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In this special issue, we explore the challenges and opportunities arising with respect to normative goals of shifting production and international trade in agriculture towards greater sustainability. Private voluntary sustainability standards have experienced substantial growth in various global markets, reaching 40% of global coffee production, 25% of cocoa, and 15% of palm oil1. Given the rapid expansion of private standards, whether third-party certifications, corporate codes of conduct (Vermeulen 2010), or ‘newer’ regulatory approaches such as multi-stakeholder initiatives, public-private partnerships, and efforts to develop new sustainable business models, it is important to consider what such approaches offer. All of these approaches are seeking to contribute, at differing levels of ambition, towards a sustainability transition.

The chocolate market is experiencing a wave of market differentiation thanks to the emergence of the bean-to-bar movement. Cacao is seeing both a rise in demand for mass markets and a process of market bifurcation into more specialized, high-quality products for wealthy urban consumers. For the specialized market, the quality and origin of the beans are important attributes. Direct trading between chocolate makers and famers seeks to promote the conservation of rare cultivars and traditional agroforestry systems, while lifting farmers out of poverty. Here we assess whether these alternative configurations of the global value chain truly offer smallholders new opportunities, beyond the traditional intensification or marginalization pathways that are generally offered to them. We conducted detailed socio-economic and biophysical surveys with a sample of farms in three of the largest cacao producing provinces of Ecuador. Our results show that, even though smallholders lack the assets needed to join mainstream commodity markets, they have been able to capitalize on the qualities of their traditional varieties to access niche markets. Through strong cooperatives, the knowledge held by buyers about what constitutes a high-quality bean has been transferred to farmers. A unique natural capital may provide smallholders with rewarding pathways to develop their agriculture, exploiting new market opportunities offered by globalization. Copyright © 2018 John Wiley & Sons, Ltd and ERP Environment

Specialty coffee markets that recognize coffee-quality price premiums can improve business conditions for smallholders and promote agro-ecological practices. We studied the Relationship Coffee Model (RCM), a business model that supports long-term partnerships between coffee buyers and smallholders based on product quality. We examined how biophysical conditions and production practices affect smallholders’ ability to participate in this model. Furthermore, we considered common unobservable variables driving growers’ participation such as farm soil quality and connection to social networks. In turn, we evaluated key environmental, socio-economic and technological outcomes, including tree and bird population diversity. Our estimations indicated that RCM participants employed more sustainable resource management practices, had better access to credit and were more informed and optimistic about the coffee business. However, we did not find significant farm-gate price differences. Increased adoption of organic farming and shade-grown systems to elevate coffee quality can stimulate sustainable business strategies. Copyright © 2018 John Wiley & Sons, Ltd and ERP Environment

Global trade in niche commodities has increased the influence of consumers' choices on land use change and livelihoods in developing rural areas. New niche commodity markets for fine cocoa—produced by old tree varieties frequently grown in shaded agroforestry systems—create more direct linkages between producers and buyers. We explored the socioeconomic and environmental outcomes for cocoa smallholders that participated in direct trade relations compared with smallholders that sold through mainstream markets. Household interviews were conducted with cocoa smallholders in northern Ecuador. Biodiversity conditions at farm level were monitored for 75% of surveyed households. Using a counterfactual based on genetic matching, we found that smallholders engaged in direct trade (a) captured superior prices for cocoa sales; (b) had greater access to agricultural training, technical assistance, and improved social networks; and (b) applied more nature‐friendly management practices, compared with smallholders selling through mainstream markets. However, a strong overlap between direct trading practices and organic certification made attribution of environmental benefits difficult. This overlap likely explained why farmers engaged in direct trade used more organic fertilizers and less herbicide. Shade level and plant species richness and abundance in plantations were unrelated to market participation. Additional qualitative analyses suggest that certification facilitates engagement in direct trade and that some direct buyers request certification. This study provides insights on the potential of developing value chain innovations for high‐quality commodity trade. The success of value chain innovations hinges on the competitiveness of farmers' cooperatives and involvement of governments, nongovernmental organizations, and private actors.