Food and cotton certification schemes are no panacea for poorer producers

Study raises questions about pro-poor impact of popular certification schemes.

News, 26 March 2012

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.”

Download the report