The purpose of this research is to analyze and evaluate the potential for agricultural diversification of marginal, small scale coffee farms to support family incomes in Veracruz, Mexico. The municipality of Zozocolco is selected as the focus of the University of Veracruz efforts to help local farmers to diversify their farming systems out of low quality coffee and into other, more profitable enterprises. This research focuses on an analysis of household characteristics, government programs, migration, and alternative enterprises in the marginal coffee growing regions, such as vanilla and black pepper. Factors that would provide incentives to coffee farmers to diversify are evaluated. In Zozocolco, the land available for agricultural diversification depends mainly on two variables: coffee price and number of coffee plants. This work contributes to the understanding of the coffee growers characteristics and their incentives to diversify into other crops.