Aspectos desde el punto de vista económico

Several authors note indirect effects of sustainability standards in producer countries (Kessler et al., 2012). Indirect effects would include more policy dialogue on minimum standards, stimulating better enforcement of national legal frameworks on social and environmental issues (like child labour), and supporting the emergence of local standards (as in tea, soy, aquaculture and palm oil). Spill-over effects of certification are well documented: studies in East-African coffee production for instance find that yield/quality improvements after training soon enter non-certified production, reducing visible net effects of joining a standard scheme in just a few years (Hoebink et al., 2014). Effects at the regional or landscape level are not indicated (Molenaar et al., 2013). In addition, there are indirect effects of VSS in global value chains, such as increased transparency and traceability, enhanced brand and market value, et cetera.

Could current standards and certification make the difference?

The role that sustainable sourcing of commodities can play in addressing poverty in developing countries should not be overestimated. Apart from the evidence of the limited positive effects on the ground described in the previous paragraph, there are a number of reasons why sustainable sourcing – as it is developing up to now – is an important but modest instrument for change, given the challenges at stake.

1. There are important limitations in the way current schemes have been set up and operate: - The poorest producers are often not engaged in the latest generation of certification

schemes. While Fairtrade works more often with poorer farmers (Hoebink et al., 2014), the large majority of certified soy, palm oil, coffee and tea comes either from estates or well-organised producer organisations (Molenaar et al., 2013). Many of these producers are poor, but the very poor or often not part of the schemes. - Certification schemes tend to start with ‘low-hanging fruit’. The supply of

sustainable products is concentrated in regions with more developed production capacity: within developing countries, sustainable production is concentrated in Latin America (IISD & IIED, 2014).19 _{In countries like Vietnam or Ivory Coast, the most}

organised, well-connected and capitalised farmers are more likely to be included than others. Some observers point therefore to the danger that certification leads to the exclusion of the most vulnerable farmers from the market, while others show that new production arrangements such as out-grower schemes can include also smallholder producers in certified supply chains (WUR / IOB, 2014).

- Newer, mainstream-oriented standards tend to apply criteria of reduced depth and breadth to allow for more rapid uptake (IISD & IIED, 2014). Most initiatives contain few criteria related to economic sustainability, reflecting a general belief that economic benefits will follow automatically upon reaching compliance. ILO core labour standards, as well as environmental practices with direct quality and yield outcomes, show the greatest degree of coverage in these mainstream standards.

19 _{When developed countries can supply sustainable markets (as in the forestry sector), they tend to}

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Box 1 Inclusion and exclusion of smallholders in certification schemes

Voluntary standards are not necessarily inclusive. The group of commodity producers is not homogeneous and not all producers can access certification. A KPMG study for IDH on cocoa farmers in West-Africa noted that 90-95% of these farmers are smallholders and relatively poor. They can be classified in four segments. The first, small segment is already certified. The second, small segment is not yet certified, but with little effort they can be certified, mainly because they are already organised in producer organisations or cooperatives. A third, larger segment is more difficult to reach because they are remote and not yet organised. Certification will require larger investment costs. A fourth large segment cannot be reached at all with certification: farmers live too remote and their production is too small to cover the annual costs for certification (KPMG, 2011b).

2. Factors related to economic structures in developing countries reduce potential impact: • The potential impact of certified production on poverty and livelihoods is limited by the simple fact that, often, smallholders do not depend solely on the certified crop. In Kenyan coffee production, for instance, coffee makes up a quarter to a third of the coffee producer’s income (Hoebink et al., 2014). In West-African cocoa production the percentage is larger, around two-thirds of total income (IDS and University of Ghana, 2008).

• A growing part of commodity production in developing countries does not enter Western consumer markets. It is either consumed nationally, or exported to expanding markets such as China and other emerging economies. While

sustainability concerns may increase in such major economies also (see examples in tea in chapter 5), it is unlikely that this will happen soon on a very large scale. • In smallholder production of commodities like cocoa, cotton and coffee, there is

also a deeper structural factor that influences the potential of certified production: the size of the farm of some smallholders is too small to provide a decent income in the longer run (International Trade Centre, 2011a). It would require a structural transformation of the economy to alleviate their poverty: a process by which the smallest farmers leave the primary sector to take up wage- or self-employment in other growing sectors, facilitating the scaling-up and intensification of the remaining smallholder farm production. While this process is ongoing or has already taken place in Latin America and many parts of Asia, this is not (yet) the case in most parts of Africa, where recent growth has largely been fuelled by commodity extraction (and price increase) rather than structural growth in the non-agrarian economy (Timmer & Akkus, 2013).

3. The allocation of costs and benefits across the value chain does, generally, not work to the benefit of primary producers:

• The producer’s share in the end value of many commodities is often remarkably small. A kilogram of made tea leaves Kenya for around EUR 2 (FOB Mombasa, RA Certified or not), while after repacking and distribution it is sold in Dutch

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