Walk the Talk: Private Sustainability Standards in the Ugandan Coffee Sector

Abstract

We investigate the welfare and productivity implications of private sustainability standards in the coffee sector in Uganda. We use cross-sectional household survey data and an instrumental variable method with instruments that pass weak identification and over-identification restrictions. We find that triple Utz-Rainforest Alliance-4C certification increases income, and land and labour productivity, and reduces poverty. Double Fairtrade-Organic certification is found to be associated with higher producer prices but results in lower land and labour productivity, and thereby fails to increase producer income and contribute to poverty reduction. We conclude that private sustainability standards do not always live up the expectations they create towards consumers.

Acknowledgements

The authors acknowledge research funding from the KU Leuven research fund under the DBOF scholarship program and the OT program. They thank seminar and conference participants in Leuven, Ithaca, The Hague, Gent and Brussels, for useful comments on earlier versions of the paper. They thank Betty Namazzi for support with coordination of the survey and Stefaan Dondeyne for help with GIS analysis. They thank the enumerators for their intense work in the mountains, as well as the village chiefs and household heads who readily shared their time, knowledge and experience. They thank two anonymous reviewers for valuable comments on the paper.

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1. The World Bank International poverty line of $3.10/day (in 2011 PPP prices) is used; this is equivalent to USH 3473.80 /day in 2014 price levels (World Bank, 2015).

2. DEM was based on void filled Shuttle Radar Topography Mission (SRTM) data at a resolution of one arc-second (United States Geological Survey [USGS], 2015).

3. Failure to control for agro-ecological differences likely would have resulted in an underestimation of the impact of Utz_RA_4C certification and an overestimation of the impact of FT_Org certification.

Additional information

Funding

This work was supported by the KU Leuven DBOF scholarship program [OT program].