Multi-governance choices by smallholder farmers in the pineapple supply chain in Benin: An application of transaction cost theory

The present study validates the new construct “Multi-governance choices”, to sharpen our understanding of how and why smallholder farmers select among alternative governance structures. Primary data were collected from a sample of 219 pineapple farmers in Southern Benin. Results from a multivariate probit model analysis showed that farmers involved in outgrowing schemes were less likely to be involved in other type of governance structure, indicating the specificity of this type of transaction arrangement in Beninese pineapple supply chain. Results also show that the specificity of the investments, transaction connectedness, market stability, institutional support and market attributes are key factors affecting the choice of governance structure. The study suggests that further research is needed into the impact of selected governance structures on pineapple quality and farmer’s income.