Do Private Sustainability Standards Contribute to Poverty Alleviation? A Comparison of Different Coffee Certification Schemes in Ethiopia

Fikadu Mitiku, Yann de Mey, Jan Nyssen and Miet Maertens

No 253589, Working Papers from Katholieke Universiteit Leuven, Centre for Agricultural and Food Economics

Abstract: Private sustainability standards are spreading rapidly in the agri-food sector and are especially important in trade with developing countries. In this paper we analyze the impact of sustainability standards in the smallholder coffee sector in Ethiopia. We look at Fairtrade, Organic and Rainforest Alliance certification in a comparative way. We use cross-sectional survey data from a sample of 427 coffee farmers in the Jimma and Kaffa zones of Ethiopia, with all sampled farmers being member of a coffee cooperative. We analyze the impact of certification to different standards on poverty, income, yield and farm-gate prices in order to unravel the channels of possible poverty-reducing effects. We use logit, tobit and OLS regression models and attempt to control for cooperative-level heterogeneity. We find that Rainforest Alliance certification improves rural income by 72% and reduces the incidence and depth of poverty by 25% and 31% respectively while Fairtrade and Organic certification have no effect. We find that the positive effect of Rainforest Alliance mainly comes from a large impact on producer prices that offsets a negative impact on yields. Also, Fairtrade certification is found to lead to higher producer prices, but to a much smaller extent than Rainforest Alliance, and the price effect does not lead to an overall effect on farmers’ income and poverty reduction.

Keywords: Agricultural and Food Policy; Food Security and Poverty (search for similar items in EconPapers)
Pages: 28
Date: 2017
New Economics Papers: this item is included in nep-agr and nep-dev
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Citations: View citations in EconPapers (18)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:kucawp:253589

DOI: 10.22004/ag.econ.253589

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