The benefits of geographical indication certification through farmer organizations on low-income farmers: the case of Hoa Vang sticky rice in Vietnam

Abstract

Origin labeling and quality upgrading through farmer organizations have been considered as solutions to reduce transaction costs and improve market bargaining power. This paper explores whether belonging to a farmer organization that improves and signals quality can help increase yields and household incomes of small-scale farmers for a specific quality product, Hoa Vang sticky rice in Vietnam. The paper is based on primary data on 185 households collected in 2013 and on 149 households collected in 2015. Different econometric methods were applied to investigate the effect based on rice yield, rice income and household income as the outcome variables. The results show that membership of farmer organization does not significantly improve household income compared to non-membership. However, members of farmer organizations have less resources in terms of land and inputs than non-members. These results suggest that the economic results achieved by farmers with fewer opportunities to access markets are similar to those obtained by farmers with more opportunities thanks to the involvement of farmer organizations in marketing. The specificities of the Hoa Vang sticky rice are still not reflected in higher farmer sales prices and incomes. More dialogue between farmer organizations and their customers is thus required, as well as better public control of labeling fraud.