An accounting method-based cost-benefit analysis of conformity to certified organic standards for spices in Tanzania

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 export- ers 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 based on samples of scheme members and control groups. In both cases none of the potential benefit listed above were realized. This is the result of absent price premiums and, in the case of at least one scheme, wider contract failure. Adoption of re- commended organic practices by members of the schemes was also low. Learning from more successful schemes, recruitment of larger and better organized exporters and design of more effective contracts are some of the changes recommended for future schemes in Tanzania.