51 has come to focus less on trying to ‘fix’ low and volatile prices, and more on enabling producers to increase their share of existing returns and to cope with the volatility. In addition to developing safety nets and promoting diversification out of coffee, therefore, policy prescriptions emanating from the multilateral donors and major industry bodies rely on market risk management tools. They also aim to increase the returns to producers through a reduction in their costs and an increase in their access to premium markets.

The Fairtrade movement also recognizes a number of factors that reduce the returns to producers and bases its justification for intervention in commodity markets on these. At the level of LDCs, these factors include market power at the farm-gate, a lack of capacity in producers and their organizations for direct market access and other capacity and information failures. That Fairtrade justifies its intervention of the basis of these is seen not only through their rhetoric, but in their active and targeted support of cooperative producer organizations. In its motivation and _modus operandi_ , then, Fairtrade reflects elements of both the new international commodity policies, as well as of the older national commodity market policies of LDCs. As an example of the latter, the preoccupation with market power had been the impetus for numerous marketing board and producer price arrangements in the South. It was certainly the motivating force behind the elaborate regulatory system of Law 2762 in the Costa Rican coffee industry. This question is addressed through a case study of the Costa Rican coffee market. Using an original data series collected from fieldwork, this paper preliminarily assesses the market power justification and wider Fairtrade effect of Fairtrade intervention in the Costa Rican input market for coffee cherries. The results of the analysis simultaneously inform on the role of Fairtrade and, where this interacts with national and international policy tools, on the wider coffee commodity policy environment.

# _Future research_

The analysis creates and makes available a firm-level panel data set of 21 variables over 26 years for the Costa Rican coffee sector. The data set includes price, quantity and cost data and a variety of mill-specific characteristics including size, geography, bean type and industrial organization variables, as well as tax and policy variables. The process of collecting a coherent series provides a wide scope for further research in the Costa Rican coffee sector. The work undertaken for this analysis rendered the data set usable and provided an overview look of farm-gate pricing behavior in a selected commodity market, and the determinants of such.

Recall that the research question addressed here had a wider scope than the measurement of market power. As such, the measure used only informs broadly on the market power question. Future research specifically aimed at the measurement of input market power in Costa Rica is desirable, not only in its own right, but to inform on the methodological identification procedure used in this application (namely, the reliance on cooperatives as the inefficient but honest benchmark).

Other directions of future research include explicitly modeling the process by which Fairtrade cooperatives are chosen. Although the empirical work of the paper establishes a baseline result and methodology for assessing Fairtrade intervention, it is worthwhile thinking whether the selection of Fairtrade cooperatives can be