Voluntary sustainability standards (VSSs) are designed to shift markets to be more environmentally and socially responsible, in line with SDG 12 (responsible consumption and production).
While there are some promising signs, a lack of good research still impedes the ability to track both VSSs' effectiveness and to harness their future potential.
A recent report on examining standards as a tool for poverty reduction exemplifies the kind of research we need to better understand how VSSs can create more sustainable markets.
By Ruerd Ruben, Professor Emeritus, Wageningen University
Fairtrade standards, organic standards, and other voluntary sustainability standards (VSSs) are designed to shift markets to be more environmentally and socially responsible, in line with Sustainable Development Goal 12 (responsible consumption and production). While there are some promising signs, a lack of good research still impedes the ability to track both VSSs’ effectiveness and to harness their future potential. A recent report on examining standards as a tool for poverty reduction exemplifies the kind of research we need to better understand how VSSs can create more sustainable markets.
Do Standards Contribute to Poverty Reduction Among Farmers?
The ‘State of Sustainability Initiatives Review: Standards and Poverty Reduction’ from the International Institute for Sustainable Development (IISD) provides a wealth of information on the reach of VSSs regarding poverty reduction in agricultural sectors and rural areas. It has been launched at a time of growing doubt about the effectiveness of VSS to improve the welfare of workers and smallholders and to strengthen farmers’ bargaining positions in agricultural value chains.
The report covers 13 widely adopted standards regimes and looks at major livelihood dimensions that influence poverty and inequality among smallholders. Attention is focused on issues like equitable access to markets, services, finance, technology, and social capital as key conditions for enhancing opportunities and choice and improving prospects for power and voice for smallholder farmers and other stakeholders in the commodity network and value chain.
The report is based on the review of comparative studies and meta reviews that address different aspects of VSS performance and impact. This is complemented with an expert survey of 57 diverse value chain actors to identify enabling factors and major constraints and limitations of VSS’ effectiveness for particular stakeholders and in specific contexts. The report concludes with 18 practical recommendations to VSS bodies, value chain actors, and governments to further reduce poverty.
Stakeholders concerned with VSSs have been discussing opportunities for improving sustainable resource use and strategies for enhancing trust in VSSs through verification and compliance. For example, UNCTAD recently looked at the trade impact of standards, while the UN Forum on Sustainability Standards (UNFSS) analysed the opportunities for scaling-up VSSs through public procurement and trade policies. But almost no studies discuss the wider implications of VSSs on market performance, agri-food system governance, and stakeholder interactions.
Standards need to be assessed for their capacity to truly contribute to SDG 12. VSSs show great potential to aid progress on indicator 12.6 to help large companies report on their sustainability performance and 12.7 to support public procurement policies for sustainable products. But this will only happen by engendering meaningful behavioural change, broad sector transformation, and balanced bargaining dynamics the market.
VSSs should contribute to behavioural change
Most research on the impact of VSSs focuses on directly measurable effects on land use practices, market access, resource use, household income and farmer’s organization. Far less attention is given to changes in key behavioural mechanisms that are required to guarantee durable effects.
If standards are expected to reduce risk and support investment in smallholder farmers, they need to reinforce trust, confidence, and reliability between supply chain parties, as well as strengthen collective action and reduce free-riding farmer organizations. Assessing these behaviours requires thorough, sound experimental field research far beyond the current small-scale (and often not very representative) surveys and many superficial case studies.
VSSs must support broad market transformations
Much attention has been paid to studies that assess the impacts of VSSs on crops sales, production efficiency, household income and wages, social effects (schooling, safety), and environmental impacts. And while progress in these areas is frequently registered for VSS-compliant actors, it remains far more difficult to identify broader effects.
Moreover, with the growing importance of VSSs in some commodity markets–estimates say more than 20% of cocoa, coffee and tea is now certified–we might expect a wider impact from standards, for instance, on farm-gate prices for conventional producers. Such sector-wide effects have always been the ultimate aim of VSSs, but this critical marker of success remains to be seen.
VSSs need to bring balance to bargaining power
Adopting VSSs is usually perceived as a way to improve production conditions and global trade via incentives for farmers and value chain stakeholders. At the same time, it is widely acknowledged that inequalities in production and trade persist even under VSS-compliance, stemming from bargaining power disparities. More participatory VSS governance mechanisms can better support balancing these longstanding power dynamics by supporting access to resources, revenues, and voice for smallholders, and especially women. This would get at the root of entrenched inequities that, for example, see smallholders receive a very small percentage of the revenue generated from their products.
In short, we need to see a scaling up and deepening of research to understand if VSSs are creating real progress on 2030 Agenda and to truly understand if and how they might be a force for meaningful transformation towards environmental and social sustainability.