Sustainable Organic Coffee Prospects And Coffee Transaction Costs Chain In Timor – Leste (2025)

Research Article

Abstract

Introduction: The small island of Timor basically and namely of Timor-Leste plantation Hybrid Coffee is a coffee variety that is resistant disease and climate change adaptation growing on 1000-1500 meters under shade trees special Albizia and Casuarina during Portugues time until now. The Timor coffee base growing in 6 Municipality Ermera, Aileu Ainaro, Manufahi and Bobonaro more them 42% family monoculture Coffee farm. Potential can be developed sustainable economic value because it can only grow under the shade of albizzia and casuarina, but now big problem on sustainable develop. With high economic potential, needs to developed as family economic patrimonial, because more Then 90% population dependent on coffee production every year. Timor - Leste has great potential in developing organic coffee because its tropical and subtropical climate change is created some of conditions very different and geography only have two seasons, namely dry and rainy (wet and dry months). The importance of institutional arrangements in supporting small farmers to develop organic products with high added value is very important, according to progressive nature geographic and conditions are behaved cited by (WB., 2019; Maia J., 2022; Gov.TL, 2024).

Research Objectives: This research is aims to look at the strategic development of sustainability is coffee as a family economic asset in improving the welfare of coffee faming families and the impact of transaction cost on the basic price received by farmers, the impact of which is not satisfactory in the motivation for the innovation in development coffee farming business. In addition, to see the factor of institutional development of coffee in the terms of existing customers of coffee agribusiness agriculture sector in Timor-Leste, base of standards coffee in global market decision.

Research Methodology: The best method to share by qualitative and quantitative apprised focus on information representative farm, public institutional, private sector and social institution to covered information by the farms and references date during Portugues Time, Indonesia Time and Independent Time, to take comparation production analysis qualitative and quantitative or combination method by institutional analysis with sample propose random site application of in study.

Result of Discussion: The economic contribution of coffee farmers managing coffee farming in 6 districts since the Portuguese average 4,65,9%, during Indonesia time after Independence has provided a real contribution of 20-29% coffee farmers livelihood household. The management 90% monoculture farming is managed organically environmentally friendly by local organic material. Farmers' income guaranty from coffee as source of economic, social, educational and health needs. In addition to being source income for farmers, it can absorb 3000-5000 workers every year during the 3-month coffee harvest period from the field the city, especially green ben coffee production factory. Currently, the government and donors through international institutions are working on the development coffee agrobusiness planning culture by the President of Timor - Leste Ramos Horta in 2019. CCT-NCBA the cooperative that has 21,565 base CCT-NCBA Maia de Jesus survey, 2022 permanent members registered organically provides the largest coffee supply to Starbucks Coffee every year, average 2000-3000 tons of green coffee/years, the financial cost transaction higher by transportation, labor cost, information and promotion cost impact directly to coffee price on farmer. Through sales results agribusiness diversification carried out in other farming businesses such cocoa, cloves, vanilla, pepper potential plantation areas to anticipate decline coffee production. Currently, there 5 prestigious plantation crops managed by CCT-NCBA Economic rehabilitation development by USAID to increase rural economic, Rahmadanih, 2022, Institutional strengthening of women farmers group (KWT) in developing household food security. Integrating this cultural heritage into coffee production and trade could bring economic benefits while maintaining cultural integrity.

Conclusion: Unlike typical industrialized agricultural models, Timor - Leste coffee sector could emphasize organic farming practices and traditional cultivation methods, which preserve the soil, biodiversity, and local ecosystems, contributing to sustainability. The World Bank's 2023 report said the country's economic growth is expected to increase by an average of 4.1% in 2024 and 2025, thanks to lower inflation and a healthy fiscal position. The report also said the government's emphasis on capital spending and infrastructure development, which has increased the budget from 18.4% of GDP in 2023 to 24.5% of GDP in 2024, is likely to drive further growth.