From Bean to Income: Assessing the Financial Resilience of Kerala’s Smallholder Coffee Farmers to Climate Change

Abstract

The economic well-being of smallholder coffee farmers is particularly threatened by climate change, as their livelihoods are directly linked to climate conditions. This paper describes how smallholder coffee farmers in Kerala, India, are affected by climate change, particularly in financial terms, including the dimensions of risk and the factors that impact household income. Cross-sectional data were obtained from 420 farmers in Wayanad and Idukki, using a structured interview schedule and multistage random sampling. Three latent variables that had been the bases for the resilience of financial components, as (Financial Buffer & Risk Management, Institutional Support & Social Capital, Climate Change Smart Adaptive Practices ), were determined, and these factors explained 58.23 % of the cumulative variance from the exploratory factor analysis. According to the Multiple Linear Regression analysis, they were highly significant predictors for annual home income (R² = .361, p < .001), and Financial Buffers (β = .452, p < .001) as the strongest predictor. Furthermore, an Independent sample t-test further showed that the Arabica climate-sensitive coffee growers had reported substantially more severe effects of climate change than the Robusta coffee growers (t (418) = 6.127, p < 001). 001). The paper suggests that the financial resilience of smallholder coffee farmers to weather variability is multifaceted, encompassing the need for enhanced financial safety nets, institutional support, and bolstering adaptive responses to protect household revenue. The holistic interventions based on these pillars should be the top priorities for policies in constructing climate-resilient, inclusive coffee systems.