Effects of Fairtrade on farm household food security and living standards: Insights from Côte d’Ivoire

Fairtrade certification has recently gained in importance for various export crops produced in developing countries. One of Fairtrade's main objectives is to improve the social conditions of smallholder farmers. Previous research showed that Fairtrade has positive effects on farmers' sales prices and incomes in many situations. However, more detailed analysis of the effects on food security and other dimensions of household living standard is rare. Here, we use data from a survey of cocoa farmers in Côte d’Ivoire to analyze how Fairtrade certification affects aggregate household consumption expenditures and the consumption of specific types of consumer goods and services. We also differentiate between poor and non-poor households. Regression models with instrumental variables suggest that Fairtrade increases aggregate consumption expenditures by 9% on average. For poor households, the effect is even larger (14%). These effects are driven by increases in non-food expenditures. We do not find significant effects on food consumption and dietary diversity. In poor households, Fairtrade primarily increases spending on other basic needs such as housing and clothing, whereas in non-poor households positive effects on education and transportation expenditures are found. We conclude that Fairtrade improves farm household living standards, but not food security.