U N I V E R S I T Y O F C O P E N H A G E N

F A C U L T Y O F S C I E N C E

Master’s Thesis Sidsel Nørskov Thomsen

The impacts of organic standards on global value chain dynamics A case study of the organic cotton value chain in Tanzania

Supervisor:MarianneNylandstedLarsen

Submitted:7thofNovember2016

University University of Copenhagen

Faculty: Faculty of Science

Department: Department of Geoscience and Natural Resource Management

Section: Geography

Author: Sidsel Nørskov Thomsen

Title: The impacts of organic standards on global value chain dynamics – A case study of the organic cotton value chain in Tanzania

Supervisor: Marianne Nylandsted Larsen

Submitted: 7th of November 2016

Abstract

ThisthesisinvestigatestheimpactsoforganicsstandardsonglobalvaluechaindynamicsintheTanzaniancottonsector.Thisisdonebyexaminingthenatureoftheorganiccottonsectorandwhat role theorganic standardshasplayed in the governanceof the value chain. In addition,upgradingpossibilitiesforsmallholdersandginneriesandmajorcostsandbarriersinmeetingtheorganicstandardsareanalyzed.AcasestudyintheShingyangaRegionwasappliedandthemethod of data collection was based on qualitative interviews with organic cotton buyingcompanies, farmersandginneries.Theanalytical approach isbasedon theglobal value chaintheory with specific focus on the role of standards and the importance of the institutionalcontextinrelationtotheopportunitiesofupgrading.Thethesisfindsthatthedisseminationofthe organic cotton production is rather successful and that the enforcement of four organicstandards has influenced the governance of the chain and the upgrading possibilities forfarmersandginneries involvedin it.Firstly, thethesissuggeststhatthetypeofgovernanceintheorganiccottonvaluechainistwofoldandresemblesacaptiveforminthelinkagesbetweentheorganiccottonbuyingcompanyandthefarmers,whilethelinkagesoftheginneryandtheorganiccottonbuyingcompanyisofamorerelativenature.Secondly,itshowshowtheorganicstandards especially require farmers to adapt to strict organic farming practices, while theginneryprimarilyhastoabidetocertainrulesregardingtheseparationofcottonaccordingtothedifferentorganic standards.Todealwith this,highdegreesofmonitoringandcontrolareexercised throughout the chain. Thirdly, it finds that trust play a significant role in both theestablishmentof theorganiccottonvaluechain,and in theongoingrelationshipwith farmersandginnerywhichevolvesfromrepeatedandclosecontact.Fourthly,thesechangesareseentoprovide the farmers and ginnery included in the chain with upgrading on one hand, whileserving as entry barriers on the other hand as they excludes farmers that cannot meet theselectioncriteriaoflandsizeandlandownership.Thethesisfinallypointsoutthatthepatternsofparticipationsuggestunequaldynamics intheexpansionoforganiccottonproduction.Thisseems to create a spatial differentiation where some areas and farmers are preferred overothers, resulting in enclaves of rural development and improved living conditions ofsmallholders.

Keywords:Agro-foodstandards;organiccertificationschemes;cottonproduction;globalvaluechains;upgrading