Small-scale farmers and certification: is there a business case?

Publication by Michiel Kuit (independent consultant) and Yuca Waarts (LEI Wageningen UR), commissioned by the Technical Centre for Agricultural and Rural Cooperation (CTA)

Certification of products and production processes dates back to the early 1900s. Up to the late 1980s, organic certification was the single most important agricultural certification scheme. The concept of fair trade had been around since the 1950s but in late 1988, the first Max Havelaar Fairtrade-certified coffee appeared on the shelves in Dutch supermarkets. From coffee, Fairtrade expanded into other product categories such as fruit and vegetables, cotton, cocoa and flowers. Today it certifies 15 different single products and numerous composite ones.

In the 1990s, growing concerns over food safety, workers’ rights, deforestation and farmers’ livelihoods led to a substantial number of new certification initiatives. The Rainforest Alliance certified its first farm (a large-scale banana plantation) in 1993. UTZ Certified started in 1998. GLOBALG.A.P. (then called EUREPGAP) started at that time as an initiative of European retailers in the horticultural sector. Towards the end of the 1990s and during the next decade, the certification movement gained momentum, with companies using it as an insurance policy that demonstrated their commitment to responsible sourcing.

This publication by Michiel Kuit (independent consultant) and Yuca Waarts (LEI Wageningen UR), commissioned by CTA, presents the findings of a study of the impact of certification on farmers in coffee, cocoa, cotton, fruit and vegetables. Substantial investments have been made by the private sector and donors to promote the uptake of certification by small-scale farmers. Understanding the effects these programmes have on small-scale farmers is vital as certification continues to expand.

Certification agencies and NGOs that help to implement their programmes, sometimes provide a rosy view of expected benefits. The picture that emerges from this study is that the benefits for small-scale farmers are less obvious than usually stated. Nevertheless, certification can be part of a viable strategy for companies, farmer groups and farmers. However, whether dealing with a donor-funded project or a commercial supply chain, the decision to invest in certification must rest on sound economic and market fundamentals.

This is the fifth publication in CTA’s new ‘Value Chains & Trade’ series. You can read the full report here.