Who benefits from the rapidly increasing Voluntary Sustainability Standards? Evidence from Fairtrade and Organic coffee in Ethiopia

Bart J. Minten, Mekdim Dereje, Ermias Engeda and Seneshaw Tamru
Authors registered in the RePEc Author Service: Mekdim Dereje Regassa

No 212708, 2015 Conference, August 9-14, 2015, Milan, Italy from International Association of Agricultural Economists

Abstract: Voluntary Sustainability Standards (VSS) are rapidly increasing in global value chains. While consumers (mostly in developed countries) are willing to pay significant premiums for such stand-ards, it is however not well understood how effective these incentives are transmitted to producing countries. We study VSS in Ethiopia’s coffee sector, its most important export commodity, using a unique census of transaction data at the export level and large-scale data at the production level. We find that transmission of the export quality premiums to coffee producers is limited, with only one-third of this premium being passed on. Moreover, as quality premiums are small and with low average production levels from coffee farmers in these settings, these premiums would only lead to an increased income of 20 USD per year even with a perfect transmission scenario, and would therefore have little effect on the livelihoods of an average coffee farmer.

Keywords: Environmental Economics and Policy; International Development; International Relations/Trade (search for similar items in EconPapers)
Pages: 40
Date: 2015
New Economics Papers: this item is included in nep-afr, nep-agr and nep-mkt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:iaae15:212708

DOI: 10.22004/ag.econ.212708

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