Organic Agriculture and Fair Trade: A Happy Marriage? A Case Study of Certified Smallholder Black Pepper Farmers in India
Highlights
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- We compare conventional, organic and joint organic and fair trade farmers.
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- We assess the added benefit of fair trade for organic farmers.
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- Counterfactual analysis confirms the advantage of fair trade adoption.
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- The main benefit of a fair trade adoption is asset growth for organic farmers.
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- Panel data are necessary to capture the full impact of fair trade adoption.
Summary
This
study examines whether the joint adoption of organic and fair trade
systems adds additional benefits to smallholders in developing
countries. We use panel data collected from 300 smallholder rural black
pepper growers in Kerala, India to assess household welfare impacts. We
apply a multinomial endogenous switching regression model along with a
counterfactual analysis to estimate certification effects. Results show
that both certification systems have a significant impact on income
compared to conventional black pepper farming. However, membership in
fair trade marketing systems does not increase income of organic
farmers, but has positive effects on asset accumulation of smallholder
farmers.
Key words
- organic;
- fair trade;
- impact evaluation;
- multinomial switching regression;
- India;
- Asia
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