Analysis of the determinants of inclusion of small-scale producers in dynamic markets

Aurelle du PONT de ROMEMONT, December 2006

This document presents the main factors of inclusion of small-scale producers in dynamic markets. This study was made for the Regoverning Markets program, with different research team, including Estelle BIENABE (CIRAD) and Julio BERDEGUE (RIMISP) that led this study.

Agrifood markets in developing countries are restructuring, and that changes are having a great impact on organizations and governance in those supply chains. But the changes are also occurring in the standards and quality required by the buyers. It seems very interesting to analyse this factors of inclusion, allowing small-scale producers to have a better role in the chains. 

The case study of AJ Ticonel in Guatemala give a good example of an organization succeeding in including small-scale producers in a competitive and high requirement market. The benefits producers can get through this firm are higher than what they could get in traditional markets. This organization helped farmers to adapt their production techniques to the buyers' needs, but they also developed some new abilities in negotiation and experience, helping them remaining included in the chain.

Then, a synthesis of the 16 case study of the component 2 is made. The main point that can be highlighted is that the two main innovation drivers are collective action and business model. Public policy and strategy of developing agency are important, but they are secondary to the two main drivers. Those two types of drivers have very different costs and benefits for the different actors of the chain, but also very different degrees of selection for inclusion.