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International standards and small-scale farmer behaviors: evidence from Peru

Lemeilleur S.. 2011. In : PAA; PENSA. The Multiple Agro Profiles: How to Balance Economy, Environment and Society : 8th International Agribusiness PAA-PENSA Conference, Buenos Aires, Argentina, November 30th to December 2nd, 2011. s.l. : s.n., 16 p.. International Agribusiness PAA-PENSA Conference. 8, 2011-11-30/2011-12-02, Buenos Aires (Argentine).

The prevalence of food quality standards in international trade is constantly increasing and has a growing influence on developing countries. A wide range of literature in development economics focused on the determinants of the standard adoption and on the debate of whether international standards exclude small-scale farmers from high-value food markets. Otherwise, when exclusion is pointed out, very little is said on how problematic such forms of exclusion are. In this paper, we use the Hirschman's (1970) conceptual framework to examine which behaviors small-scale farmers adopt face to the incontrovertible standards, what happens to the farmers that are excluded from a specific certified market, and to what extent small farmers are affected to not be certified. Based on an analysis of primary data collected to examine the implication of GlobalGAP on the mango sector in Peru, we consider three main options for the small-scale farmers: "loyalty" (implementation of the standard under specific conditions), "switch" of market segment, and "exit" from the market. The last option leads farmers to sell all their production to small and volatile exporters, called golondrinos (swallows). We show empirically that some small-scale farmers (8% of the sample) comply with GlobalGAP standard thanks to the support from exporters (farming contrats which include the certification cost), while others switch of market segment by complying with the organic certification (12,5%). Organic certification substitutes for the GlobalGAP requirement in the EU market. Finally, we find a significant level of exit option (24%), especially among smaller farms, less specialized, and furthest from exporter plants. The latter seem very affected by the changes related to the GlobalGAP standard requirements: price risk on their production has increased and their bargaining power and agricultural income have decreased. They are particularly vulnerable because their level of investment (mango trees) impedes to radically change of farm activity.

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