True Price and IDH, the Sustainable Trade Initiative, have released a series of reports on the True Price of commodities in an area of production. The investigation compares external costs between sectors, allowing for stakeholders to identify interventions that could potentially reduce external costs.
Some interesting findings from the reports are presented below. Click through to the reports themselves for more information.
The study showed that 95% of the total external costs of cultivation are environmental, of which 28% are caused by scarce water use from over-irrigation. In addition, certified coffee has 20% lower external costs of cultivation than conventional coffee. The most impact can, therefore, come from i) improving irrigation practices to reduce scarce water use. ii) improving fertilizer application rates to reduce water pollution and energy use.
This study shows that the majority of external costs of conventional tea cultivatiuoncome from social costs (79%), of which 29% are due to underpayment of hired and family workers. The external cost of tea cultivation from smallholders involved in a Farmer Field School (FFS) program is about 29% lower than that of conventional tea. 40% of this change is due to higher productivity. There are also demonstrably higher wages, less accidents and reduced fertilizer use on FFS farms.
The study shows that the cultivation phase of cotton accounts for about 30% of the total societal costs in the supply chain. Approximately 75% of which are environmental costs. Certified cotton farmers are also on average about 50% more profitable than conventional farmers.