Elsevier

Global Food Security

Volume 26, September 2020, 100373
Global Food Security

Do smallholder farmers benefit from sustainability standards? A systematic review and meta-analysis

https://doi.org/10.1016/j.gfs.2020.100373Get rights and content

Highlights

  • We conduct a systematic review and meta-analysis of the effects of sustainability standards on smallholder farmers.

  • Certified farmers receive 20–30% higher prices and obtain 16–22% higher household incomes.

  • Yet not all farmers benefit as substantial heterogeneity in effect sizes exists.

  • Context-specific factors play a decisive role and are underappreciated in the extant literature.

  • Policy implications and directions for future research are discussed.

Abstract

Several studies have analyzed whether sustainability standards—such as Fairtrade or Organic—deliver on their promise to benefit smallholder farmers in developing countries, with mixed results. We conduct a systematic review and meta-analysis to consolidate results from 97 original studies. We place a focus on economic effects of sustainability standards and outcome variables that are frequently considered in quantitative studies, including output prices, yields, production costs, farmer profits, and household income. Results suggest that farmers certified under a sustainability standard receive 20–30% higher prices than their non-certified counterparts. Effects of standards on production costs and yields are mixed and vary across standards. Certified farmers gain higher profits, leading to an overall increase in household incomes through standards by 16–22%. Yet substantial heterogeneity exists, which is only partly attributable to observed factors that vary across studies (such as the type of product, standard, or region). Our findings suggest that more context-specific factors—such as the organization of supply chains—play a more decisive role. Based on a critical review of the sampling strategies and methods employed in the original studies, we discuss the generalizability of our findings and derive directions for policy and future research.

Introduction

Over the last decade, sustainability standards such as Fairtrade, Organic, UTZ, Rainforest Alliance, and GlobalGAP have gained in importance (ITC, 2017; Potts et al., 2014). The proliferation of sustainability standards is attributable to their promise to promote environmentally friendly production while lifting poor producers out of poverty by linking them to lucrative (export) markets. Various studies analyze whether sustainability standards deliver on their promise, with mixed results. While some studies suggest that sustainability standards help poor farmers to improve their production and livelihoods (Jones and Gibbon, 2011; Kleemann et al., 2014; Qiao et al., 2016) other studies suggest that standards keep farmers in a vicious cycle of poor yields, low prices, low investments, and low profits (Beuchelt and Zeller, 2011; Jena et al., 2017; Valkila, 2009). Hence, it remains unclear whether and under what conditions farmers benefit.

Empirical studies focus on farmers certified under different standards, producing different crops in different years and different counties. These differences may explain variations in the estimated effects. Studies also differ in terms of their sampling strategy (e.g., sample size and representativeness) and methodological rigor (e.g., many studies do not account for possible selection bias), which may also contribute to mixed results. In the absence of large, cross-section and cross-country studies, reviews provide a suitable tool to synthesize the current evidence. A number of qualitative reviews have been conducted (Schleifer and Sun, 2020), typically focussing on specific sub-topics such as Fairtrade standards (Dammert and Mohan, 2015), Organic standards (Jouzi et al., 2017; Meemken and Qaim, 2018; Seufert and Ramankutty, 2017), or social effects of sustainability standards (Terstappen et al., 2013). Further, synthesizing quantitative results in a precise and transparent manner can be challenging using narrative methods. Meta-analysis is an alternative, well-established approach to consolidate quantitative results from individual studies, test specified hypotheses, and identify questions that could be tested empirically by future studies (Borenstein, 2009; Cooper, 2009; Israel and Richter, 2011; Pigott, 2012). However, with two exceptions (DeFries et al., 2017; Oya et al., 2018), available quantitative syntheses and meta-analyses focus on Organic farming and standards, typically in higher-income, temperate countries (Crowder and Reganold, 2015; Ponisio et al., 2015; Ponti et al., 2012; Seufert et al., 2012).

The objective of this systematic review and meta-analysis is to synthesize the available evidence on economic effects of sustainability standards on smallholder farmers in developing countries. There are two related quantitative syntheses (DeFries et al., 2017; Oya et al., 2018), which differ in important ways from the focus and approach employed here. Especially DeFries et al. (2017) summarize results in a very aggregated way, differentiating between positive, non-significant, and negative social, economic, and environmental effects. Here, we consider a wide range of more detailed economic outcomes, including prices, yields, production costs, profits, overall household incomes, and poverty levels. This allows us to understand possible pathways through which farm households may be affected. Further, results presented in DeFries et al. (2017) and Oya et al. (2018) are based on a much smaller number of original studies. Many of the original studies included in our dataset were published in recent years, and are thus not included in the aforementioned studies. More importantly, the aforementioned studies employ very strict inclusion criteria, resulting in a small set of original studies included in their analyses. When conducting meta-analyses, it is common practice to exclude studies that do not meet specified criteria, and especially those that are not based on experimental data. This is relevant in the context of certification, as self-selection of better-off farmers into certification is a common concern and difficult to address with observational data. Currently, there is, however, no study that assesses the effect of standards based on experimental data. While some studies try to correct for selection bias using statistical methods, there is no study with a perfect identification strategy. As a result, telling ‘more credible’ studies from ‘less credible’ studies is not straightforward. Instead of employing strict inclusion criteria, we account for differences in the study designs of original studies (e.g., sample size and statistical approach) in our analysis. We carefully discuss common shortcomings of original studies and implications for the interpretation of our results. Given the support for and interest in sustainability standards among consumers, donors, and researchers, we consider it useful to summarize this large and increasing body of literature to derive implications for policy and future research.

Section snippets

Literature search and selection criteria

To identify original studies, we conducted a systematic review with keyword searches in relevant literature databanks (ISI Web of Science, ScienceDirect, EconLit, repec, and AgEcon Search).1

Overview of included studies

Our data set includes 1143 estimates taken from 97 original studies. The complete list of original studies included can be found in the Online Appendix. Original studies capture a wide range of different crops, including traditional export crops such as coffee and cocoa; but also fruits and vegetables, staple foods, and various other products (see Table 3).

In most cases, these products are meant for the export market.4

Discussion

Our results suggest that certified farmers receive about 20–30% higher prices than their non-certified colleagues. Effects of standards on production costs and yields are mixed and vary across standards. On average, certified farmers gain higher profits, leading to an overall increase in household incomes by about 16–22%. These results are largely in line and complement findings from previous, related meta-analyses (DeFries et al., 2017; Oya et al., 2018). Oya et al. (2018), based on a much

Concluding remarks

We have conducted a meta-analysis of the economic effects of sustainability certification on smallholder farmers in developing countries based on 97 original studies. Results suggest that certified farmers receive higher prices, revenues, profits, and overall incomes than their non-certified counterparts. There is, however, substantial variation in effect sizes. Thus, we caution readers and policymakers not to rely on clear-cut conclusions often presented in individual case studies. Exploring

Declaration of competing interest

The author declares no competing interest.

Acknowledgments

This research was financially supported by the German Research Foundation (DFG) through the RTG1666 “GlobalFood” and a DFG-fellowship (ME 5179/1-1). I thank Matin Qaim for helpful comments; and Louisa Sophie Barzen, Johanna Bodewing, Magdalene Trapp, and Yuanwei Xu for their excellent support during the literature search and data entry.

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