This paper focuses on how microfinance has affected the investment decision making of squash and bitter gourd cluster farmers in Impasugong in the Southern Philippines. The farmers received loans from a microfinance institution (MFI) but because of production problems farmers were not able to meet their buyers' requirements. The squash cluster disintegrated, while the bitter gourd cluster decided to diversify into onion production and to adopt organic fertilizers as a more cost effective means of production. As a result of these setbacks, both the clusters and the MFI learned some valuable lessons including; the role of microfinance in production; the risks associated with loans; and the level of support received by the farmers. Sustainability of livelihoods is the key factor that keeps the MFI and the farmers together. As the farmers aspire to maintain production, they will continue to need access to financial resources to meet their farm and family commitments.

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Researching and developing new arrangements for marketing smallholder products in the transitional economies is complex and requires an agribusiness systems approach. One approach to addressing complex problems is for researchers to facilitate an action learning process with farmers and market intermediaries, while using an action research process to investigate the factors that enhance the chances of success for farmer groups. This paper reviews the literature on action learning, action research and participatory processes in an attempt to clarify some of the terminology and define the similarities and differences. It outlines research into a framework to improve the effectiveness and resilience of cluster marketing groups through the application of these processes to smallholder vegetable chains in Mindanao, the southern Philippines.

Over the past two decades, numerous studies have explored the role and the impact of social capital in organizations. Social capital helps overcome problems of institutional access to information, credit, the supply of farm inputs and the provision of government services. Despite the increasing number of studies, the role of social capital and trust in collaborative marketing arrangements for smallholder producers remains relatively unexplored. This study examines social capital among cluster marketing groups in three regions of the Southern Philippines. The results show that social capital in the form of affiliations and networks, social cohesiveness, open communication and trust had positive benefits for each of the cluster marketing groups.