Thesis Submitted: Effect of Certification on Cacao Smallholders’ Net Incomes

I submitted my thesis for my M.S. in International Agricultural Development: “Evaluating the Effects of Certification on Smallholders’ Net Incomes, with a Focus on Cacao Farmers in Cooperatives in Côte d’Ivoire.” I focused on evaluating smallholders’ agronomic and economic outcomes, and farming practices and inputs, under the Fairtrade (FLO), Rainforest Alliance and UTZ Certified certifications. The thesis comprises a) a theoretical analysis of the potential effects of each certification on price, yield and total output, and costs and expenditures (farm and producer group levels); b) a literature review synthesizing independent research findings on each of these areas; and c) an econometric analysis of fieldwork in Côte d’Ivoire, comparing group means across certified farmers and non-certified controls; and using regressions to estimate the effect of certification on yield and expenditure.

The abstract is below. Feel free to peruse the thesis and contact me with any questions. Note: The theoretical analysis and literature review chapters have summary tables for a quick scan of the overall findings/conclusions; and the field work chapter has several tables summarizing key group differences, and regression results.

The quick summary: The theoretical analysis identified numerous ways that certification standards could affect price, yield/output and expenditures/costs; with contextual factors leading modulating the effects. The meta-analysis of relevant literature indicates that certification is overwhelmingly associated with higher prices; while certified producers’ yields, expenditures and net incomes may be better than, then same as, or worse than non-certified farmers, within and across producer types, crops, areas and certifications.

Among cacao producers in Côte d’Ivoire overall, certified producers have significantly higher prices per kg, and profits per hectare (ha); and significantly lower expenditures per than non-certified controls; while yields did not differ significantly. These trends did not hold in each of the three regions included in the study. Regressions indicate that certification is associated with significantly lower expenditures; and mixed outcomes ranging from negative to positive for yield. Overall, outcomes vary across contexts; emphasizing the importance of the enabling environment; and the actions of value chain partners from governments and buyers to consumers; in shaping the potential of certification.

Evaluating the Effects of Certification on Smallholders’ Net Incomes,
with a Focus on Cacao Farmers in Cooperatives in Côte d’Ivoire


This thesis evaluates the direct effects of the Fairtrade International (Fairtrade), Rainforest Alliance (RA) and UTZ Certified (UTZ) certifications on smallholders’ net incomes (profit), using three modes of inquiry: a theoretical evaluation of each certifier’s standards and activities, a literature review, and econometric analyses of primary data from cacao producers in Côte d’Ivoire. It seeks to inform efforts to scale up these certifications, particularly in the West African cacao sector, the primary source of mass-market cacao, and ensure that certification benefits producers.

In recent years, commodity certifications such as Fairtrade, RA and UTZ have shown robust growth in the agricultural sector, and cacao in particular. Certifiers, brand owners and others have asserted that certification improves farm-level profit, via factors such as higher prices, and better farm management that increases yield and reduces expenditure. However, little independent research has explored such claims, particularly for cacao. This thesis seeks to fill gaps in understanding using a comprehensive, rigorous approach, including regressions using primary data from certified and non-certified Ivorian cacao farmers.

The theoretical evaluation, literature review and analyses of primary data indicate that certified producers’ profits may be higher than, lower than or equal to non-certified farmers, depending on the context. Certification seems to impact profit largely by enabling farmers to command premiums for certified sales, which increase average farm gate price for total output sold. Such price increases may be small, as with the Ivorian sample. The theoretical evaluation and literature review indicate that certification is associated with varied outcomes for yield and expenditures. Regressions using the primary data show that certification has a strong effect in reducing expenditures, while its effect on yield ranges from negative to positive.

If certifiers and their partners wish to improve certified producers’ profits, they can take numerous steps to address factors that affect farmers’ average prices, yields and expenditures, and certification costs. In some cases, this will require broadening the scope of certification training, standards, producer services, or implementation partners to address development constraints that lie beyond the scope of certifiers’ current requirements, activities and capabilities.


This entry was posted in Agriculture & Food, Chocolate & Cacao, Corporate Social Responsibility (CSR) & Sustainability Strategy, International Development/Agricultural Development, Sourcing & Supply Chain, Writing & Presentations and tagged , . Bookmark the permalink.

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