Large farms, large benefits? Sustainability certification among family farms and agro-industrial producers in Peru

Abstract

• We use nationally representative data to explore implications of sustainability certification among large and small farms. • Certification is much more common among large farms than among small farms. • Certified farms are geographically clustered. • Certification is associated with higher farm incomes and changes in farm practices among large but not among small farms. • The importance and potential of certification in the large farm sector has been overlooked and deserves more attention. Do sustainability standards improve socioeconomic conditions and environmental performance among participant farms? While numerous studies have addressed this question, results are mixed, and the external and internal validity of the available evidence is limited. Moreover, the extant literature has mainly focused on smallholder farms. Our contribution is twofold. First, this is the first paper to use nationally representative panel data to explore the proliferation and implications of sustainability certification. Second, we consider both small (family-operated) and large (agro-industrial) farms. We use data from Peru’s National Agricultural Survey and panel and pseudo panel methods. In terms of outcome variables, we focus on annual farm income and farm practices. Although sustainability standards rhetorically emphasize small farms, we find that certification is much more common among large farms than among small farms. Further, certified farms are geographically clustered, which confirms previous findings. Results also show that certification is associated with higher farm incomes and changes in farm practices among large but not among small farms. These differences are not attributable to farm size alone but likely associated with other characteristics of large farms such as crop choices and type of standard. We conclude that the importance and potential of certification in the large farm sector have been underappreciated and should receive more scientific attention in the future.