The small nation of Timor-Leste has a natural advantage in producing good quality, organic Arabica coffee
owing to its climate, altitude and historically low use of inputs including fertilizer (World Bank 2011; MAF
2009). Despite these advantages and similar to other agricultural commodities in Timor-Leste, the coffee
industry must also contend with poor roads, missing infrastructure and limited access to essential services.
In addition, the Ministry of Agriculture and Fisheries (MAF) estimates that over 55 per cent of the area
planted with coffee trees in the country is now taken up with old and relatively unproductive trees (MAF
2009). Notwithstanding these challenges, the Government has identified the industry, which provides
income to over one third of the population (NSD 2011) and accounted for 80% of the value of non-oil
exports in 2010, as having a key role to play in reducing rural poverty (GOTL 2011).
In addition to productivity constraints, Timorese coffee growers must also engage with supply
chains for international coffee that have marginalised and disempowered small scale coffee producers.
While there are a number of well-studied initiatives, such as Fairtrade coffee, that attempt to change the
damaging effects market trends are having on small-hold growers (Bacon 2005; Daviron and Ponte 2005;
Ponte 2002), it is increasingly being found that price premiums have not increased in line with coffee
prices1 and that where a premium does exist it is often insufficient to have an impact on overall household
livelihoods (Méndez et al. 2010; Bacon 2010; Valkila 2009; Jena et al. 2012).
One aspect that is receiving more coverage in the literature is how participation in cooperatives
(including Fairtrade or organic) helps improve household livelihoods. Jena et al. (2012) isolate the benefits
that arise as a result of participation in cooperatives and compare these to the benefits of being part of a
certification scheme. They conclude that certification does not automatically provide better outcomes for
coffee growers and that it is the structure and capabilities of the cooperative itself that are most relevant to
overall grower livelihoods. Viewed more broadly, cooperatives and collective action, with their focus on
providing services to members, also provide a number of benefits to coffee growers including improving
economies of scale (Markelova et al. 2009), increasing market coordination and facilitating access to higher
value supply chains, such as Fairtrade and organic certified coffee (Poulton et al. 2010).
This research seeks to build on these findings and contribute to the small body of literature on the
Timor-Leste coffee industry. It aims to understand the key factors influencing the livelihoods of coffee
growers with a view to identifying how actors can best work with communities to improve overall
livelihoods. The paper is separated into two sections. The first section of the paper will introduce the
sustainable livelihoods approach and explore the conceptualisation of social capital within this framework.
The second section will outline the research methods and explain the key findings.