Food and cotton certification schemes are no panacea for poorer producers

News, 26 March 2012
Study raises questions about pro-poor impact of popular certification schemes.

Consumers today are confronted with a growing array of certification labels – from organic and Fairtade to Rainforest Alliance and Starbucks’ CAFÉ Practices –but research published today shows that costs and benefits of these schemes vary greatly, and that certification may have little to offer the poorest producers.

Researchers at the International Institute for Environment and Development reviewed several certification schemes in a study that focused on coffee, tea and cotton produced in China, Vietnam, Indonesia and India.

“Schemes such as Rainforest Alliance, UTZ Certified and CAFÉ Practices offer no minimum prices, no guaranteed premiums and do not aim to address price volatility and inequity in the value chain, though they are less bureaucratic than other schemes and do enable market access,” says co-author Emma Blackmore.

Other schemes include organic and Fairtrade labels, both of which have different emphases and costs and benefits. While organic labelling schemes are likely to create environmental benefits, their social and economic benefits are less clear.

Fairtrade certification can act as an important safety net by guaranteeing minimum prices for poor farmers, but in some cases the share of retail prices that goes to Fairtrade producers is less than for conventional products.

Fairtrade premiums have fallen in real terms over time and will need to be adjusted to make any significant different to the livelihoods of small-scale farmers, say the researchers.

“Certification schemes are often touted as means for poor farmers in developing nations to improve their livelihood security and farm in a way that is better for their environment,” says James Keeley.

“But there is little information available that allows rigorous and meaningful comparisons between the many schemes. Our study concludes that it is unlikely that any will emerge as a clear pro-poor winner, and that whether a scheme will benefit small-scale farmers will depend on local conditions.”

For small scale farmers, the benefits of certification can include long-term relationships with buyers and therefore potentially better returns, and greater negotiating power in schemes – such as Fairtrade -- that require farmers to form democratic producer organisations.

Certification can also promote improved farm practices, better quality produce, and training and other opportunities for farmers. But it is unlikely that all farmers will be able to benefit from certification.

“For many farmers certification is simply too costly,” says Emma Blackmore. “Certification may therefore be a driver of rural differentiation which serves to improve the livelihoods and market opportunities of farmers who are not the poorest.”

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Contact

For interview contact:
James Keeley (james.keeley@iied.org) +251 920 192700 GMT+3
Emma Blackmore (emma.blackmore@iied.org) +85268962857 GMT +8

For further enquiries contact:
Mike Shanahan
Press officer

International Institute for Environment and Development
80-86 Gray’s Inn Road
London WC1X 8NH, UK.
Tel: +44 (0)20 3463 7399
Fax: +44 (0)20 3514 9055

Email: mike.shanahan@iied.org
www.iied.org

Notes to editors

Organic agriculture is a production system that sustains the health of soils, ecosystems and people. It emphasises a knowledge-intensive rather than input-intensive farming system. It is regarded as a technically challenging certification that requires learning new skills and is typically associated with high quality products. It is made more challenging by the fact that there is no single system for organic certification – with different standards existing for Japanese, US and European markets.

Fairtrade is defined as an alternative approach to conventional trade that aims to improve the livelihoods and wellbeing of small producers. Its emphasis is on fairness and building livelihoods through its minimum prices and ‘social’ premium. Fairtrade regards environmental sustainability as necessary to underpin sustainable livelihoods.

Utz Certified is based on the idea of Good Agricultural Practices, as specified by GLOBALGAP. Its primary emphasis is on traceability and production practices and processes. It offers producers access to high-specification traceability technologies. It does also incorporate some social and environmental criteria such as abiding by International Labour Organization (ILO) conventions regarding wages and working hours and responsible use of agrochemicals. Some farmers engaged in Utz certification do achieve higher prices and this is associated with improvements in quality. Its original focus was on large estates though small-scale producers can now become certified. It may be easier, however, for large estates to meet the requirements of the scheme than smaller farmers. Exporters and support organisations have a key role in facilitating the inclusion of small-scale farmers in Utz certification schemes. There is a significant difference between the volumes produced as Utz Certified and the amount sold. This may indicate that there is insufficient demand for Utz Certified produce, though Utz argues that this is because the scheme wants to be able to respond quickly if a new roaster wants to get involved.

CAFÉ Practices is a corporate ethical sourcing scheme which evaluates the sustainable production of cherry and green coffee. The scheme is designed and managed by Starbucks, though it is verified by a third party – Scientific Certification Systems. Product quality and economic accountability are prerequisites for participation in the scheme, although the standard also includes social responsibility and environmental leadership criteria. Producers are evaluated through a points system and awarded Strategic Supplier status if they score 80 per cent. They then receive a US $0.05 premium per pound for the first crop. There are no other formal price premiums for farmers.

Rainforest Alliance aims to protect ecosystems and the people and wildlife that depend on them. It has focused on larger growers and estates, though this is now changing, which has allowed the scheme to scale up quickly, but may limit its impact on development. Rainforest Alliance has been criticised for allowing coffee containing anywhere between 30 and 90 per cent of certified produce to carry its label, thereby diluting its impact. Farmers may receive a premium for producing Rainforest Alliance certified coffee because of associations with higher quality but this is not part of the scheme. It is argued that it is relatively quick to implement  but the costs associated with certification have been found to be high and may not yet have been appropriately tailored to small-scale production. Rainforest Alliance certification may bring environmental benefits, such as the conservation of natural resources and a reduction in pesticide use.

 

The International Institute for Environment and Development (IIED) is an independent, non-profit research institute. Set up in 1971 and based in London, IIED provides expertise and leadership in researching and achieving sustainable development (see: www.iied.org).

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