IDEAS home Printed from https://ideas.repec.org/a/eee/ecolec/v93y2013icp1-10.html
   My bibliography  Save this article

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

Author

Listed:
  • 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.

Suggested Citation

  • 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
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0921800913001018
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.ecolecon.2013.03.010?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Emmanuel Skoufias, 1994. "Using Shadow Wages to Estimate Labor Supply of Agricultural Households," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 76(2), pages 215-227.
    2. Nigel Key & Elisabeth Sadoulet & Alain De Janvry, 2000. "Transactions Costs and Agricultural Household Supply Response," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(2), pages 245-259.
    3. Norman Myers & Russell A. Mittermeier & Cristina G. Mittermeier & Gustavo A. B. da Fonseca & Jennifer Kent, 2000. "Biodiversity hotspots for conservation priorities," Nature, Nature, vol. 403(6772), pages 853-858, February.
    4. Barnum, Howard N. & Squire, Lyn, 1979. "An econometric application of the theory of the farm-household," Journal of Development Economics, Elsevier, vol. 6(1), pages 79-102, February.
    5. Arslan, Aslihan & Taylor, J.Edward, 2009. "Farmers' Subjective Valuation of Subsistence Crops: The Case of Traditional Maize in Mexico," American Journal of Agricultural Economics APPENDICES, Agricultural and Applied Economics Association, vol. 91(4), pages 1-4, April.
    6. Rosenzweig, Mark R & Evenson, Robert E, 1977. "Fertility, Schooling, and the Economic Contribution of Children in Rural India: An Econometric Analysis," Econometrica, Econometric Society, vol. 45(5), pages 1065-1079, July.
    7. Salvatore Di Falco & Jean-Paul Chavas, 2006. "Crop genetic diversity, farm productivity and the management of environmental risk in rainfed agriculture," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 33(3), pages 289-314, September.
    8. Michael R. Carter & Yang Yao, 2002. "Local versus Global Separability in Agricultural Household Models: The Factor Price Equalization Effect of Land Transfer Rights," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 84(3), pages 702-715.
    9. Benjamin M. Friedman & Kenneth N. Kuttner, 1993. "Economic Activity and the Short-term Credit Markets: An Analysis of Prices and Quantities," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 24(2), pages 193-284.
    10. Mukesh Eswaran & Ashok Kotwal, 1984. "The Moral Hazard of Budget-Breaking," RAND Journal of Economics, The RAND Corporation, vol. 15(4), pages 578-581, Winter.
    11. Vakis, Renos & Sadoulet, Elisabeth & de Janvry, Alain & Cafiero, Carlo, 2004. "Testing for Separability in Household Models with Heterogeneous Behavior: A Mixture Model Approach," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt4hs3g5dj, Department of Agricultural & Resource Economics, UC Berkeley.
    12. Dasgupta, Partha, 1995. "An Inquiry into Well-Being and Destitution," OUP Catalogue, Oxford University Press, number 9780198288350.
    13. Hayes, M.G., 2008. ""Fighting the Tide: Alternative Trade Organizations in the Era of Global Free Trade"--A Comment," World Development, Elsevier, vol. 36(12), pages 2953-2961, December.
    14. LeClair, Mark S., 2008. ""Fighting the Tide: Alternative Trade Organizations in the Era of Global Free Trade"--A Reply," World Development, Elsevier, vol. 36(12), pages 2962-2965, December.
    15. Mahmud Yesuf & Randall A. Bluffstone, 2009. "Poverty, Risk Aversion, and Path Dependence in Low-Income Countries: Experimental Evidence from Ethiopia," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 91(4), pages 1022-1037.
    16. Hanan G. Jacoby, 1993. "Shadow Wages and Peasant Family Labour Supply: An Econometric Application to the Peruvian Sierra," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 60(4), pages 903-921.
    17. de Janvry, Alain & McIntosh, Craig & Sadoulet, Elisabeth, 2010. "The supply- and demand-side impacts of credit market information," Journal of Development Economics, Elsevier, vol. 93(2), pages 173-188, November.
    18. LeClair, Mark S., 2002. "Fighting the Tide: Alternative Trade Organizations in the Era of Global Free Trade," World Development, Elsevier, vol. 30(6), pages 949-958, June.
    19. Li, Guo & Rozelle, Scott & Brandt, Loren, 1998. "Tenure, land rights, and farmer investment incentives in China," Agricultural Economics, Blackwell, vol. 19(1-2), pages 63-71, September.
    20. Nunes, Paulo A. L. D. & van den Bergh, Jeroen C. J. M., 2001. "Economic valuation of biodiversity: sense or nonsense?," Ecological Economics, Elsevier, vol. 39(2), pages 203-222, November.
    21. Nijkamp, Peter & Vindigni, Gabriella & Nunes, Paulo A.L.D., 2008. "Economic valuation of biodiversity: A comparative study," Ecological Economics, Elsevier, vol. 67(2), pages 217-231, September.
    22. Meike Wollni & Manfred Zeller, 2007. "Do farmers benefit from participating in specialty markets and cooperatives? The case of coffee marketing in Costa Rica1," Agricultural Economics, International Association of Agricultural Economists, vol. 37(2‐3), pages 243-248, September.
    23. Rosenzweig, Mark R & Schultz, T Paul, 1982. "Market Opportunities, Genetic Endowments, and Intrafamily Resource Distribution: Child Survival in Rural India," American Economic Review, American Economic Association, vol. 72(4), pages 803-815, September.
    24. Bacon, Christopher, 2005. "Confronting the Coffee Crisis: Can Fair Trade, Organic, and Specialty Coffees Reduce Small-Scale Farmer Vulnerability in Northern Nicaragua?," World Development, Elsevier, vol. 33(3), pages 497-511, March.
    25. Brush, Stephen B. & Taylor, J. Edward & Bellon, Mauricio R., 1992. "Technology adoption and biological diversity in Andean potato agriculture," Journal of Development Economics, Elsevier, vol. 39(2), pages 365-387, October.
    26. Alastair M. Smith, 2009. "Evaluating The Criticisms Of Fair Trade," Economic Affairs, Wiley Blackwell, vol. 29(4), pages 29-36, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Blare, Trent & Useche, Pilar & Grogan, Kelly A., 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 169782, 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. 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.
    4. 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.
    5. 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.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Useche, Pilar & Blare, Trent, 2012. "Seeds of Gold: How Environmental Considerations Influence Cacao Production Decisions for Small Landholder Households in Northwestern Ecuador," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124738, Agricultural and Applied Economics Association.
    2. Arcand, Jean-Louis & d'Hombres, Beatrice, 2006. "Testing for Separation in Agricultural Household Models and Unobservable Household-Specific Effects," MPRA Paper 1863, University Library of Munich, Germany.
    3. Md Shafiul Azam & Katsushi Imai & Raghav Gaiha, 2012. "Agricultural Supply Response and Smallholders Market Participation: the Case of Cambodia," Economics Discussion Paper Series 1208, Economics, The University of Manchester.
    4. Henning, Christian H.C.A. & Henningsen, Arne, 2005. "Modeling Price Response of Farm Households Under Imperfect Labor Markets: A Farm Household Approach to Family Farms in Poland," 94th Seminar, April 9-10, 2005, Ashford, UK 24431, European Association of Agricultural Economists.
    5. J. Taylor & Irma Adelman, 2003. "Agricultural Household Models: Genesis, Evolution, and Extensions," Review of Economics of the Household, Springer, vol. 1(1), pages 33-58, January.
    6. Hayatullah Ahmadzai, 2018. "Factor market participation and tests for separability in Afghanistan," Discussion Papers 2018-10, University of Nottingham, CREDIT.
    7. Wang, Xiaobing, 2007. "Labor market behavior of Chinese rural households during transition," Studies on the Agricultural and Food Sector in Transition Economies, Leibniz Institute of Agricultural Development in Transition Economies (IAMO), volume 42, number 92321, September.
    8. Ana C. Dammert & Sarah Mohan, 2015. "A Survey Of The Economics Of Fair Trade," Journal of Economic Surveys, Wiley Blackwell, vol. 29(5), pages 855-868, December.
    9. Blaise Waly BASSE & Amadou Abdoulaye FALL, 2023. "Allocation de la main-d’œuvre dans les exploitations rizicoles au Sénégal," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 57, pages 49-61.
    10. Babigumira, Ronnie & Angelsen, Arild & Buis, Maarten & Bauch, Simone & Sunderland, Terry & Wunder, Sven, 2014. "Forest Clearing in Rural Livelihoods: Household-Level Global-Comparative Evidence," World Development, Elsevier, vol. 64(S1), pages 67-79.
    11. Wang, Xiaobing & Herzfeld, Thomas & Glauben, Thomas, 2007. "Labor allocation in transition: Evidence from Chinese rural households," China Economic Review, Elsevier, vol. 18(3), pages 287-308.
    12. Jia, Lili, 2012. "Land fragmentation and off-farm labor supply in China," Studies on the Agricultural and Food Sector in Transition Economies, Leibniz Institute of Agricultural Development in Transition Economies (IAMO), volume 66, number 66, September.
    13. Balineau, Gaëlle, 2013. "Disentangling the Effects of Fair Trade on the Quality of Malian Cotton," World Development, Elsevier, vol. 44(C), pages 241-255.
    14. Touhami Abdelkhalek & Fouzia Ejjanoui, 2015. "Tests De Séparabilité dans les Decisioins des Menages Agricoles: Cas du Maroc," Working Papers 955, Economic Research Forum, revised Oct 2015.
    15. repec:eee:labchp:v:3:y:1999:i:pb:p:2859-2939 is not listed on IDEAS
    16. Thomas Barré, 2010. "Overemployment, Underemployment and the opportunity cost of time," Working Papers halshs-00452809, HAL.
    17. Chen, Jing & Rozelle, Scott, 2003. "Market Emergence And The Rise And Fall Of Backyard Hog Production In China," 2003 Annual meeting, July 27-30, Montreal, Canada 21969, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    18. Bagamba, Fredrick & Burger, Kees & Kuyvenhoven, Arie, 2007. "Determinants of smallholder farmer labour allocation decisions in Uganda," 106th Seminar, October 25-27, 2007, Montpellier, France 7920, European Association of Agricultural Economists.
    19. Sudha Narayanan & Digvijay S Negi & Tanu Gupta, 2023. "Separability, spillovers, and segmented markets : Evidence from dairy in India," Agricultural Economics, International Association of Agricultural Economists, vol. 54(6), pages 884-899, November.
    20. Jia, Lili & Petrick, Martin, 2014. "How does land fragmentation affect off-farm labor supply: panel data evidence from China," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 45(3), pages 369-380.
    21. John Cockburn, 2002. "Income Contributions of Child Work in Rural Ethiopia," CSAE Working Paper Series 2002-12, Centre for the Study of African Economies, University of Oxford.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ecolec:v:93:y:2013:i:c:p:1-10. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/ecolecon .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.