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Performance and optimization of farm certification systems as private institutions of sustainability

Book - Dissertation

Subtitle:Performantie en optimalisatie van landbouwcertificatiesystemen als private instituties van duurzaamheid
The demand for an ecologically and socially more responsible production has increased dramatically. Traditionally, public authorities intervene by means of regulations and economic stimuli, but also private market parties integrate social and ecological concerns into their business objectives. As such they hope to create added value. Consequently, this can result into a win-win for both the private actor and the society.To operationalize these private initiatives in the farm sector, certification schemes with private standards and labels are used. These certification schemes can be considered as an example of Private Institutions of Sustainability, which are sets of rules voluntary followed by private market actors to reach a sustainability target.The doctoral thesis investigates whether these certification schemes and labels, as examples of Private Institutions of Sustainability, are a promising instrument to realize sustainable development.The introductory part focuses on why market actors are interested in these Private Institutions of Sustainability. A first descriptive analysis places PIoS between other sustainable development initiatives. According to different market actors PIoS are promising both from economic and ecological perspective. An important condition for the success of these schemes is consumer interest. By means of U+2018choice preferenceU+2019-modelling it is shown that there are strong consumer preferences for some sustainability claims. Moreover, different types of consumers perceive the same claims differently. A second important precondition for the success of these schemes is retail interest. In a qualitative analysis different retail strategies for sustainable production were identified.The second part of the thesis focuses on whether these private systems deliver what they promise, which is effectively contributing to ecological, economic and social sustainability. First the contribution of PIoS to ecological sustainability is investigated by means of a meta-analysis. The contribution is confirmed, although some question marks can be placed. To assess the economic performance of these systems the sustainable value method is further optimized. The analysis reveals that firms participating in PIoS create more added value by using ecological resources more efficiently. The social performance was investigated by means of a qualitative analysis of social equity within the value chain. PIoS are not automatically a guarantee for social equity within the value chain.In part three of the dissertation changes are modelled in the PIoS to further improve sustainability. By means of U+2018choice preferenceU+2019-modelling the cost experienced by market actors for ecological changes in the certification scheme is estimated. This enables us to estimate the private cost for further ecological sustainability. In a following step it is shown how the U+2018choice preferenceU+2019-methodology can be used to estimate the desired compensations for institutional changes within the certification scheme. This allows to reduce the information asymmetries during negotiations between participants in the value chain. Finally, a methodology is developed to assess the sustainable efficiency of firms and certification schemes when new sustainability targets are introduced. From the analysis it became clear that firms participating in certification schemes have a higher sustainable efficiency compared to firms who do not.The research shows that there is still room for further ecological and economic improvement by removing current inefficiencies in the systems. Given that these institutions are private, a trade off is made between private and social objectives. Although the role of public authorities has shifted from initiator to monitor, it is important that these give the necessary impulses for further improving PIoSU+2019 sustainability. Finally, the contribution of PIoS to internal value chain social sustainability depends on whether specific rules have been incorporated that safeguard the equity between participants.
Pages: VIII, 244 p.
Publication year:2010