Introducing quality certification in staple food markets in Sub-Saharan Africa: Four Conditions for Successful Implementation

Third party quality certification can be used to reduce transaction frictions caused by asymmetric information in value chains. Such certification may help to secure the competitiveness of smallholder farmers in domestic markets for staple crops in Sub-Saharan Africa (SSA) in the face of rising competition with high quality imports. Yet, while frequent in high value export crops, quality certification is still rare for staple crops. To understand why this discrepancy persists, we develop a model with four sufficient conditions for the functionality of certification in a value chain—willingness to pay for quality by downstream agents, upstream competition among traders with pass-through of quality-price premiums to farmers, existence of cost-effective certification, and farmers’ capacity to respond to certification by enhancing quality. We show that if these conditions hold, certification should theoretically lead to farmers receiving higher prices for higher quality goods, increasing investment in quality-enhancing inputs, and experiencing welfare gains in response to this quality enhancement. To see if these conditions and results hold in practice, we turn to evidence from a country-level diagnostic survey and from results obtained by others. We find that while certification systems exist in most countries surveyed, evidence of downstream willingness to pay for quality and of price premiums paid to farmers for quality is uneven. However, in cases where quality price premiums do exist, we find evidence that producers respond by enhancing quality. We conclude that policymakers can promote quality certification in staple chains by first ensuring that the four conditions we identify hold.