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Food Policy
journal homepage: www.elsevier.com/locate/foodpol
International Food Policy Research Institute (IFPRI), 2033 K Street, NW, Washington, DC 20006-1002, United States
International Maize and Wheat Improvement Center (CIMMYT), Apdo. Postal 6-641, 06600, Mexico, D.F., Mexico
a r t i c l e
i n f o
Article history:
Accepted 2 October 2008
Keywords:
Collective action
Smallholder
Market access
Public and private sectors
High-value crops
a b s t r a c t
The opportunity for smallholders to raise their incomes increasingly depends on their ability to compete
in the market; yet there are many failures in rural markets in developing countries that make it difcult
for them to do this. Understanding how collective action can help address the inefciencies, coordination
problems or barriers to market access is particularly important. This paper draws on the case studies in
this special issue and on other literature to examine the conceptual issues and empirical evidence on the
role of collective action institutions in improving market access for the rural poor. Applying insights from
studies of collective action in natural resource management, the paper examines what conditions facilitate effective producer organizations for smallholders market access, with special attention to the characteristics of user groups, institutional arrangements, types of products (staples, perishables and other
commodities), markets (local, domestic and international), and external environment. The paper also
identies policies and interventions that facilitate collective action for market access among smallholders, and examines whether the public sector, private sector and/or civil society is best positioned to provide such interventions.
2008 Elsevier Ltd. All rights reserved.
party certication, which in turn may be a major barrier to smallholder participation (Barrett et al., 2001).
The case for farmer organizations
There is increasing evidence that farmer organizations offer one
way for smallholders to participate in the market more effectively.
Acting collectively, smallholders may be in a better position to reduce transaction costs of accessing inputs and outputs, obtain the
necessary market information, secure access to new technologies,
and tap into high value markets, allowing them to compete with
larger farmers and agribusinesses (Stockbridge et al., 2003). In
addition, there is evidence that collective action can help smallholders reduce barriers to entry into markets by improving their
bargaining power with buyers and intermediaries (Thorp et al.,
2005; Kherallah et al., 2002, Devaux et al., this issue).
Research in natural resource management has already demonstrated the advantages of collective action voluntary action by
a group to pursue shared objectives for technology adoption,
and to ensure that resource use is efcient, equitable, and sustainable (Meinzen-Dick et al., 2002). While resource management and
market access pose different obstacles for smallholders, there are
important parallels in terms of the factors that enable group formation and cooperation to serve as crucial mechanisms through
which the poor access vital resources and markets (Thorp et al.,
2005; Heyer et al., 2002).
Collective action and producer organizations are, therefore,
among the foci of the pro-poor market approach. There is, however, a need to determine when supporting producer organizations
make sense. Some see rural areas as so marginal that interventions
to facilitate market access are ill-advised. For example, Hitchins
et al. (2004) refer to a viability void where the rationale and efcacy of income generation promotion is questionable and of a low
priority compared to relief or social protection measures. It is indeed the case that when poverty reduction is the overriding goal,
facilitating access to markets may not be the best way forward.
However, there are also cases when support for farmer organizations can contribute to pro-poor development by mitigating market inefciencies that prevent smallholders from participating in
markets where there are opportunities to raise their incomes.
It is important to understand better when farmer organizations
make sense, when they do not and how they can best be established and maintained. The papers in this issue enhance the conceptual and empirical understanding of the role of collective
action institutions (e.g. rules and norms, producer organizations,
publicprivate partnerships) in improving market access for the
rural poor and the implications that these ndings have for policy.
The objective of this paper is to provide a summary of the issues
that are important for collective action in marketing, drawing on
the established body of literature on cooperation in natural resource management, illustrated with ndings of the studies in this
issue.
include nancial (particularly micro-credit) and non-nancial services, the latter commonly known as business development services (BDS).1
The case-studies in this issue show that while many of these
conditions are not found in rural markets, collective action in form
of producer groups can help to compensate for these other weaknesses by enabling the farmers to deal with transportation costs,
overcome nancial barriers and access other services. For example,
potato farmers in Uganda pooled their nancial resources from
personal savings and loans to nance operations of their group,
and later established a savings and credit co-operative (Kaganzi
et al.). Gruere et al. show that minor millet growers in India organized specialized task-force groups to deal with missing input and
credit markets. Kruijssen et al. demonstrate how a womans group
involved in processing tropical fruits in Thailand was able to purchase valuable equipment that allowed them to transform their
products, achieve a better price and develop new market opportunities.2 The Papa Andina case (Devaux et al.) shows that collective
action can reduce the share of transport costs in the nal product value, thus allowing the potato farmers to bridge the infrastructural
remoteness.
Improving marketing systems
Traditionally, small farmers sold their crops at the farm gate to
intermediaries, often at a low price (Fafchamps and Vargas-Hill,
2005). However, innovations in marketing arrangements can
transform market relations in favour of smallholders (IFAD,
2001), and producer organizations are well-positioned to take
advantage of these new approaches. In addition to lling in the
gaps created by market imperfections, the case-studies in this issue
show that collective action can open up new marketing opportunities for smallholders by introducing innovations to existing value
chains or creating entry ways into new markets. For example, creating new demand for traditional products through processing and
value-adding activities has proved to be an innovative route to
higher prices, such as through design of a branding strategy and
an awareness campaign for minor millets (Grure et al., this issue),
and the use of native Andean potatoes in the production of potato
chips (Devaux et al., this issue). This involved going to different
fora, including chefs, supermarkets and temple festivals. Narrod
et al. (this issue) show that grape producer groups in India were
able to participate in high-value markets by obtaining the required
food safety certications, which otherwise would be inaccessible
to them individually.
Smallholders organized into groups are able to turn to domestic
markets, especially supermarkets, which are growing in number in
developing countries, especially in urban areas (Weatherspoon and
Reardon, 2003). While most of these buyers prefer to deal with larger and medium farmers, there is a potential for small farmers to
access these markets if they can successfully deal with economies
of scale (volume) and co-ordination issues. This is where collective
action in form of farmer organizations can help smallholders to
satisfy the stringent requirements to become part of these procurement systems. There is evidence of willingness on the part of
supermarkets to include upgraded (i.e. with capital, managerial,
coordination, and volume capacity) smallholders into their consolidated procurement chains, especially for the supply of fresh pro-
1
These services include: input supplies (seeds, livestock, and fertilizers); nancial
services (micro-credit); market information (prices, trends, buyers, and suppliers);
transport services; quality assurance (monitoring and certication); technical expertise and business advice; veterinary services; support for product development and
diversication.
2
However, Stringfellow et al. (1997) note that collective ownership of equipment
is particularly challenging.
Table 1
Range of group sizes of marketing groups reported in this issue.
Authors
Country
Case
Group
size
Devaux et al.
Devaux et al.
Devaux et al.
Devaux et al.
Devaux et al.
Kaganzi et al.
Kruijssen et al.
Kruijssen et al.
Kruijssen et al.
Kruijssen et al.
Narrod et al.
Narrod et al.
Gruere et al.
Peru
Bolivia
Bolivia
Bolivia
Ecuador
Uganda
Thailand
India
Syria
Vietnam
India
Kenya
India
22
17
9
13
32
120
40
9000
10
160
50*
30
14*
1220
Barham and
Chitemi
Barham and
Chitemi
Tanzania
CAPAC
APROTAC
Chuo Norm Group
Chuo & Tunta Platform
Chimborazo Platform
Nyabyumba farmer group
Cowa
Kokum
Laurel
Coconut bre
Mahagrapes
Green Beans
Millets, pineapple, rice
milling
FAIDA
32*
1540
Tanzania
TIP
38
Range
20
150
macroeconomic instability, both of which can undermine incentives for cooperation. Good governance that ensures legal and credit systems in favour of the poor will undoubtedly increase
economic opportunities for smallholders and provide incentives
to join with others (World Bank, 2001). Governments, for example,
can help ensure that the legal and judicial system supports lowcost contract enforcement, including getting rid of red tape (Marr,
2003; Shepherd, 2007). The formal laws of the state can also determine whether the environment for farmer organizations is an enabling or a disabling one (Stockbridge et al., 2003).
markets are imperfect and often biased against the poor in rural
areas (Hoff and Stiglitz, 1990), the government has a unique capacity to reduce these constraints through pro-poor policies.
Regardless of who provides facilitation or intervention, it is
important that the groups formed by smallholders should be controlled by the members and adjusted to local conditions to ensure
loyalty and a sense of ownership (Stringfellow et al., 1997; Thorp
et al., 2005). Such local ownership can be promoted through active
local participation and institutional arrangements that complement local conditions, such as available human capabilities and
technology (Bebbington, 1996; World Bank, 2001). Moreover,
when considering where public or private investments should be
made, it is essential to match farmer skills, nancial capacity and
managerial experience to different forms of farmer organization
(Stringfellow et al., 1997; Coulter et al., 1999).
Acknowledgments
The authors would like to thank Andrew Shepherd, Tony Bebbington, and the participants of the CGIAR Systemwide Program on
Collective Action and Property Rights (CAPRi) Workshop on Collective Action and Market Access for Smallholders held in Cali, Colombia in October 2006 for their ideas and comments that contributed
to shaping this paper. Sophie Higman provided invaluable help in
the preparation of this paper and the whole special issue. The
nancial support of the governments of Norway, Italy, and the
World Bank to the CAPRi program is gratefully acknowledged.
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