Dr. Eberhard Krain & Pelelefanga J.-M. Coulibaly International Certification Conference (ICC)

1. Certified sustainability: Only a burden to farmers or a tool to improve sustainability? (Some GIZ experience) • Dr. Eberhard Krain & Pelelefanga J.-M. Coulibaly • International Certification Conference (ICC) • Yamoussoukro, Côte d‘Ivoire • 15th-20th September 2014 Sector Programme Social and Environmental Standards & Promotion of Agricultural Value Chains and Biodiversity Programme (PROFIAB) - Sector Network Rural Development (SNRD) Africa

2. Overview • GIZ at a glance • The sustainability bottleneck • Role of GIZ in supporting sustainability and certification • Experience with certified sustainability • Experiences worldwide • GIZ experience with focus on Africa • Alternatives to certified sustainability • Conclusions Sector Programme Social and Environmental Standards & Promotion of Agricultural Value Chains and Biodiversity Programme (PROFIAB) - Sector Network Rural Development (SNRD) Africa

3. GIZ at a glance • GIZ is a not-for-profit enterprise, owned by German Federal Republic • Mandate: Sustainable development through international cooperation • Thematic areas: economic development, governance, environment, energy, health, education, agriculture and food, etc. • Present in about 130 countries, mainly developing countries and emerging economies • 2012: business volume of € bn 2.1 , mostly development projects, advisory services, dialog platforms and training courses • Major clients: German Federal Ministry for Economic Cooperation and Development (BMZ), other German ministries, European Commission, foundations and private sector • Staff members: > 16,000 globally, about 3,100 in Germany Sector Programme Social and Environmental Standards & Promotion of Agricultural Value Chains and Biodiversity Programme (PROFIAB) - Sector Network Rural Development (SNRD) Africa

4. The sustainability bottleneck Profit - increasing Market demands People - lacking capacity and incentives Planet - limited natural resources xda-developers Sector Programme Social and Environmental Standards & Promotion of Agricultural Value Chains and Biodiversity Programme (PROFIAB) - Sector Network Rural Development (SNRD) Africa

5. Components of a Voluntary Sustainability Standards System (VSS) A standard is like a law, it is just a piece of paper that needs a corresponding system to make it work 1. Standard Setting requirements 3. Assurance Providing evidence of compliance 2. Capacity Building Know-how & skills To fulfill requirements Certification is just 1 of 3 assurance options The bottleneck lever! 4. Accreditation „Controlling the controller“ Sector Programme Social and Environmental Standards & Promotion of Agricultural Value Chains and Biodiversity Programme (PROFIAB) - Sector Network Rural Development (SNRD) Africa

6. Role of GIZ as international donor organization in supporting sustainability and certification Network membership Standard Systems Development Secretariat function • African Cashew Initiative • Sustainable Cocoa Business • Competitive African Cotton Initiative • Cotton made in Africa • Better Rice Initiative Asia • ….. Dev. Projects & PPPs Sector Programme Social and Environmental Standards & Promotion of Agricultural Value Chains and Biodiversity Programme (PROFIAB) - Sector Network Rural Development (SNRD) Africa

7. (ISEAL= International Social and Environmental Accreditation and Labelling Association) Selected worldwide Experiences (ISEAL) Standard compliant production is increasing dramatically and market penetration is significant in some sectors There is a gap between production and sales for some commodities Sustainable production is skewed towards more developed countries Certified farms are different and excel on numerous social, environmental, and economic characteristics Certified operations do make improvements over time Impact evaluation results are still rare. Recent studies suggest that observed changes cannot always be attributed to standard systems Farmer incomes increase, but not always and more improvement is needed There are some important limits to what certification and standards can do alone Sector Programme Social and Environmental Standards & Promotion of Agricultural Value Chains and Biodiversity Programme (PROFIAB) - Sector Network Rural Development (SNRD) Africa

8. Certified vs. uncertified producers outcomes(% difference in results for important COSA indicators)(COSA= Committee on Sustainability Assessment) Certified producers perform better on average Source: ISEAL presentation taken from the COSA Measuring Sustainability Report 2014 Sector Programme Social and Environmental Standards & Promotion of Agricultural Value Chains and Biodiversity Programme (PROFIAB) - Sector Network Rural Development (SNRD) Africa

9. Experiences of GIZ-SNRD Africa projects with certified sustainability (SNRD= Sector Network Rural Development Africa) Survey methodology • Survey sent to 48 member projects • 18 filled the questionnaire • For about 40% of the SNRD projects certified sustainability appears to be a matter of interest for their work Sector Programme Social and Environmental Standards & Promotion of Agricultural Value Chains and Biodiversity Programme (PROFIAB) - Sector Network Rural Development (SNRD) Africa

10. SNRD Africa Experiences: Key Results Opinions about sustainability standards 2/3 positive attitude • They are interested in further exchanges on the subject 1/3 sceptical attitude • Concerns: complexity, costs sceptical about benficial impact Mostly used standards • UTZ > Rainforest Alliance (in the cocoa production) • Fairtrade, GlobalGAP, Organic (for fruits, vegetables, cashew, cotton, coffee crops) Sector Programme Social and Environmental Standards & Promotion of Agricultural Value Chains and Biodiversity Programme (PROFIAB) - Sector Network Rural Development (SNRD) Africa

11. SNRD Africa Experiences: Lessons Learnt Positive impact on productivity and quality • Increasing farmer negotiation power for better margins, growing reputation asexport countries, positive environmental impact Critical issues to pay attention to: • inclusion of smallholder, less organized producers and less competitive export countries • That benefits should also go towards farmers (not only towards buyers/processing industry etc.) • Complexity/ cost for farmers • Standards are one tool in value chain development; other measures need to be undertaken simultaneously Ex: organizational development of farmer groups, access to founds and markets, road network Sector Programme Social and Environmental Standards & Promotion of Agricultural Value Chains and Biodiversity Programme (PROFIAB) - Sector Network Rural Development (SNRD) Africa

12. GIZ Experience in Côte d’Ivoire • PPP projects implemented by GIZ in the cocoa sector between 2010 and 2013 had a big focus on certification • Project private partners: CEMOI, SACO, KRÜGER, TOUTON • UTZ : 1 Coop., 735 Prod., 3 900 MT certified • Rainforest Alliance : 35 Coop., 19 010 Prod., 40 935 MT certified • Projects objectives • Support implementation of certification process in the coop. (information, internal management system, audit, …) • Training of extension staff • Monitoring and evaluation Sector Programme Social and Environmental Standards & Promotion of Agricultural Value Chains and Biodiversity Programme (PROFIAB) - Sector Network Rural Development (SNRD) Africa

13. GIZ Experience in Côte d’Ivoire • Success • cooperative organization were strengthened • increasing rate of adoption of GAP by producers and there incomes • Challenges • capacity building of cooperative leaders should be increased • sustainability beyond the projects • Lessons learnt • GIZ CIV is no more working on certification (only in marginal cases) but develops a more comprehensive capacity building for private partners and cooperatives Sector Programme Social and Environmental Standards & Promotion of Agricultural Value Chains and Biodiversity Programme (PROFIAB) - Sector Network Rural Development (SNRD) Africa

14. Zooming in on Assurance (Certification) 1 • Assurance types • First party (assessmentbyproducer) • Second party (assessmentbybuyer) • Third party (assessment/auditingbyindpendentbody = certification) • Certification, mostcredible but most expensive way • Alternatives • First party: farmerself-assessment on sustainability (SAI Platform) (nowcalledfarmsustainabilityassessment (FSA) • Peer review: MOAP, Ghana; IFOAM PariticipatoryGuarantee System • Smallersamples (e.g. ½ 4C vs. SAN/RA, Utz, FairTrade) • Longerauditingcyclesforgoodperformers (e.g. SAN/RA in Code underrevision) Sector Programme Social and Environmental Standards & Promotion de Filières Agricoles et de Biodiversité (PROFIAB), Sector Network Rural Development (SNRD) Africa

15. Zooming in on Assurance (Certification) 2 Is certification necessary for sustainability? • NO, however, it increases credibility What is really important? • Acquisition of know-how & skills • Application of improved practices Sector Programme Social and Environmental Standards & Promotion of Agricultural Value Chains and Biodiversity Programme (PROFIAB) - Sector Network Rural Development (SNRD) Africa

16. Conclusions • (Certified) sustainability has reached significant proportions of markets in developed economies • Certified sustainability has developed from a niche into the mass market • Certification costs are high, but much lower than the costs that are necessary to build up farmers know-how and skills • The impact of certified sustainability is mixed, however, in the majority of cases the outcomes are positive and small farmers have benefitted, too • Certification is not necessary for sustainability, but helps credibility • The more certified sustainability becomes mainstream, the less will be the opportunity for better prices (premium), nevertheless farmers are well advised to go towards (certified) sustainability in order to ensure market access • Alternatives to certification (1st & 2ndparty assurance) should be more explored Sector Programme Social and Environmental Standards & Promotion of Agricultural Value Chains and Biodiversity Programme (PROFIAB) - Sector Network Rural Development (SNRD) Africa

17. Contact Dr. Eberhard Krain eberhard.krain@giz.de Tel. +49 6196 79-1467 Pelelefanga J.-M. Coulibaly Pelelefanga.coulibaly@giz.de Tel. +225 2243 4392 Thank you! Sector Programme Social and Environmental Standards & Promotion of Agricultural Value Chains and Biodiversity Programme (PROFIAB) - Sector Network Rural Development (SNRD) Africa

18. References • Aimee Russillo (GIZ consultant): Overview Current State of Impact Measurements of Sustainability Standards Systems, GIZ, Eschborn 2013 • COSA: Measuring Sustainability - First global Report on COSA Findings in Agriculture, Draft, 2013 • FAO: Impact of international voluntary standards on smallholder market participation in developing countries, Rome 2014 • IFC: Building a roadmap to sustainability in agro-commodity production, 2013 • KMPG: Improving Smallholder Livelihoods: Effectiveness of Certification in Coffee, Cocoa and Cotton, 2013 • Kristin Komives: Entry presentation to the Panel Discussion “Responding to Results”, ISEAL Conference, London, May 2014 • NRI: Assessing the Poverty Implication of Sustainability Standards – University of Greenwich, 2013 • State of Sustainability Initiatives Review 2014 Sector Programme Social and Environmental Standards & Promotion of Agricultural Value Chains and Biodiversity Programme (PROFIAB) - Sector Network Rural Development (SNRD) Africa