Impacts of sustainability certification on farm income: Evidence from small-scale specialty green tea farmers in Vietnam

• Published in: Food policy 2019-02, Vol.83, p.70-82
• Main Authors: Tran, Duc, Goto, Daisaku
• Format: Article
• Language: English
• Subjects: Propensity score matching; Small-scale farmers; Specialty green tea; Sustainability certification; Vietnam
• ISSN: 0306-9192; 1873-5657
• DOI: 10.1016/j.foodpol.2018.11.006

•We examine the economic impacts of sustainability certification on small-scale farms.•We use original survey data on small-scale specialty green farmers in Vietnam.•We employ propensity score matching to mitigate the selection bias.•Certification adoption increases farm average selling price and sales value.•Certification improves net farm income although increasing hired labor costs. Sustainability certification for small-scale farms has gained considerable momentum in developing countries. However, evidence on the economic benefits of certification schemes in the context of domestically consumed foods and beverages is scarce. This paper addresses this gap by evaluating the impacts of sustainability standards on the selling prices, sales, costs and net income of small-scale specialty green tea farming in Vietnam. We analyze original survey data on 401 smallholder green tea farmers and employ propensity score matching to mitigate self-selection bias. Our estimates reveal that certified green tea producers are able to obtain a higher average selling price and sales value. In addition, although certification leads to a dramatic increase in the costs of hired labor, net farm income is still significantly improved.