Since the mid-1980s, the way goods are produced, traded, and certified across the world has changed dramatically. The state, which once directed large parts of the economy, has stepped back. Markets have expanded into areas they never touched before. And a third actor, civil society, has quietly taken on roles that governments used to perform. This rebalancing is most visible in agriculture, where the journey of a coffee bean or a cotton boll from a small farm to a supermarket shelf now passes through a dense web of private standards and certifications. Understanding how market, state, and civil society now relate to one another is essential to understanding who gains and who loses in a globalised economy.
Table of Contents
How neo-liberalism redrew the boundaries
The starting point is the policy turn known as neo-liberalism. Neo-liberalism is both an economic theory and a policy stance which holds that a largely unregulated market delivers the best outcomes, while the state should be confined to a narrow role of defining property rights, enforcing contracts, and managing the money supply. In practice this translated into deregulation of business, privatisation of public assets, cutbacks in welfare spending, and lower taxes on capital.
From the mid-1980s onward, these ideas spread rapidly, accelerating after the third-world debt crisis and the end of the Cold War. For India, the decisive moment came with the economic reforms of 1991, which dismantled large parts of the licence-permit system, opened the economy to foreign investment, and reduced the state’s direct grip on production and trade. As the state withdrew, two questions became urgent: who would now coordinate increasingly complex markets, and who would protect producers and consumers when government oversight thinned out?
The rise of global value chains
One answer lay in a new way of organising production. Instead of single firms making products within one country, manufacturing and processing became fragmented across many countries, linked together in what scholars call global value chains. Within these chains, powerful companies, usually large retailers or branded marketers, set the terms even when they do not own the farms or factories that supply them. Research on agri-food chains shows they have become increasingly buyer-driven, with lead firms coordinating suppliers through standards rather than direct ownership.
Coordination by standards, not ownership
This is the crucial shift. A supermarket chain in Europe does not need to own a tea estate in Assam to control how that tea is grown. It simply specifies the standards the tea must meet, who must verify them, and how they must be documented. The lead firm governs the chain through what one influential study calls normative work, embedding complex quality requirements into codified standards and certification procedures. Power moves to whoever defines the standard, and that is rarely the farmer.
Conventions: the hidden grammar of quality
To see why this matters, it helps to understand how “quality” itself is defined. Drawing on the work of Boltanski and Thévenot, scholars of agriculture identify several distinct conventions, or shared understandings of what makes a product worthwhile. In the agro-food sector, four are especially important, as set out in the influential analysis of fair trade and conventions:
Market convention: quality is judged mainly by price, set through the mechanism of supply and demand. Industrial convention: quality rests on measurable standards, norms, objective rules, and testing procedures. Domestic convention: quality is grounded in trust, in the reputation of a place, a brand, or repeated face-to-face relations. Civic convention: quality reflects a group’s commitment to collective principles such as fairness or environmental care, with fair trade as the classic example.
The neo-liberal era has seen a powerful shift from market conventions toward industrial ones. Where small producers once sold commodities priced simply by volume, they increasingly face buyers who demand specific, verifiable product characteristics. Vertical integration through an industrial convention, rather than a market convention, has been described as a major corollary of neo-liberal globalisation, as integrated firms seek tight control over the characteristics of what they buy.
Why raw commodity producers lose out
This is where the disadvantage for raw commodity producers becomes clear. A farmer growing pepper, coffee, or cotton sells an unprocessed commodity at the very start of the chain. Under an industrial convention, the standards that determine acceptable quality are written far downstream, by lead firms and certifiers in consumer markets. In producing countries, transactions often take place with only limited information about the quality demands that ultimately drive prices, leaving producers as price-takers rather than price-makers.
Small producers also struggle to establish a civic convention of their own. Building one requires collective organisation, recognised principles, and, crucially, a credible system to verify claims. Most smallholders lack the capital, technical knowledge, and institutional support to create this on their own. As a result, the value added through processing, branding, and certification is captured by larger firms, while the grower receives a thin slice of the final price. Studies of fair trade certification among coffee and pepper growers show that the gains for producers are real but often modest and uneven, partly because certification itself is costly and complex.
Civil society as the new standard-setter
As the state stepped back and markets grew more demanding, a gap opened up between what farmers could do alone and what global buyers required. Increasingly, civil society has filled that gap. Non-governmental organisations, farmer producer organisations, self-help groups, cooperatives, and fair trade networks now perform tasks that were once handled either by government agencies or by the market alone. They organise producers, negotiate with buyers, set ethical standards, and run the certification systems that make those standards credible.
This expansion has been described as the spread of multi-stakeholder initiatives, with their own standards, certifications, and accreditations, which are seen as both a product of neo-liberalism and a response to it, as analysed in work on governance in the age of global markets. Fair trade is the prototype of the civic convention, an attempt to embed market exchange in collective principles of justice. In several Asian developing countries, including in India, NGOs and community organisations have worked in partnership with farmer organisations on training for sustainable and organic production, including in well-known cases such as Darjeeling tea, spices, and coffee.
There is, however, an important catch. Even civic and domestic conventions, once they enter global trade, must be guaranteed through certification. This pushes them back toward an industrial logic of objective rules and testing, as the very act of certifying fairness or organic status requires standardised, auditable procedures. Civil society thus does not escape the world of standards; it becomes a key player within it.
The Indian picture
India shows this dynamic clearly. For organic exports, the government runs the National Programme for Organic Production, implemented by APEDA under the Ministry of Commerce, which accredits certification bodies and sets production standards that the European Commission and Switzerland recognise as equivalent to their own. Third-party certification is mandatory for export, and a group certification system was introduced to help small and marginal farmers who cannot afford individual certification.
Alongside this state-anchored system sits a civil-society alternative, the Participatory Guarantee System, in which farmers and local communities verify one another’s compliance through peer review. The PGS lowers costs and builds trust at the grassroots, but it is mainly recognised within India, so producers chasing export markets still need expensive third-party certification. Organisations such as Navdanya have trained farmer groups, often women-led, and linked them to markets, yet a large share of organically grown produce remains uncertified and therefore sells at a disadvantage. The fragility of these arrangements surfaced when allegations of fraud in organic cotton certification prompted APEDA to defend the integrity of the certification programme, a reminder that standards are only as strong as the institutions that enforce them.
Tensions in the new arrangement
The shift of standard-setting toward civil society and private actors carries real tensions. The first is a proliferation of competing standards. Different organisations promote different certifications, each with its own rules and fees, creating a confusing and costly maze for small producers who may need several at once to reach different markets.
The second is a question of democratic legitimacy. When NGOs and advocacy groups take on functions once performed by elected governments, they are not accountable to voters in the way public officials are. They may claim to speak for producers or consumers, but who checks that claim? A related concern is that the neo-liberal emphasis on formal equality under the law can ignore the real inequalities that civic action is meant to remedy, allowing private standards to entrench existing power imbalances rather than correct them.
The third tension is one of hybridity. Civic initiatives such as fair trade and organic farming begin as alternatives to the mainstream market, but to scale up they must adopt the industrial machinery of audits and certifications, which can blunt their transformative edge. The relationship among market, state, and civil society is therefore not settled. It is a moving balance, constantly renegotiated as each actor adapts to the others.
What do you think? If a small coffee or cotton farmer cannot afford the certifications that global buyers demand, should that gap be filled by the state, by private civil society organisations, or by the market itself? And when civil society groups set the standards that decide a farmer’s income, how should they be held accountable for the choices they make?
References
- https://people.umass.edu/dmkotz/Glob_and_NL_02.pdf
- https://www.tandfonline.com/doi/full/10.1080/0308514042000329315
- https://www.academia.edu/8866422/Quality_Standards_Conventions_and_the_Governance_of_Global_Value_Chains
- https://www.sciencedirect.com/science/article/abs/pii/S0743016702000517
- https://ageconsearch.umn.edu/record/346973
- https://www.researchgate.net/publication/255666903_Quality_Standards_Conventions_and_the_Governance_of_Global_Value_Chains
- https://www.cambridge.org/core/journals/agricultural-and-resource-economics-review/article/fair-trade-certification-and-livelihoods-a-panel-data-analysis-of-coffeegrowing-households-in-india/CCB64D912C7291D6F8E3D33C252C9597
- https://link.springer.com/article/10.1007/s10460-014-9510-x
- https://unctad.org/system/files/official-document/ditcted11d.pdf
- https://apeda.gov.in/national-programme-for-organic-production-npop
- https://csa-india.org/pgs/
- https://www.pib.gov.in/PressReleasePage.aspx?PRID=2148991®=3&lang=2
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