The Paradox of Organic and Sustainable Certifications in Nepalese Orthodox Tea: Do Producers Truly Benefit?

DOI

10.2991/978-94-6239-646-3_10How to use a DOI?

Keywords

Cost-benefit Analysis; Economic Impact; Nepal tea; Organic certification; Sustainable Certification

Abstract

Organic and sustainable certifications have become critical for tea producers seeking access to premium international markets. However, their economic implications in Nepal’s orthodox tea industry continue to be a subject of debate. Organic and sustainable certifications such as United States Department of Agriculture (USDA) Organic and Rainforest Alliance (RA) are key market access tools but their economic viability is uncertain due to high certification and compliance costs. This paper explores whether Nepalese orthodox tea producers truly gain from the certifications or if the financial burden outweighs the advantages. This study examines the economic impact of certification through a set of economic indicators, including production costs, costs of certification, prices, profit margins, and benefit-cost ratios. A census survey of 69 tea companies in Ilam, Nepal was conducted, employing structured interviews. Using a combination of descriptive and inferential statistics, including one-way ANOVA, a comparison was made among 3 groups, organic, RA and uncertified producers. The findings indicate that while certification provides higher per-unit prices, net financial benefits are low due to high certification costs. Benefit-cost ratio differences between certified and non-certified producers suggest that certification may not necessarily result in higher profitability. The study concludes that unless certification costs are reduced or external financing is provided, small and medium-scale producers will be unable to sustain certification. These findings contribute to the ongoing discourse on the economics of certification in the tea sector.

Copyright

© 2026 The Author(s)

Open Access

Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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TY  - CONF
AU  - Gaurab Luitel
AU  - Hari Krishna Panta
AU  - Kishor Chandra Dahal
AU  - Tara Prasad Bhusal
AU  - Krishna Prasad Timsina
PY  - 2026
DA  - 2026/04/15
TI  - The Paradox of Organic and Sustainable Certifications in Nepalese Orthodox Tea: Do Producers Truly Benefit?
BT  - Proceedings of the International Tea Symposium (InTSym100 2025)
PB  - Atlantis Press
SP  - 165
EP  - 181
SN  - 2468-5747
UR  - https://doi.org/10.2991/978-94-6239-646-3_10
DO  - 10.2991/978-94-6239-646-3_10
ID  - Luitel2026
ER  -