Columbia International Affairs Online: Working Papers

CIAO DATE: 01/2009

An Accounting Method-Based Cost-Benefit Analysis of Conformity to Certified Organic Standards for Spices in Tanzania

Adam Akyoo, Evelyne Lazaro

December 2008

Danish Institute for International Studies

Abstract

Certified organic farming has emerged as a market channel providing participating African small-holders with access to high value markets in the EU. The benefits may include not only a guaranteed produce market, but also premium prices, and higher net revenues. Where training in organic farming techniques is provided there may be also benefits in terms of increased yield. The major cost challenges are those for certification, although in many cases donor support to exporters is available to cover these.

This study quantifies the costs and benefits of complying with the certified organic standard for members of black pepper and chilli contract farming schemes in two districts in Tanzania. It is based on survey data from 2006-07 from samples of scheme members and control groups. In both cases none of the potential benefit listed above were realized. These results contrast with much more positive findings on the experience of schemes in Uganda, reported by other members of the DIIS-SUA SAFE Programme.* The results reported here are shown to be a consequence of absent price premiums and, in the case of at least one of the schemes studied, wider contract failure. Adoption of re-commended organic practices by members of the schemes was also low across schemes.

Learning from more successful schemes, working through larger and better organized exporters and design of more effective contracts are some of the changes recommended for future schemes in Tanzania.

*Standards and Agro-Food Exports from Africa, a 4-year ENRECA research and capacity building programme financed by FFU.