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Traditional vs. modern production systems: Price and nonmarket considerations of cacao producers in Northern Ecuador

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  • Useche, Pilar
  • Blare, Trent

Abstract

Many factors besides profit maximization, such as nonmarket ecological and social benefits, influence smallholder households to adopt a specific agricultural production system or sell in a particular market. Thus, different analytical techniques are needed that take into consideration more than monetary income to fully capture these additional benefits to better understand the production decisions of smallholder farmers. We build on previous work on the household model and shadow wage estimation to develop a shadow wage for Ecuadorian cacao producers that includes these nonmarket benefits. We found that the shadow wage correctly indicated that, on average, these households would prefer to use an agroforestry production system instead of the more profitable modern system because of the nonmarket benefits received from the former system.

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  • Useche, Pilar & Blare, Trent, 2013. "Traditional vs. modern production systems: Price and nonmarket considerations of cacao producers in Northern Ecuador," Ecological Economics, Elsevier, vol. 93(C), pages 1-10.
    • Handle: RePEc:eee:ecolec:v:93:y:2013:i:c:p:1-10
    DOI: 10.1016/j.ecolecon.2013.03.010
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    1. Useche, Pilar & Blare, Trent, 2014. "The Sustainable Choice: How Gendered Difference in the Importance of Ecological Benefits Affect Production Decisions of Smallholder Cacao Producing Households in Ecuador," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 174285, Agricultural and Applied Economics Association.
    2. Sebastián Escobar & Margareth Santander & Pilar Useche & Carlos Contreras & Jader Rodríguez, 2020. "Aligning Strategic Objectives with Research and Development Activities in a Soft Commodity Sector: A Technological Plan for Colombian Cocoa Producers," Agriculture, MDPI, vol. 10(5), pages 1-32, April.
    3. Jilmar Castañeda-Ccori & Anne-Gaël Bilhaut & Armelle Mazé & Juan Fernández-Manjarrés, 2020. "Unveiling Cacao Agroforestry Sustainability through the Socio-Ecological Systems Diagnostic Framework: The Case of Four Amazonian Rural Communities in Ecuador," Sustainability, MDPI, vol. 12(15), pages 1-17, July.
    4. Gonzalo Villa‐Cox & Francesco Cavazza & Cristian Jordan & Mijail Arias‐Hidalgo & Paúl Herrera & Ramon Espinel & Davide Viaggi & Stijn Speelman, 2021. "Understanding constraints on private irrigation adoption decisions under uncertainty in data constrained settings: A novel empirical approach tested on Ecuadorian Cocoa cultivations," Agricultural Economics, International Association of Agricultural Economists, vol. 52(6), pages 985-999, November.
    5. Ximena Rueda & Andrea Paz & Theodora Gibbs‐Plessl & Ronald Leon & Byron Moyano & Eric F Lambin, 2018. "Smallholders at a Crossroad: Intensify or Fall behind? Exploring Alternative Livelihood Strategies in a Globalized World," Business Strategy and the Environment, Wiley Blackwell, vol. 27(2), pages 215-229, February.

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