In recent decades contract farming as a mechanism that integrates and subordinates agricultural production to export oriented agribusiness has expanded in Third World countries. In Mexico contract farming dominates the production of horticultural crops for processing and export. It is also used for barley and to grow some varieties of wheat for Cargill. The contract farming labour agreement represents an institution that links local and global processes where agribusiness is the key actor that integrates local farmers to national and world markets. The purpose of this paper is to analyse the implications of contract farming for productive relations by examining its impact upon farmers and firms. The study found that despite the disadvantages of contract farming for growers, and the disproportional risks born by producers, they enter into contract farming labour agreements because they lack alternatives for financing, technical assistance and access to markets. The experience of contract farming in Mexico and several Third World countries shows that its growth is related to the implementation of neo‐liberal policies that are accompanied by the withdrawal of state support and regulation of agricultural production. In this context, contract farming represents a livelihood strategy for many Mexican growers.

Mexico is the leading mango‐exporting country in the world. In this global commodity chain there is an important participation by small‐scale farmers whose products end up in US supermarkets. This paper analyses the linkages between the agriculture sector in a developing country and the global agro‐food system. Drawing on the development geography approach and the global commodity‐chain perspective, the effects and responses of global processes on local development are analysed by examining the relations between fruit export companies, local growers and consumer markets. Our case study is of small farmers (ejidatarios) who grow mangos in one of Mexico's main export‐oriented agricultural areas, the Bahía de Banderas Valley, and whose situation is similar to other small‐scale producers of non‐traditional products. The study examines the impact on the farmers of structural adjustment policies that have been implemented in Mexico since the mid‐1980s. It also examines the main livelihood strategies that ejidatarios and their households have been adopting during the same period.

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