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Market access, organic farming and productivity: the determinants of creation of economic value on a sample of Fair Trade affiliated Thai farmers

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  • Leonardo Becchetti

    () (University of Rome Tor Vergata)

  • Pierluigi Conzo

    (University of Rome Tor Vergata)

  • Giuseppina Gianfreda

    (University of Tuscia)

Abstract

We analyse the impact of Fair Trade and organic farming on a sample of Fair Trade organic rice producers in Thailand. We find that per capita income from agriculture is positively and significantly affected by organic certification and FT affiliation years. Such effect does not translate into higher productivity due to a concurring increase in worked hours. FT and organic certification contributions are however downward biased if we do not take into account the relatively higher share of self- consumption of affiliated farmers. Our main findings are robust when we control for selection bias and endogeneity with instrumental variables, propensity score matching and by restricting the sample to affiliated producers only. We also test which of the two (organic and FT) effects is stronger and find that the latter prevails.

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Paper provided by Econometica in its series Econometica Working Papers with number wp05.

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Length: 47
Date of creation: Jan 2009
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Handle: RePEc:ent:wpaper:wp05

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Keywords: organic production; Fair Trade; productivity;

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  1. Maseland, Robbert & Vaal, Albert de, 2001. "How fair is fair trade?," Research Report 01C48, University of Groningen, Research Institute SOM (Systems, Organisations and Management).
  2. David Reinstein & Joon Song, 2008. "Efficient Consumer Altruism and Fair Trade," Economics Discussion Papers 651, University of Essex, Department of Economics.
  3. Becchetti Leonardo & Costantino Marco & Portale Elisa, 2007. "Human capital, externalities and tourism: three unexplored sides of the impact of FT affiliation on primary producers," Departmental Working Papers 262, Tor Vergata University, CEIS.
  4. Kassie, Menale & Zikhali, Precious & Pender, John & Köhlin, Gunnar, 2008. "Organic Farming Technologies and Agricultural Productivity: The case of Semi-Arid Ethiopia," Working Papers in Economics 334, Göteborg University, Department of Economics.
  5. Windmeijer, Frank, 2005. "A finite sample correction for the variance of linear efficient two-step GMM estimators," Journal of Econometrics, Elsevier, vol. 126(1), pages 25-51, May.
  6. LeClair, Mark S., 2002. "Fighting the Tide: Alternative Trade Organizations in the Era of Global Free Trade," World Development, Elsevier, vol. 30(6), pages 949-958, June.
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