This paper explores the implications for value chain structures within smallholder coffee systems across Indonesia arising from the establishment of externally authored environmental and social compliance systems. The paper discusses their implications, and sometimes contradictions, thereby highlighting the complexities of applying global ethics locally. These demands are pivotally changing the incentive structures for various value chain participants, leading to changing business strategies and the emergence of new institutional forms. Certain organizations and actors are already emerging as key beneficiaries of these shifting ''rules of the game,'' including producer cooperatives and multinational trading companies. Key findings from this analysis include: (i) the prioritisation of idealized forms of farmer organisation (such as cooperatives) over traditional market-based trade networks; (ii) consolidation among a limited number of exporting firms and the upstream penetration of multinational trading firms; and (iii) trends toward contract farming-style arrangements between multinational coffee companies and producers leading to ''value chain enclosure'' and ''farmer capture.'' Finally, the ability of lead actors to ''govern'' the value chain by specifying compliance requirements across rural Indonesia is changing the relative profitability of various institutional arrangements in the coffee regions of Indonesia.
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World Development 36(9), 1607-1622