Market Integration Shape Organic Farmers’ Organisation

Summary

Increasing consumption of organic products in globalised food chains will require the involvement of thousands more smallholder farmers in many regions of the world. A study of Egypt, China and Uganda identified the three key factors of property rights regimes, cultural differences and social organisation as determents of the supply chain organization and farmers’ degree of direct integration in the export markets. Patterns are emerging where smallholder farmers are being socially and economically linked to larger farmers who may do some processing before the raw materials are handed over to the contracting company. Where transactions costs are high, local communities may develop and contract out the land directly to exporting companies who farm using employees. Four organisational patterns are identified which each leads to different types of livelihood benefits for the producers; preliminary results indicate that income and a reliable market access is the dominant benefits.