IDEAS home Printed from https://ideas.repec.org/p/fpr/mtiddp/85.html
   My bibliography  Save this paper

Vertical coordination in high-value commodities: implications for smallholders

Author

Listed:
  • Birthal, Pratap Singh
  • Joshi, Pramod Kumar
  • Gulati, Ashok

Abstract

"Rising per capita income, urbanization and globalization are changing the consumption basket in the developing countries towards high-value commodities (like fruits & vegetables, milk, meat, poultry, fish, etc.). This paper explores how smallholders can benefit from the emerging opportunities from a silent demand-driven changes in high-value agriculture in India. The study examines the institutional mechanisms adopted by different firms to integrate small producers of milk, broilers and vegetables in supply chain and their effects on producers' transaction costs and farm profitability. The study finds that the innovative institutional arrangements in the form of contract farming have considerably reduced transaction costs and improved market efficiency to benefit the smallholders. The study does not find any bias against smallholders in contract farming. Also, the study does not find that the relevant firms have exploited their monopsonistic position by paying lower prices to farmers. On the contrary, contract producers were found enjoying benefits of assured procurement of their produce and higher prices. The study lists policy hurdles in scaling up the innovative models of vertical coordination in high-value food commodities" Authors' Abstract

Suggested Citation

  • Birthal, Pratap Singh & Joshi, Pramod Kumar & Gulati, Ashok, 2005. "Vertical coordination in high-value commodities: implications for smallholders," MTID discussion papers 85, International Food Policy Research Institute (IFPRI).
    • Handle: RePEc:fpr:mtiddp:85
    as

    Download full text from publisher

    File URL: https://hdl.handle.net/10568/160702
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Hans P. Binswanger, 1980. "Attitudes Toward Risk: Experimental Measurement in Rural India," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 62(3), pages 395-407.
    2. Oliver E. Williamson & Scott E Masten (ed.), . "The Economics of Transaction Costs," Books, Edward Elgar Publishing, number 1652.
    3. Garcia, Otto & Mahmood, Kalid & Hemme, Torsten, 2003. "A Review of Milk Production in Pakistan with Particular Emphasis on Small-scale Producers," PPLPI Working Papers 23782, Food and Agriculture Organization of the United Nations, Pro-Poor Livestock Policy Initiative.
    4. Hemme, Torsten & Garcia, Otto & Saha, Amit, 2003. "A Review of Milk Production in India with Particular Emphasis on Small-Scale Producers," PPLPI Working Papers 23777, Food and Agriculture Organization of the United Nations, Pro-Poor Livestock Policy Initiative.
    5. Narayanan, Sudha & Gulati, Ashok, 2002. "Globalization and the smallholders: a review of issues, approaches, and implications," MTID discussion papers 50, International Food Policy Research Institute (IFPRI).
    6. Marcel Fafchamps, 1992. "Cash Crop Production, Food Price Volatility, and Rural Market Integration in the Third World," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 74(1), pages 90-99.
    7. Pingali, Prabhu L. & Rosegrant, Mark W., 1995. "Agricultural commercialization and diversification: processes and policies," Food Policy, Elsevier, vol. 20(3), pages 171-185, June.
    8. Martinez, Stephen W., 2002. "Vertical Coordination Of Marketing Systems: Lessons From The Poultry, Egg, And Pork Industries," Agricultural Economic Reports 34051, United States Department of Agriculture, Economic Research Service.
    9. 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.
    10. Glover, David J., 1987. "Increasing the benefits to smallholders from contract farming: Problems for farmers' organizations and policy makers," World Development, Elsevier, vol. 15(4), pages 441-448, April.
    11. Steven Were Omamo, 1998. "Transport Costs and Smallholder Cropping Choices: An Application to Siaya District, Kenya," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 80(1), pages 116-123.
    12. Jha, Dayanatha, 2001. "Agricultural Research and Small Farms," Indian Journal of Agricultural Economics, Indian Society of Agricultural Economics, vol. 56(01), March.
    13. Oliver E. Williamson, 1993. "The Economic Analysis of Institutions and Organisations - in General and with Respect to Country Studies," OECD Economics Department Working Papers 133, OECD Publishing.
    14. Sulaiman V., Rasheed & Sadamate, V. V., 2000. "Privatising Agricultural Extension in India," Policy Papers 344996, ICAR National Institute of Agricultural Economics and Policy Research (NIAP).
    Full references (including those not matched with items on IDEAS)

    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. Dzanku, Fred M., 2015. "Household-specific food price differentials and high-value crop production in rural Ghana," Food Policy, Elsevier, vol. 57(C), pages 73-82.
    2. Joshi, P.K. & Joshi, Laxmi & Birthal, Pratap Singh, 2006. "Diversification and Its Impact on Smallholders: Evidence from a Study on Vegetable Production," Agricultural Economics Research Review, Agricultural Economics Research Association (India), vol. 19(2), July.
    3. Muriithi, Beatrice W. & Matz, Julia Anna, 2014. "Smallholder Participation in the Commercialisation of Vegetables: Evidence from Kenyan Panel Data," Quarterly Journal of International Agriculture, Humboldt-Universitaat zu Berlin, vol. 53(2), pages 1-28, May.
    4. Leavy, Jennifer & Colin, Poulton, 2008. "Commercialisations in Agriculture," Ethiopian Journal of Economics, Ethiopian Economics Association, vol. 16(01), pages 116-116, May.
    5. Ecker, Olivier & Hatzenbuehler, Patrick L. & Mahrt, Kristi, 2018. "Transforming agriculture for improving food and nutrition security among Nigerian farm households," NSSP working papers 56, International Food Policy Research Institute (IFPRI).
    6. Joshi, P. K. & Pangare, V. & Shiferaw, B. & Wani, S. P. & Bouma, Jetske & Scott, Christopher, 2004. "Socioeconomic and policy research on watershed management in India: synthesis of past experiences and needs for future research," IWMI Research Reports H035345, International Water Management Institute.
    7. Ruben, Ruerd & Pender, John, 2004. "Rural diversity and heterogeneity in less-favoured areas: the quest for policy targeting," Food Policy, Elsevier, vol. 29(4), pages 303-320, August.
    8. Garcia, Otto & Hemme, Torsten & Nho, Luong Tat & Tra, Hoang Thi Huong, 2006. "The Economics of Milk Production in Hanoi, Viet Nam, with Particular Emphasis on Small-scale Producers," PPLPI Working Papers 23766, Food and Agriculture Organization of the United Nations, Pro-Poor Livestock Policy Initiative.
    9. Vakis, Renos & Sadoulet, Elisabeth & de Janvry, Alain, 2003. "Measuring Transactions Costs from Observed Behavior: Market Choice in Peru," CUDARE Working Papers 25110, University of California, Berkeley, Department of Agricultural and Resource Economics.
    10. Kherallah, Mylene & Kirsten, Johann F, 2002. "The New Institutional Economics: Applications For Agricultural Policy Research In Developing Countries," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 41(2).
    11. Liying Mu & Milind Dawande & Xianjun Geng & Vijay Mookerjee, 2016. "Milking the Quality Test: Improving the Milk Supply Chain Under Competing Collection Intermediaries," Management Science, INFORMS, vol. 62(5), pages 1259-1277, May.
    12. Barrett, Christopher B., 1996. "On price risk and the inverse farm size-productivity relationship," Journal of Development Economics, Elsevier, vol. 51(2), pages 193-215, December.
    13. Barrett, Christopher B. & Brown, Douglas R., 2002. "Agriculture And Rural Development: Lessons For Christian Groups Combating Persistent Poverty," Working Papers 14738, Cornell University, Department of Applied Economics and Management.
    14. Keil, Alwin & Nielsen, Thea, 2012. "Accounting for farmers’ risk preferences in investigating land allocation decisions in marginal environments: a test of various elicitation measures in an application from Vietnam," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 126054, International Association of Agricultural Economists.
    15. Zezza, Alberto & Llambi, Luis, 2002. "Meso-Economic Filters Along the Policy Chain: Understanding the Links Between Policy Reforms and Rural Poverty in Latin America," World Development, Elsevier, vol. 30(11), pages 1865-1884, November.
    16. Torero, Maximo & Viceisza, Angelino C.G., 2016. "Potential collusion and trust: Evidence from a field experiment in Vietnam," African Journal of Agricultural and Resource Economics, African Association of Agricultural Economists, vol. 11(01), pages 1-11.
    17. Bruno Morando, 2022. "Aggregate productivity and inefficient cropping patterns in Uganda," Journal of Productivity Analysis, Springer, vol. 58(2), pages 221-237, December.
    18. Mungandi, Sepiso & Conforte, Daniel & Shadbolt, Nicola M., 2012. "Integration of Smallholders in Modern Agri-food Chains: Lessons from the KASCOL Model in Zambia," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 15(3), pages 1-22, September.
    19. Omamo, S. W. & Lynam, J. K., 2003. "Agricultural science and technology policy in Africa," Research Policy, Elsevier, vol. 32(9), pages 1681-1694, October.
    20. Mohammad Khaledi & Simon Weseen & Erin Sawyer & Shon Ferguson & Richard Gray, 2010. "Factors Influencing Partial and Complete Adoption of Organic Farming Practices in Saskatchewan, Canada," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 58(1), pages 37-56, March.

    More about this item

    Keywords

    urbanization; costs; smallholders; small farms; scaling up;
    All these keywords.

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    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:fpr:mtiddp:85. 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: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/ifprius.html .

    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.