The Producer Response to Eco-certification: Evidence from Coffee in the Brazilian Cerrado

• Development Workshop

Date and Location

Tuesday, October 29, 2019, 4:10 PM - 5:30 PM
ARE Library Conference Room, 4101 Social Sciences and Humanities

Abstract

In the last decades, certification programs have proliferated across the world, aiming to differentiate consumer goods based on otherwise unobserved social or environmental features of their production. Although studies on certifications employing price floors suggest they rarely enhance producer incomes once net of their costs, previous research has suggested that standards can more effectively support farmer income through influencing production, e.g., improving processing practices and/or supporting quality upgrades. As one test of the evidence on these claims, this study examines the quality and quantity of coffee supplied from 504 farms to a major Brazilian cooperative from 2008-2016, during which time 75 farms obtained the Rainforest Alliance certification. Employing an identification strategy that exploits variation in cooperative-assessed quality across years for each farm and supported by evidence from over 100 field surveys, we find the once-certified farms exhibit modest gains in quality without demonstrating a quantity tradeoff. We consider the channels through which this result occurs and outline implications for the ongoing merger of two large certification programs.