The impact of voluntary sustainability standards on banana exports
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With the growing use of voluntary sustainability standards (VSS) covering agricultural production processes, there is also increasing interest in understanding the impact that these standards have on trade. Empirical evidence is needed because a priori there are theoretical reasons why VSS may promote or hinder trade. This paper analyses banana trade data using a gravity model and adds to the available evidence that VSS increase the likelihood of exporting bananas and the value of banana exports. The impact is larger depending on the quantity exported. The estimated elasticity of the value of banana exports to VSS ranges from 0.2 to 0.5 for certified producers, 0.4 to 0.7 for certificate holders and 0.2 to 0.3 for certified areas. The findings are very similar to those generated by earlier studies. This study adds value in that it provides estimates of the elasticity of banana exports to a variety of VSS. The results show that the estimates for GlobalGAP, Fairtrade and Rainforest Alliance certificate holders are all quite similar. In addition, the estimates are also relatively close for the different indicators for VSS used, i.e. certificate holders, certified producers and area certified. With regard to GlobalGAP certification, the results show a stronger impact for middle-income countries than for high- or low-income countries.