Farmers' Acceptance of the Organic Certification System in Germany: A Partial Least Squares Model

The institutional framework of the certification scheme is a crucial factor in the future success of the organic market. Increasing complexity and a couple of scandals indicate that current control structures might be insufficient. A better understanding of farmers' attitudes is necessary to increase acceptance and to guarantee the longer term success of the organic certification system. By means of a conceptual framework based on the technology acceptance model, an investigation was conducted into acceptance of the organic certification system in Germany. The empirical basis of the study was a survey conducted among organic farmers in Germany. Partial least squares was used as a multivariate analysis technique to estimate the parameters of the proposed causal model. The findings indicate that the majority of farmers accept the present organic certification system but are not convinced of its cost-benefit relationship.     

The Influence of Trust and Attitudes on the Purchase Frequency of Organic Produce

Growth in organic food sales is mainly due to consumers becoming more aware of health issues and environmental concerns. Understanding the drivers of organic consumption is crucial to predict future market outcomes. In this analysis, the authors expand previous research by including general and institutional trust variables in addition to consumer attitudes to examine organic food purchases. Food production is unobservable and hence, consumers need to exhibit trust with respect to organic production and certification. A bivariate ordered probit model applied to U.S. survey data confirms that organic purchases are determined by health, nutrition, and taste. In some cases, general trust and trust in media are statistically significant. Trust in institutions that are involved in the organic certification process is not statistically significant. A hierarchical cluster analysis grouping consumers based on trust and attitudes shows that (dis)trust in the organic certification and supply chain does not hinder organic food market growth.     

Consumers’ Appreciation of Regional Certification Labels: A Pan‐European Study

Successful regional products, such as Florida oranges, Idaho potatoes and Parma ham, often have to compete against products passing themselves off as the authentic product using the exact same name. This unfair competition misleads consumers, discourages small‐ and medium‐sized enterprises (SMEs) from marketing products based on their region of origin, and may end up hurting rural economies. To protect consumers, and support SMEs and rural economies, many countries around the world have introduced regulations enabling SMEs to legally protect the names of their regional products. The success of these regulations largely depends on consumers’ appreciation of regional certification labels that inform consumers that the name of the regional product is protected and that it denotes the authentic product. To gain an understanding about consumers’ appreciation of regional certification labels, this paper investigates consumers’ image of these labels and proposes a model that relates this image to consumers’ willingness to buy and pay for protected regional products. The model is tested based on Regulation No. 2081/92 that was introduced by the EEC allowing European SMEs to protect their regional products and market their products with a protected‐designation‐of‐origin (PDO) label. Structural equation modelling results suggest that consumers’ image of regional certification labels consists of a quality warranty dimension and an economic support dimension, which positively relate to consumers’ willingness to buy and pay for the protected regional product. Protecting regional products and marketing them with regional certification labels may be beneficial for SMEs producing and marketing regional products. Policy and managerial implications are discussed.     

Assessing the Income Effects of Group Certification for Smallholder Coffee Farmers: Agent‐based Simulation in Uganda

Voluntary sustainability standards, aimed at improving the environmental, social and economic aspects of agricultural production and trade, are becoming increasingly common. The coffee sector is a prime example, where sustainability certification could improve livelihoods for poor smallholders. However, as individual production volumes are low, smallholder farmers need to cooperate in certification as a group, which makes impact assessment more complicated. Previous empirical studies, reporting premia of up to 30%, have neglected the costs associated with group certification. We explore the issue using an agent‐based simulation of coffee producer organisations in Uganda, including the certification‐related costs for farmers. Our results suggest that certification can have a small positive impact on participating households. But the added value of certification is substantially lower than the price premium, because of certification costs. Increasing both the membership of the producer groups and their deliveries of certified coffee are necessary to improve the rewards of certification.     

The financial benefits of forest certification: Case studies of acacia growers and a furniture company in Central Vietnam

The demand for forest products is growing and plantation forests are supplying an increasing proportion of wood to industry. There are also increasing market requirements to demonstrate the sustainability of timber supply. Vietnam has some 3.9 M ha of plantation forests, 44% of which is on short-rotations managed by smallholders. More than 80 percent of the harvested volume from the plantation forests is used for woodchip production to serve domestic and international markets. The Vietnam Government has goals to increase the domestic supply of suitable wood for furniture production to international markets by increasing the supply of larger logs grown in plantations and the supply of certified wood to industry. However, it is not clear that these objectives will necessarily benefit growers and processors. This study compared financial returns from certified and non-certified forest products for: (1) growers with 10-year rotation acacia plantations; and (2) a furniture processing business (battens for chair and table) in Quang Tri Province, Central Vietnam. The data were collected from smallholder tree growers and a sawmilling company, triangulated with and supplemented by formal and informal interviews with other stakeholders. Currently, much of the cost of certification is met by external aid donors. Results showed that net returns from both certified and non-certified timber products are positive for both actors and are higher from certified timber production than non-certified timber production. When the full costs of certification are included, the benefits to growers of certification are much reduced and potentially negative unless the fixed costs can be spread over a large group of growers. A minimum of group with 3000 ha may be required to make certification cost effective. In recent years, the price difference between the certified and non-certified logs is narrowing and this may discourage farmers from attaining certification. For the sawmiller, the benefit of certified timber production is greater. It would be in their interests to increase prices paid to growers for certified logs. Government policy measures to support certification should include consideration of who bears the cost, support for aggregation of smallholder growers and improved communication in timber supply chains.     

Feasibility of risk‐based inspections in organic farming: results from a probabilistic model

A risk‐based inspection system might improve the efficiency of the organic farming certification system and ultimately provide a basis for increased competitiveness of this sector. This requires the definition of an effective inspection procedure that allows statistical evaluation of critical risk factors for noncompliance. In this article, we present a study based on data from selected control bodies in five European countries that is aimed at determining the feasibility of risk‐based inspections in the organic sector according to the data that are currently routinely recorded. Bayesian networks are used for identification of the factors that can affect the risk of noncompliance. The results show that previous/concurrent noncompliant behavior explains most of the risk, and that the risk increases with farm size and the complexity of their operations. The data currently recorded by control bodies appear to be insufficient to establish an effective risk‐based approach to these inspections.     

The impact of coffee certification on small‐scale producers’ livelihoods: a case study from the Jimma Zone,Ethiopia

What is the impact of product certification on small‐scale farmers’ livelihoods? To what extent does the participation of Ethiopian small‐scale coffee farmers in certified local cooperative structures improve their socioeconomic situation? To answer these questions, this article employs household data of 249 coffee farmers from six different cooperatives collected in the Jimma zone of Southwestern Ethiopia in 2009. Findings show that the certification of coffee cooperatives has in total a low impact on small‐scale coffee producers’ livelihoods mainly due to (1) low productivity, (2) insignificant price premium, and (3) poor access to credit and information from the cooperative. Differences in production and organizational capacities between the local cooperatives are mirrored in the extent of the certification benefits for the smallholders. “Good” cooperatives have reaped the benefits of certification, whereas “bad” ones did not fare well. In this regard the “cooperative effect” overlies the “certification effect.”     

An institutional and policy framework to foster integrated rice–duck farming in Asian developing countries

Asia has accounted for the vast majority of the world's rice and meat-duck production. In the integrated rice–duck farming (IRDF) system, ducklings are released into rice paddies in order to maximize the use of renewable resources in a closed-cycle flow of nutrients during rice vegetation periods. Rice–duck farming used to be widely adopted in tropical and subtropical eastern Asian countries, but has remained unpopular in the wake of prevailing agricultural productivism characterized by specialization, intensification, mechanization and excessive dependence on agrochemicals. This paper sets out institutional pathways that can redevelop IRDF in Asia. These include organic food certification systems, organic farmers' cooperatives, community-wide organic farming, localized technical extension and educational services, and between-farm rice–duck integration. A comprehensive package of these institutional tools would further expedite the expansion of IRDF particularly in low-income Southeast Asia where the rice or duck farming landscape is overwhelmingly dominated by smallholders.     

Decent rural employment and farm production efficiency: empirical evidence from Tanzania and Ethiopia

Promoting decent rural employment, by creating new jobs in rural areas and upgrading the existing ones, could be one of the most efficient pathways to reduce rural poverty. This article systematically investigates the impact of decent rural employment on agricultural production efficiency in Ethiopia and Tanzania. The analysis applies an output‐oriented distance function approach with an estimation procedure that accounts for different technological, demographic, socioeconomic, institutional, and decent rural employment indicators. Data of the 2011 round of Living Standards Measurement Study‐Integrated Surveys on Agriculture for the two countries are used, and a set of indicators is derived to proxy core dimensions of decent rural employment. The findings of our analysis show that decent rural employment contributes to agricultural production efficiency.     

Determinants of Adoption of Protected Designation of Origin Label: Evidence from the French Brie Cheese Industry

This paper investigates empirically the determinants of agro‐food firms’ adoption of the Protected Designation of Origin (PDO) label. A unique dataset containing firm‐level cost and production information on the French Brie cheese is used, covering the period 1980–2000. The Brie cheese data are especially relevant as PDO Brie producers have coexisted with other non‐PDO producers since 1981. To evaluate the producers’ incentive to opt for PDO certification, we use a structural switching regression model which incorporates cost and production structure variables. Results show that PDO certification is less attractive the higher the costs of raw materials and the greater the size of the company. PDO Brie cheese production costs are estimated to be on average 40% higher than those for non‐PDO Brie. The PDO production process could be technically inefficient when compared with the unconstrained non‐PDO manufacturing; yet, PDO producers benefit from a price premium on their product which offsets their higher production cost.     

Production Risk and Technical Efficiency in Organic and Conventional Agriculture – The Case of Arable Farms in Germany

This paper quantifies the importance of production risk and technical efficiency as two possible sources of production variability in German organic and conventional farming. Determinants of production risk and inefficiency are investigated based on a combination of Just and Pope’s stochastic production framework and a Stochastic Frontier Analysis. The empirical analysis is conducted using a balanced panel of farm records from 1999/2000 to 2006/2007 on 37 organic and conventional arable farms, respectively. Euclidian‐Distance‐Matching is used to identify for each organic farm a conventional counterpart with similar structural features. Results indicate that output variability in both production technologies is mainly caused by production risk. Land and labour are identified as risk‐increasing inputs in both farm types whereas higher capital endowment, seed costs and soil quality have risk‐reducing effects.     

Do Differences in the Scale of Irrigation Projects Generate Different Impacts on Poverty and Production?

This article investigates differences in household production and consumption among small‐ and large‐scale irrigators to assess whether the scale of an irrigation project increases household welfare in Mali. Much of the evidence of the impact of irrigation does not use counterfactual analysis to estimate such impact or distinguish between the scale of the irrigation projects to be evaluated. In the dataset collected by the author, both a large‐scale irrigation project and small‐scale projects are used to construct counterfactual groups. Propensity score matching is used to estimate the average treatment effect on the treated for small and large irrigators relative to non‐irrigators on agricultural production, agricultural income and consumption per capita. Small‐scale irrigation has a larger effect on agricultural production and agricultural income than large‐scale irrigation, but large‐scale irrigation has a larger effect on consumption per capita. This suggests that market integration and non‐farm externalities are important in realising gains in agricultural surplus from irrigation.     

Agricultural Policy in the 21st Century: Economics and Politics

This paper provides a framework for thinking about agricultural policy, why and how it is introduced, and how it changes over time. This framework suggests that agricultural policy will be influenced by both concerns for efficiency and lobbying. While agricultural policy will not always be effective, it will be relatively stable, at least in terms of its broad outlines. Underlying this broad stability, however, will be considerable small‐scale change as program and policy details shift in response to a changing environment. When policy changes in a major way, which it almost always will, the shift will be abrupt—a punctuation. These abrupt changes come as attention is eventually paid to areas and/or issues that are increasingly understood to be not working. While there is considerable room for economic analysis in the policy process, it will not be the main driver; this role belongs to politics—the ability to change the discourse around a policy issue in such a way that different evaluations and interpretations of the policy and its impact are created. Based on the analysis in this paper, it is argued that supply management is more likely to see significant change than business risk management programs, since more attention seems to be currently directed at the former issue. It is also argued that although proponents of local food, organic production, and urban agriculture have had some success at getting attention focused on these issues, this success will not translate into any major policy changes, in part because markets for these products are developing and appear to be working reasonably well.     

The Effects of Transaction Costs,Power and Risk on Contractual Arrangements: A Conceptual Framework for Quantitative Analysis

Increased reliance on commercial traders in liberalised agricultural markets poses questions about the nature of contractual relations between traders and farmers; about welfare, efficiency and equity characteristics of these relations; and about conditions necessary for traders to engage in these markets. A new institutional economics analysis seeks to understand the institutions that affect transaction costs and risks for each party, and power relations between them. Transaction cost analysis has not, however, developed a unifying conceptual or quantitative framework to integrate these issues. This paper develops a methodology for modelling negotiated choice of contractual arrangements in buyer/seller relationships, taking account of the socioeconomic characteristics of each party, economic and technical characteristics of the commodity, and the institutional environment. The model is setup as a non‐linear programming problem. The approach provides a framework for the application of transaction cost economics to quantitative empirical study of markets, to individual firms' supply chain decisions, and to the analysis of policy interventions in markets.     

The interface between land use systems research and policy: Multiple arrangements and leverages

In recent years, interest in the policy-informing role of research organisations has grown considerably. It has been argued from within the science domain that the management of land, whether at the field, farm or regional scale, can benefit from computer-based systems analysis. This proposition was examined through 26 semi-structured interviews, by conducting a workshop on modelling support in policy decision-making and investigating 11 European-based cases of policy-oriented modelling research. On basis of these materials, we assess approaches towards policy-oriented modelling within the domain of agricultural production and other environmental services of land. First, we define the boundary arrangements for our field of interest, i.e. computer-based systems analysis of agricultural production and ecosystems services. Such ideotypical classification of boundary arrangements makes explicit the institutional space in which system scientists function. This space enables certain activities, and at the same time constrains other initiatives, dependent on who is perceived to initiate and/or control research activities and to formulate objectives, and whether it is considered appropriate to integrate scientific knowledge development with policy work. Five ideotypical boundary arrangements are proposed: ‘Civil mandate’; ‘Trickle out’; ‘Janus face’; ‘Critical participant’; and ‘Knowledge broker’. In a second step, a number of critical leverage points are identified based on the 11 cases and these are addressed in relation to the five boundary arrangements. The term ‘leverage point’ covers means, conditions and methods that foster use of modelling work that can be changed, and thus may be part of a strategy to increase the chances that a model is used. The leverage points were: reputation of research institute and/or scientists; raising and balancing expectations; communication about and investment in the scientific basis of the modelling work; participation in model development; heterogeneous and extensive social network in policy domain; institute mandate that secures availability of ‘stepping stones’. We conceive of two applications of our research for modellers who are interested in the use of their work in the policy sphere. First, the boundary arrangement classification helps to interpret the experiences of others and to assess the relevance of lessons and suggestions for their own context. Secondly, the combination of the boundary arrangement perspective and critical leverage points presents a basis to design an institutional pathway for enhancing impact of modelling research in the policy sphere. For those researchers functioning in a science-domain-oriented environment, the analysis in this paper suggests that there are more options than the frequently proposed ‘more participation’ for increasing the likelihood that their policy-oriented work is used. These include establishing contacts with research groups or institutes that are in a position to function as ‘stepping stones’, or engaging with others to develop a social network in the policy sphere.     

The potential impact of markets for irrigation water in Italy and Spain: a comparison of two study areas*

The viability of irrigated systems in Southern Europe is closely linked to efficient institutional settings and water‐allocation mechanisms. A significant, although not widely used, mechanism for water allocation is an intra‐sectorial water market. The objective of this paper is to evaluate to what extent water markets may contribute to the improvement of the efficiency of water allocation and to the profitability of irrigated agriculture. The related issues of water allocation among farm types and farm specialisation are also addressed. The analysis is based on a basin‐level linear programming model, comparing the situation with and without a market. It includes both fixed and variable transaction costs and estimates their combined effects on market performances. The model is applied in two areas in Southern Italy and Spain, and simulates the behaviour of different farm types, derived from cluster analysis on a sample of farms in each area. The paper confirms that water markets could potentially improve the economic efficiency of water use, in terms of higher profit per hectare, given limited water availability. The potential improvements are associated with a more intense specialisation of farms and are strongly differentiated among farmers, particularly where significant restrictions to water availability occur. This corroborates the expectations of institutional difficulties in implementing water markets. However, the exchanges, and consequently the potential effects of water markets, are heavily affected by the actual level of water availability, as well as the size and the structure (fixed vs. proportional) of transaction costs. The paper calls for a more in‐depth analysis of the connections between market performances and institutional settings, as related to the issue of water‐agriculture policy design and coordination.     

Land outsourcing and labour contracting: Labour management in China's capitalist farms

Difficulty in labour supervision has been considered to be one of the obstacles to the development of capitalist agriculture. This paper presents two distinctive labour management strategies in China's large‐scale agriculture, which contribute to the development of agrarian capitalism in China. As shown in these cases, agribusiness companies engaged in grain crop production retreat from direct labour management by outsourcing crop cultivation, while acquiring profits from upstream and downstream activities. On the other hand, capitalist producers, who are involved in the labour‐intensive and capital‐intensive crop production, tend to mobilize local elites to manage the farmworkers. Although independent labour contracting services have not emerged, a specialized group of labour contractors is being cultivated. Rural social resources are utilized in labour recruitment and supervision to minimize the labour management costs in both strategies. However, the conflicts between capital and labour are covered or replaced instead of being settled.     

Marketing Opportunities for Certified Pork Chops

U.S. consumers are increasingly concerned about food safety, environmental degradation, and animal welfare at the live animal production stage. In response, meat suppliers are developing food credence certification to secure market access, increase margins, and increase overall demand. The objective of this paper is to characterize the demand and the market potential of a credence certification program for pork in the United States. Information regarding consumer willingness to pay for the conventional and certified products is derived from a latent class random utility model. The willingness to pay estimates are subsequently compared to the costs of implementing the programs at the producer, packing, and retailing stages. One of the findings in this study is that a significant segment of consumers would purchase certified pork at the anticipated marginal cost of certification. Therefore, future studies should consequently focus on the welfare economic implications on consumers and meat suppliers from incomplete adoption of voluntary certification programs on the part of both producers and consumers. Aux États‐Unis, les consommateurs se préoccupent de plus en plus de la sécurité alimentaire, de la dégradation de l'environnement et du bien‐être des animaux au stade de la production. En réponse à ces inquiétudes, les fournisseurs de viande travaillent à l'élaboration de programmes de certification des aliments pour garantir l'accès au marché, accroître les marges ainsi que la demande globale. Le présent article vise à caractériser la demande et le potentiel de marché d'un programme de certification du porc aux États‐Unis. L'information concernant la volonté de payer du consommateur pour des produits classiques et des produits certifiés a été tirée d'un modèle d'utilité aléatoire à structure latente. Les estimations de la volonté de payer ont ensuite été comparées aux coûts de mise en place des programmes aux stades de la production, de l'abattage et de la vente au détail. L'un des résultats de l'étude a montré qu'un nombre important de consommateurs achèterait du porc certifié au coût marginal prévu de la certification. Des études ultérieures devraient donc se pencher sur les répercussions économiques de l'adoption incomplète des programmes de certification volontaires de la part des producteurs et des consommateurs sur le bien‐être des consommateurs et des fournisseurs de viande.     

Effective dimensionality and factors affecting crop-livestock integration in West African savannas: a combination of principal component analysis and Tobit approaches

Crop‐livestock integration (CLI) to improve natural resource management for increased productivity is evolving in Nigeria and West Africa. Processes in the evolution and factors that influence it still need to be well understood. This article proposes and tests a new framework for measuring the multiple dimensionality of CLI. The framework derives a CLI index using the principal components of its most common single measures; it develops geographic information systems (GIS)‐based village‐level ecological and market factors; and it estimates parameters of factors affecting CLI using the derived index as the dependent variable in a Tobit model. The framework is tested using empirical data from 634 farm households in 11 geo‐referenced villages in the Sudan savanna (SS) and northern Guinea savanna (NGS), Nigeria. Along a north–south (SS to NGS) axis, CLI initially increases, peaking around 11.2°N, and then declines. This latitude probably identifies the boundary below which disease challenge constrains traditional livestock production and CLI. This polynomial pattern of CLI is contrary to an expected linear increase along lines of perceived potentials for rain‐fed crop production. Household resources, GIS‐derived village‐level market factors, and institutional factors also significantly affect CLI. Ecological and institutional factors have most impact on the probability of adoption and use intensities of CLI. The incorporation of GIS‐derived market factors with household and institutional variables in an econometric model offers new opportunities for assessing patterns of evolution of CLI, comparing results across sites, and targeting recommendation domains objectively. A comparison with results from more common methods of running independent models for individual indicators of CLI shows that this new framework is an effective way of reducing the multiple dimensionality of CLI to gain quicker, well‐focused knowledge of the processes of agricultural intensification.     

Values and Markets: an Analysis of Organic Farming Initiatives in Andalusia

This article sets out the overlapping political and cultural roots of an innovative farming co‐operative in Andalusia, one composed of both ex‐labourers and small farmers. One strand of values involves the realization of a food chain in which no capitalist enterprise can extract profit from their labours: this, together with various conceptions of personal and local autonomy, shapes much of their practice of organic farming. Nevertheless, their labour has to generate an acceptable livelihood through selling food in an environment dominated by large‐scale commercial agriculture in both the ‘conventional’ and ‘organic’ sectors. The article explains how they achieve this by building ties with consumers around a variety of shared values. This focus on the particularities of a radical food movement sheds light on many larger issues, both the nature of markets and competition in the dominant economy, and the debates about organic certification and ‘conventionalization’.