Agricultural marketing systems and sustainability : study of small scale Andean hillside farms

J. Castaño

Research output: Thesisexternal PhD, WU

Abstract

<p>A better understanding of the way in which marketing systems can contribute to the adoption of sustainable agricultural practices (<font size="2">ASAP</font>) on small-farms constitutes the aim of this study. In particular, the study examines the contribution of vertical marketing systems (<font size="2">VMS</font>) and conventional marketing channels (<font size="2">CMC</font>) in stimulating resource users towards sustainable soil management. The research aim arose from the need to evaluate the merit of marketing strategies to provide incentives for sustainable agriculture in developing countries, as public interventions to promote adoption have often been less than successful.</p><p>An analytical framework was developed and involved a method for measuring<font size="2">ASAP;</font>an econometric model for testing the influence of marketing and other factors on<font size="2">ASAP;</font>and a multiple-goal linear programming (<font size="2">LP</font>) model (<font size="2">COOPERA</font>) to simulate and evaluate the impact of alternative marketing structures on soil sustainability. The Cabuyal Watershed, a tropical hillside area in Colombia, was selected as a case study. The study area shares not only the typical characteristics of bio-diversity of tropical hillsides, but also most of their problems such as high population density, lack of physical infrastructure and severe erosion. A survey undertaken in Cabuyal entailed 120 farms and the characterisation of 196 farm plots. The main findings of the analysis are enumerated below.</p><UL><font size="2"><p><LI>ASAP</font>is built up on three soil sustainability dimensions, namely 'soil-disturbance control', 'soil protection' and 'run-off control' <sup>1</sup> . Cabuyal farmers combine these dimensions or aspects in strategies towards sustainable soil management.</LI></p><p><LI>The econometric model revealed that the various aspects of soil sustainability appear to be distinctly influenced by institutional (e.g. marketing), economic, personal-social and physical factors. Economic and marketing factors appear to be the most critical factors for<font size="2">ASAP</font><sup>2</sup> .</LI></p><p><LI>Government factors, such as the strength of and links to technical institutions, appear significant with respect to only one aspect of<font size="2">ASAP</font>reflecting a possible lack of emphasis of technical extension on wider aspects of soil conservation.</LI></p><p><LI>The<font size="2">COOPERA</font>model revealed that<font size="2">VMS</font>channels, based on long-term relationship and having some credit support from the government, have a positive impact on the use of, and income from, production factors, and do better with respect to soil sustainability than<font size="2">CMC</font>. It appears that in<font size="2">VMS</font>, farmers are more willing to take on crops, which are capital-intensive and more risky to produce in<font size="2">CMC</font>.</LI></p><p><LI>Farmers in<font size="2">VMS</font>channels appear to perform better with respect soil sustainability than in<font size="2">CMC</font>even in the case where they make income maximisation the first priority and minimisation of soil erosion the second priority.</LI></p></UL><p>In the light of these findings, the main conclusions related of the study are:</p><UL><p><LI>Long-term oriented<font size="2">VMS</font><sup>3</sup> channels positively affect farmers and stimulate them towards more environmentally sound production systems.</LI></p><p><LI>If the marketing channel leader has a short-term perspective and is more concerned with short-term gains at the cost of long-term benefits (sustained profit), sustainable farm production systems are unlikely to occur.</LI></p><p><LI>The government plays an important role in sustainable agriculture in Cabuyal but technical extension needs greater emphasis on a wider range of soil conservation practices.</LI></p><font size="2"><p><LI>VMS</font>would have the greatest impact on farm soil sustainability when government policy is oriented towards assisting the operations of these channels in rural areas.</LI></p><p><LI>The method developed for the measurement of<font size="2">ASAP</font>contributes substantially to the empirical appraisal of soil sustainability. The holistic approach of the econometric model towards the explanation of<font size="2">ASAP</font>constitutes a sound methodological option. The<font size="2">COOPERA</font>model is a useful LP alternative to explore the impact on and trade-off between farm income and soil erosion as a result of various market scenarios and different priorities in farmers' objectives.</LI></p></UL><em><p>Implications for marketing policies of companies</p></em><p>The positive impact of<font size="2">VMS</font>on farm sustainability will be particularly meaningful when marketing companies:</p><UL><p><LI>are not only concerned with price and quantity but also with quality production;</LI></p><p><LI>are long-term oriented and favour a sustained use of the soil resource;</LI></p><p><LI>provide extension to and share market information with farmers so resources can be allocated in a more skilful and timely manner;</LI></p><p><LI>provide inputs and finance, which reduces farmer's financial concerns.</LI></p></UL><em><p>Implications for policy makers in Cabuyal</p><UL></em><p><LI>Policies aiming at soil conservation or the reversing of soil degradation must orient at improving small farmers' access to markets and institutions, while supporting the establishment of processing plants, cooperatives and other VMS institutions. Educational campaigns should acquaint resource-users about the risks of non-adoption in less steeper lands.</LI></p><p><LI>Policies must stimulate the emergence of VMS that help to reduce the dependence of small farmers on conventional intermediaries. In particular, the development of marketing channels for perennial crops that that can offer farmers both economic returns and sustainable viability.</LI></p></UL>Notes:<br/>1 The first sustainability dimension refers to farm practices with a mechanical impact on the soil structure in preparation and harvest activities (such as ploughing). The second dimension refers to overall cover of the field ground with mulch, leaves and other physical barriers as a protection from erosive tropical rainfalls. The last sustainability dimension relates to physical practices, such as interception drains made at the margins of farm plots, intended to cope with soil surface run-off by carrying the water flow away.<br/>2 Marketing factors, in particular, were the primary factors for the protection of the topsoil, a crucial environmental issue in Cabuyal.<br/>3 There exist some risks associated with VMS, such as being capital intensive, abuse of monopsony position in contracts and limited coverage of contracts. The recognition of these risks, however, helps to strengthen the viability of marketing strategies like VMS.
Original languageEnglish
QualificationDoctor of Philosophy
Awarding Institution
  • Wageningen University
Supervisors/Advisors
  • Meulenberg, M.T.G., Promotor
  • van Tilburg, A., Promotor, External person
  • Janssen, W.G., Promotor, External person
Award date24 Oct 2001
Place of PublicationS.l.
Publication statusPublished - 2001

Keywords

  • marketing channels
  • food marketing
  • agricultural products
  • agriculture
  • small farms
  • sustainability
  • innovation adoption
  • colombia
  • developing countries
  • andes

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