Commercializing Small Farms: Reducing Transaction Costs
AbstractBroad changes are taking place in agrifood systems worldwide. These changes are driven by economic development, increase in per caput incomes, changing technology and urbanization. Consumers are changing their dietary preferences and shopping habits, resulting in substantial organizational and institutional changes throughout the food marketing chain. Growing concentration at all levels is taking place, particularly in the retail sector, and private sector standards for food quality and safety are proliferating. Increasingly exchange is arranged through the use of contracts. These changes have significant implications for growth, poverty and food security. For the small farmer in particular there are difficulties to meet the standards and contractual requirements. They are faced with a new set of transaction costs that emerge from dealing with a food system characterized by different rules, regulations and players. Increased transactions costs deter entry of small farmers into the market. This paper looks at required interventions aimed at reducing transaction costs to encourage increased farmer participation in competitive markets.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Agricultural and Development Economics Division of the Food and Agriculture Organization of the United Nations (FAO - ESA) in its series Working Papers with number 05-08.
Length: 42 pages
Date of creation: 2005
Date of revision:
Contact details of provider:
Postal: Agricultural Sector in Economic Development Service FAO Viale delle Terme di Caracalla 00153 Rome Italy
Phone: +39(6) 57051
Fax: +39 06 57055522
Web page: http://www.fao.org/es/esa/
More information through EDIRC
Food systems; Agricultural commercialization; Transaction costs; Small farmers; Policy.;
Find related papers by JEL classification:
- Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness
- Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy
- D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
This paper has been announced in the following NEP Reports:
- NEP-AGR-2006-03-25 (Agricultural Economics)
- NEP-ALL-2006-03-25 (All new papers)
- NEP-CFN-2006-03-25 (Corporate Finance)
- NEP-MKT-2006-03-25 (Marketing)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Prabhu L. Pingali, 1997. "From Subsistence to Commercial Production Systems: The Transformation of Asian Agriculture," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(2), pages 628-634.
- Jill E. Hobbs, 1997. "Measuring the Importance of Transaction Costs in Cattle Marketing," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(4), pages 1083-1095.
- Ahmed, Zia U., 1989. "Effective costs of rural loans in Bangladesh," World Development, Elsevier, vol. 17(3), pages 357-363, March.
- Rosegrant, Mark W. & Schleyer, Renato Gazmuri & Yadav, Satya N., 1995. "Water policy for efficient agricultural diversification: market-based approaches," Food Policy, Elsevier, vol. 20(3), pages 203-223, June.
- Birthal, Pratap S. & Joshi, P. K. & Gulati, Ashok, 2005. "Vertical coordination in high-value commodities," MTID discussion papers 85, International Food Policy Research Institute (IFPRI).
- Priya Deshingkar & Usha Kulkarni & Laxman Rao & Sreenivas Rao, 2003. "Changing Food Systems in India: Resourcesharing and Marketing Arrangements for Vegetable Production in Andhra Pradesh," Development Policy Review, Overseas Development Institute, vol. 21(5-6), pages 627-639, December.
- Prabhu Pingali, 2004.
"Westernization of Asian Diets and the Transformation of Food Systems: Implications for research and policy,"
04-17, Agricultural and Development Economics Division of the Food and Agriculture Organization of the United Nations (FAO - ESA).
- Pingali, Prabhu, 2007. "Westernization of Asian diets and the transformation of food systems: Implications for research and policy," Food Policy, Elsevier, vol. 32(3), pages 281-298, June.
- Ratner, Blake D. & Meinzen-Dick, Ruth Suseela & Hellin, Jonathon & Mapedza, Everisto & Unruh, Jon D. & Veening, Wouter & Haglund, Eric & May, Candace & Bruch, Carl, 2013. "Addressing conflict through collective action in natural resource management:," CAPRi working papers 112, International Food Policy Research Institute (IFPRI).
- Bhattari, Salil & Lyne, Michael & Martin, Sandra, 2013. "Analysing The Performance Of Two Export-Oriented Spice Chains In Nepal: Taking The Smallholder Perspective," 2013 Conference, August 28-30, 2013, Christchurch, New Zealand 160194, New Zealand Agricultural and Resource Economics Society.
- Hellin, Jon & Lundy, Mark & Meijer, Madelon, 2009. "Farmer organization, collective action and market access in Meso-America," Food Policy, Elsevier, vol. 34(1), pages 16-22, February.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Gustavo Anríquez) The email address of this maintainer does not seem to be valid anymore. Please ask Gustavo Anríquez to update the entry or send us the correct address.
If references are entirely missing, you can add them using this form.