Under standard conditions in the Colombian coffee sector, the benefits of producing better coffee are not passed on to farmers, weakening their incentives to invest in higher-quality production. However, when a large international buyer required intermediaries to pay farmers higher prices for quality, this solved the hold-up problem, induced upgrading, and increased welfare along the supply chain.
Mario Bernasconi, Patrick Farrell, Rocco Macchiavello, Josepa Miquel-Florensa, Eric Verhoogen and Nicolas de Roux
25 February 2026
VoxDev
https://voxdev.org/topic/agriculture/quality-upgrading-agriculture-path-poverty-reduction
This work is published under POID and the CEP's Growth programme.
This publication comes under the following CEP theme: Innovation drivers