NANCY Seminar – Benjamin OUVRARD (SMART)
The 2026/03/17
From 11:00am to 12:30pm
Event details :
Title: Fair Pricing, Eco-Certification, and Excess Supply
Abstract: There is a growing environmental concern about the link between agricultural trade and deforestation, as expressed in the EU 2024 deforestation regulations, which included prominent fair-trade products such as cocoa, coffee, and oilseeds. In this paper, we demonstrate the potential for fair pricing standards to cause structural excess farm supply conditions that can exacerbate global food waste and deforestation problems. We endogenize the fair pricing standard as an outcome determined through private politics between a retailer and an eco-certification agent. We show that the fair pricing standard proposed by the eco-certifier decouples farm supply from the optimization problem of the retailer, causing the agricultural product market to become oversupplied when the farm supply function is more price elastic than consumer demand. We confirm these results in a laboratory experiment, where subjects generated excess supply in equilibrium that was an order of magnitude larger when retailers accepted the fair pricing standard proposed by eco-certifiers than when they rejected them.
