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Certification: Facts, challenges, and the future
CHAPTER 6
Certification: Facts, challenges, and the future Roberta Souza Piãoa, Lyon Saluchi da Fonsecaa, Éder de Carvalho Januáriob, Maria Sylvia Macchione Saesb a Department of Production Engineering, University of São Paulo, São Paulo, Brazil Department of Business, University of São Paulo, São Paulo, Brazil
b
6.1 Voluntary sustainability standards: Origin In the last two decades, there has been an increase of certifications and standards created by the consumer countries, the so-called voluntary sustainability standards (VSS) (Grabs et al., 2016). One of the reasons for the existence of certifications and standards is due to the variety of producer countries and different producer profiles. In this sense, it becomes complicated to access all relevant product information. In addition, standards also arise to preserve the environment, improve the conditions of workers in the agricultural sector, and promote the consumption of healthy foods. Coffee was one of the first and the most important markets to receive environmental certification (Potts et al., 2014). According to coffee industry associations,“Sustainable Coffee Program” (2016), the share of certified coffee or in accordance with some standard in total production increased from 15% to 40% from 2008 to 2015, respectively, whereas conventional coffee production increased 4% per year, and certified or standardized coffee grew 26% per year. From a producer’s perspective, some authors argue that VSS could be an opportunity for small and medium farmers to differentiate their products and capture more value (Borrella et al., 2015; Fitter and Kaplinksy, 2001), whereas others argue that, in the upper levels of the value chain, coffee prices tend to increase faster than the commodity prices received downstream. This is what is called the “coffee paradox” (Daviron and Ponte, 2005). On the other hand, for the smaller producer, the requirements regarding sustainability certificates are constantly increasing, and it is expensive to adopt and maintain certification.The costs refer to changes on the farm to comply with the requirements; also, payments to certification bodies for annual monitoring of property improvements are high (Henson and Humphrey, 2009; Coffee Consumption and Industry Strategies in Brazil https://doi.org/10.1016/B978-0-12-814721-4.00005-6
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Raynaud et al., 2005). Besides the cost of the certification, coffee producers need to address requirements from different standards. Each market requires a different standard/certification, which means that producers have to adopt multiple certificates to sell in more than one market. For example, the Netherlands consumes around 30% of all UTZ-certified coffee. Europe imports 55% of Rainforest Alliance-certified coffee, whereas the United States, Germany, and Switzerland are the main consumer markets for certified Organic coffee (Pierrot et al., 2010). Bitzer et al. (2013) argue that producers have risks for addressing VSS requirements, and financial support and a long-term buyer relationship is essential to enable investments. Besides, the results about the impacts of the VSS adoption on productivity are controversial. Some authors such as Everage and Ingersoll (2013), argue that VSS implementation could improve yields and technical efficiency. However, the Committee on Sustainability Assessment (Giovannucci et al., 2008) using a multicriteria analysis approach find that more than 60% of respondents reported decreased coffee yields as a result of participation in a recognized sustainability system. In the most important coffee markets like the European Union, the United States, and Japan, the demand for conventional coffee is stagnant, yet demand for certified coffee is increasing. It is worth noting that there are few statistics on this market, although all studies point to its significant growtha (Giovannucci and Koekoek, 2003; Giovannucci et al., 2012). Coffee is cultivated in more than 80 countries in Central and South America, Africa, and Asia, and provides livelihoods for 20–25 million farming families, because smallholders produce most of the world’s coffee, around 70% of the total (Panhuysen and Pierrot, 2014). However, the total land dedicated to coffee production covers a relatively small area of agricultural land, around 10.5 million ha. Four countries dominate global coffee production: Brazil (35%), Vietnam (15%), Indonesia (9%), and Colombia (7%). In 2016, Brazil produced 51.37 million bags of 60 kg of coffee. Arabic coffee production was 43.38 million bags, and Conilon coffee production was 7.98 million bags.The planted area of the two varieties is 2,223,464.1 ha, and the estimated productivity is 26.33 sc/ha. From January to December 2016, coffee represented US $5.47 billion, ranking fifth in position among the most exported products by Brazilian agribusiness (Companhia Nacional de Abastecimento—CONAB, 2016). a
See https://hivos.org/sites/default/files/coffee_barometer_2014_report_1.pdf
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6.2 Standards and certificates for coffee To ensure that coffee production actually follows sustainable criteria, the industry in line with government organizations have created several certificates that guarantee compliance with certain sustainability standards (Kolk, 2012). These certificates began to be launched in the 1980s in response to concerns about the implications of increasing agricultural production for the environment and for society (Taylor, 2005). In general, certificates require the producer to have minimum working conditions that do not suffer any kind of discrimination, respect the local minimum wage law for all involved in production, and not to employ children under 15 years or less than the minimum age as defined by local legislation (Dammert and Mohan, 2015). The four major coffee certificates that include independent monitoring and certification are: Fair trade, Organic, Rainforest Alliance (RA), and UTZ (Kolk, 2013). In some producing countries such as Brazil, Vietnam, and Colombia, the 4C standard of conduct is also of great importance due to the large volume of production that address this code. Each of these certificates, although similar to each other, has different approaches (Kolk, 2012). Overall, Fair trade aims to support small farmers; the Rainforest Alliance (RA) and Organic focus on protecting ecosystems and biodiversity; whereas UTZ aims to integrate sustainability with market criteria. In 2017, the merger of Rainforest Alliance and UTZ was announced until the end of the year. The new organization will be named Rainforest Alliance according to UTZ Organization website. It was also stated that the merger would make it easier for companies to achieve sustainability certification. 4C is pointed out by experts as the gateway to other certificates. It is noteworthy that the four certificates comprise producer, environment, and market, and what will differentiate them is the importance they give to each of these criteria. Next are details of a little more of each of these certificates. According to the Association’s website, “The 4C Standard was designed in order to improve the economic viability (productivity, efficiency and market access) for coffee producers, the working and living conditions of their families and workers, the protection of primary forest and the conservation of natural resources such as water, soil, biodiversity and energy.” Launched in 2003 through a multistakeholder international public-private initiative, the 4C Association is already responsible for more than 42% of the world’s sustainable coffee production and 22% of total coffee production, with a production growth rate of about 90% per year (Potts et al., 2014).
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According to the organization’s website, “The 4C association, through the Collaboration Platform, organizes periodic forums and workshops, in which participants can acquire knowledge, establish new contacts and create synergies to jointly address the sustainability issues that affect the coffee sector.” Potts et al. (2014) draws attention to the fact that a certification, by definition (ISO, 2005), is a statement of third parties related to products, processes, systems, or people. As the 4C association performs its own audits, it would not necessarily be a certification but rather a verification, which is confirmation by providing objective evidence, that the specified requirements have been met. In 2017, Coffee Assurance Services (CAS) was created, which is responsible for the 4C standard verification system. CAS is a provider of integrity control services in the coffee industry for 4C Code of Conduct Verification as well as supervision, integrity, and monitoring coffee progress. This organization is responsible for: (1) providing training to local 4C testers; (2) issuing 4C licenses; and (3) assessing the level of compliance of 4C Units with respect to the 4C Code of Conduct. Organic: The organic certificate is intended to avoid harmful practices to the environment. It prohibits the use of agrochemicals and deforestation, and requires measures of soil erosion control (Blackman and Naranjo, 2012). According to Potts (2007), the certified organic coffee market has doubled every 5 or 6 years. However, only about 3% of the world coffee production meets the requirements of this certification. According to the website of the certificate: “Organic certification can be done by local, international agencies or by partnerships between them. It can also be carried out by groups of small producers, since there are internal control mechanisms that follow the standards of organic agriculture. In such cases, it is common the commercialization through farmers’ and producers’ market and there is no export concern.” An advantage to the farmer who produces in this pattern is that a much higher percentage of production, about 54%, is sold as sustainable. This percentage for other coffees ranges from 25% to 35% (Potts et al., 2014; Bacon, 2005). Fair trade: Fair trade began to appear in the late 1980s, when the Dutch Foundation Max Havelaar launched the first Fair Trade coffee label (Dammert and Mohan, 2015). About 10 years later, this organization, in line with another 17 that also proposed fairer trade, joined together to create the Fair Trade Labeling Organizations International (FLO), which aims to
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“contribute to sustainable development, provide better commercial conditions and guarantee the rights of marginalized producers and workers.” This certification focuses on social aspects, specifically support to producers’ organizations, to offer price premiums aimed at local development. The certification also supports the strength of labor rights and long-run market relations (Valkila, 2014). Rainforest Alliance: This certificate aims to integrate biodiversity conservation, community development, workers’ rights, and productive farming practices to ensure comprehensive management of sustainable exploitation (SCAA Sustainability Council, 2010). According to Pinto et al. (2014), this certificate was initially deployed to large producers in 2008, but over time it began certifying small farmers who were organized into associations and cooperatives. According to the Imaflora Report of 2014, Europe is the largest importing region of Rainforest coffee in Brazil. About 87% of the Rainforest coffee exported goes to Europe followed by North America (48%) and the United Kingdom (33%). As for the origin, the Cerrado Mineiro is the largest region producing Rainforest coffee. UTZ: UTZ Certification is an international certification program that establishes standards to guarantee agricultural production and responsible delivery of coffee, cocoa, and tea. According to Kolk (2012), the advantage of this certificate for the producer is that the improvement of the quality of production and processing causes greater value added to the product to revert to a premium price, that is, a higher price for a better product, following the supply-demand logic of the conventional market. This type of approach is different from the Fair trade certificate, for example, which has the premium price as a certificate requirement. Kolk (2012) still draws attention to the fact that it is very difficult to compare the effects of these certifications to define “which is better.” According to the author, the few studies that tried to compare more than one pattern tended to find positive and distinct effects in each of them, indicating that they could possibly complement each other. An example is the study of van Rijsbergen et al. (2016) conducted in Kenya between 2009 and 2013, which aimed to compare Fair trade and UTZ certifications. The result was that both certifications improved the profitability of coffee production, with Fair trade having a greater impact on quantity produced, and UTZ on improving productivity (reduction of planting area) and quality. The author suggests that this may indicate a certification lifecycle, which initially goes from increased production and increased value
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capture with Fair trade, followed later by a certificate that requires higher productivity and quality, which in this case would be UTZ. Another study aimed at comparing certificates is by Chiputwa et al. (2015). In the survey conducted in Uganda in 2012 comparing Fair trade, Organic, and UTZ certificates, the authors observed that there was no significant correlation between improved quality of life among Organic-certified producers and UTZ. Fair trade-certified producers had 30% higher per capita consumption and were likely to be 50% less poor compared to noncertified producers. Although the Rainforest and UTZ certificates are dealt with separately in this chapter, the merger of the two certificates was announced in June 2017. According to information obtained so far, the merger will not cause changes in procedures and standards for the producer certified by the Rainforest system and UTZ by the end of the year 2018. A summary of the main certifications is in Table 6.1.
6.3 Application in Brazil: Coffee producers in Brazil Coffee is among the most traded agricultural products in the world. Its annual retail sales grew from US $45 billion (Alvarez et al., 2010) in 2007 to US $173.4 billion in 2014 (ICO, 2014), which makes it one of the leading segments in the global food and beverage industry (Carvalho et al., 2016). The fact that its production is mostly concentrated in countries located in tropical regions of the southern hemisphere and consumed mainly in the temperate regions of the northern hemisphere makes coffee a very important product in international trade (Carvalho et al., 2016). This trade is considered important because it brings resources from more developed countries to developing countries (ICO, 2014). According to Giovannucci and Ponte (2005), more than 6 million families live according to this culture. These families account for more than 70% of the world’s coffee production (Bravo-Monroy et al., 2016). In Brazil, coffee is one of the main agricultural products marketed (Santos et al., 2009; Costa et al., 2013; Rodrigues et al., 2011). According to the report “2015-2024 Agricultural Outlook launched in July 2015” by FAO and OCDE, the country is the leading coffee supplier in the world. According to data from the Brazilian Coffee Industry Association (ABIC), coffee production in Brazil in 2015 corresponded to about 32% of total world production. In addition, according to ABIC, Brazil is also the world’s largest consumer of coffee (in kg of coffee), with an annual consumption of about 1200 million kg.
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Table 6.1 Certifications for coffee Certification/ Standards
4C Common Code
BSCA
Caccer—Café do Cerrado CACCER— Conselho das Associações dos Cafeicultores do Cerrado
Fair trade
Origin
Scope of the program
To start in 2003 as publicprivate partnership project by the coffee industry and the German development cooperation to initiate a multistakeholder dialog for defining a mainstream code of conduct for sustainability. The Brazil Specialty Coffee Association aims to bring together producers of specialty coffee, spreading this production and stimulate constant technical improvements and greater efficiency in services related to the marketing of these coffees. To certify the origin and the quality of coffee produced in a region called Cerrado Mineiro located in the Northwest of Minas Gerais State, Brazil, under a social, economic, and environmentally sustainable model. It is the first region in Brazil with Protected Geographical Indication systema for coffee. To start in the Netherlands in the 1970s.
Exclude worst practices and continuously increase the sustainability of coffee production and processing in the economic, social, and environmental dimension. Certifies that coffee was analyzed by independent cup tasters and the production process does not harm the environment or workers’ rights. The certification is based on a code of conduct, which includes aspects such as Good Agricultural Practices, Social and Environment Responsibility, supported by traceability mechanism.
Economic and environmental sustainability for farmers and their communities. Minimum price and social premium to cover costs of production and community-elected development programs. Organic premium for organic coffees. Continued
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Table 6.1 Certifications for coffee—cont’d Certification/ Standards
GlobalGap
Organic
Rainforest
UTZ
a
Origin
Scope of the program
The EurepGAP was created in 1997 by a group of British and Dutch retailers called Eurep (Euro-Retailer Produce Working Group). The group is composed of agricultural producers, inputs, and services industries. The standard was developed using the guide: Hazard Analysis and Critical Control Points (HACCP) guidelines published by the United Nations Food and Agriculture Organization. In September 2007, EurepGap changed to GlobalGap. The First Certification was formulated in England, India, and the United States in 1967. Begun in 1992 by Rainforest Alliance and a coalition of Latin America NGO’s, the Sustainable Agriculture Network (SAN). First coffee farm certification in 1996.
EurepGAP “is a set of normative documents suitable to be accredited to internationally recognised certification criteria such as ISO GUIDE 65 and internationally recognised.” The objective is “to reduce the risks in the agricultural production.”
It is started in 1997 as an initiative from industry and producers in Guatemala; Utz Kapeh became an independent NGO in 2000. In 2008, Utz Kapeh changed its name to Utz Certified— Good Inside
Organic farming and processing practices. Sustainable farm management in most holistic sense—social, environmental, economic and, ethical improvements are the cornerstones of the program. Sustainability: economic performance through productivity and farm professionalism; environmental standards to preserve flora fauna shade, buffer zones; Worker Health and Safety.
Protected Geographical Indication links product quality to their geographic origin, and the quality is certified by a public organization. In other words, the “credibility of a quality label relies on government enforcement” (Raynaud et al., 2005, p. 48). (Souza, R.C., Presoto, A., Saes, M.S.M., Lemeilleur, S., The adoption of sustainable certificates by Brazilian coffee producers. In: 9th Research Workshop on Institutions and Organizations–RWIO, 13–14 October, Center for Organization Studies–CORS, São Carlos, São Paulo, 2014.)
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Brazil also appears as a protagonist in the world production of sustainable coffee. According to Potts (2007), the coffee certification movement presents a market-based solution to the problems created by trade liberalization, through the fixing of minimum prices and payment of premium prices to reduce business volatility, reaching new markets and encouraging an ecologically sustainable production. Wal-Mart, one of the world’s largest retailers, buys all six of its own sustainable coffee brands directly from Brazilian producers (Elder et al., 2014). In addition, it is important to note that the average annual growth rate of sales of sustainable coffee has been significantly higher than the annual growth in conventional coffee sales (Potts and Sanctuary, 2010). Based on Elder et al. (2014) there is an evolution of sales of sustainable coffee. According to Elder et al. (2014), the sales of sustainable coffee increased almost 400% from 2004 to 2009. However, according to Veiga et al. (2016), there are indications that the production of sustainable coffee in Brazil is already greater than the demand. One of the consequences is that the premium price paid to certified coffee producers is decreasing. In 2014, empirical research was conducted by academics from the Center for Organization Studies (CORS) research group about the perception of Brazilian coffee producers regarding the adoption of VSS. There were 250 face-to-face interviews with Brazilian coffee producers undertaken. One of the elements analyzed in the research was the type of investment made by producers to meet the requirements of sustainable certifications. The results point out that the investments that stand out are those related to improvements with social and environmental focus, such as biodigestor equipment and the construction of dormitory housing for the workers. From the point of view of the benefits of adopting certification, the producers pointed to the possibility of obtaining a premium price. In other research carried out by Fonseca (2018) with coffee organizations, one conclusion indicated that one of the main effects for producers when adopting the 4C standard was the improvement and adoption of production practices for environmental protection. It also stands out in terms of screening and greater control in the use of pesticides. Another point highlighted by experts is that most of the certificates show “what is to be done” but not “how it should be done.”The “how” element is an essential factor for producers to meet the criteria.They found the scenario of the production of coffee composed by a large number of small producers was fundamental to show how the requirements of the certificates can be met.
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In Brazil there are some government companies that provide this service such as Emater-Empresa de Assistência Técnica e Extensão Rural (Company of Technical Assistance and Rural Extension), which was created in 1966 and does this work with agricultural producers in the State of Minas Gerais. In the case of Emater, we highlight the work related to Certifica Minas, which provides technical support for producers to adopt the 4C Standard. Certifica Minas is an institution linked to the Government of Minas Gerais and responsible for a sustainable standardization program created in 2006 by the State Government. The program aims to stimulate the implementation of good agricultural practices in the mining of coffee, aiming to increase the visibility and competitiveness of this product both in the domestic market and in the foreign market. As an example of a private institution working on 4C standard certification, there is the Global Coffee Platform. The Global Coffee Platform is an organization formed by agents of different links in the coffee production chain. The institution is administered by a Board of 12 members elected at a meeting. Representatives of producers, commerce, industry, and civil society are part of the board of directors.The 2017 board of directors has representatives of other coffee sustainability standards (such as UTZ and Rainforest), thus highlighting the noncompetitive character of this organization. All members of the former 4C Association were automatically included in the Global Coffee Platform. One of the main goals of the Global Coffee Platform is to provide the coffee sector with support in terms of training, indicator data collection, and reporting. The goal is to enable coffee growers to continuously evolve within the industry, allowing them to (1) monitor and report on their progress in a transparent manner; (2) measure their performance relative to others; (3) promote their performance; (4) evaluate areas to innovate and improve performance; (5) attract new partners and donors for funding; (6) support producers in meeting the Sustainable Development Goals (SDGs); (7) identify the gaps, strengths, and opportunities of the coffee sector; (8) share communication, knowledge, and use of resources; and (9) increase effectiveness within the farm. In general, it can be said that the Global Coffee Platform is an institution with a more global profile focused on policy-making for the chain as a whole. The 4C standard is one of the main proposals of the Global Coffee Plataform, but from 2017, the organization responsible for the verification system became CAS. CAS is a provider of integrity control services in the coffee industry for 4C Code of Conduct Verification as well as supervision,
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integrity, and monitoring of coffee progress.This organization is responsible for: (1) p roviding training to local 4C testers; (2) issuing 4C licenses; and (3) assessing the level of compliance of 4C Units with respect to the 4C Code of Conduct. In 2017, the Global Coffee Platform began to carry out actions related to the diffusion of sustainable practices. In early 2017 in Brazil, the organization in partnership with EMBRAPA, SEBRAE, and SENAR conducted an advanced training course on Coffee Sustainability for producers and rural workers from the cities of Ouro Preto do Oeste and Alvorada do Oeste in Rondônia. It also offered sustainability training courses in coffee agriculture for undergraduate students in agronomy at the Universidade Federal dos Vales do Jequitinhonha e Mucuri (UFVJM), Diamantina—MG (Federal University of the Jequitinhonha and Mucuri Valleys), and at the Instituto Federal da Bahia (Salvador—BA) (Federal Institute of Bahia). Another example of VSS diffusing institution in Brazil is Imaflora. According to the organization’s website: “The Institute for Forest and Agricultural Management and Certification - Imaflora - is a non-profit civil association founded in Piracicaba in 1995. The Institute was born under the premise that the best way to conserve tropical forests is to give them an economic destination associated with good management practices and responsible management of natural resources. From this perspective, Imaflora believes that socio-environmental certification is one of the tools that respond to this part of the challenge, with a strong incentive for local, sustainable development in the forestry and agricultural sectors. In the same way, the Institute seeks to influence the productive chains of products of forest and agricultural origin; collaborate in the elaboration and implementation of policies of public interest and, finally, in fact, make a difference in the regions in which it operates, creating models of land use and sustainable development that can be reproduced in other municipalities, regions or biomes from the country.”b This institute is responsible in Brazil for the Sustainable Agriculture Network certification—Rainforest Alliance Certified (RAS) and was responsible for the verification process of the 4C Association from 2013 until 2016. Although this type of organization is formally outside the agricultural production chains, it has importance in the diffusion of new rules and behaviors of this sector. b
http://www.imaflora.org/imaflora-institucional/id_2232.php
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6.4 Conclusions The objective of this chapter was to present the main VSS for coffee adopted by Brazilian producers. It also stressed the importance of some public and private institutions as disseminators of sustainable practices, as well as some advantages and disadvantages indicated in the literature for the adoption of VSS. In general, it is mentioned that, for producers, the adoption of VSS, despite the costs involved, can lead to premium prices and greater access to markets. However, one of the difficulties is the issue of diversity and the large number of certificates/standards, which leads to increased costs for the producer in trying to meet them. One of the fundamental changes occurred with the unification of the certificates Rainforest and UTZ, two of the main certificates for coffee. This fact shows the movement of the market to reduce the number of certifications, which can facilitate the adoption of the certificates by producers. Another factor to emphasize is the importance of certification to increase the control of the producer in the use of inputs in the property and, mainly, control in the use of pesticides. Finally, the importance of rural extension work done by cooperatives or state governments, such as Emater, is emphasized. Certification is made up of requirements, but it is critical to train the producer on how to meet these requirements. This transfer of knowledge is fundamental for the adoption of VSS to be disseminated and lead to improvements in coffee production in Brazil considering economic, environmental, and social aspects.
6.5 Managerial and policy implications From the perspective of producers and industry, it is essential to establish procedures for the adoption of knowledge by producers regarding certifications and how to address the requirements. Given the diversity of production areas, producer profile, and investment capacity found in Brazil, it is crucial to create mechanisms for the transference of knowledge regarding certification requirements and also to support investments that bring improvements in terms of process, product quality, and environmental conditions in coffee production in Brazil. From a policy perspective, state governments could intensify rural extension work in each producing region by strengthening the transfer of knowledge to producers. Finally, through rural extension work, it would be possible to create financing lines for the improvements and changes proposed by the VSS.
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6.6 Questions 1. What are the main challenges for producers to addressVSS requirements? 2. What are the main functions of government and cooperatives in the adoption of VSS?
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Sustainability Initiatives in the Coffee Sector. Committee on Sustainability Assessment (COSA). Giovannucci, D., Scherr, S., Nierenberg, D., Hebebrand, C., Shapiro, J., Milder, J., Wheeler, K., 2012. Food and Agriculture: The Future of Sustainability. A Strategic Input to the Sustainable Development in the 21st Century (SD21) Project. United Nations Department of Economic and Social Affairs, Division for Sustainable Development, New York. Grabs, J., Killian, B., Hernández, D., Dietz, T., 2016. Understanding coffee certification dynamics: a spatial analysis of voluntary sustainability standard proliferation. Int. Food Agribus. Manag. Rev. 19 (3), 31–56. Henson, S., Humphrey, J., 2009. The impacts of private food safety standards on the food chain and on public standard-setting processes. In: Paper Prepared for FAO/WHO, Rome. vol. 13, p. 59. ICO, 2014. World Coffee Trade (1963–2013): A Review of the Markets, Challenges and Opportunities Facing the Sector. International Coffee Organization, London. ISO, 2005. International organization for standardization. Int. Organ. 2005 (2), 1–24. Kolk, A., 2012.Towards a sustainable coffee market: paradoxes faced by a multinational company. Corp. Soc. Responsib. Environ. Manag. 19 (2), 79–89. Kolk, A., 2013. Mainstreaming sustainable coffee. Sustain. Dev. 21 (5), 324–337. Panhuysen, S., Pierrot, J., 2014. Coffee Barometer 2014. Hivos, IUCN Netherlands, Oxfam Novib, Solidaridad and WWF. Pierrot, J., Giovannucci, D., Kasterine, A., 2010. Trends in the Trade of Certified Coffees. International Trade Centre. Technical Paper, Available from: https://ssrn.com/ abstract=1736842. Pinto, L.F., Gardner, T., McDermott, C., Ayub, K., 2014. Group certification supports an increase in the diversity of sustainable agriculture network–rainforest alliance certified coffee producers in Brazil. Ecol. Econ. 107, 59–64. Potts, J., 2007. Alternative Trade Initiatives Income Predictability: Theory and Evidence From the Coffee Sector. International Institute for Sustainable Development, pp. 1–33. Potts, J., Sanctuary, M., 2010. Sustainable Markets Are Growing—Is Sustainability Keeping Pace? A Perspective on Sustainable Coffee Markets. Entwined. Potts, J., Lynch, M.,Wilkings, A., Huppé, G.A., Cunningham, M.,Vivek,V., 2014.The State of Sustainability Initiatives Review 2014: Standards and the Green Economy. International Institute for Sustainable Development and the International Institute for Environment and Development, Winnipeg, MB, ISBN: 978-1-894784-45-0. Raynaud, E., Sauvee, L.,Valceschini, E., 2005. Alignment between quality enforcement devices and governance structures in the agro-food vertical chains. J. Manag. Gov. 9 (1), 47–77. Rodrigues, F., Burnquist, H., Costa, C., 2011. Escalada tarifária e exportações brasileiras da agroindústria do café e da soja. Rev. Econ. Sociol. Rural. 49 (2), 295–322. Santos,V., Gomes, M., Braga, M.J., Silveira, S., 2009. Análise do setor de produção e processamento de café em Minas Gerais: uma abordagem matriz insumo-produto. Rev. Econ. Sociol. Rural. 47 (2), 363–388. SCAA Sustainability Council, 2010. Sustainable Coffee Certifications. A Comparison Matrix (Long Beach, CA: Specialty Coffee Association of America (SCAA)). Taylor, P., 2005. In the market but not of it: fair trade coffee and forest stewardship council certification as market-based social change. World Dev. 33 (1), 129–147. Valkila, J., 2014. Do fair trade pricing policies reduce inequalities in coffee production and trade? Dev. Policy Rev. 32 (4), 475–493. van Rijsbergen, B., Elbers, W., Ruben, R., Njuguna, S., 2016. The ambivalent impact of coffee certification on farmers’ welfare: a matched panel approach for cooperatives in Central Kenya. World Dev. 77, 277–292. Veiga, J.P., Barbosa, A., Saes, M.S., 2016. A Cadeia Produtiva do Café no Brasil: Impactos Sociais e Trabalhistas da Certificação. Relatório de Pesquisa.
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Further reading Giovannucci, D., Von Hagen, O., Wozniak, J., 2013. Corporate social responsibility and the role of voluntary sustainability standards. In: Schmitz-Hoffmann, C. (Ed.), Voluntary Standards Systems—A Contribution to Sustainable Development. Springer Publishing, Berlin, pp. 359–384. Knorringa, P., Nadvi, K., 2016. Rising power clusters and the challenges of local and global standards. J. Bus. Ethics 133 (1), 55–72. Levy, D., Reinecke, J., Manning, S., 2016. The political dynamics of sustainable coffee: contested value regimes and the transformation of sustainability. J. Manag. Stud. 53 (3), 364–401. Souza, R.C., Presoto, A., Saes, M.S.M., Lemeilleur, S., 2014. The adoption of sustainable certificates by Brazilian coffee producers. In: 9th Research Workshop on Institutions and Organizations–RWIO, 13–14 October. Center for Organization Studies–CORS, São Carlos, São Paulo.
Certification: Facts, challenges, and the future Roberta Souza Piãoa, Lyon Saluchi da Fonsecaa, Éder de Carvalho Januáriob, Maria Sylvia Macchione Saesb a Department of Production Engineering, University of São Paulo, São Paulo, Brazil Department of Business, University of São Paulo, São Paulo, Brazil
b
6.1 Voluntary sustainability standards: Origin In the last two decades, there has been an increase of certifications and standards created by the consumer countries, the so-called voluntary sustainability standards (VSS) (Grabs et al., 2016). One of the reasons for the existence of certifications and standards is due to the variety of producer countries and different producer profiles. In this sense, it becomes complicated to access all relevant product information. In addition, standards also arise to preserve the environment, improve the conditions of workers in the agricultural sector, and promote the consumption of healthy foods. Coffee was one of the first and the most important markets to receive environmental certification (Potts et al., 2014). According to coffee industry associations,“Sustainable Coffee Program” (2016), the share of certified coffee or in accordance with some standard in total production increased from 15% to 40% from 2008 to 2015, respectively, whereas conventional coffee production increased 4% per year, and certified or standardized coffee grew 26% per year. From a producer’s perspective, some authors argue that VSS could be an opportunity for small and medium farmers to differentiate their products and capture more value (Borrella et al., 2015; Fitter and Kaplinksy, 2001), whereas others argue that, in the upper levels of the value chain, coffee prices tend to increase faster than the commodity prices received downstream. This is what is called the “coffee paradox” (Daviron and Ponte, 2005). On the other hand, for the smaller producer, the requirements regarding sustainability certificates are constantly increasing, and it is expensive to adopt and maintain certification.The costs refer to changes on the farm to comply with the requirements; also, payments to certification bodies for annual monitoring of property improvements are high (Henson and Humphrey, 2009; Coffee Consumption and Industry Strategies in Brazil https://doi.org/10.1016/B978-0-12-814721-4.00005-6
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Raynaud et al., 2005). Besides the cost of the certification, coffee producers need to address requirements from different standards. Each market requires a different standard/certification, which means that producers have to adopt multiple certificates to sell in more than one market. For example, the Netherlands consumes around 30% of all UTZ-certified coffee. Europe imports 55% of Rainforest Alliance-certified coffee, whereas the United States, Germany, and Switzerland are the main consumer markets for certified Organic coffee (Pierrot et al., 2010). Bitzer et al. (2013) argue that producers have risks for addressing VSS requirements, and financial support and a long-term buyer relationship is essential to enable investments. Besides, the results about the impacts of the VSS adoption on productivity are controversial. Some authors such as Everage and Ingersoll (2013), argue that VSS implementation could improve yields and technical efficiency. However, the Committee on Sustainability Assessment (Giovannucci et al., 2008) using a multicriteria analysis approach find that more than 60% of respondents reported decreased coffee yields as a result of participation in a recognized sustainability system. In the most important coffee markets like the European Union, the United States, and Japan, the demand for conventional coffee is stagnant, yet demand for certified coffee is increasing. It is worth noting that there are few statistics on this market, although all studies point to its significant growtha (Giovannucci and Koekoek, 2003; Giovannucci et al., 2012). Coffee is cultivated in more than 80 countries in Central and South America, Africa, and Asia, and provides livelihoods for 20–25 million farming families, because smallholders produce most of the world’s coffee, around 70% of the total (Panhuysen and Pierrot, 2014). However, the total land dedicated to coffee production covers a relatively small area of agricultural land, around 10.5 million ha. Four countries dominate global coffee production: Brazil (35%), Vietnam (15%), Indonesia (9%), and Colombia (7%). In 2016, Brazil produced 51.37 million bags of 60 kg of coffee. Arabic coffee production was 43.38 million bags, and Conilon coffee production was 7.98 million bags.The planted area of the two varieties is 2,223,464.1 ha, and the estimated productivity is 26.33 sc/ha. From January to December 2016, coffee represented US $5.47 billion, ranking fifth in position among the most exported products by Brazilian agribusiness (Companhia Nacional de Abastecimento—CONAB, 2016). a
See https://hivos.org/sites/default/files/coffee_barometer_2014_report_1.pdf
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6.2 Standards and certificates for coffee To ensure that coffee production actually follows sustainable criteria, the industry in line with government organizations have created several certificates that guarantee compliance with certain sustainability standards (Kolk, 2012). These certificates began to be launched in the 1980s in response to concerns about the implications of increasing agricultural production for the environment and for society (Taylor, 2005). In general, certificates require the producer to have minimum working conditions that do not suffer any kind of discrimination, respect the local minimum wage law for all involved in production, and not to employ children under 15 years or less than the minimum age as defined by local legislation (Dammert and Mohan, 2015). The four major coffee certificates that include independent monitoring and certification are: Fair trade, Organic, Rainforest Alliance (RA), and UTZ (Kolk, 2013). In some producing countries such as Brazil, Vietnam, and Colombia, the 4C standard of conduct is also of great importance due to the large volume of production that address this code. Each of these certificates, although similar to each other, has different approaches (Kolk, 2012). Overall, Fair trade aims to support small farmers; the Rainforest Alliance (RA) and Organic focus on protecting ecosystems and biodiversity; whereas UTZ aims to integrate sustainability with market criteria. In 2017, the merger of Rainforest Alliance and UTZ was announced until the end of the year. The new organization will be named Rainforest Alliance according to UTZ Organization website. It was also stated that the merger would make it easier for companies to achieve sustainability certification. 4C is pointed out by experts as the gateway to other certificates. It is noteworthy that the four certificates comprise producer, environment, and market, and what will differentiate them is the importance they give to each of these criteria. Next are details of a little more of each of these certificates. According to the Association’s website, “The 4C Standard was designed in order to improve the economic viability (productivity, efficiency and market access) for coffee producers, the working and living conditions of their families and workers, the protection of primary forest and the conservation of natural resources such as water, soil, biodiversity and energy.” Launched in 2003 through a multistakeholder international public-private initiative, the 4C Association is already responsible for more than 42% of the world’s sustainable coffee production and 22% of total coffee production, with a production growth rate of about 90% per year (Potts et al., 2014).
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According to the organization’s website, “The 4C association, through the Collaboration Platform, organizes periodic forums and workshops, in which participants can acquire knowledge, establish new contacts and create synergies to jointly address the sustainability issues that affect the coffee sector.” Potts et al. (2014) draws attention to the fact that a certification, by definition (ISO, 2005), is a statement of third parties related to products, processes, systems, or people. As the 4C association performs its own audits, it would not necessarily be a certification but rather a verification, which is confirmation by providing objective evidence, that the specified requirements have been met. In 2017, Coffee Assurance Services (CAS) was created, which is responsible for the 4C standard verification system. CAS is a provider of integrity control services in the coffee industry for 4C Code of Conduct Verification as well as supervision, integrity, and monitoring coffee progress. This organization is responsible for: (1) providing training to local 4C testers; (2) issuing 4C licenses; and (3) assessing the level of compliance of 4C Units with respect to the 4C Code of Conduct. Organic: The organic certificate is intended to avoid harmful practices to the environment. It prohibits the use of agrochemicals and deforestation, and requires measures of soil erosion control (Blackman and Naranjo, 2012). According to Potts (2007), the certified organic coffee market has doubled every 5 or 6 years. However, only about 3% of the world coffee production meets the requirements of this certification. According to the website of the certificate: “Organic certification can be done by local, international agencies or by partnerships between them. It can also be carried out by groups of small producers, since there are internal control mechanisms that follow the standards of organic agriculture. In such cases, it is common the commercialization through farmers’ and producers’ market and there is no export concern.” An advantage to the farmer who produces in this pattern is that a much higher percentage of production, about 54%, is sold as sustainable. This percentage for other coffees ranges from 25% to 35% (Potts et al., 2014; Bacon, 2005). Fair trade: Fair trade began to appear in the late 1980s, when the Dutch Foundation Max Havelaar launched the first Fair Trade coffee label (Dammert and Mohan, 2015). About 10 years later, this organization, in line with another 17 that also proposed fairer trade, joined together to create the Fair Trade Labeling Organizations International (FLO), which aims to
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“contribute to sustainable development, provide better commercial conditions and guarantee the rights of marginalized producers and workers.” This certification focuses on social aspects, specifically support to producers’ organizations, to offer price premiums aimed at local development. The certification also supports the strength of labor rights and long-run market relations (Valkila, 2014). Rainforest Alliance: This certificate aims to integrate biodiversity conservation, community development, workers’ rights, and productive farming practices to ensure comprehensive management of sustainable exploitation (SCAA Sustainability Council, 2010). According to Pinto et al. (2014), this certificate was initially deployed to large producers in 2008, but over time it began certifying small farmers who were organized into associations and cooperatives. According to the Imaflora Report of 2014, Europe is the largest importing region of Rainforest coffee in Brazil. About 87% of the Rainforest coffee exported goes to Europe followed by North America (48%) and the United Kingdom (33%). As for the origin, the Cerrado Mineiro is the largest region producing Rainforest coffee. UTZ: UTZ Certification is an international certification program that establishes standards to guarantee agricultural production and responsible delivery of coffee, cocoa, and tea. According to Kolk (2012), the advantage of this certificate for the producer is that the improvement of the quality of production and processing causes greater value added to the product to revert to a premium price, that is, a higher price for a better product, following the supply-demand logic of the conventional market. This type of approach is different from the Fair trade certificate, for example, which has the premium price as a certificate requirement. Kolk (2012) still draws attention to the fact that it is very difficult to compare the effects of these certifications to define “which is better.” According to the author, the few studies that tried to compare more than one pattern tended to find positive and distinct effects in each of them, indicating that they could possibly complement each other. An example is the study of van Rijsbergen et al. (2016) conducted in Kenya between 2009 and 2013, which aimed to compare Fair trade and UTZ certifications. The result was that both certifications improved the profitability of coffee production, with Fair trade having a greater impact on quantity produced, and UTZ on improving productivity (reduction of planting area) and quality. The author suggests that this may indicate a certification lifecycle, which initially goes from increased production and increased value
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capture with Fair trade, followed later by a certificate that requires higher productivity and quality, which in this case would be UTZ. Another study aimed at comparing certificates is by Chiputwa et al. (2015). In the survey conducted in Uganda in 2012 comparing Fair trade, Organic, and UTZ certificates, the authors observed that there was no significant correlation between improved quality of life among Organic-certified producers and UTZ. Fair trade-certified producers had 30% higher per capita consumption and were likely to be 50% less poor compared to noncertified producers. Although the Rainforest and UTZ certificates are dealt with separately in this chapter, the merger of the two certificates was announced in June 2017. According to information obtained so far, the merger will not cause changes in procedures and standards for the producer certified by the Rainforest system and UTZ by the end of the year 2018. A summary of the main certifications is in Table 6.1.
6.3 Application in Brazil: Coffee producers in Brazil Coffee is among the most traded agricultural products in the world. Its annual retail sales grew from US $45 billion (Alvarez et al., 2010) in 2007 to US $173.4 billion in 2014 (ICO, 2014), which makes it one of the leading segments in the global food and beverage industry (Carvalho et al., 2016). The fact that its production is mostly concentrated in countries located in tropical regions of the southern hemisphere and consumed mainly in the temperate regions of the northern hemisphere makes coffee a very important product in international trade (Carvalho et al., 2016). This trade is considered important because it brings resources from more developed countries to developing countries (ICO, 2014). According to Giovannucci and Ponte (2005), more than 6 million families live according to this culture. These families account for more than 70% of the world’s coffee production (Bravo-Monroy et al., 2016). In Brazil, coffee is one of the main agricultural products marketed (Santos et al., 2009; Costa et al., 2013; Rodrigues et al., 2011). According to the report “2015-2024 Agricultural Outlook launched in July 2015” by FAO and OCDE, the country is the leading coffee supplier in the world. According to data from the Brazilian Coffee Industry Association (ABIC), coffee production in Brazil in 2015 corresponded to about 32% of total world production. In addition, according to ABIC, Brazil is also the world’s largest consumer of coffee (in kg of coffee), with an annual consumption of about 1200 million kg.
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Table 6.1 Certifications for coffee Certification/ Standards
4C Common Code
BSCA
Caccer—Café do Cerrado CACCER— Conselho das Associações dos Cafeicultores do Cerrado
Fair trade
Origin
Scope of the program
To start in 2003 as publicprivate partnership project by the coffee industry and the German development cooperation to initiate a multistakeholder dialog for defining a mainstream code of conduct for sustainability. The Brazil Specialty Coffee Association aims to bring together producers of specialty coffee, spreading this production and stimulate constant technical improvements and greater efficiency in services related to the marketing of these coffees. To certify the origin and the quality of coffee produced in a region called Cerrado Mineiro located in the Northwest of Minas Gerais State, Brazil, under a social, economic, and environmentally sustainable model. It is the first region in Brazil with Protected Geographical Indication systema for coffee. To start in the Netherlands in the 1970s.
Exclude worst practices and continuously increase the sustainability of coffee production and processing in the economic, social, and environmental dimension. Certifies that coffee was analyzed by independent cup tasters and the production process does not harm the environment or workers’ rights. The certification is based on a code of conduct, which includes aspects such as Good Agricultural Practices, Social and Environment Responsibility, supported by traceability mechanism.
Economic and environmental sustainability for farmers and their communities. Minimum price and social premium to cover costs of production and community-elected development programs. Organic premium for organic coffees. Continued
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Table 6.1 Certifications for coffee—cont’d Certification/ Standards
GlobalGap
Organic
Rainforest
UTZ
a
Origin
Scope of the program
The EurepGAP was created in 1997 by a group of British and Dutch retailers called Eurep (Euro-Retailer Produce Working Group). The group is composed of agricultural producers, inputs, and services industries. The standard was developed using the guide: Hazard Analysis and Critical Control Points (HACCP) guidelines published by the United Nations Food and Agriculture Organization. In September 2007, EurepGap changed to GlobalGap. The First Certification was formulated in England, India, and the United States in 1967. Begun in 1992 by Rainforest Alliance and a coalition of Latin America NGO’s, the Sustainable Agriculture Network (SAN). First coffee farm certification in 1996.
EurepGAP “is a set of normative documents suitable to be accredited to internationally recognised certification criteria such as ISO GUIDE 65 and internationally recognised.” The objective is “to reduce the risks in the agricultural production.”
It is started in 1997 as an initiative from industry and producers in Guatemala; Utz Kapeh became an independent NGO in 2000. In 2008, Utz Kapeh changed its name to Utz Certified— Good Inside
Organic farming and processing practices. Sustainable farm management in most holistic sense—social, environmental, economic and, ethical improvements are the cornerstones of the program. Sustainability: economic performance through productivity and farm professionalism; environmental standards to preserve flora fauna shade, buffer zones; Worker Health and Safety.
Protected Geographical Indication links product quality to their geographic origin, and the quality is certified by a public organization. In other words, the “credibility of a quality label relies on government enforcement” (Raynaud et al., 2005, p. 48). (Souza, R.C., Presoto, A., Saes, M.S.M., Lemeilleur, S., The adoption of sustainable certificates by Brazilian coffee producers. In: 9th Research Workshop on Institutions and Organizations–RWIO, 13–14 October, Center for Organization Studies–CORS, São Carlos, São Paulo, 2014.)
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Brazil also appears as a protagonist in the world production of sustainable coffee. According to Potts (2007), the coffee certification movement presents a market-based solution to the problems created by trade liberalization, through the fixing of minimum prices and payment of premium prices to reduce business volatility, reaching new markets and encouraging an ecologically sustainable production. Wal-Mart, one of the world’s largest retailers, buys all six of its own sustainable coffee brands directly from Brazilian producers (Elder et al., 2014). In addition, it is important to note that the average annual growth rate of sales of sustainable coffee has been significantly higher than the annual growth in conventional coffee sales (Potts and Sanctuary, 2010). Based on Elder et al. (2014) there is an evolution of sales of sustainable coffee. According to Elder et al. (2014), the sales of sustainable coffee increased almost 400% from 2004 to 2009. However, according to Veiga et al. (2016), there are indications that the production of sustainable coffee in Brazil is already greater than the demand. One of the consequences is that the premium price paid to certified coffee producers is decreasing. In 2014, empirical research was conducted by academics from the Center for Organization Studies (CORS) research group about the perception of Brazilian coffee producers regarding the adoption of VSS. There were 250 face-to-face interviews with Brazilian coffee producers undertaken. One of the elements analyzed in the research was the type of investment made by producers to meet the requirements of sustainable certifications. The results point out that the investments that stand out are those related to improvements with social and environmental focus, such as biodigestor equipment and the construction of dormitory housing for the workers. From the point of view of the benefits of adopting certification, the producers pointed to the possibility of obtaining a premium price. In other research carried out by Fonseca (2018) with coffee organizations, one conclusion indicated that one of the main effects for producers when adopting the 4C standard was the improvement and adoption of production practices for environmental protection. It also stands out in terms of screening and greater control in the use of pesticides. Another point highlighted by experts is that most of the certificates show “what is to be done” but not “how it should be done.”The “how” element is an essential factor for producers to meet the criteria.They found the scenario of the production of coffee composed by a large number of small producers was fundamental to show how the requirements of the certificates can be met.
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In Brazil there are some government companies that provide this service such as Emater-Empresa de Assistência Técnica e Extensão Rural (Company of Technical Assistance and Rural Extension), which was created in 1966 and does this work with agricultural producers in the State of Minas Gerais. In the case of Emater, we highlight the work related to Certifica Minas, which provides technical support for producers to adopt the 4C Standard. Certifica Minas is an institution linked to the Government of Minas Gerais and responsible for a sustainable standardization program created in 2006 by the State Government. The program aims to stimulate the implementation of good agricultural practices in the mining of coffee, aiming to increase the visibility and competitiveness of this product both in the domestic market and in the foreign market. As an example of a private institution working on 4C standard certification, there is the Global Coffee Platform. The Global Coffee Platform is an organization formed by agents of different links in the coffee production chain. The institution is administered by a Board of 12 members elected at a meeting. Representatives of producers, commerce, industry, and civil society are part of the board of directors.The 2017 board of directors has representatives of other coffee sustainability standards (such as UTZ and Rainforest), thus highlighting the noncompetitive character of this organization. All members of the former 4C Association were automatically included in the Global Coffee Platform. One of the main goals of the Global Coffee Platform is to provide the coffee sector with support in terms of training, indicator data collection, and reporting. The goal is to enable coffee growers to continuously evolve within the industry, allowing them to (1) monitor and report on their progress in a transparent manner; (2) measure their performance relative to others; (3) promote their performance; (4) evaluate areas to innovate and improve performance; (5) attract new partners and donors for funding; (6) support producers in meeting the Sustainable Development Goals (SDGs); (7) identify the gaps, strengths, and opportunities of the coffee sector; (8) share communication, knowledge, and use of resources; and (9) increase effectiveness within the farm. In general, it can be said that the Global Coffee Platform is an institution with a more global profile focused on policy-making for the chain as a whole. The 4C standard is one of the main proposals of the Global Coffee Plataform, but from 2017, the organization responsible for the verification system became CAS. CAS is a provider of integrity control services in the coffee industry for 4C Code of Conduct Verification as well as supervision,
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integrity, and monitoring of coffee progress.This organization is responsible for: (1) p roviding training to local 4C testers; (2) issuing 4C licenses; and (3) assessing the level of compliance of 4C Units with respect to the 4C Code of Conduct. In 2017, the Global Coffee Platform began to carry out actions related to the diffusion of sustainable practices. In early 2017 in Brazil, the organization in partnership with EMBRAPA, SEBRAE, and SENAR conducted an advanced training course on Coffee Sustainability for producers and rural workers from the cities of Ouro Preto do Oeste and Alvorada do Oeste in Rondônia. It also offered sustainability training courses in coffee agriculture for undergraduate students in agronomy at the Universidade Federal dos Vales do Jequitinhonha e Mucuri (UFVJM), Diamantina—MG (Federal University of the Jequitinhonha and Mucuri Valleys), and at the Instituto Federal da Bahia (Salvador—BA) (Federal Institute of Bahia). Another example of VSS diffusing institution in Brazil is Imaflora. According to the organization’s website: “The Institute for Forest and Agricultural Management and Certification - Imaflora - is a non-profit civil association founded in Piracicaba in 1995. The Institute was born under the premise that the best way to conserve tropical forests is to give them an economic destination associated with good management practices and responsible management of natural resources. From this perspective, Imaflora believes that socio-environmental certification is one of the tools that respond to this part of the challenge, with a strong incentive for local, sustainable development in the forestry and agricultural sectors. In the same way, the Institute seeks to influence the productive chains of products of forest and agricultural origin; collaborate in the elaboration and implementation of policies of public interest and, finally, in fact, make a difference in the regions in which it operates, creating models of land use and sustainable development that can be reproduced in other municipalities, regions or biomes from the country.”b This institute is responsible in Brazil for the Sustainable Agriculture Network certification—Rainforest Alliance Certified (RAS) and was responsible for the verification process of the 4C Association from 2013 until 2016. Although this type of organization is formally outside the agricultural production chains, it has importance in the diffusion of new rules and behaviors of this sector. b
http://www.imaflora.org/imaflora-institucional/id_2232.php
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6.4 Conclusions The objective of this chapter was to present the main VSS for coffee adopted by Brazilian producers. It also stressed the importance of some public and private institutions as disseminators of sustainable practices, as well as some advantages and disadvantages indicated in the literature for the adoption of VSS. In general, it is mentioned that, for producers, the adoption of VSS, despite the costs involved, can lead to premium prices and greater access to markets. However, one of the difficulties is the issue of diversity and the large number of certificates/standards, which leads to increased costs for the producer in trying to meet them. One of the fundamental changes occurred with the unification of the certificates Rainforest and UTZ, two of the main certificates for coffee. This fact shows the movement of the market to reduce the number of certifications, which can facilitate the adoption of the certificates by producers. Another factor to emphasize is the importance of certification to increase the control of the producer in the use of inputs in the property and, mainly, control in the use of pesticides. Finally, the importance of rural extension work done by cooperatives or state governments, such as Emater, is emphasized. Certification is made up of requirements, but it is critical to train the producer on how to meet these requirements. This transfer of knowledge is fundamental for the adoption of VSS to be disseminated and lead to improvements in coffee production in Brazil considering economic, environmental, and social aspects.
6.5 Managerial and policy implications From the perspective of producers and industry, it is essential to establish procedures for the adoption of knowledge by producers regarding certifications and how to address the requirements. Given the diversity of production areas, producer profile, and investment capacity found in Brazil, it is crucial to create mechanisms for the transference of knowledge regarding certification requirements and also to support investments that bring improvements in terms of process, product quality, and environmental conditions in coffee production in Brazil. From a policy perspective, state governments could intensify rural extension work in each producing region by strengthening the transfer of knowledge to producers. Finally, through rural extension work, it would be possible to create financing lines for the improvements and changes proposed by the VSS.
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6.6 Questions 1. What are the main challenges for producers to addressVSS requirements? 2. What are the main functions of government and cooperatives in the adoption of VSS?
References Alvarez, G., Pilbeam, C., Wilding, R., 2010. Nestlé Nespresso AAA sustainable quality program: an investigation into the governance dynamics in a multi-stakeholder supply chain network. Supply Chain Manag. 15 (2), 165–182. Bacon, C., 2005. Confronting the coffee crisis: can fair trade, organic and specialty coffees reduce small-scale farmer vulnerability in Northern Nicaragua? World Dev. 33 (3), 497–511. Bitzer,V., Glasbergen, P., Arts, B., 2013. Exploring the potential of intersectoral partnerships to improve the position of farmers in global agrifood chains: findings from the coffee sector in Peru. Agric. Hum.Values 30 (1), 5–20. Blackman, A., Naranjo, M., 2012. Does eco-certification have environmental benefits? Organic coffee in Costa Rica. Ecol. Econ. 83, 58–66. Borrella, I., Mataix, C., Carrasco-Galego, R., 2015. Smallholder farmers in the speciality coffee industry: opportunities, constraints and the businesses that are making it possible. IDS Bull. 46 (3), 29–44. Bravo-Monroy, L., Potts, S., Tzanopoulos, J., 2016. Drivers influencing farmer decisions for adopting organic or conventional coffee management practices. Food Policy 58, 49–61. Carvalho, J.M., Paiva, E., Vieira, L., 2016. Quality attributes of a high specification product evidences from the speciality coffee business. Br. Food J. 118 (1), 132–149. Chiputwa, B., Spielman, D., Qaim, M., 2015. Food standards, certification, and poverty among coffee farmers in UgandaWorld Development. World Dev. 66 (C), 400–412. CONAB, 2016. Acompanhamento da safra agrícola: Café. Companhia Nacional de Abastecimento. Terceiro levantamento, Brasília, pp. 1–107. set. 2017 v. 1. Costa, C., Guilhoto, J., Imori, D., 2013. Importância dos setores agroindustriais na geração de renda e emprego para a economia brasileira. Rev. Econ. Sociol. Rural. 51 (4), 787–814. Dammert, A.C., Mohan, S., 2015. A survey of the economics of fair trade. J. Econ. Surv. 29 (5), 855–868. Daviron, B., Ponte, S., 2005.The Coffee Paradox. Global Markets, Commodity Trade and the Elusive Promise of Development. Zed Books, London, p. 288. Elder, S., Lister, J., Dauvergne, P., 2014. Big retail and sustainable coffee: a new development studies research agenda. Prog. Dev. Stud. 14, 77–90. Everage, L., Ingersoll, C., 2013. The COSA Measuring Sustainability Report: Coffee and Cocoa in 12 Countries. The Committee on Sustainability Assessment (COSA), Philadelphia. Fitter, R., Kaplinksy, R., 2001. Who gains from product rents as the coffee market becomes more differentiated? A value-chain analysis. IDS Bull. 32 (3), 69–82. Fonseca, L., 2018. Efeitos do Padrão 4C na Produção Brasileira de Café Sustentável. Dissertação (Mestrado em Engenharia de Produção), Escola Politécnica, Universidade de São Paulo, São Paulo. Giovannucci, D., Koekoek, J., 2003. The State of Sustainable Coffee: A Study of Twelve Major Markets. International Coffee Organization, London. Giovannucci, D., Ponte, S., 2005. Standards as a new form of social contract? Sustainability initiatives in the coffee industry. Food Policy 30 (3), 284–301. Giovannucci, D., Potts, J., Killian, B., Wunderlich, C., Schuller, S., Soto, G., Schroeder, K., Vagneron, I., Pinard, F., 2008. Seeking Sustainability: COSA Preliminary Analysis of
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Sustainability Initiatives in the Coffee Sector. Committee on Sustainability Assessment (COSA). Giovannucci, D., Scherr, S., Nierenberg, D., Hebebrand, C., Shapiro, J., Milder, J., Wheeler, K., 2012. Food and Agriculture: The Future of Sustainability. A Strategic Input to the Sustainable Development in the 21st Century (SD21) Project. United Nations Department of Economic and Social Affairs, Division for Sustainable Development, New York. Grabs, J., Killian, B., Hernández, D., Dietz, T., 2016. Understanding coffee certification dynamics: a spatial analysis of voluntary sustainability standard proliferation. Int. Food Agribus. Manag. Rev. 19 (3), 31–56. Henson, S., Humphrey, J., 2009. The impacts of private food safety standards on the food chain and on public standard-setting processes. In: Paper Prepared for FAO/WHO, Rome. vol. 13, p. 59. ICO, 2014. World Coffee Trade (1963–2013): A Review of the Markets, Challenges and Opportunities Facing the Sector. International Coffee Organization, London. ISO, 2005. International organization for standardization. Int. Organ. 2005 (2), 1–24. Kolk, A., 2012.Towards a sustainable coffee market: paradoxes faced by a multinational company. Corp. Soc. Responsib. Environ. Manag. 19 (2), 79–89. Kolk, A., 2013. Mainstreaming sustainable coffee. Sustain. Dev. 21 (5), 324–337. Panhuysen, S., Pierrot, J., 2014. Coffee Barometer 2014. Hivos, IUCN Netherlands, Oxfam Novib, Solidaridad and WWF. Pierrot, J., Giovannucci, D., Kasterine, A., 2010. Trends in the Trade of Certified Coffees. International Trade Centre. Technical Paper, Available from: https://ssrn.com/ abstract=1736842. Pinto, L.F., Gardner, T., McDermott, C., Ayub, K., 2014. Group certification supports an increase in the diversity of sustainable agriculture network–rainforest alliance certified coffee producers in Brazil. Ecol. Econ. 107, 59–64. Potts, J., 2007. Alternative Trade Initiatives Income Predictability: Theory and Evidence From the Coffee Sector. International Institute for Sustainable Development, pp. 1–33. Potts, J., Sanctuary, M., 2010. Sustainable Markets Are Growing—Is Sustainability Keeping Pace? A Perspective on Sustainable Coffee Markets. Entwined. Potts, J., Lynch, M.,Wilkings, A., Huppé, G.A., Cunningham, M.,Vivek,V., 2014.The State of Sustainability Initiatives Review 2014: Standards and the Green Economy. International Institute for Sustainable Development and the International Institute for Environment and Development, Winnipeg, MB, ISBN: 978-1-894784-45-0. Raynaud, E., Sauvee, L.,Valceschini, E., 2005. Alignment between quality enforcement devices and governance structures in the agro-food vertical chains. J. Manag. Gov. 9 (1), 47–77. Rodrigues, F., Burnquist, H., Costa, C., 2011. Escalada tarifária e exportações brasileiras da agroindústria do café e da soja. Rev. Econ. Sociol. Rural. 49 (2), 295–322. Santos,V., Gomes, M., Braga, M.J., Silveira, S., 2009. Análise do setor de produção e processamento de café em Minas Gerais: uma abordagem matriz insumo-produto. Rev. Econ. Sociol. Rural. 47 (2), 363–388. SCAA Sustainability Council, 2010. Sustainable Coffee Certifications. A Comparison Matrix (Long Beach, CA: Specialty Coffee Association of America (SCAA)). Taylor, P., 2005. In the market but not of it: fair trade coffee and forest stewardship council certification as market-based social change. World Dev. 33 (1), 129–147. Valkila, J., 2014. Do fair trade pricing policies reduce inequalities in coffee production and trade? Dev. Policy Rev. 32 (4), 475–493. van Rijsbergen, B., Elbers, W., Ruben, R., Njuguna, S., 2016. The ambivalent impact of coffee certification on farmers’ welfare: a matched panel approach for cooperatives in Central Kenya. World Dev. 77, 277–292. Veiga, J.P., Barbosa, A., Saes, M.S., 2016. A Cadeia Produtiva do Café no Brasil: Impactos Sociais e Trabalhistas da Certificação. Relatório de Pesquisa.
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Further reading Giovannucci, D., Von Hagen, O., Wozniak, J., 2013. Corporate social responsibility and the role of voluntary sustainability standards. In: Schmitz-Hoffmann, C. (Ed.), Voluntary Standards Systems—A Contribution to Sustainable Development. Springer Publishing, Berlin, pp. 359–384. Knorringa, P., Nadvi, K., 2016. Rising power clusters and the challenges of local and global standards. J. Bus. Ethics 133 (1), 55–72. Levy, D., Reinecke, J., Manning, S., 2016. The political dynamics of sustainable coffee: contested value regimes and the transformation of sustainability. J. Manag. Stud. 53 (3), 364–401. Souza, R.C., Presoto, A., Saes, M.S.M., Lemeilleur, S., 2014. The adoption of sustainable certificates by Brazilian coffee producers. In: 9th Research Workshop on Institutions and Organizations–RWIO, 13–14 October. Center for Organization Studies–CORS, São Carlos, São Paulo.