technology is transferred from one actor, e.g. a buyer, to a grower; rather, the involvement in the scheme
enables farmers to innovate; if they actually do, depends on various other factors including their
embededness in social networks and interactions with many other players (Hartwich, Scheidegger, 2010).
Information on these schemes, inroads or paths to innovation - the term “innovation trajectories” is used
in the following sections to depict the dynamics of exchange relationships - have been gathered from an
exploratory survey among main agents in Honduras’ coffee value chain. Six different innovation
trajectories that allow coffee growers to anticipate innovations in production were found.

3.1     Local buyer led innovation trajectory

After harvesting producers usually dry coffee on the farm and then send it to a local processor (called the
beneficio”) where it gets pealed, dried, cleaned, homogenized, husked (decascated) and calibrated.
However, farmers deliver the coffee directly to the “
benefio” only when they accumulate sufficient
quantity and dispose of adequate means of transport. Otherwise middlemen (sometimes called “coyotes”)
with special means of transport would come to get the coffee from the farmers delivering it to the
beneficio. This system of procurement is overlaid by financing relationships: Usually growers don’t dispose
of enough cash to apply the necessary fertilizers and pesticides and pay harvest laborers. Therefore the
beneficios, either directly or through their agents, the intermediaries, provide growers with credit to buy
inputs and work their plantations. The credit is paid back when the farmers deliver the coffee. This
scheme also allows the
beneficios to bind the producer and make them deliver the coffee exclusively.
Conditions of the credits, usually given out in an ad-hoc manner without detailed accounting systems, are
often ambiguous reaching, at times, 3% interest per month.

Information on improvements in coffee cultivation, though often in the hands of beneficios and
intermediaries (many of which are large coffee producers at the same time), is only passed to growers in

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