Transaction Costs, Institutions and Smallholder Market Integration: Potato Producers in Peru Irini Maltsoglou and Ay en Tanyeri-Abur

By Food and Agriculture Organization of the United Nations

Book Id: WPLBN0000046601
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Reproduction Date: Available via World Wide Web.

Title:	Transaction Costs, Institutions and Smallholder Market Integration: Potato Producers in Peru Irini Maltsoglou and Ay en Tanyeri-Abur
Author:	Food and Agriculture Organization of the United Nations
Volume:
Language:	English
Subject:	United Nations., Food and Agriculture Organization of the United Nations. FAO agriculture series, Agriculture
Collections:	United Nations Food and Agriculture Organization Collection
Historic Publication Date:
Publisher:	Food and Agriculture Organization of the United Nations; Digitizer: Fao


Citation APA MLA Chicago And Agriculture Organization Of The United Nations, B. F. (n.d.). Transaction Costs, Institutions and Smallholder Market Integration: Potato Producers in Peru Irini Maltsoglou and Ay en Tanyeri-Abur. Retrieved from http://gutenberg.cc/

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Electronic reproduction.

Excerpt
Introduction: Assessing the impacts of globalisation on smallholders is a topic that has received a lot of attention in the past decade but also has been most difficult to tackle. It is difficult to narrowly define globalization, and moreover, attribute the impacts solely to factors related to globalization. Globalization is characterized by increasing economic integration, particularly trade and capital flows, between countries. The associated liberalization of trade has enlarged and transformed the input and commodity markets faced by agricultural producers, markedly changing their terms of trade and underlining the importance of international competitiveness. Smallholders are a heterogeneous group whose resources, livelihood patterns and income sources are quite diverse. Depending on their income sources, their location, other social and/or demographic factors, and the variety of economic and social costs they encounter in their participation in markets, they often have different responses to changes in economic variables and policy actions. Some smallholders are taking part in global markets while some risk exclusion. Therefore, an understanding of the variables that explain smallholder response to globalization is important and can help refine and better target policies. The paper argues that transaction costs and rural institutions are important in explaining the impacts of globalisation on smallholders due to their impact on the ability of smallholders to access markets beyond the local markets. A survey of transaction costs faced by smallholder potato farmers in Peru is used to identify the types of transaction costs farmers face and how they affect the marketing decisions of the households, both in terms of how much they sell and where they sell. In this context, the analysis shows, as would be expected, that sales are higher where transaction costs are lower and factors other than price affect market integration of households. The paper starts with a brief overview of the literature on transaction costs and market failures, followed by a description of the data and modeling. The third section discusses the results followed by conclusions and directions for further research.