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The impact of Fair Trade on banana producers in northern Peru

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  • Fort, Ricardo
  • Ruben, Ruerd

Abstract

This study provides one of the first detailed analyses of the impact of Fair Trade (FT) banana certification at the household level. With a careful selection of treatment and control farmers (through their associations) and the use of a propensity score matching technique, we were able to construct an appropriate counterfactual for the situation of FT farmers prior to their involvement in this supply chain. Due to the fact that all sales of banana FT in the Chira Valley also have an organic certification, and to be able to distinguish the effects of FT involvement from the effects of participating in the organic market, we compared the outcomes of organic farmers which belong to a FT association with the outcomes of two different types of farmers: (a) organic farmers which belong to an association recently FT certified, and (b) conventional farmers in the same area which do not belong to any association. Our results provide clear evidence of an impact of FT involvement on income and overall welfare indicators for banana farmers in the Chira Valley. These improvements are not only achieved via the better price obtained for FT sales but also because of higher productivity levels obtained as a results of the FT premium investment.

Suggested Citation

  • Fort, Ricardo & Ruben, Ruerd, 2009. "The impact of Fair Trade on banana producers in northern Peru," 2009 Conference, August 16-22, 2009, Beijing, China 50964, International Association of Agricultural Economists.
    • Handle: RePEc:ags:iaae09:50964
    DOI: 10.22004/ag.econ.50964
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    References listed on IDEAS

    as
    1. James J. Heckman & Hidehiko Ichimura & Petra E. Todd, 1997. "Matching As An Econometric Evaluation Estimator: Evidence from Evaluating a Job Training Programme," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 64(4), pages 605-654.
    2. Mark Hayes, 2006. "On the efficiency of fair trade," Review of Social Economy, Taylor & Francis Journals, vol. 64(4), pages 447-468.
    3. Aimee Shreck, 2005. "Resistance, redistribution, and power in the Fair Trade banana initiative," Agriculture and Human Values, Springer;The Agriculture, Food, & Human Values Society (AFHVS), vol. 22(1), pages 17-29, March.
    4. repec:bla:devpol:v:21:y:2003:i:5-6:p:641-654 is not listed on IDEAS
    5. Marco Caliendo & Sabine Kopeinig, 2008. "Some Practical Guidance For The Implementation Of Propensity Score Matching," Journal of Economic Surveys, Wiley Blackwell, vol. 22(1), pages 31-72, February.
    6. Steven Suranovic, 2002. "International Labour and Environmental Standards Agreements: Is This Fair Trade?," The World Economy, Wiley Blackwell, vol. 25(2), pages 231-245, February.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Blackman, Allen & Naranjo, María Angélica & Robalino, Juan & Alpízar, Francisco & Rivera, Jorge, 2014. "Does Tourism Eco-Certification Pay? Costa Rica’s Blue Flag Program," World Development, Elsevier, vol. 58(C), pages 41-52.
    2. Krumbiegel, Katharina & Maertens, Miet & Wollni, Meike, 2018. "The Role of Fairtrade Certification for Wages and Job Satisfaction of Plantation Workers," World Development, Elsevier, vol. 102(C), pages 195-212.
    3. Blackman, Allen & Rivera, Jorge, 2010. "The Evidence Base for Environmental and Socioeconomic Impacts of “Sustainable†Certification," RFF Working Paper Series dp-10-10-efd, Resources for the Future.
    4. Blackman, Allen & Rivera, Jorge, 2010. "The Evidence Base for Environmental and Socioeconomic Impacts of “Sustainable” Certification," RFF Working Paper Series dp-10-17, Resources for the Future.
    5. Leonardo Becchetti & Stefano Castriota, 2008. "Is Fair Trade Honey Sweeter? An empirical analysis on the effect of affiliation on productivity," Working Papers 104, ECINEQ, Society for the Study of Economic Inequality.
    6. John K M, 2013. "Global GAP Standard Compliance and Smallholder Pineapple Farmers’ Access to Export Markets: Implications for Incomes," Journal of Economics and Behavioral Studies, AMH International, vol. 5(2), pages 69-81.
    7. Raluca Dragusanu & Eduardo Montero & Nathan Nunn, 2022. "The Effects of Fair Trade Certification: Evidence from Coffee Producers in Costa Rica," Journal of the European Economic Association, European Economic Association, vol. 20(4), pages 1743-1790.
    8. Krumbiegel, Katharina & Maertens, Miet & Wollni, Meike, 2017. "The role of Fairtrade certification for wages and job satisfaction of plantation workers. Revised version," GlobalFood Discussion Papers 258582, Georg-August-Universitaet Goettingen, GlobalFood, Department of Agricultural Economics and Rural Development.
    9. Fédes Rijn & Ricardo Fort & Ruerd Ruben & Tinka Koster & Gonne Beekman, 2020. "Does certification improve hired labour conditions and wageworker conditions at banana plantations?," Agriculture and Human Values, Springer;The Agriculture, Food, & Human Values Society (AFHVS), vol. 37(2), pages 353-370, June.
    10. repec:hal:journl:dumas-00933469 is not listed on IDEAS
    11. Ana C. Dammert & Sarah Mohan, 2015. "A Survey Of The Economics Of Fair Trade," Journal of Economic Surveys, Wiley Blackwell, vol. 29(5), pages 855-868, December.
    12. Aashish Argade & Sukhpal Singh, 2016. "Seeking Markets in Production Fields: An Assessment of the Potential for Fair Trade in India," Millennial Asia, , vol. 7(2), pages 131-152, October.
    13. Kleemann, Linda & Abdulai, Awudu & Buss, Mareike, 2013. "Is organic farming worth its investment? The adoption and impact of certified pineapple farming in Ghana," Kiel Working Papers 1856, Kiel Institute for the World Economy (IfW Kiel).
    14. Mohan, Sarah, 2020. "Risk aversion and certification: Evidence from the Nepali tea fields," World Development, Elsevier, vol. 129(C).
    15. Kleemann, Linda & Abdulai, Awudu & Buss, Mareike, 2014. "Certification and Access to Export Markets: Adoption and Return on Investment of Organic-Certified Pineapple Farming in Ghana," World Development, Elsevier, vol. 64(C), pages 79-92.
    16. Oya, Carlos & Schaefer, Florian & Skalidou, Dafni, 2018. "The effectiveness of agricultural certification in developing countries: A systematic review," World Development, Elsevier, vol. 112(C), pages 282-312.

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