What are the true costs and benefits of certification? This is a question we often get asked at UTZ. Underlying it is; how can we be sure that certification isn’t only an administrative burden for farmers, but an asset actually benefitting their livelihoods? To address these questions and help farmers gain a clearer picture of the costs and benefits of certification, we developed the cost/benefit tool.
It allows producer groups (a group of organized farmers) to make better-informed decisions about certification. This gives farmers the knowledge and resources they need to become better entrepreneurs and increase their position in the marketplace. At the same time, it creates more transparency and objectivity in the discussions around costs and benefits of certification. This is good news for all actors in the supply chain.
Henriette Walz, Global Lead Deforestation at UTZ, developed the tool as part of the Monitoring & Evaluation team. She explains:
It is very important to us that the producers themselves are empowered to make the decision whether or not to get certified. That they decide what is best for them. That decision-making process we want to support with this tool.
Getting a clearer picture: now and in the future
The tool is a comprehensive spreadsheet that allows producer groups to provide their information and get an estimate of their individual costs and benefits in return. Costs include for example training, staff, equipment and audits while benefits involve market access, increased group income, external support and better organization. Interdependencies between costs, benefits and influencing factors are taken into account as well.
The tool cannot provide exact numbers on how much the certification process will cost due to the many uncertainties and unique influencing factors of each producer group. However, it does provide users with detailed cost and benefit estimates. Costs and benefits can even be compared side-by-side to help producer groups determine when the benefits of certification will begin to outweigh the costs.
How did we develop the tool?
As we said pinning down exact costs for producer groups can be difficult as they vary widely from farm to farm. They can often overlap with costs that are not related to certification. Henriette adds: “That’s why we commissioned several studies and used existing studies conducted by third parties, such as KPMG and Technoserve, to distinguish different cost and benefit categories. We then went through the UTZ Code of Conduct, a set of requirements farmers need to comply with to get certified, to identify possible costs that could arise from every requirement. Finally, we made a survey and asked our Field Representatives to tell us which costs are typically high and which costs are typically low for farmers in their country.”
Piloting the tool
The tool is currently being piloted with farmers in Côte d’Ivoire and is continuously undergoing improvements to make it more accurate and inclusive. Right now, it is only available at the group-level for short term costs and benefits. We are working to adapt it for the farm-level and to include longer term effects, such as environmental or social benefits, which are often more difficult to quantify and track.
Siriki Diakité, our Regional Representative for West Africa, is working hand-in-hand with producer groups to implement this tool in Côte d’Ivoire. About the results he has witnessed so far, he says:
The tool has helped the groups gather their costs in one place. It gives an overview of the costs and allows groups to better compare them to the benefits.
Transparency to grow
As the demand for sustainability continues to grow, it is our mission to support farmers in making informed decisions based on transparent information. This new cost and benefit tool is one more way in which we can empower farmers to make choices that are best for them.
Would you like to know more about the tool? Or do you know a producer group that wants to join the pilot? Get in touch at email@example.com.