Our data analysis suggest that certification does not unambiguously increase market access for smallholder avocado and mango farmers (about 10% of farmers sampled have any form of sustainable production practice certification). Farmers who are more distant from markets, as proxied by distance to the nearest road, are less likely to be certified for sustainable production practices. This suggests that the closer farmers are located to markets, the more it pays for the to cover the transaction costs related to sustainability certification. This finding also implies that infrastructure development is likely only viable for farmers with a potential for certification up to a certain distance to market infrastructure which would enable market access to national and international markets. Thus, to increase certification, policymakers could nevertheless focus on farmers with limited road access. However, the model results based on survey data also indicate that for farmers located far from major cities (large markets), the distance to the nearest town road loses its significance, much in line with previous work that has shown bilateral trade to decrease with distance (Disdier & Head, 2008).

We also find evidence that formal institutions (the government providing subsidies) and informal institutions (trust among farmers and traders) can act as substitutes in supporting farmers to adopt sustainable production standards. Nevertheless, in the case of avocado farmers, the results suggest that formal institutions can have a negative effect on certification initiatives adoption. In contrast, both formal and informal institutions have a positive and significant impact on certification adoption for mango farmers.

Our findings also indicate that the risk management strategies employed by smallholder farmers are influenced by their geographic location, social networks, and size of their enterprise. Smaller farmers are more likely to diversify their crops beyond avocados or mangos, while larger ones focus on a narrower range of agricultural commodities. Farmers who engage in livestock production or have additional income outside of farming are less inclined to certify their agricultural products for sustainability standards, yet organizational support related to certification plays a critical role in helping farmers with off-farm jobs to get certified. We find limited evidence for significant deforestation as part of risk management or enterprise expansion. Spatial distance between farmers plays a crucial role in information sharing. The results suggest that farms located close to each other, as measured by a geometric mean proximity index, are more likely to adopt sustainable production practice certification. Thus, spatial proximity likely facilitates knowledge exchange, collaboration, and access to resources, all of which can enhance certification adoption. Social proximity, in terms of shared experiences among farmers, has a significantly positive effect on certification adoption, indicating that higher social proximity increases the likelihood of farmers being certified.

Disdier, A.-C., & Head, K. (2008). The puzzling persistence of the distance effect on bilateral trade. The Review of Economics and Statistics, 90(1), 37–48. https://doi.org/10.1162/rest.90.1.37