Sustain­ability labels boost exports of tropical products

Sustainability labels such as Fairtrade and Rainforest Alliance contribute to higher exports of tropical products from the Global South. That is the conclusion of new research by KU Leuven, based on trade data from more than 80 countries. Some labels are also associated with higher export prices.

Sustainability labels have become a familiar feature on products such as chocolate, coffee, and bananas. They indicate that a product has been produced in line with specific social and environmental standards. For exporting countries, such certifications can help provide access to international markets.

More exports through certification

The researchers analyzed trade data from tropical exporting countries. Their findings show that a larger share of certified agriculture is linked to higher export volumes. “When the share of certified agriculture increases in a country, exports of those products also increase, creating economic value for those countries,” says Professor Miet Maertens of KU Leuven’s Department of Earth and Environmental Sciences.

According to the researchers, certification helps producers and countries build trust with foreign buyers. “Certification works as a common language in international trade. It helps countries and producers build trust in their products and production processes among foreign buyers.”

Differences between labels

The study shows that sustainability labels promote trade. This is mainly reflected in larger trade volumes and improved access to markets. For some labels and products, the researchers also found higher prices. “That difference is linked to how stringent a label’s sustainability standards are and how effectively compliance with those standards is monitored,” says Maertens.

According to the researchers, sustainability labels can encourage producers to adopt more environmentally friendly practices, provide better working conditions, and improve the organization of their production processes.

Impact on farmers

The study focused on trade data at the country level. It did not directly examine the income of individual farmers. However, the researchers refer to earlier studies showing that certification can offer benefits such as access to training, higher productivity, better prices, or more stable incomes.

“This research confirms what we see in the field every day: certification gives farmers access to markets that would otherwise be difficult to reach,” says Philippe Weiler, CEO of Fairtrade Belgium.

Kuleuven.be