Complementarity Between Voluntary Sustainability Standards and Agroforestry in the Indonesian Coffee Sector

VSS are market-based instruments that promote sustainability by incentivising producers to adopt sustainable farming practices. AF is a farm and land management practice that provides environmental benefits and diversified income sources.

Despite their shared sustainability goals, these approaches are rarely examined together, leaving gaps in understanding their interaction. This paper investigates the individual and combined effects of VSS and AF on socioeconomic outcomes in Indonesia’s smallholder coffee sector using cross-sectional data from 403 households across Bandung and Tanggamus Regencies, and OLS, IPW, and IV estimations. We find that VSS is associated with higher yields, revenue, productivity, and income, while AF with lower coffee returns but higher income at farm and household level.