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

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

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.

Suggested Citation

  • Mitiku, Fikadu & de Mey, Yann & Nyssen, Jan & Maertens, Miet, 2017. "Do Private Sustainability Standards Contribute to Poverty Alleviation? A Comparison of Different Coffee Certification Schemes in Ethiopia," Working Papers 253589, Katholieke Universiteit Leuven, Centre for Agricultural and Food Economics.
  • Handle: RePEc:ags:kucawp:253589
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    References listed on IDEAS

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    Cited by:

    1. Meemken, Eva-Marie & Spielman, David J. & Qaim, Matin, 2017. "Trading off nutrition and education? A panel data analysis of the dissimilar welfare effects of Organic and Fairtrade standards," Food Policy, Elsevier, vol. 71(C), pages 74-85.
    2. Mitiku, Fikadu & Nyssen, Jan & Maertens, Miet, 2017. "Can Coffee Certification Promote Land-sharing and Protect Forest in Ethiopia?," Working Papers 253567, Katholieke Universiteit Leuven, Centre for Agricultural and Food Economics.
    3. Meemken, Eva-Marie & Qaim, Matin, 2017. "Can Private Food Standards Promote Gender Equality in the Small Farm Sector?," 2017 Annual Meeting, July 30-August 1, Chicago, Illinois 258088, Agricultural and Applied Economics Association.
    4. Akoyi, K.T. & Mitiku, F. & Maertens, M., 2018. "Is prohibiting child labour enough? Coffee certification and child schooling in Ethiopia and Uganda," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 275958, International Association of Agricultural Economists.

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    Keywords

    Agricultural and Food Policy; Food Security and Poverty;

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