Global Sustainability Regulation and Coffee Supply Chains in Lampung Province, Indonesia

This paper examines the global sustainability regulation in agricultural trade by conducting an in-depth assessment of the economics of coffee-producing regions in Lampung Province, Indonesia.

A negative campaign blaming illegal coffee producers for the loss of tigers in the Bukit Barisan Selatan (BBS) National Park in the province further complicates the issue, as the current coffee supply chain could not guarantee the workability of price transparency and asymmetric structures of coffee markets, to name a few. In this region, community initiatives have been developed to foster forest conservation by adopting coffee multi-strata practices under the agroforestry system and community-based forestry management in the buffer zone outside the BBS National Park.

Based on research findings, buyer-driven regulation of environmental practices in the coffee industry, which characterize most global initiatives, have somehow restructured the supply chain in producing regions. Recent global sustainability standards require adequate organizational capacity of coffee-farmer groups and rural cooperatives involved in the supply chain. The paper recommends policy integration between bottom-up initiatives at farm level or institutional changes at supply-chain organizations, and top-down sustainability standards set by the private sector and non-government organizations.