Innovative Business Models In The Thai Horticultural Sector: A Panel Data Analysis Of The Impacts Of Globalgap Certification

In recent years, compliance with international food safety and quality standards, such as GlobalGAP, has become increasingly important for farmers in developing countries supplying high-value markets. Adoption of the GlobalGAP standard is challenging and external support by exporters, donors or other support agencies is often necessary to enable small-scale farmers to adopt. While the factors influencing GlobalGAP adoption have been analyzed in several studies, the impacts of the standard on smallholders' livelihoods remain less clear. This study for the first time presents a panel data analysis of the effects of GlobalGAP certification on net household income (NHI) and producer prices, using a sample of 214 farmers in the Thai horticultural sector. We find that the impacts of GlobalGAP certification differ depending on whether farmers are organized in producer-managed or exporter-managed certification groups. In the producer-managed groups, GlobalGAP certification has led to significantly higher prices and to significantly higher NHIs. In the exporter-managed certification groups, however, the effect of GlobalGAP certification on both prices and NHI is insignificant. Our results suggest that monetary benefits of GlobalGAP adoption do exist, but in cases where exporters finance GlobalGAP certification, those benefits are not passed on to farmers.