Master’s program in Agricultural, Environmental and Resource Economics Environmental Track
Author: Kateryna Yuhai, Supervisor: Bodo Steiner
Abstract: Social capital plays a critical role in promoting environmental responsibility and economic resilience in local and global food systems. This study investigates the impact of social capital on risk mitigation strategies and sustainable farming practices among small-scale avocado and mango farmers in Kenya. Using econometric models, including non-linear ordered logistic regression and a two-level random intercept logit model, the research highlights that trust-based networks and collective farming arrangements enhance the likelihood of farmers adopting sustainability certification as a risk management tool. Certification, in turn, offers potential long-term environmental benefits such as improved water management and sustainable farming practices. However, the study also reveals trade-offs, including reduced fruit tree density and increased deforestation, as farmers adapt to compliance requirements. Beyond environmental implications, certification plays a crucial role in improving market access for small-scale farmers by integrating them into higher-value global supply chains. Trust in brokers and intermediaries facilitates certification adoption, yet access to formal processor contracts and labor agreements presents challenges, often restricting farmers’ risk management capabilities. While certification can offer price premiums and more stable trade relationships, its success is contingent on external market conditions, institutional support, and farmers’ ability to navigate certification costs. Strengthening trust-based networks, aligning certification standards with environmental sustainability objectives, and supporting collective farming initiatives can enhance trade opportunities and market integration for smallholder farmers. This study underscores the need for agricultural policy frameworks that integrate social and environmental dimensions to foster resilience, sustainability, and equitable market participation for smallholder farmers. While limitations exist in the scope of data and methodological constraints, these findings contribute to a deeper understanding of how social capital fosters both environmental responsibility and economic opportunities in smallholder farming contexts.