The Politics of Food Labeling and Certification - The Oxford Topic of Food, Politics, and Society - page 632

agents who visit farm sites, review production conditions, grant or deny certification for
a given standard, and monitor compliance.
The central concern that critics (Griffiths 2012, Weitzman 2006) articulate about
labeling organizations is that, although they lack the profit incentive that firms face,
labeling organizations face incentives of their own that might undermine their objec-
tivity, the quality of information they present to consumers, and the integrity of their
standards enforcement.
One such incentive is the imperative of self-perpetuation. Organizations, once estab-
lished, tend to develop a path-dependent inclination to remain in existence (Pierson
2000). For a standard-setting organization to remain in existence, it must maintain suf-
ficient credibility in the eyes of the public so that its label is marketable to companies.
This does not incentivize labeling organizations to publicize cases of system breakdown.
If a certified farm is found to be violating standards, reporting violations to the public
runs the risk of doing damage to the label's image if consumers view the problem to be
endemic, and this could be detrimental to the labeling organization's future. Pritchett
models a situation in which public-sector advocates with altruistic motives have the
incentive to avoid rigorous investigation and evaluation of their pet programs in order
to safeguard their budget for doing good in their chosen way (Pritchett 2002). The logic
is similar here.
A related incentive is genuine concern on the part of third-party certifiers for the
welfare of producers and environmental outcomes. This creates an added inducement
to minimize publicity when violations are discovered, since damaged credibility could
lead to decreased sales overall, ultimately hurting the social or environmental cause in
question. It is easy to justify a lack of total transparency with the idea of protecting other
farms from consumer backlash.
Together, these incentives run the risk of discouraging perfect transparency on the
part of labeling organizations. After all, at present there is no watchdog to the watchdog
(Follesdal 2004).16 And although third-party certifiers are not selling products, they are
effectively selling a brand (Granville 2009). In that sense they are both certifying prod-
ucts and marketing the concept of Fair Trade or Organic certification. At the front of
its 2009/10 “Impact Report,” Fair Trade USA quotes a worker from one of its certified
farms: “Thank you to those who buy Fair Trade. By buying this fruit, you've made it pos-
sible for the dreams of families like mine to become a reality” (Fair Trade USA 2010).
This kind of inspiring personal testimonial often stands in for a more rigorous measure
of impact in public materials produced by third-party certification bodies. Critics sug-
gest that labeling organizations tend to project an image of their impact that is unrealis-
tic in order to sell their products, and worry about the potential of moral hazard on the
part of labelers, particularly as competition between labels increases (Luetchford 2011,
Canavari, Cantore, and Spadoni 2010).
Little research has been done to weigh in on these questions about the transparency,
incentives, and performance of certifying watchdog organizations themselves. Existing
literature does suggest that although consumers claim that they perceive third-party
organizations to be most trustworthy, they still exhibit measurable trust in claims made