Private certification in the Madagascar lychee export chain: business-driven or donor-driven dynamics?

Abstract

Madagascar has a tradition of agricultural trade (coffee, vanilla, cloves). In the 90s, the country started developing non-traditional exports, such as lychees, to the European Union (EU), thereby generating substantial cash revenues for small producers. In 2005, access to the EU market became more difficult, due to more stringent quality requirements and to the growing use of the private retailer standard GlobalGAP. Whereas the empirical literature on private standards presents GlobalGAP either as a success story or a threat for small producers, the case of Madagascar exhibits a specific dynamics: after booming in 2007, GlobalGAP is actually collapsing. The aim of this article is to disentangle the mechanisms of this evolution and to draw some conclusions regarding market access enhancement through private standards. This work is based on semi-structured interviews carried out with all stakeholders of the export chain, government agencies and programs supporting lychee production and on weekly data on lychee trade flows (2001-2010). Using a global value chain approach, we first show the importance of the chain structure: importers are identified as lead-firms (conversely to most studies dealing with private certification) in an environment characterized by low competition at the international level. We then evaluate the role of donors and trade facilitators in the promotion of GlobalGAP. After giving evidence for the collapse of GlobalGAP, we assess what is left of the GlobalGap procurement system once it has been abandoned: stabilization of the relationship between exporters and producers and thus enhanced traceability, upgrading of private marketing infrastructures, improved management discipline. We conclude that in the Madagascar lychee chain, although GlobalGAP had little impact on market access, its implementation produced beneficial side-effects for small producers.