Smallholders at a Crossroad: Intensify or Fall behind? Exploring Alternative Livelihood Strategies in a Globalized World

Abstract

The chocolate market is experiencing a wave of market differentiation thanks to the emergence of the bean‐to‐bar movement. Cacao is seeing both a rise in demand for mass markets and a process of market bifurcation into more specialized, high‐quality products for wealthy urban consumers. For the specialized market, the quality and origin of the beans are important attributes. Direct trading between chocolate makers and famers seeks to promote the conservation of rare cultivars and traditional agroforestry systems, while lifting farmers out of poverty. Here we assess whether these alternative configurations of the global value chain truly offer smallholders new opportunities, beyond the traditional intensification or marginalization pathways that are generally offered to them. We conducted detailed socio‐economic and biophysical surveys with a sample of farms in three of the largest cacao producing provinces of Ecuador. Our results show that, even though smallholders lack the assets needed to join mainstream commodity markets, they have been able to capitalize on the qualities of their traditional varieties to access niche markets. Through strong cooperatives, the knowledge held by buyers about what constitutes a high‐quality bean has been transferred to farmers. A unique natural capital may provide smallholders with rewarding pathways to develop their agriculture, exploiting new market opportunities offered by globalization. Copyright © 2018 John Wiley & Sons, Ltd and ERP Environment

Challenges and Opportunities for the Sustainability Transition in Global Trade (Introduction)

“…Looking at the wider debate and the research presented in this special issue, we find that there is empirical evidence indicating that direct trade relationships, where there are opportunities for high-value markets, can be highly effective in delivering on social, environmental and economic goals. The studies included here empirically test the claims of better quality, better revenues and better social and ecological conditions, and each provide meaningful evidence supporting the claims (Hernandez-Aguilera et al, 2017;Rueda et al, 2017). Such schemes involve longer-term partnerships, and avoid the situation that can occur in which standards are (mis-) used as simply the means of avoiding reputational damage by buyers and is motivated by risk avoidance (Vermeulen, 2015).…”

“…The third article (Rueda et al, 2017) also tests the claim that direct trading is an effective means of achieving multiple goals: social, economic and environmental. The article focuses upon direct trade relationships between chocolate makers and cacao farmers in Ecuador.…”

“…More recent innovations could assist in this regard. First, the expansion of direct trade and other forms of alternative trade partnerships that focus primarily in sensorial and physical quality, and create shorter linkages between compliant producers and buyers, thus reducing transaction costs and improving producers' bargaining position, as the supply of these high-quality products is limited to specific geographic areas and production and processing methods (MacGregor et al, 2017;Rueda et al, 2017). Second, these alternative chains and even mainstream markets are showing a growing focus on quality improvement, which potentially could deliver a higher market value for upstream farmers, as they implement better technologies and upgrade.…”

Improving smallholder livelihoods and ecosystems through direct trade relations: High‐quality cocoa producers in Ecuador

“…Our finding that the interviewed farmers owned on average about 16 ha of land may place some of them in the category of medium land holders rather than smallholders. However, by comparison with cocoa farmers in the neighboring provinces of Ecuador where land holdings of 30 to 50 ha were common (Rueda et al, ), the farmers we interviewed were in the lower end of the land holding distribution for the region.…”

Evaluación de la cadena de valor del cacao (Theobroma cacao l.) peruano

“…De este análisis, el mercado del cacao peruano utiliza la "diferenciación" como estrategia de posicionamiento en el mercado mundial. Tal como señala Rueda et al (2018), la demanda de cacao está experimentando un ritmo sin precedentes, al incrementar los mercados, que exigen una calidad más especializada. Para estos mercados, no solo los atributos objetivos del producto son importantes, sino también las descripciones de su origen, modo de producción y sostenibilidad ambiental, es decir la demanda de productos diferenciados.…”