Can Ethical Trade Certification Contribute to the Attainment of the Millennium Development Goals? A Review of Organic and Fair-Trade Certification
 The growth of ethical consumerism in developed countries has led to increased imports of environmentally and socially certified products produced by the poor in developing countries, which could potentially contribute towards the achievement of the Millennium Development Goals (MDGs). Organic products and fair-trade products are among the rapidly growing “ethical trade” products. This market development trend utilizes certification systems that ensure impartiality in assessment of products produced in developing countries. This paper assesses how the conditions under organic certification and fair-trade certification directly and indirectly contribute to the achievement of the MDG targets.
This study found that organic certification substantially contributes to MDG1 (poverty and hunger) and MDG7 (environmental sustainability). Farmers who follow certification requirements stand to be rewarded with substantial improvements in farming systems, premium prices, and better market access. In addition, by eliminating the risk of exposure to toxic agrochemicals, fair trade farming directly contributes to health-related MDGs. Moreover, as organic agriculture contributes to mitigating climate change, certified organic farmers with established farm-monitoring systems are in better positions to receive compensation for soil carbon sequestration, when the methodology is approved.
Fair-trade certification directly deals with social aspects and directly targets smallholders in marginal areas, resulting in broader impacts on other non-income MDGs. In addition, financial benefits for fair-trade certification are immediate, while organic certification often requires a transition period before full certification is granted. Thus, in achieving the MDG targets, a combination of organic and fair-trade certification is recommended. For this market-based development scheme to broaden its poverty impacts, public sector support in harmonizing standards, building up the capacity of certifiers, developing infrastructure, and innovating alternative certification systems will be required.
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The views expressed in this paper are the views of the authors and do not necessarily reflect the views or policies of the Asian Development Bank Institute (ADBI), the Asian Development Bank (ADB), its Board of Directors, or the governments they represent. ADBI does not guarantee the accuracy of the data included in this paper and accepts no responsibility for any consequences of their use. Terminology used may not necessarily be consistent with ADB official terms.
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