The COSA Measuring Sustainability Report UTZ Certified response

Transcription

1 The COSA Measuring Sustainability Report UTZ Certified response

2 The COSA Measuring Sustainability Report The COSA Measuring Sustainability Report is a landmark study of the impact of coffee and cocoa sustainability standards on people, planet and profit. The Committee on Sustainability Assessment (COSA) is a neutral and non-profit global consortium dedicated to accelerate sustainability in agriculture. The Swiss government and the Ford Foundation are among the core funders of COSA. COSA s mission is to create a better understanding of the social, economic and environmental impacts of sustainability initiatives in agriculture. This should allow policymakers, companies and farmers to improve their practices and better manage sustainability. COSA has developed a methodology for impact assessment based on standardized tools for data collection and management, SMART indicators and the use of control groups to assess the counterfactual (what would have happened in the absence of certification). The COSA report is the result of a 7-year research based on the COSA methodology, drawing on a huge set of data from nearly farm and village-level surveys in 12 countries. The scale and depth of the COSA research is unprecedented. The COSA report is therefore unique in its kind. The COSA report does not specifically refer to the impact of UTZ certification or any other sustainability standard. The report gives the overall findings with regard to the impact of certification and does not single out a particular sustainability standard or compare standards. UTZ Certified has collaborated with COSA over the years and was part of three large scale impact assessments in Vietnam, Ghana and Colombia. The findings of these impact assessments have been used for the COSA report, but are not recognizable as such. Main Findings The COSA study finds - on average and to varying degrees - positive economic, social and environmental impacts of sustainability standards. The overall tendency is that certified producers have greater yields, higher net income, more training, a greater number of water and soil conservation practices, and greater levels of biodiversity. There is a trend toward better economic and environmental conditions when farms are compared to uncertified farms. The COSA report concludes that sustainability standards are among the best tools currently available to promote sustainability in agriculture, in part because they serve as viable market mechanisms to transmit value. 1

3 However the COSA report also warns that there are high, and perhaps unreasonable, expectations for sustainability standards. It is clear that they do not fulfill many expectations to be a complete solution for our planet s agricultural economic, social and environmental challenges. Sustainability standards are not a magic formula and therefore require a commitment to ongoing capacity-building and long-term investment if they are to improve the conditions of farmers and their communities. Economic impact Certified farms are on balance experiencing better economic performance compared to uncertified farms. Average net income per hectare, the single best measure of farm-level economic viability, was higher across many of the major certification initiatives observed, but not by very large margins. While in general farmers with more formal education have higher yields than those with less education, certification is significantly (and positively) correlated with yields regardless of education. Higher income was typically driven by multiple factors: higher yields, lower costs of production, and occasionally, higher prices. Certified producers also tend to have a more positive perception of their economic situation. Technical efficiency was also higher among certified producers for a range of countries, although there is ample room to improve. The price premiums that buyers pay for the major certifications ranged widely and it could be that the higher price paid by consumers is often not directly transmitted to farmers. While sustainability standards can offer developmental value and public benefits, it is clear that only a small part of the financial value that they generate actually reaches producers, thus debilitating their effects. Overall there is a low level of price transparency. The COSA report did not observe a tendency for certified producers to have better price information, indicating the possibility that they are either satisfied or unable to push for more transparency. The COSA report concludes that an understanding of the governance and services of a producer organization is an important part of understanding the pathways to sustainability for many farm communities. More developed producer organizations had, on average, higher producing members, more certifications, and offered more services than the average organizations, and similarly the average organizations were superior to the less developed organizations in terms of services offered. Understanding the producer organization often explains what appear to be irrational farmer choices, such as selling elsewhere for a lower price or participating in an initiative that a farmer does not understand. 2

4 Social impact Certified producers had a consistently better perception in terms of their social, economic and environmental situation. The importance of perception, both as a reflection of behavior, but also overall well-being, should not be underestimated according to COSA. Certified producers and their workers were using, on average, more protective items such as masks, eye goggles, gloves, boots, torso cover and pants to prevent skin contact with crop protection products. According to a longitudinal study in Ghana the percentage of children working in cocoa declined from 2010 to 2012 on certified farms compared to noncertified farms. Certified farmers tend to receive more training and more diverse training on a variety of topics such as good agricultural practices and environmental stewardship. However, the COSA study also reports occasionally unexpected low levels of social benefits. Food security was often better on certified farms but not always. There is evidence that revenues and net incomes are higher for farmers reporting higher levels of food security. However, prior research suggests that we should not expect that increased income will necessarily lead to greater food security. Diversity, whether in income sources (different cash crops) or comestibles (food crops) may reduce the risk inherent in dependence. This would be particularly true where markets and crops may fail, which is the case in most rural areas and where focus on only cash crops or monocrops is risky due to farmers not having adequate fallback resources. Environmental impact The environmental practices and conditions found on certified farms tend to be somewhat better than those on conventional farms. They are more likely to use soil and water conservation measures such as soil cover, contour planting and terracing, check dams, drainage channels, soil ridges around plants, and live fences. There is a positive relationship between productivity and both environmental practices and the environmental indices, although this is not linear and varies between the countries. The economic, social and environmental benefits of certification are illustrated by the figure below. The size of the circle indicates the average positive (+ above the green line) or negative (- below the green line) differences between certified and non-certified farmers. 3

5 UTZ s view on the main findings UTZ considers the COSA report a valuable contribution to the knowledge of the impact of sustainability standards. The COSA report is one of a kind and to date unparalleled in terms of scope with regard to coffee and cocoa. UTZ recognizes most of the findings of the COSA report. They are consistent with previous findings of impact assessments in coffee and cocoa. At the same time, it is important to notice that the COSA report reflects several sustainability labels and not only or specifically UTZ. This means that the report reflects the average performance of sustainability standards in coffee and cocoa. We would welcome if future reports by COSA would differentiate the findings in relation to specific sustainability standards. UTZ considers the findings on training, good agricultural practices and economic performance as support for its theory of change. The COSA report positively links training on good agricultural practices and certification with higher yields and higher net income for farmers. UTZ finds it concerning that insufficient market demand for certified products limits the financial gains from certification, in particular premium. If farmers can only sell a small part of their certified crop as certified, they are insufficiently rewarded by the market for their sustainability efforts. This finding stresses the need to raise demand, so that the market can play its part to stimulate sustainable production. The finding also points to the need to increase transparency on premium and its distribution. 4

6 The COSA report is in line with the main findings of UTZ s own impact report, released in January With the COSA report, the body of solid evidence that indicates that sustainability standards have on average positive economic, social and environmental benefits has grown considerably. UTZ considers the COSA report as a strong incentive to step up our efforts and to learn from its findings to increase our impact. 5