Fighting standards with standards: harmonization

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Fighting standards with standards: harmonization, rents, and social accountability in certified agrofood networks. Tad Mutersbaugh. Department of Geography ...
Environment and Planning A 2005, volume 37, pages 2033 ^ 2051

DOI:10.1068/a37369

Fighting standards with standards: harmonization, rents, and social accountability in certified agrofood networks Tad Mutersbaugh

Department of Geography, University of Kentucky, Lexington, KY 40506, USA; e-mail: [email protected] Received 21 October 2004; in revised form 7 January 2005

Abstract. In this paper I explore the remaking of globalized standards through harmonization, and its impact upon certified-organic and fair-trade agrofood networks. I focus on certification standards and discuss four shifts associated with globalized standards (an increased importance of multilateral institutions, changes to standards language, displacement of network-specific standards, and a shift away from relational standards). It is then argued, with reference to value-chain rent theory, that the shift to globalized standards has transformed rent relations in ways that benefit certain actors (that is, retailers) and imperil the earnings of others. In brief, globalized standards increase the costs of standards compliance, the full burden of which falls upon immiserated producers, to the point at which farmers see little economic advantage to certified-organic and fair-trade production. I then examine social-accountability standards that seek to `fight standards with standards' by championing the consolidation of strong labor and environmental protections under a single label. The study suggests that a single-label strategy can be successful, yet must struggle to overcome a Polanyian double bind, for, in order to build broad coalitions necessary to extend the reach of protective standards, the coalitions must include corporate interests that prefer weaker, contract-based standards.

In the study of global standards, many paths lead back to Karl Polanyi's (2001) analysis of late 19th ^ early 20th century market utopian efforts to base the international economy on the gold standard. As national currencies were pegged to gold, governments newly stripped of control over monetary policy found it increasingly difficult to protect citizens from the wrenching economic dislocations occasioned by the knock-on effects of a static money supply. Although those powerful nations benefiting most from the single standard managed to preserve social peace, others experienced a widespread breakdown in economic order. Many responded with increased police power that, in some cases, proved fatal to democratic institutions (Polanyi, 2001, page 245; see Burawoy, 2003; Hart, 2004). With respect to contemporary agricultural standards, Polanyi's analysis of market regulation offers three relevant insights: first, social movements seeking to manage markets arise in potent, though discordant, coalitions of multiple class and state actors; second, the remaking of market form reshapes economic practice, altering, among other things, modes of transaction, ways of measuring, gathering, storing, and policing data, and ways of taking decisions; third, these remodeled markets are productive of far-reaching and disruptive changes in social and cultural relations. Drawing upon these insights, in this paper I will argue that agrofood standards are being progressively `globalized'. The standards language is being rewritten, or harmonized, to bring provisions into agreement across national and transnational contexts. This `globalization through harmonization' is not, however, a unitary movement, but rather encompasses diverse national and regional initiatives such as the US Department of Agriculture's National Organic Program (USDA NOP), the European Union's 2092/91 organic-food standards, transnational institutional codes such as the UN Codex Alimentarius, the International Organization for Standardization (ISO) Guide 65, and the World Trade Organization Trade-Related Aspects of Intellectual Property Rights (WTO TRIPS),

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and finally nongovernmental organization (NGO)-sponsored programs such as the International Federation of Organic Agriculture Movements (IFOAM), the Fairtrade Labelling Organization (FLO), and the International Social and Environmental Accreditation and Labelling alliance. This wealth of parallel initiatives provides standards globalization with momentum, yet also internalizes conflicting elements of standards language, some of which favor trade liberalization, others social justice and environmental protections. In other words, harmonization does not yield homogeneous standards. Globalized agrofood standards codes such as the USDA NOP or FLOöwhich, including supporting rationales, can run to several hundred pages öform a highly contingent mix of component substandards of varying origins. I identify two distinct milieus active in the production of standards: multilateral institutions (MLIs) such as ISO and the WTO, which press for trade liberalization, and agrofood-network NGOs such as IFOAM or FLO, which emphasize social justice and environmental protections. This said, I do not mean to suggest that these milieus occupy separate social and political spheres. In fact they overlap substantially in the process of standards compilation. For instance, the two-hundred standards-writing technical committees of the ISO are populated with industry representatives via national standards bodies (ISO, 2004), and IFOAM, to take an agrofood-network example, integrates corporate interests in its policy forums. The writing of national standards such as the US NOP can be very contentious, pitting bureaucrats, activists, and agribusiness in extended struggles over standards language. To cast the making of globalized standards into sharper relief, I focus in this paper upon certification norms. These provisions, which I analytically distinguish from production norms, typically form a chapter within a standards document and concern practices necessary to quality assurance and transparency of inspections and documentationöin sum, practices said to provide a technical means to `reconvene trust' between globally-separated producers and consumers (Whatmore et al, 2003). Examples of certification practices include field inspections to demonstrate that commodities contain specified qualities, warehouse inspections and tagging requirements to ensure that qualities are not adulterated during transit, and contractual separations between inspectors, certifiers, and producers to assure the integrity and transparency of inspections.(1) Certification requirements provide a useful vantage point for the analysis of harmonization. First, ISO and the WTO have had a hand in the writing of certification language and its introduction into agrofood standards. Second, certification provisions directly affect the accumulation of wealth within networks by restricting interorganizational liaisons, that is to say social relations, in the field. In a sense, certification alters the framework of value production such that farmers and their organizations become consumers of certifications. I turn to rent theory to analyze these relations. Third, political and economic impacts cause certification standards to become a locus of social struggle, pitting trade liberalization against socioecological protections, as evidenced by alternative social accountability initiatives detailed in section three. Through the attention given in this paper to MLI and NGO involvement in the writing of certification standards I seek to contribute to a productive tension between actornetwork and conventions theorists (for example, Busch, 2000; Callon, 1998; Goodman, 2004; Mansfield, 2003) and political economists (for example, Flynn et al, 2003; Freidberg, 2003a; Guthman, 2004; Watts and Goodman, 1997; Whatmore et al, 2003). I call attention (1)

This study is limited to organic and fair-trade standards within agrofood networks. Certification practices, however, have been extended to every corner of the `quality' economy from footwear to agroforest products such as sustainable timber, carbon sequestration (Brown, 2002), nongenetically-modified foods (Roseboro, 2002), and geographic indicator labels such as Mesoamerican biological corridor products (World Bank, 2003).

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to ways in which institutional and social struggles over globalized standardsöbeyond the boundaries of what are generally construed as agrofood networksöshape geographies of governmentality, and consider how social action within agrofood networks, both by farmers and by social activists, affects these geographies (Goodman and DuPuis, 2002; Winter, 2004). As Gillian Hart puts it: ``[G]overnmentality calls for a far more precise diagnosis of the rationalities of rule, the forms of knowledge and expertise they construct, and the specific and contingent assemblages of practices, materials, agents and techniques through which these rationalities operate to produce governable subjects ... the concept of governmentality decisively decenters the state as a monolithic source of power, a move that opens up for examination a multiplicity of other sitesö including, for example, non-governmental organizations (NGOs) and multilateral agencies'' (2004, page 92). In this paper I draw connections between standards writing, impacts, and alternatives in three sections. In the first, I examine how `green label' certified-organic or fair-trade agrofood standards are modified as they are brought into harmony with ISO norms. Four broad shifts are linked to standards harmonization, including changes to standards language, changes in organizational structure, and consolidation and loss of alternative standards. In the second section I examine the impacts of global standards on certified-organic and fair-trade coffee producers. Using the value-chain theory of Gary Gereffi (1999) and Raphael Kaplinsky (2004), I show how globalized certification standards constitute a policy rent. Well-organized farmer groups are able to gain access to this rent, which allows them to innovate with respect to administrative capacity. I also show that, unfortunately, globalized certification standards bring higher production costs, causing Mexican producers to wash out of certified-organic and fair-trade production. In the third section I assess `social accountability' efforts that seek to remedy this difficult situation. Initiatives such as Social Accountability in Sustainable Agriculture (SASA) seek to set up a single standard integrating organic, fair-trade, and environmental certifications in order to confront globalized standards, reassert a full range of social justice and environmental productions, and claim rents for marginalized producers. However, this approach confronts competition from corporate contract-based private standards initiatives. Globalized standards: harmony for prosperity The ISO year 2000 World Standards Day poster, `Harmony for Prosperity' (figure 1, see over) captures several qualities that distinguish globalized standards. The image is striking: a globe set on a black background recalls the view of earth from space, but in place of clouds drifting across a blue-green orb, we are shown a gridded matrix, a future in which prosperity is secured by global trade underwritten by (ISO) rules. The equation of harmony and prosperity would replace our present Polanyian polyphony of national regulation and, of importance to this study, independent agrofood network standards. The reference to `World Standards Day' points to the broader social context of standards harmonization as a corporate social movement, based in national and international institutions, that promotes harmonization as an element in neoliberal trade strategy (Cortopassi, 2001; Lowell, 1997). The dashed dividing lines that bisect the globe recall the original mission of ISO as a clearinghouse for trade management metrics. However, globalized ISO-based standards for product-certification systems are qualitatively different than, say, those setting the length of a meter: whereas earlier standards were concerned with product specifications, contemporary certification standards codify social practice, setting rules of institutional process and specifying

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Figure 1. ISO World Standards Day 2000 poster.

interorganizational contractual relations necessary to demonstrate that a commodity is in possession of advertised qualities (such as being organic or fair-trade) and to protect that quality, which has also an exchange value, as the commodity travels from producer to consumer. Perhaps the most prominent reference, however, is to the harmonization process, depicted both temporally in the (present) harmonization for (future) prosperity slogan and spatially as global grids delimiting a harmony of ordered trade. Since the mid-1990s, ISO-defined globalized certification standards have displaced agrofood standards with remarkable rapidity. To take the case of organic standards, certification norms were developed in tandem with production norms in the 1970s. State regulation was limited and third-party inspections not required. This structure persisted until the early 1990s, when the EEC 2092/91 standard was formed (Raynolds, 2004); by the late 1990s a series of parallel national standards and harmonization initiatives were underway [US NOP, EU 2092/91, Japanese Agricultural Standards (JAS)], first in Europe, and subsequently in the United States and Japan. Harmonization was keyed by transnational institutions: ISO produced the Guide 65 program on third-party certification standards, and later the ISO 9000 quality standards, which established the process for harmonizing certification standards. The UN Food and Agriculture Organization (FAO) Codex Alimentarius Commission followed suit, introducing its Guidelines for the Production, Processing, Labelling and Marketing of Organically Produced Foods; nation states including Argentina, Australia, Canada, the US, Israel, Japan, and Switzerland, among others, soon adopted food certification standards harmonized to transnational norms. What are the consequences of harmonization? Several broad trends, detailed in following sections, may be discerned. These are: (a) a change from a regime in which standards governance was primarily vested in commodity networks to one in which they are governed in part by MLIs, and (b) changes to standards text that establish common auditing frameworks and cross-reference, for instance, the reference of NOP certification standards to international auditing standards. These changes in institutional

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embeddedness and language give rise to other shifts including: (c) a displacement of organic and fair-trade labels [such as IFOAM-associated certifiers like the Organic Crop Improvement Association (OCIA)] by national labels such as the NOP, and (d) loss of relational network standards as they become notional globalized standards. Harmonizing institutions Taking up the first of these four trends, I will argue that organic and fair-trade certification standards are being progressively removed from their network crucibles and institutionally (re)embedded in MLIs. Although ISO has played a central role in standards-making since the 1940s, recent years have seen the institutional matrix become much expanded and new formal collaborations with other multilateral institutions have been established. The internal structure has grown to include 146 national standards member bodies such as the US American National Standards Institute (US ANSI) located in 126 countries, which send delegates to standards-writing committees (certification standards, for example, are written by the Conformity Assessment Committee). Equally significant are changes to the manner in which globalized standards are adopted and compliance is policed. In its early postwar years, ISO was viewed as a negotiated, democratic activity (Kuert, 1946). The contemporary standards scene, by contrast, takes a rather more activist approach to standards adoption. Standards compliance is enforced via an institutional triangulation with the WTO: under the Technical Barrier to Trade agreement, WTO signatory nations failing to comply with standards may risk prosecution for trade obstruction (ISO, 2005). As ISO has become intertwined with the WTO, it has also become enrolled in major trade-related standards initiatives such as TRIPS, TRIM (agreement on TradeRelated Investment Measures) and GATS (General Agreement on Trade in Services). What these initiatives share is an intent to set up globalized standards templates that will constrain network standards and national regulation. The placing of certification standards under the rubric of transnational codes has contradictory implications for certified product producers: backing by the ISO Guide 65 process, for instance, was instrumental in gaining EU market access for Mexican certifying agencies. On the other hand, MLI-based certification adds costs, as detailed below, and is broadly embedded in the global Northern strategy that Robert Wade (2003) terms `kicking out the ladder', in which wealthy countries, led by the United States and the United Kingdom, can protect intellectual property rights and thereby preserve a privileged economic position.(2) Any realization of standards-based global harmony is, however, far from complete. Social-justice and agrofood-network activists question MLI-based standards from without (as discussed in the third section), and, even from within, national standards committees differ on the goals and uses of standards. For example, an ANSI online standards primer distinguishes US approaches from EU approaches: ``The U.S. standards system is `bottom-up' and is private-sector-driven. In contrast, in European and in other world regions, there is a `top-down' approach which is centralized and government-run'' (ANSI, 2003). (2) (Global) Northern organic producers receive economic support from parallel rules outside of the standards framework. The European Community 1257/1999 rule, for instance, provides parallel support for rural development from the European Agricultural Guidance and Guarantee Fund, and acknowledges that some `distortions of competition' are justified [1257(15)], and the USDA has paid crop certification costs for several years (for example, Dmitri and Oberholtzer, 2005). My point here is not to dispute smallholder-friendly environmental policy, but rather to point out equity issues: standards support (global) Northern economies, enforcing intellectual property rights and obligating nations of the South to demonstrate compliance, yet incorporate no enforceable mechanisms to promote technology sharing.

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In part this derives from transatlantic institutional differences: David Goodman (2003) notes that EU scholars have had better access to EU food and agricultural policy circles whereas North American scholars have been relatively isolated from policymaking. In addition, there are differences in the realpolitik of standards. Geographic indicator (GI) standards, for instance, have provoked disputes over articles 22 and 23 of the TRIPS agreement (WTO, 1995), with EU authorities pushing for expanded GI labels to benefit agricultural and tourist industries dependent upon local-name branding (for example, wine regions), and US policymakers representing the interests of corporations that would benefit from weakened place labels (Barham, 2003; Wade, 2003). In sum, globalized standards and affiliated transnational institutions have become both a bone of contention in international trade disputes and a focus of corporate and environmental or social-justice movement attention. Certification standards rewritten Concurrent with a shift in institutional location, harmonization introduces two changes with respect to standards language. First, MLI language has been introduced into national standards in three areas, including transparency standards that constrain contacts within and between network actors, auditing standards that spell out processes required to certify compliance with organizational norms, and labor ^ environment exclusions that limit the ability of network-specific and national norms to establish independent labor and environmental protections. Taking the case of the NOP standard, certification provisions are derived from the ISO Guide 65 standard [sections 4.2(l), 4.2(f ), 4.2(o)(2), 4.2(e) on conflict of interest and section 8.1.1 on transparency]. Second, standards are often cross-referenced to other ISO standards. The NOP full-text standard makes reference, in particular, to the ISO 10011-1 (Guidelines for Auditing Quality Systems, Part I Auditing). Transparency and auditing

Organizational relations required by certification standards are depicted in figure 2. New administrative auditing jobs required by globalized standards are underscored. As is evident, transparency standards require the introduction of many new professional positions, institutionalize separations between offices (many of which formerly worked in concert), and bring thoroughgoing changes in production spatiotemporality (Mutersbaugh, 2004). These new certification-induced administrative activities (figure 2) burden producer organizations, certifying agencies, and inspectors with costly activities (Mutersbaugh, 2004). Labor and environmental exclusions

Harmonization also introduces environmental and labor exclusions. Within the NOP, for example, many environmental standards survived challenges (including efforts to allow genetically modified organisms, use of sewage sludge, and irradiation), yet other issues were excluded from the final version (Allen and Kovach, 2000; Vos, 2000). Biodiversity conservation measures are not supported, and labor and fair-trade standards are excluded by asserting that labor standards lie outside of the purview of certified-organic standards and referring readers to labor law öas responses to public comments in the full text version of the NOP make clear (NOP, 2002). Organic labels displaced Given that trade forms a central rationale for standards harmonization, improved foreignmarket access for some certifiers and farmers might be anticipated. Less expected, perhaps, has been the apparent decline in importance of agency labelsösuch as the OCIA certified

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Figure 2. Third-party certification in an organic coffee producer group. OCIA refers to the Organic Crop Improvement Association.

organic labelörelative to harmonized national standards such as the NOP or JAS, and the concomitant shift of independent labelers from standards writers to service providers. The logic of this trend, based on ethnographic data, is clear. In a conversation in 2003, a certifying-agency official commented upon loss of independent standards: ``We can't deny the NOP seal to any producer who complies with NOP norms ... . If we have additional certifying agency requirements [other than NOP requirements] producers will just ask for the NOP seal'' (certifying-agency official, 10 July, 2003). This militates against the maintenance of independent labels for two reasons. On the one hand, labels are expensive to maintain owing to the costs of complying with additional certification paperwork requirements and of convincing consumers (through adverts) to prefer firm-based labels. On the other hand, labels are undercut because producers prefer to lower costs by declining additional inspection points such as `shade-grown' that are not NOP recognized. Indeed, an Internet search indicates that certifying agencies including Oregon Tilth and QAI (Quality Assurance International) no longer advertise organic standards independent from NOP, the European Union, or JAS. As a result, globalized standards tend towards a `lowest common denominator,' minimizing protections in national standards and displacing more comprehensive network-based standards.

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From relational to notional standards In addition to the loss of independent certifier standards, there has been a shift from relational to notional standards. A constitutive characteristic noted for agrofood networks, particularly by actor-network theorists, is a relational character such that norms and standards of proof are generated and adjudged from within networks (Campbell and Liepins, 2001). With harmonization, however, certification standards become increasingly notional, that is to say, defined outside of networks by ISO committees, nonnegotiable, and verified by external inspections. An example of this relational-to-notional shift may be seen in the transformation of OCIA certification practices. The original approach of OCIA was to certify in a decentralized, collegial peer-review process reminiscent of academic reviewing. Producers, organized into local chapters of 5 ^ 100 members, held periodic meetings in which they submitted individual organic cultivation plans for criticism by chapter comembers with reference to IFOAM standards (see Gonza¨lez and Nigh, 2004). As globalized standards language replaced network norms and IFOAM revised its organic principles in accordance with International Organic Accreditation Service standards, third-party certification was implemented. This loss of chapter-based peer review was acutely felt by certifying agency personnel no longer allowed, under ISO-based rules, to work directly with members to resolve organic-certification problems: in the words of one certifying-agency executive, certifying agencies have become `schizophrenic', certification `a political animal' (certifying-agency executive, 1 June 2004). This experience is replicated in Oaxacan (Mexico) certified-producer organizations: a review of certification documents over the 1994 ^ 2003 period demonstrates a similar shift from `trust-based' to third-party certification that provoked similar misgivings (Mutersbaugh, 2004). Globalized standards, rents, and producer organizations Having set out a set of shifts attributable to globalized standards, in this section I will examine their effect on certified-agricultural commodity producers. First I will argue that globalized standards constitute a form of `policy rent' that helps producer groups with exceptionally good administrative capacity to increase their income-earning capacity relative to other, less organized groups. Then, striking a less sanguine note, I will argue that even the best-organized groups find their gains severely eroded by the high cost of complying with globalized standards. In a sense, globalized standards, particularly certification standards, create a barrier to entry so formidable that all of the rent income earned by market entry is spent in scaling the barrier. To make these points, I draw upon the work of value-chain theorists Gereffi, Kaplinsky, and Robert Fitter. In what Kaplinsky (2004) terms the `search for the Nth rent', he argues that rent seeking is a key to economic success. Rent is a useful optic because it allows a consideration of the multiple ways in which farmers both claim rents through rent seeking yet also simultaneously may pay out rents as they purchase yearly certifications from certifying agencies. Certified-agricultural commodity producers earn exogenous `policy' (barrier-to-entry) rents when they gain access to certified-product markets, or endogenous (innovation) rents when they innovate with respect to, for instance, human capital or administrative capacity. Rents are earned as `returns from scarce assets' (Gereffi, 1999), yet scarce assets are, following Schumpeter, ephemeral qualities created (or eliminated) through economic and political activity (Guthman, 2004). To be clear: high-quality administrative capacities are responsible for organizational access to both types of rent. Barrier-to-entry and innovation rents thus overlap to a degree [Kaplinsky (2004) refers to rents as `mostly' one or the other]. Added administrative

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capacity enables organizations to overcome successfully bureaucratic hurdles, gaining access to barrier-to-entry rents (in this case certification requirements) that arise outside a network. Better administration also permits cost or labor savings from administrative efficiency, thereby gaining innovation rents generated `locally' within a network. Seen in this light, globalized standards create a policy rent by restricting access to certified-commodity markets. Picking up on the four shifts detailed in the previous section, globalized certification standards increase barriers to entry by imposing more stringent auditing requirements, reducing the ability of certified-agricultural producers to negotiate exceptions, and eliminating alternative paths to certification. Exogenous rents arise, then, because globalized standards-based certification is difficult and costly to implement as figure 2 indicates (see Bray et al, 2002; Ponte, 2002; Raynolds, 2004), and only those firms possessed of exceptional administrative capacity are able to obtain it. Although certified-organic and fair-trade rents have decreased in real terms, they remain significant. In the case of certified-organic coffee, for example, producers earn double or triple spot market prices (above historic coffee-price lows) for coffees with organic, fair-trade, and biodiversity certifications (for example, shade-grown), provided that coffees have a high organoleptic (physical taste) quality (Fitter and Kaplinsky, 2001; Rice, 2001). Standards, organizations, and technology rents Julie Guthman's (2004) exploration of US organics finds innovation rents to be fleeting: new technologies adopted by organic users provide superrents to early innovators, but the ability of other producers to rapidly adopt most organic technologies soon undercuts rents. For Mexican organics, this ephemeral character of rents holds, yet when the unique social character of Mexican organics is taken into account (widespread institution of cooperatively organized producer groups in lieu of the family farms or agribusiness firms which are predominant in US and EU contexts (3)) it may be seen that, although rents are ephemeral ödissipating under the pressure of static prices and increased costsörentier relationships persist in the form of administrative relations such as those depicted in figure 3 (over). Figure 3 illustrates the extent of organizational development present in a (case study) farmer's union. Integrating some six thousand fair-trade and organic producers (with over fifteen thousand including nonorganic, fair-trade coffee producers), the union employs about twenty full-time personnel plus another twenty in the associated credit union. By building up administrative staff, Mexican peasant producer unions such as CEPCO, UCIRI and ISMAM öeach of which possess equally complex organizationsöhave been able to keep up with ever-increasing requirements of globalized certification standards, allowing them to reap rents unavailable to less organized groups. Successful unions such as CEPCO and UCIRI have also persisted because they mobilize political and administrative capacity to capture other sources, such as finance and government assistance (`credit union' and `programs', respectively, in figure 3). Kaplinsky (2004) theorizes these abilities in terms of rent-seeking capacities. Though a full explication of rents is beyond the scope of this paper, I have grouped the most important aspects of rent below.

(3)

In the US case, farmsteads are individually certified, human capital being more readily available, and the USDA provides assistance such that the Schumpeterian technology rents discussed here are less important relative to ground rents (Guthman, 2004).

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Regional coffee producer organizations

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Figure 3. Organizational relations within an organic coffee cooperative. Human resources

CEPCO has combined Oaxacan indigenous cargo and tequio communal governance mechanisms (cargos are a form of Mexican indigenous village administrative labor, tequios are a labor tax or corve¨e)(4) with a Oaxaca City-based professional organic-agricultural extension team to achieve the disciplined document and farm management required by certification (Mutersbaugh, 2002). This `indigenous professional' governance strategy has been deployed by other indigenous certified-agriculture organizations such as ISMAM (Hernandez-Castillo and Nigh, 1998), UCIRI, and most recently Michiza Nava. In rent terms, this indigenous-governance capacity increases efficiency and provides the labor for certification, thus capturing innovation and policy rents, respectively. A second institutional innovation, the credit union, allows self-financing, which cheapens the cost of money used to finance coffee sales and helps to stabilize peasant livelihoods by providing banking facilities. In policy-rent terms, a credit capability allows the union to capture grants, financing assistance, and welfare programs from international NGOs, private banks, and the Mexican state. Relational (networking) capacity

Relational rents arise when producers cooperate horizontally (with other unions) and vertically (with other network actors such as certifiers) within a network (Gereffi, 1999; Kaplinsky, 2004). In the Mexican case, vertical cooperation with certifying agencies allowed producer groups to reduce certification costs öand capture innovation rentsö in the period before globalized standards: for example, the Oaxaca-based Certimex certifier originated in horizontal collaboration between Oaxacan coffee unions. At the time, EU-market certification was handled through IMO-Control (Institute for Marketecology, an EU-based certifying agency), and inspectors charged upwards of US $300 per day. Certimex provided training for Mexican inspectors who provided (4) Cargos are a form of indigenous governance widespread in Mesoamerica. Cargo participation is generally thought to dampen or `level' economic differentiation by diverting labor power to community service, although the general applicability of this principle is disputed (Chance, 1989). Cargos also provide a `brokering' function, providing a means to institutionalize liasons to Mexican governmental agencies, NGOs, and now alternative trade networks (Hernandez-Castillo and Nigh, 1998; Rus, 1994).

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services more cheaply, thereby reducing producer-group costs and providing employment for Mexican agronomists. To capture policy-rents, Oaxacan producer unions united politically to mobilize state bureaucratic capacity, petitioning for the allocation of statefinanced agricultural extension agents through Oaxaca's CECAFE [Consejo Estatal de Cafe (State Coffee Council)] to train villagers in certification-document management. In sum, rents derived from organizational innovation have enhanced the certification success of Oaxacan peasant producer unions. Union administrative capacityöwhich is cyclically underemployed owing to the seasonal nature of coffee production öorganizes member access to government programs, including coffee quality enhancement initiatives, housing assistance, and cultural programs. These programs cover a portion of administrative costs, thereby reducing overhead. This capacity is crucial, because certified-agricultural rents have largely dissipated owing to competition from other peasant unions and, more importantly, the high cost of administrative labor required to comply with globalized standards and political resistance from coffee buyers to higher prices. Prices paid to organic producers have not increased significantly since the late 1990s, and fair trade pricesöand indeed the principle of a minimum `living' wageöare currently under a `fair-trade light' challenge from corporate interests such as Starbucks and UtzKapeh (Goodman, 2004; Renard, 2004). Costly standards and ephemeral rents The success of certified-producer organizations in reaping innovation rents is tempered by troubling signs. Certified organic producers are on the increase, yet attrition is high. Statistical and documentary evidence from research on 29 regional organizations and 129 villages engaged in certified organic agriculture in Oaxaca, Mexico from 1998 to 2003 shows that as fewer producers enter into certified organic production, an increasing number leave (figure 4). The rate of producer exodus (figure 4) increases from negligible amounts in 1998 (the first year that globalized standards began to intrude upon network certification practices) and prior years to peak at, respectively, 12% and 14% in 1999 and 2000, and then improves until the 2002 ^ 03 cycle, when failing households again surpass the 10% mark. Matched to this, recruitment remained high until 2001 when it fell significantly. 2500 New organic farmers

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Figure 4. Producers entering or exiting certified-organic coffee production in a producer group, 1998 ^ 2003.

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In part this increased attrition and reduced recruitment may be attributed to increasingly difficult certification requirements, particularly when harmonization led to globalized standards after 1999. Additional contributing factors included the cancellation of CEPCO programs that defrayed initial costs of meeting standards and a general deterioration in the Mexican rural economy. Another consequence of low price levels has been that producers picked only about 50% of estimated production, during the 2002 ^ 03 harvest, preferring to leave one half of their coffee on the trees rather than sell it. As recently as 2000 ^ 01 harvest producers picked 85% of their coffee (and approximately 60% in 2001 ^ 02). (Certified organic production bases the amount that each household may sell upon production estimated during inspection to avoid the possibility that a household might `launder' noncertified coffee.) The proximate causes for this situation may be found in high production and certification costs relative to the added income from organic and fair-trade price premiums. A Technoserve study (2003) shows Mexico to have high production costs relative to other coffee-producer countries, with a cost band ranging from US $0.70 ^ 0.80/lb. Indeed, recent fieldwork indicates that this may underestimate costs, particularly in zones such as Oaxaca's Mixteca (home to many organic-producer organizations) where out-migration leads to increased costs via labor-pool reduction (see also Pe¨rezgrovas Garza and Celis Calleja, 2002). In addition, global-standards-based certification is quite costly. I estimate that 10 ^ 30% of gross organic-coffee receipts leave the village. Field studies and interview notes indicate that: (a) about 1% of gross sales receipts are charged by the certifying agency; (b) third-party inspection costsö10 ^ 20% of a village's plots must be independently inspected and their internal inspections auditedöfor smaller organizations run as high as 10% of gross receipts (although the average is 3%); (c) in-house costs of agricultural extension staff, marketing, and administrative personnel consumes a similar figure; and (d) regional organizational costs connected to certification, such as special travel, total 3 ^ 10% of gross (Mutersbaugh, 2002; 2004). As a result, certified-product price premiums at best just cover production costs. One might suppose that this redistribution up the certification chain would at least aid certifier personnel, yet certifying agency expenditures required to meet globalized standards cause most of the rent to be consumed. In the words of one certifying agency official: ``[Under the NOP] the certifying agency has become decentralized for service reasons, for the benefit of producers. The problem is that there is a lack of accumulation in the network apart from human capital. What we have here, a desk, some chairs, a computer, bookcases full of documents, that's it'' (certifying agency personnel, July 10, 2003). Furthermore, the ability to reach `down the commodity chain' and direct retailer profits to cover certification costs is severely curtailed. Certification standards only require a clear chain of custody to the retailer's door, and so retailers are not affected by certification costs despite the fact that coffee-chain profits are disproportionately concentrated in coffee import and retailing sectors. The top five importers control 40% of global trade and the top ten control 60%, with even greater levels of concentration in coffeehouse markets. Coffee profits are increasing in the retail sector as consumers discover and pay more for higher quality coffees, yet village-based producers reap no benefit and pay the costs of certification [Fitter and Kaplinsky (2001); see Marsden and Wrigley (1995) on retail capital concentration]. In short, globalized standards, as currently constituted, cause rents to be consumed in meeting standards requirements, reduce the possibility of cost-reducing cooperation, and reinforce the broader terrain of inequality by constraining the work of certification to producers and distributors, leaving retailers with cost-free rents.

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Fighting standards with standards: seeking social accountability via policy rents Watching rent earnings being consumed by globalized standards compliance, hemmed in by oligopolisitic market structures that stymie equitable distribution of certification costs, and confronting an earnings crisis, particularly in coffee, environmental, and social justice, NGOs have teamed up with producer organizations to `search for the Nth rent'. In this section I will focus on two `single-seal' initiatives, SASA and the Sustainable Coffee Partnership (SCP). They agree that fair-trade, organic, and environmental concerns should be combined in a single label. However, they differ fundamentally in approaches to implementation and certification. SASA prefers that standards be embedded in regulatory frameworks independent of networks whereas the SCP proposal, though less welldeveloped, has put forth a notion of private, contract-based voluntary standards along the lines of ethical supermarket labels (Freidberg, 2003b). To prefigure this discussion, it is useful to recall Polanyi's observation that market-managing initiatives unite diverse coalitions of social and state actors. This characterization holds for the two initiatives examined here. Each is comprised of social-justice and environmental groups joined to varying degrees with industry and state actors. These liaisons afford the respective initiatives with vital measures of transnational institutional support and social acceptance; yet they also limit their scope. Political economy of quality labels

Before examining these initiatives in depth, it is useful to weigh those factors that affect the multiplication and consolidation in numbers and types of quality labels, and the consequences flowing from the existence of multiple, competing labels. The globalization of social-choice agribusiness in the 1990s brought regionalized fair-trade and organic labels, first nationally and then internationally, into competition for consumer loyalties (Goodman, 2004; Guthman, 2004; Raynolds, 2004). In Latin America, IMOControl, Naturland, and OCIA-international were early certified-organic entrants serving EU and US markets. Northern organic and fair-trade certifiers developed early production standards and certification schemes, and by the late 1990s they were joined by new Latin America-based entrants such as Certimex (Oaxaca) and the Oaxaca-based OCIAMexico. Despite the competition, conflict between Northern and Southern certifiers was muted and manifested itself as bureaucratic hurdles. However, it soon became evident that Latin American certifiers were able to work for less and provide relational rents for Latin American certified-organic producers; this led to a retreat of Northern labelers from Southern markets and a consolidation-through-elimination of competing labels. What did not occur, however, was a `cross-platform' consolidation that would unite fair-trade, organic, and biodiversity certifications. Quite to the contrary, the early 2000s saw an expansion of environmental certifications such as the Smithsonian Migratory Bird Council bird-friendly, non-genetically modified organism, and carbon sequestration (Rice, 2001). Although some organic labels added fair-trade and biodiversity certificationsö Naturland in Mexico provides an instanceöthis did not result in combined, but rather led to `parallel' certifications in which a product is `double' or even `triple' certified by paying separate fair-trade, organic, and environmental certifications (in some instances Oaxacan farmers still pay separate US and EU organic certifications as well!). Harmonization contributes to this consolidation trend, as argued in the first section, by making firm-based labels an economic liability (relative to NOP-type national labels). It also can lead to a reduction in protections, as in the case of the NOP, in which tradeliberalizing interests won out, leading to an organic standard sans labor and biodiversity protections. In other words, harmonization promotes consolidation within, but not between, platforms. Thus, although a single-label initiative would be in step with a

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trend towards consolidation within platforms, it goes against the tide with respect to cross-platform consolidation. But what difference does a single, cross-platform ethical trade label make? It is argued that `label fatigue' contributes to a decline in consumer confidence, and hence to stagnation in ethical commodity market growth (NRETP, 2001). (Label fatigue results from confusing and conflicting label claims, for example, multiple competing definitions of `organic' and `fair trade'.) Assuming label fatigue is to blame, this would provide a potent argument for cross-platform consolidation if single-label initiatives can overcome three collective action difficulties. First, a Polanyian `double movement' of firmcentered accumulation and social action within organic and fair-trade networks has encouraged the formation of multiple labels (Barham, 1997; Goodman and DuPuis, 2002; Renard, 2005). Second, cross-platform consolidation would surely produce shortterm losers. Third, activists differ with respect to which platform (for example, fair-trade versus environmental conservation) should receive priority. Fighting for a single, cross-platform standard The two single-seal initiatives reviewed here share an interest in combining socialjustice, ecological, and organic protections, yet are quite different in other respects. The first of these, SASA, advocates reinforcement and expansion of public standards, the second, SCP, though less well developed, suggests a privatization of standards along the Starbucks sustainability-contract model. The SASA project unites NGOs with a long history of standards development in organic agriculture (IFOAM) and social justice [FLO, Sustainable Agriculture Network with the Social Accountability International industry-NGO collaboration (SASA, 2004)]. SASA, which published its final report in August 2004 and is now awaiting adoption decisions by project participants, would `fight standards', that is to say globalized standards, in two respects. In political terms, it reaches beyond the terrain of fair-trade or organic standardsöand certainly the ISO-WTO rubricöto expand the scope of standards by including international labor standards championed by the International Labor Organization (ILO). SASA labor standards specify core social-justice norms such as free association, treatment of special populations (for example, children), minimum labor standards such as wage rates and hours, work conditions, including hazardous exposure, and living conditions such as housing and educational access for children (SASA, 2002)öin a sense carrying forward the ideals of a standards `social clause' dropped after the Uruguay round of the General Agreement on Tariffs and Trade (Haworth et al, 2005). In economic terms, the SASA public label combining social justice and ecological or organic standards allows certified-producer organizations to fortify their rentier power vis-a©-vis large estates. Seen from a Oaxacan indigenous farmer's standpoint, farmers already meet social justice criteria, live on lands that retain high conservation value because of indigenous horticultural techniques, are willing to perform labor-intensive organic-agricultural tasks, and have invested heavily in administrative and physical infrastructure. In short, they have already scaled the most difficult barriers to entry, and would be in a competitive position with respect to retailers and large-scale `plantation organic' fincas (of over 20 hectares) ö that in the absence of stringent labor standards may otherwise come to dominate Latin American organic production (Gomez Tovar et al, 2005). It would seem that much hangs in the balance, yet so far the single, cross-platform label has not been widely embraced, for reasons that I will speculate on below. A second initiative, the SCP project sponsored by the United Nations Conference on Trade and Development (UNCTAD) and the International Institute for Sustainable Development, also seeks to build consensus for a single-label, multiplatform initiative.

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In this case, however, standards are private and contract-based. NGO participants overlap with the SASA initiative, yet its steering committee additionally includes global trade institutions (WTO, UNCTAD), national governments (Colombia, India, Brazil) and industry groups (Specialty Coffee Association of America, Kraft foods, Nestle¨) under a `stakeholder' rubric (IISD, 2003). Goals vary as well. Rather than work towards robust protections for workers and the environment, many participants call for `mainstreaming' (inclusion of all major coffee marketing agents) and a `common code' (a set of minimum environmental and worker standards) negotiated by and acceptable to all stakeholders. To achieve these goals, participants do not seek to revise globalized standards, but rather to develop voluntary standards embedded in `s-contracts' (producer ^ marketer sustainable contracts) that feature long contract terms, preferred client status, and transparent price premium systems. This initiative would also press for novel credit frameworks allowing producer capitalization via trade credit schemes. The SCP initiative adheres much more closely to the spirit of the `liberal creed' depicted by Polanyi. Industry players seek to preserve trade-liberalizing standards and also retain rentier power exercised through oligopolistic control of product value chains. Freidberg's (2003b) study of the Tesco supermarket (United Kingdom) `ethical trade initiative' provides an assessment of the contradictions that confront this strategy. On the one hand, ethical norms are enforced out of fear that the reputation of the supermarket will become `tarnished,' on the other, ethical standards are not well adapted to the social environment, and growers do not develop indigenous administrative capacity, at least in comparison with the situation found in Mexican organic coffee. Starbucksöwhich has remained outside of the SCP, but whose `preferred client' contracts provide a reference point for s-contractsöprovides an alternative image. Starbucks long resisted offering fair-trade coffee in its franchises, relenting in 2000 only after a concerted campaign by TransFair, Global Exchange, the Organic Consumer's Association, and thousands of activists. Nevertheless, despite reservations, many sustainable coffee advocates have chosen to support NGO ^ corporate collaborations. In this instance the rewards sought are far more immediate: at a time of unparalleled crisis in coffee production, with prices at historic lows, even small and short-term gains may make a significant difference to the survival of a coffee farm family. Which of these initiatives is to be preferred? SCP-type s-contracts take attention away from SASA-style cross-platform initiatives, receiving greater support from MLIs and industry groups. The reason for this support is clear, industry groups such as Starbucks would prefer to `greenwash' their products and keep their options open (Goodman, 2004). This means not only retaining control over the degree to which they engage in sales of ethical products, but also over variables such as price and environmental standards. The problem with s-contracts is that they privatize standards, making them voluntary and placing them under corporate control. And, because certification would also be internal and contract mediated, knowledge about specifics of social and environmental protections would not be public. More to the point, s-contracts would likely exclude the least-advantaged producers and most-endangered environments. The logic is as follows. Assuming that successful producer unions such as CEPCO, UCIRI, and Michiza Nava are included in s-contracts rather than certified-organic or fair-trade networksöindeed CEPCO is presently involved in a coffeequality project with Starbucks and Oxfamöthey would lose third-party certification practices and associated administrative structures. Lacking a sophisticated administration capable of mobilizing popular or public resources, slimmed-down unions will incorporate fewer really poor farmers. At least in Oaxaca, this would translate into less environmental protection because the poorest producers occupy the lands of greatest conservation value, namely, the cloud-forested slopes of the Mixe and Sierra Norte.

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Conclusion Working in the spirit of Polanyi, I have argued that contemporary globalized standardsö those standards reshaped through harmonization efforts of trade-liberalizing multilateral institutionsösubject certified-organic and fair-trade producers to an economic squeeze. As a result, Mexican farmers are washing out of green-label commodity production despite their extraordinary efforts. Because of these negative consequences, globalized standards have become a terrain of social action as social movements `jump scale' to challenge the process, effects, and multilateral institutional backers of harmonization (see Smith, 1993). However, as social accountability activists press for a single label that combines fair-trade, certified-organic, and environmental-conservation standards they encounter a Polanyian duality: NGOs advocate an expansion of social and environmental standards under an open, public standard, yet corporate actors prefer to privatize social accountability in `sustainable contracts' that protect retailer power. To address this single-label standards versus s-contracts split, I have drawn from the work of value-chain theorists Gereffi and Kaplinsky to argue that standards create a `policy-rent'. To gain access to standards-induced rents, Mexican certified-producer organizations engage in grassroots rent seeking by mobilizing a unique combination of indigenous governance and professional administration. From this perspective, the question becomes `How will changes to standards affect certified-producer organizations?' In this regard, a SASA-type social accountability approach, based upon expanded rent seeking that rewards ethical production, is most likely to preserve the innovative administrative structure that characterizes successful producer organizations. Greenwashing advocates, I would suggest, misunderstand the administrative intensity of certified-organic and fair-trade production in the global South. I have argued that s-contracts undermine the administrative capability of certified-organic and fair-trade producers, stripping their ability to promote social and ecological justice from below. As Polanyi argued, we must rediscover society, the intricate network of sustaining, cooperative relations that makes the economy tick. Figures 2 and 3 hold just such a social relation, built upon the solidarity of participants who view certified `sustainable' coffees as earth-friendly, feel themselves as part of an ecological social movement, and are willing to make sacrifices to further socioecological goals. Do globalized standards embedded in multilateral institutions promote a fundamentally new form of globalization, with unique spatialities (Peck and Tickell, 2002)? The answer is a qualified yes. Polanyi's work viewed economic liberalism as a social movement which, wielding the gold standard as a policy instrument, sought to realize a form of spatiality later popularized by Foucault, namely, Bentham's panopticism, in which `inspectability' becomes the hallmark of an economy based upon state-enforced private accumulation (Foucault, 1979; Polanyi, 2001 [1944], page 146). What is new to the contemporary era is a shift in the institutional location of inspectability to multilateral institutions. Globalized standards provide economic liberalism with an ability to reach well beyond currency management and directly affect the practice of everyday work. Although the gold standard had extreme (and harsh) local effects, the standard itself did not stipulate particular activities that had to occur at dispersed local sites, nor, for that matter, did it require (or 19th-century, fin de sie©cle international institutions acquire) an apparatus of global reach to ascertain whether scattered groups were in compliance with the standard. Globalized standards provide a new means of governmentality, yet also a new arena of social action.

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