Supermarket Expansion in Turkey: Shifting Relations of Food Provisioning

This paper examines the shifting relations of food provisioning in Turkey as small producers are increasingly integrated into commercialized agri‐food supply chains led by supermarkets. Turkey's entry into a customs union with the European Union and a World Bank–imposed policy measure adopted during the 2001 economic crisis have greatly facilitated the process of market intensification in Turkish agriculture. There are two sides to this process: one concerns the historical centrality of small‐scale production directed towards local–regional consumers; the other relates to the dominant role played by supermarkets in changing the conditions of subsistence. The restructuring of wholesale markets and the privatization of formerly state‐led agricultural co‐operatives and producers' unions have been crucial for the expansion of supermarkets into agri‐food relationships. The competitive growth of Islamically oriented small and medium‐sized capital groups alongside large retailers is further deepening the commodification process in food relationships.     

Derivatives for Development? Small‐Farmer Vulnerability and the Financialization of Climate Risk Management

While agricultural production has always been a risky endeavour, it has become even more so in the current context of climatic change and increasing market uncertainty. Meanwhile, the rollback of state protections has rendered small‐scale farmers, especially marginalized peasant producers in the Global South, particularly vulnerable to these contemporary stressors. This essay critically evaluates the contemporary roll‐out of financial derivatives that purportedly aim to mitigate smallholder vulnerability. It gives particular attention to a novel type of derivative known as index‐based agricultural insurance (IBAI) that plays an increasingly prominent role in initiatives to ‘climate proof’ agriculture. The creation of IBAI markets has required significant work, including (1) technical interventions to debundle environmental risk from agricultural production and rebundle it in novel ways that support private financial capital and agricultural input suppliers, (2) extensive state support in the creation of risk markets, and (3) the construction of an accommodating ‘insurance culture’ among small‐scale producers. In addition to mitigating weather‐based risk, a primary objective of IBAI is to spur agricultural modernization. In promoting this agenda, IBAI initiatives may have the paradoxical effect of exposing smallholders to new risks while expanding their overall vulnerability to environmental and economic stressors.     

EU Food Safety Standards,Pesticide Use and Farm‐level Productivity: The Case of High‐value Crops in Kenya

This article provides an empirical analysis of the impact of European Union (EU) private food safety standards on pesticide use and farm‐level productivity among small‐scale vegetable producers in Kenya. We apply an extended three‐stage damage control production framework, accounting for multiple endogeneity problems, to farm‐level data collected from a random cross‐sectional sample of 539 small‐scale producers. Estimation results show that farmers producing vegetables for the domestic market use significantly lower quantities of pesticides than do export farmers. However, contrary to findings elsewhere, the econometric evidence here shows that both domestic and export‐oriented vegetable farmers in Kenya use pesticides at levels below the economic optimum. The results also show that the adoption of standards by export farmers does not have any significant impact on total pesticide use. However, adopter categories are distinguishable in terms of types of pesticide used, i.e. adopters use safer pesticides based on World Health Organization (WHO) classification. The third‐stage structural revenue model results demonstrate that adoption of standards has a positive and significant impact on revenue raised in vegetable production. Nevertheless, farmers producing for the export market are indistinguishable from those producing for the domestic farmers in terms of the total revenue earned from producing vegetables during the rainy season, on a ‘per acre’ basis. Although standards can potentially prevent resource‐poor smallholders from maintaining their position in the lucrative export markets, they can also result in positive changes in the production systems of those small‐scale farmers who adopt it, as shown by these results.     

Multilateral Trade and Agricultural Policy Reforms in Sugar Markets

We analyse the impact of trade liberalisation, removal of production subsidies and elimination of consumption distortions in world sugar markets using a partial‐equilibrium international sugar model calibrated on 2002 market data and current policies. The removal of trade distortions alone induces a 27% price increase while the removal of all trade and production distortions induces a 48% increase in 2011/2012 relative to the baseline. Aggregate trade expands moderately, but location of production and trade patterns change substantially. Protectionist Organisation for Economic Co‐operation and Development (OECD) countries (the EU, Japan, the US) experience an import expansion or export reduction and a significant contraction of production in unfettered markets. Competitive producers in both OECD countries (Australia) and non‐OECD countries (Brazil, Cuba), and even some protected producers (Indonesia, Turkey), expand production when all distortions are removed. Consumption distortions have marginal impacts on world markets and the location of production. We discuss the significance of these results in the context of mounting pressures to increase market access in highly protected OECD countries and the impact on non‐OECD countries.     

Economic Effects of the Consumer‐oriented Genetically Modified Products in Markets with a Labelling Regime

This paper builds on the literature on the economic effects of the second‐generation, consumer‐oriented genetically modified products (GMPs). It analyses the market and welfare impacts of the introduction of these new products in markets, like the EU, that mandate the segregation and labelling of the first‐generation, producer‐oriented GMPs. Developing an empirically relevant model of heterogeneous consumers and producers, the study determines the effects of the consumer‐oriented GMPs on the markets of conventional, GM and organic products, and the welfare of consumers and agricultural producers. Analytical results indicate that the market effects of the new GMPs are case specific and depend on: (i) the consumer valuation of the quality‐enhancing attribute of the new GMP; (ii) the level of consumer aversion to GMOs; (iii) the strength of consumer preference for organic products; and (iv) the production costs and marketing margins in the different supply channels. The policy on the labelling of the first‐generation GMPs does not affect the impacts of the second‐generation GMPs on the quantities and market shares of the different products. However, it does affect their price effects and welfare implications. The introduction of consumer‐oriented GMPs under a mandatory labelling regime can result in losses for some GM consumers and all producers of the conventional product.     

Market Imperfections and Land Productivity in the Ethiopian Highlands

This study analyses how market imperfections affect land productivity in a degraded low‐potential cereal‐livestock economy in the Ethiopian highlands. A wide array of variables is used to control for land quality in the analysis. Results of three different selection models were compared with least squares models using the HC3 heteroskedasticity‐consistent covariance matrix estimator. Market imperfections in labour and land markets were found to affect land productivity. Land productivity was positively correlated with household male and female labour force per unit of land. Female‐headed households achieved much lower land productivity than male‐headed households. Old age of household heads was also correlated with lower land productivity. Imperfections in the rental market for oxen appeared to cause overstocking of oxen by some households. Conservation technologies had no significant positive short‐run effect on land productivity. The main results were consistent across the different econometric models.     

Post–Uruguay Round price linkages between developed and developing countries: the case of rice and wheat markets

The Uruguay Round Agreement on agriculture attempted to lower distortions in global agricultural markets. However, the significant fall in commodity prices in the late 1990s may have reduced the incentives for both developed and developing countries to better integrate into world markets. This study analyzes price linkages and adjustment between developed and developing countries during the post–Uruguay Round period. Prices of two key commodities, long‐grain rice and medium‐hard wheat, are assembled for major exporters and producers. Results of multivariate cointegration analysis suggest partial market integration between developed and developing countries in the post–Uruguay Round period. Developed countries are found to be price leaders in these two markets, and in most cases, changes in their prices have relatively large impacts on those of the developing countries. Developing countries (e.g., Vietnam and Argentina) have faced considerable price adjustment due to changes in the developed countries' prices.     

Agribusiness,Peasant Agriculture and Labour Markets: Ecuador in Comparative Perspective

The consolidation of capitalist agriculture in countries such as Ecuador has led to a recent revaluation of territories (central highlands) where cheap labour has facilitated agribusiness development linked to the world market. This process generates growth in the numbers of rural wage workers and the creation of a labour market that, in relation to others in several Latin American countries, has certain particularities: permanent jobs, gender balance, an absence of intermediaries and low levels of precariousness. Small‐scale peasant producers are marginalized in this context and play functional roles within the current dynamics of agribusiness firms. The organizational weakness of rural wage earners and the pursuit of clientelist relationships by firms do not allow rural workers and local communities to devise economic and social strategies that might improve their position in this ‘field of forces’ in the territory.     

Agricultural trade liberalization and economic development: the role of downstream market power

A model is developed to characterize the vertically linked and concentrated nature of developed‐country food markets. This model is then parameterized and used to simulate the effects of varying food market structures on the benefits to developing‐country exporters of agricultural commodities from trade liberalization by developed countries. Results demonstrate that even relatively modest departures from perfect competition can cause much of the benefits from trade liberalization to flow to marketing firms instead of producers in the developing country. The distributional effects under downstream market power differ significantly from the perfectly competitive case and may result, somewhat paradoxically, in developing countries receiving a lower share of the total value added within the food chain as trade reform occurs.     

Land outsourcing and labour contracting: Labour management in China's capitalist farms

Difficulty in labour supervision has been considered to be one of the obstacles to the development of capitalist agriculture. This paper presents two distinctive labour management strategies in China's large‐scale agriculture, which contribute to the development of agrarian capitalism in China. As shown in these cases, agribusiness companies engaged in grain crop production retreat from direct labour management by outsourcing crop cultivation, while acquiring profits from upstream and downstream activities. On the other hand, capitalist producers, who are involved in the labour‐intensive and capital‐intensive crop production, tend to mobilize local elites to manage the farmworkers. Although independent labour contracting services have not emerged, a specialized group of labour contractors is being cultivated. Rural social resources are utilized in labour recruitment and supervision to minimize the labour management costs in both strategies. However, the conflicts between capital and labour are covered or replaced instead of being settled.     

Subsistence Response to Market Shocks

Microeconomic models posit that transaction costs isolate subsistence producers from output market shocks. We integrate microeconomic models of many heterogeneous households into a general equilibrium model and show that supply on subsistence farms may respond, in apparently perverse ways, to changes in output market prices. Price shocks in markets for staple goods are transmitted to subsistence producers through interactions in factor markets. In the case presented, a decrease in the market price of maize reduces wages and land rents, stimulating maize production by subsistence households; however, real incomes of subsistence households fall.     

Land size and productivity in the livestock sector: evidence from pastoral areas in China

This article explores the relationship between land size and productivity in the livestock sector. Household panel data from pastoral areas in northwestern China were analysed. Results suggest an inverse relationship (IR) between land size and the number of livestock per ha. IR can be largely explained by labour input intensity, which is negatively correlated with land size. We find that household’s labour demand is not separable from household’s labour supply and households’ decisions to rent land and hire labour for grazing are significantly related to the labour–land endowment ratio. These findings are consistent with the Chayanovian explanation that labour input intensity varies with farm size due to unobserved interhousehold variation in shadow wage rates. In addition, participation in the labour market does not significantly influence the IR for the employer, while the practice of land renting reduces, but does not eliminate, the IR for the lease. These findings point towards the potential for using factor markets to optimise pasture‐based livestock production scale, and the need to promote the factor market development to achieve efficiency in resource use.     

The valuation of market information from livestock selling complexes

The efficient operation of livestock markets is contingent upon producers accessing relevant market information which assists adjustment to production and distribution. This article provides an analysis of the value of market information gleaned by producers attending public livestock auctions. The article uses the Travel Cost Method to quantify the value of this information and notes the limitations of applying the Travel Cost Method in this context.     

Food market liberalization: History and prospects

Abstract

Government intervention has been a feature of food markets in both industrialized and agrarian economies. However, the last 10 years have seen reforms aimed at reducing intervention; these have been a characteristic of ‘structural adjustment’. The process of reform has involved the replacement of administered by market‐determined prices and the abolition of trading parastatals or the removal of their monopoly. Despite an almost complete consensus that reforms are necessary and the absence of coherent local opposition, the pace and extent of reforms have varied. Moreover, views about liberalization tend to be polarized. Proponents argue that continued intervention is inefficient, unaffordable and distorting; antagonists suggest that unmodified markets lead to unacceptable inequalities, and expose producers and consumers to unacceptable risks. Moreover, weak fragmented markets do not constitute a sufficient base for sustained growth. This paper reviews the experience. It concludes that simple solutions of substituting public with private trading are not necessarily possible nor desirable, and argues that the nature of the debate may be misleading. The way forward may not lie in a choice between private market supremacy and conventional government intervention.     

The Boundary of Smallholder Producers’ Cooperatives: A Conceptual and Empirical Analysis

In this study we explain the concepts, determinants and imperatives of boundary in smallholder producers’ cooperatives both conceptually and empirically. The conceptual framework indicates the importance of the type of goods (being a club good or not) and range of activities that a cooperative provides to its members in defining a competitive boundary. Using unique organisational and market level data from Ethiopia, we then test empirically whether the observed (weak) performance of producers’ cooperatives in Africa is explained by their organisational boundary – the type and range of goods or services they provide to members. The empirical results confirm that the competitiveness of producers’ cooperatives is significantly correlated with the type and number of services – i.e. cooperatives that provide club goods and a limited range of services are found to be more competitive. The results also suggest that a considerable number of cooperatives in Ethiopia engage in markets where they do not have competitive advantage. Overall, we demonstrate the importance of properly defining a viable boundary – proper selection of services (or markets) and limiting the range of services – for improving the competitiveness of membership‐based producer cooperatives in Africa.     

Class formation and commodity chains in the making of regional monocultures: Agrarian reform from above and below in Mexico's henequen and cotton zones

This paper analyses the rise and fall of two regional monocultures in Mexico: the henequen zone in the southern state of Yucatán and the cotton‐growing area of La Laguna. Both regions experienced a dramatic expansion of commodity production between 1870 and 1910, but their key crops came to be cultivated under different labour regimes: debt peonage in the case of henequen and wage labour in the case of cotton. The process of class formation that unfolded in each region culminated in the 1930s in different kinds of crises. In Yucatán, a political struggle between hacienda owners and the federal government resulted in an agrarian reform “from above.” In La Laguna, class conflict between rural wageworkers and the landed bourgeoisie forced an agrarian reform “from below.” These previously distinct labour regimes converged in subsequent decades, however, as rural producers became de facto wageworkers on state‐organized and state‐administered production units known as collective ejidos. Ultimately, changes in the global markets for cotton and henequen, combined with the inability of the Mexican state to reconcile the political logic of agrarian clientelism with shifting commodity chain dynamics, resulted in the collapse of these regional monocultures in the late 20th century.     

Well‐off small‐scale tobacco growers and farm workers in the Mexican agrarian reform (1972–1990)

In this article, I study small‐scale growers of blonde tobacco varieties from the state of Nayarit in Mexico who had contract farming arrangements with the state‐owned company Tabamex (1972–1990). I refer to them as “well‐off small‐scale tobacco growers” given that in the 1960s, 1970s, and the 1980s, they became one of the subaltern social groups that benefited the most from the Mexican Agrarian Reform. I want to set this research apart from the ones carried out on tobacco growers in Nayarit, which have almost exclusively understood this group as agricultural producers and have perceived as secondary, and even as anecdotal, the impact of the high levels of wage labour hired in the region. I argue that in order to have a better understanding of the social relations at play, it is important to take into account that Nayarit tobacco growers have also been employers of farm workers. Hence in my analysis, I have also included the seasonal farm workers hired by these small‐scale tobacco growers because of their importance in the labour force. More specifically, I have looked into the vulnerability and invisibility of these workers both within this branch of agricultural activity and state institutions.     

Property rights reform to support China’s rural ‐ urban integration: household‐level evidence from the Chengdu experiment

In 2008, as part of a national experiment, Chengdu prefecture implemented ambitious property rights reforms including complete registration of all land together with measures to ease transferability and eliminate migration restrictions. Results from a difference‐in‐difference analysis of the National Statistics Bureau's regular household survey suggest that the reforms increased consumption and income, in particular for less wealthy and less educated households, with estimated benefits well above the cost of implementation. Local labour supply increased with the young shifting towards agriculture and the old towards off‐farm employment. The reforms also contributed to higher agricultural yields and profits through three channels, namely: (i) greater rental market activity that transferred land to more productive producers; (ii) substitution of purchased inputs for labour; and (iii) a shift out of grains towards vegetables, corn, and oilseeds all of which offer higher levels of profitability. All of these findings are consistent with the notion that, without reforms, imperfections in factor markets undermined investment and functioning of land and labour markets, preventing high‐value peri‐urban land from being used most effectively and reducing job creation.     

The two‐way interaction between globalization and labour market policies

Labour market and social policies both affect and are affected by the process of trade liberalization and globalization. This two‐way interaction and the feedback effects are the focus of this paper. The analysis is mainly conceptual—but examples are illustrated throughout, based mainly in the context of labour markets in North America, Latin America and the Caribbean basin. Attention is paid to outlining the mechanisms whereby globalization and trade liberalization affect labour market and social policy initiatives, and the extent to which these pressures will lead to a harmonization of legislative and policy initiatives, and if that harmonization will necessarily be downward to the lowest common denominator. The paper concludes that: (1) the pressures will lead towards policy harmonization; (2) the harmonization generally will be downwards; (3) such harmonization is not always negative as generally perceived; (4) efficient regulatory and social policy initiatives will survive and indeed expand, with the “rent‐protecting” ones under most pressure to dissipate; and (5) pure distributional or equity‐oriented initiatives that have no positive feedback effect on efficiency, unfortunately, will also be under jeopardy to dissipate, and this is a serious policy concern. Alternatives for addressing this concern are discussed, as are their associated problems.     

Demand for Seasonal Wage Labour in Agriculture: What Does Family Farming Hide?

This article draws on the agricultural household literature to understand the dynamics of wage labour on farms in a context of family farming. The recent evolution towards an increased use of seasonal wage labour motivates the original distinction of three types of labour: family labour, permanent‐wage labour and seasonal‐wage labour. Considering the two wage labour types and hiring cost for seasonal workers, our empirical results based on 2000 French data on fruit and vegetable farms suggest that the choice between hiring permanent or seasonal wage labour is not only determined by the seasonality of the activity. Indeed, the characteristics of the local labour market also affect the trade‐off between permanent and seasonal wage labour. This result provides insights on the substitutability of the two labour types, especially when the local labour market is tight. Moreover, the substitution of seasonal‐wage labour for permanent‐wage labour can occur in the agricultural sector as a mean of increasing flexibility as well as reducing costs and commitments. Finally, family labour is found to substitute for wage labour and more specifically for seasonal‐wage labour.