Integration of smallholder producers in high value chains: a marketing systems perspective

Changes in the structure of value chains have opened up lucrative opportunities for smallholder producers to increase income as a means to improve their livelihoods. Yet, recent literature argues that smallholder producers are better off in their current markets than when integrated in high value chains on disadvantageous terms. This chapter studies the terms of integration of smallholder producers in high value chains from a marketing systems perspective. Results indicate that because of uncertainty regarding reliability of supplies from smallholder producers, exporters adopt quasi-hierarchical forms of governance to monitor supplies. To enhance production, exporters offer advanced payments or loans and disbursements to smallholder producers and use smallholders� harvest as collateral. In return, smallholder producers offer assortments of deciduous fruit to exporters. To coordinate delivery of fruit to overseas markets, exporters estimate yields and inform markets; they monitor packing, liaise with cold stores, make transport and shipping arrangements and communicate these with the importer(s).While this approach guarantees smallholder producers access to high value chains, it also locks them into these relationships thus creating dependency. These findings imply a need for smallholder producers to learn to perform the functions necessary to integrate in high value chains in order to increase their margins. Key words: uncertainty, quality, deciduous fruit, exporters, perishabilit

Integration of smallholder producers in high value chains: a marketing systems perspective

Changes in the structure of value chains have opened up lucrative opportunities for smallholder producers to increase income as a means to improve their livelihoods. Yet, recent literature argues that smallholder producers are better off in their current markets than when integrated in high value chains on disadvantageous terms. This chapter studies the terms of integration of smallholder producers in high value chains from a marketing systems perspective. Results indicate that because of uncertainty regarding reliability of supplies from smallholder producers, exporters adopt quasi-hierarchical forms of governance to monitor supplies. To enhance production, exporters offer advanced payments or loans and disbursements to smallholder producers and use smallholders� harvest as collateral. In return, smallholder producers offer assortments of deciduous fruit to exporters. To coordinate delivery of fruit to overseas markets, exporters estimate yields and inform markets; they monitor packing, liaise with cold stores, make transport and shipping arrangements and communicate these with the importer(s).While this approach guarantees smallholder producers access to high value chains, it also locks them into these relationships thus creating dependency. These findings imply a need for smallholder producers to learn to perform the functions necessary to integrate in high value chains in order to increase their margins. Key words: uncertainty, quality, deciduous fruit, exporters, perishabilit

Understanding the Marketing Arrangements of Smallholder farmers in the Western Cape Province of South Africa: A case study of Goedverwacht Community

This case study sought to investigate marketing arrangements of smallholder farmers at Goedverwacht in the West Coast district of the Western Cape. A Social Network Analysis framework was applied to identify the structure of relationships among social entities used by farmers and to evaluate the patterns and implications of these relationships with regards to these marketing arrangements. The networks within the community include the local cooperative, local tourism centre, local shops, the Moravian church, farmer�s association etc and outside the community they include hawkers, input suppliers, supermarkets etc. Results indicate that all of the smallholder farmers in Goedverwacht use mostly social networks within the community to sell their produce. Sale of produce through formal channels like supermarkets is limited due to such factors as lack of transport and low volumes. Nevertheless, the Goedverwacht community benefits from free access to water and government support through provision of farming equipment and seeds. The annual Snoek and Patat festival also serves as the market for the Goedverwacht community. It is thus realized that for farmers to fully exploit social networks, market readiness is important. Collective action must also be encouraged to strengthen farmers� bargaining power and market positions thereby sustaining market access. Key words: Social Network Analysis, smallholder farmer, market access, informal market

Understanding the Marketing Arrangements of Smallholder farmers in the Western Cape Province of South Africa: A case study of Goedverwacht Community

This case study sought to investigate marketing arrangements of smallholder farmers at Goedverwacht in the West Coast district of the Western Cape. A Social Network Analysis framework was applied to identify the structure of relationships among social entities used by farmers and to evaluate the patterns and implications of these relationships with regards to these marketing arrangements. The networks within the community include the local cooperative, local tourism centre, local shops, the Moravian church, farmer�s association etc and outside the community they include hawkers, input suppliers, supermarkets etc. Results indicate that all of the smallholder farmers in Goedverwacht use mostly social networks within the community to sell their produce. Sale of produce through formal channels like supermarkets is limited due to such factors as lack of transport and low volumes. Nevertheless, the Goedverwacht community benefits from free access to water and government support through provision of farming equipment and seeds. The annual Snoek and Patat festival also serves as the market for the Goedverwacht community. It is thus realized that for farmers to fully exploit social networks, market readiness is important. Collective action must also be encouraged to strengthen farmers� bargaining power and market positions thereby sustaining market access. Key words: Social Network Analysis, smallholder farmer, market access, informal market

Towards achieving sustainable market access by South African smallholder deciduous fruit producers : the road ahead

Markets with high purchasing power, like export markets, offer opportunities for African smallholder farmers to move out of poverty. Logically, production for such higher value markets requires a different set of farm resources than the basic factors of production like land and labour. Yet it is not clear which other resources smallholder producers require to participate in different markets including high value markets. Using case studies from the Western Cape Province of South Africa, the authors identify resources that smallholder producers in developing countries require to increase competitiveness and sustain participation in high value markets. An analysis of the cases suggests that smallholder producers who are either in strategic partnerships or mentorship programmes with private sector firms are able to sustain their participation in high value markets. For smallholder producers who have not been integrated with high value markets yet, development of factor markets could be the first step towards achieving sustainable market access