1. The Impact of Sustainability Standards on Smallholders
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1 ISEAL s webinar series on standards impacts 1. The Impact of Sustainability Standards on Smallholders 7 th April 2016, 2pm UK Photo UTZ Certified
2 Impact evaluation as applied research: The impact of sustainability standards on smallholders Meet the researchers Yuca Waarts LEI, Wageningen UR Fedes Van Rijn LEI, Wageningen UR Discussant Kristin Komives Director, Impacts ISEAL Alliance
3 What differences do standards make? Impact research and reflections Yuca Waarts, Fédes van Rijn, Giel Ton, 7 April
4 Topics to be discussed Financial cost benefit assessment Benefits of standards Conclusions and recommendations Reflections on methodologies 4
5 Wageningen UR research on standards Scope of research Standard / topic Country Publication year Coffee 4C, UTZ, FT Vietnam, Uganda, Nicaragua Tea RA, UTZ, FT Kenya, Malawi , 2010, 2013 Cocoa UTZ, services Ghana, Ivory Coast 2016, 2013 Cotton BCI India, Pakistan, Mali 2014 Banana FT Ghana, Colombia Dominican Republic Palm Oil RSPO Indonesia 2013 Forthcoming Soy RTRS Brasil, Argentina Forthcoming Avocado Global GAP Kenya Forthcoming Other related research: impact of support to SMEs, land acquisition and development, product-market linkages & value distribution analyses 5
6 Costs and benefits of standards for smallholders UTZ, Rainforest Alliance, Fairtrade, 4C, Organic, Cafe Practices, GlobalG.A.P., Better Cotton Initiative, Cotton made in Africa Global, studies and information from standard setting bodies and implementers 23 studies contain results based on comparisons over time and between project and comparison group Research in In cooperation with Michiel Kuit from Kuit Consultancy 6
7 Number of studies per sector Coffee Cocoa Cotton Fruit & veg Tea UTZ Rainforest Alliance Fairtrade 4C Organic Cafe Practices, GlobalG.A.P. 7
8 Generic theory of change for standards Assumptions, risks and unintended effects Input Output Immediate outcome Intermediate Outcome Ultimate outcome Development impact Time Activities Action Yield increase Improved livelihood Money Materials Participation Products Learning Adoption Decision making Price increase Income increase Poverty alleviation Improved environment Decreasing span of direct influence 8
9 Inputs time, money, materials 9
10 Inputs: limited information unclear ROI Time, money, materials, by all stakeholders involved Extremely limited information publicly available on costs of implementation. Thus Return on Investment (ROI) or cost-benefit analyses not possible Assumption: standards aim to increase yield and quality, which are expected to increase farmer incomes, which would cover certification costs 10
11 Value (Euro/farmer) Financial cost-benefits, cocoa certification Net revenue at minimum cost (103.91) per marketability and 196 Euro/Mt premium Net revenue at maximum cost (254.72) per marketability and 196 Euro/Mt premium Volume per farmer (Mt) Median and average farmer in Ivory Coast produces Mt of cocoa 11
12 Inputs: limited information unclear ROI, how to cover costs without premiums? Standard implementation appears to be only worthwhile from financial perspective for larger and more professional farmers, which relatively high volumes per farmer, as premiums paid based on volume and programme costs related to individual farmers. Declining marketability rates and premiums: direct recovery of certification costs becomes more difficult Do standards increase yield and quality, and by doing so increase farmer incomes? In the next slides we will present research findings on the effect of standards on outputs, outcome and impacts 12
13 Output activities, participation, product 13
14 Output: improved access to training most prevalent compared to uncertified farmers Organisational development Market access Access to inputs Access to credit Access to training 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Access to training Access to credit Access to inputs Market access Organisational development Negative Neutral Positive
15 Outcomes learning and adoption 15
16 Immediate and intermediate outcomes impact on knowledge and adoption Knowledge and behavioural change important to measure because of span of direct influence Adoption Knowledge 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Knowledge Adoption Negative 0 0 Neutral 3 3 Positive
17 Knowledge and behavioural change Source figure: Some evidence of impact, but also many farmers do not adopt, or partly Reasons we know of: age, investment... Uniform service delivery for wide range of farmer types does not facilitate adoption? 17
18 Ultimate outcome yield, price, income 18
19 Ultimate outcomes mainly quality and price increase, also attributed to contracts Productivity Quality Efficiency Production cost Price Income 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Income Price Production cost Efficiency Quality Productivity Negative Neutral Positive Production cost increases offset quality, price and productivity effects 19
20 Development impact 20
21 Impacts few studies measure such impacts, some positive impacts found Environment Child labour Health Social effects 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Social effects Health Child labour Environment Negative Neutral Positive Child labour, health and environmental impacts not easily/uniformly measured21
22 Generic theory of change for standards Assumptions, risks and unintended effects Input Output Immediate outcome Intermediate Outcome Ultimate outcome Development impact Time Activities Action Yield increase Improved livelihood Money Materials Participation Products Learning Adoption Decision making Price increase Income increase Poverty alleviation Improved environment Decreasing span of direct influence 22
23 Benefits of standards: influence sphere The further in the theory of change, the less effects found: the sphere of direct influence decreases - external influencing factors become more important Attribution to poverty alleviation by standards difficult, because of this, but does not mean standards do not contribute Large number of interviews needed to measure impact on income/poverty alleviation. But trend: certificate holder M&E increase data better M&E (!?) Take impact potential into account in theories of change and impact studies (e.g. poverty alleviation) 23
24 Benefits of standards: assumptions What can be achieved in terms of impact? Potential in terms of farm size, adoption potential, yield potential Marketability rate (volume sold as certified) less than 60% (2013) effect on premiums and thus on income effect Premiums are decreasing, costs remain the same, income effects not clear: who covers costs & how Especially if standards become a licence to deliver? 24
25 Cost and benefits Give insight into costs-benefits for certificate holders and farmers Compare costs-benefits between interventions: what is the Return on Investment of different interventions? Optimize interventions towards farmers: targeting them according to farmers needs But this is a challenge! Because farmers are quite different in their characteristics and can be so too in terms of their needs And because this makes the interventions more costly 25
26 Reflections on methodology From does it work to what works for whom under what conditions? Disappearing comparison groups because of mainstreaming Increased training efforts in sectors: other groups also improve knowledge and adoption. Counterfactual design versus counterfactual thinking Causality? focus on the mechanisms of how standards contribute to change: test theory of change More focus on measuring inputs, outputs and outcomes, less on measuring development impact 26
27 Thank you! For more information, please contact us: Yuca Waarts: Fédes van Rijn: 27
28 Links to relevant research outputs BCI, cotton, baseline: RA, tea, evaluation, Kenya: UTZ, tea, evaluation, Malawi: UTZ, tea, evaluation, Kenya: UTZ, cocoa, evaluation, Ghana: UTZ, cocoa, baseline, Ivory Coast: Literature review on costs and benefits of standards, together with Kuit Consultancy 28
29 Coming up next in the ISEAL Webinar Series Exploring the design of social sustainability standards: Compliance or continuous improvement? April 28th 2016, 2-3pm UK time Comparing the breadth and depth of seafood certification programs May 19th 2016, 3-4pm UK time Market standards and ecosystem services: Insights from cost-benefit analyses June 2nd 2016, 2-3pm UK time How to improve the effectiveness of sustainability certification schemes and standards July 7th 2016, 10-11am UK time To find out more visit: Or write to Vidya Rangan )
30 Global Sustainability Standards Conference Washington DC May 2016 Register now by visiting iseal.org/conference Discount rates for academics and students Questions? us at: Bananas Marvin del Cid, Fairtrade Austria
31 ISEAL Training Workshops Sustainability Standards Essentials Geneva Monday 11 th April 2016 Washington DC Monday 9 th May 2016 Credible Sustainability Standards for Business Zurich Wednesday 13 th April 2016 Building the Foundations of a Robust M&E System Washington DC Monday 9 th May 2016 More information: FSC Pine boards Rainforest A
32 Thank You Photo Better Cotton Initiative
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