Sanjay Lanka

The Araku Way: Sustainability Accounting for Fair Trade Coffee

Sanjay Lanka

PhD student, University of Essex

Start of the project: October 2012

Funding: Funding: University of Essex / Essex Business School scholarship

Co-supervisor: Iqbal Khadaroo

Abstract: The objective of this research is to develop a performance management system for a cooperative organization operating in a Fair Trade (FT) coffee value chain. This research will examine the effectiveness of the Small and Marginal Tribal Farmers Mutually Aided Cooperative Society (Araku Cooperative) in the Araku Valley of Andhra Pradesh, India to accomplish its sustainability objectives within the framework of meeting the requirements of Fair Trade (FT) from the perspective of the small farmer. The study will use a case study approach within a participative action research methodology using a longitudinal study by being embedded in the coffee grower community at extended periods of time over the next three years. In my research from the perspective of coffee farmers in Central America, I have found that Fair Trade has either already lost its legitimacy or is in the process of losing it. This is because the performance of Fair Trade at the grass roots level does not match up to its public relations in terms of its relationship with the coffee farmers. In many cases, Fair Trade has not been responsive to their needs and the only point ensuring its continuing legitimacy is the fact that it provides the farmers access to the international coffee market along with a Fair Trade premium. The research also discovered that proactive cooperative unions such as the UCA San Ramon in Nicaragua are using stakeholder engagement and democratic participation to fulfill the needs of their stakeholders. This consists of projects to diversify their sources of revenue beyond a dependence on coffee while continuing efforts to move up the coffee value chain. There is a need for an effective performance management system to ensure that the business decisions taken by the Araku cooperative can measure not only the financial, but also the social and environmental impact of these changes.

Contact: svlank AT essex.ac.uk