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Abstract
Stricter quality requirements and greater uses of private quality standards have a
considerable impact on the fresh fruit and vegetable supply chain in developing
countries. In particular, the future of small-scale production is in doubt. This
paper presents a theoretical game theory model to study the impact of quality
requirements on producer and consumer welfare within certified supply chains.
The model shows that total producer welfare is maximized at higher quality levels
where farmers who are efficient in the production of quality products participate,
whilst less efficient producers are excluded. In addition, the model provides useful insights on welfare and poverty impact of increased competition and changes in private standard certification costs.