Dispositions towards the living wage proposition

Think tank: Institute of Development Studies

Author(s): Giel Ton et al

January 26, 2024

This report from UK think tank the Institute of Development Studies reflects on the changes induced by modifications in the Rainforest Alliance certification system.

It finds that the socio-technological proposition is highly contested in the sector. Certification holders fear the costs of the wage improvement plans without credible long-term commitments from downstream firms and brands to support them financially. The effects of the change in the Rainforest Alliance 2020 Sustainable Agriculture Standard, Farm Requirements, Version 1.2 (RA2020) are still limited and largely constrained to sectors where downstream buyers have piloted living wage premium modalities.

The paper highlights the limits to the private regulation of wages in a segmented value chain and recommends a standard volume-based living wage premium paid by international brands, which is transferred to local committees with producer and worker representatives that could manage a cash transfer system using mobile banking and support collective bargaining.