Rainforest Alliance Certification in Coffee Production: An Analysis of Costs and Revenues in Latin America 2010-11

Producers’ perceptions of costs and benefits play an important role in the motivation to become and stay certified. This study of the short-term, economic costs of the investments, in light of the price premiums paid for Rainforest Alliance Certified coffee, indicates how compliance costs may be favoring or hindering growth. It reveals a complex cost-benefit relationship in which a variety of contextual factors largely determine the profitability of certification. Data collected on the farms and at farmer group administration level indicated that implementation costs do not constitute an entry barrier and do yield positive returns, provided adequate guidance is given on cost-efficient technology, farm productivity and satisfactory price premiums are paid. To account for the diversity of influencing factors and the context-dependence of the cost-benefit relationship, a tool was developed that allows for testing of different possible solutions for each of the regions included in the study.