The Value of Organic Certifications

Consumer taste for organic products has grown, increasing demand and costs along agricultural value chains. We estimate the impact of the world’s largest certification system – USDA organic – on exporters from one of the world’s most important organic production regions – Latin America. For that purpose, we use a novel dataset which combines the universe of agricultural export transactions from 10 countries in Latin America with the universe of organic certifications granted by the US Department of Agriculture since 2012. Our results indicate that certified firms increase exports to the USA relative to non-certified firms. Spillover effects are positive within firms, as certified firms increase exports of certified products to other destinations and non-certified products to the USA. Spillover effects are negative across firms: the more firms are already certified in the USA, the less that exports increase following certification.

IDB Blog Post on early version