Challenges for Smallholder Market Access: A Review of Literature on Institutional Arrangements in Collective Marketing

Abstract

Purpose of the review: This review presents recent research on collective action in agricultural markets, focusing on the institutional settings that increase market access for smallholder farmers. It focuses attention on challenging research areas that try to understand and resolve the inherent contradictions that exist between members in the group and between the group and others.

Findings: Collective action in agricultural markets is facilitated by institutional arrangements that effectively resolve the inherent tensions within groups as well as between farmers and other economic agents. Research explores the logic of collective marketing and the impact of trust and reputation on the mediation of opportunistic action in groups. Special attention is given to institutional arrangements on the interface between vertical and horizontal coordination in food chains, especially related to strategies of producer organizations to by-pass middlemen, to meet quality requirements in modern markets and to effectively use postharvest technologies. Research points to the importance of formal and informal rules and regulations in enabling farmers’ organizations to bulk and process agricultural products.

Directions for future research: Informed decision making by value chain actors on replicating or up scaling institutional arrangements to improve the performance of their value chain needs information on its social embeddedness and its relation with the legal environment. More comparative research is needed on “workable models” and “best practices” for facilitating collaborative marketing in developing countries.

Keywords: farmers’ organisations, markets, cooperatives, bulking, opportunistic behaviour, enabling policies

JEL Classification: P13, D23