China Pear Value Chain: Implication for Smallholders

The objective of this paper is to describe different types of value chain, to capture value added activities of each chain, to discuss the organizational and institutional link in each value chain and its implications for the role of small farmers. We focus on two counties in Hebei and Zhejiang of China. Taking pear for example, analysis of value chain is conducted using data of representative samples of pear value chain. For each chain, value added activities, cost composition, profit distribution, organizational and institutional linkages are illustrated, and corresponding conclusions are indicated. After a systematic analysis of organizational and institutional linkage and value adding activities of every chain as well as cost-benefit analysis of smallholders, we found that: value-added of each value chain are different, smallholders hardly benefit from value chains of Hebei case. Farmer cooperatives are helpful for smallholders in terms of costs reducing and value adding. Influence of modern retailers such as supermarket in term of tradition fruit growers is limited in our cases. Downstream stage took most profit of value adding. Comprehensive supermarket is less competitive than professional fruit supermarket and even small fruit store in terms of procurement costs and operating costs. Taking household labor cost into account, net profit and labor compensation of large scale household are higher than that of middle or small scale farmers.