Farmer Organization, Collective Action and Market Access in Meso-America

The global agricultural economy is changing. Commodity prices are declining, andproducers increasingly supply complex value chains. There is growing interest in how farmerscan benefit from emerging market opportunities. Farmers are encouraged to produce high valuecrops and engage in value-adding activities such as agro-processing. Farmer organization andcollective action are often seen as key factors in enhancing farmers’ access to markets. Often toolittle attention is directed at a) the most appropriate types of organization, b) whether the publicand/or private sector is best placed to support their formation, and c) the conditions necessary forensuring their economic viability. This paper reports on research in Mexico and Central Americathat explored these issues for commodity maize and high value vegetables respectively. Thebenefits of farmer organization are more evident in the vegetable sector characterized by hightransaction costs associated with market access. The research suggests that farmer organizationsestablished by and directly linked to supermarkets may be more economically sustainable asopposed to organizations supported by non-governmental organizations. However, the mostrepresentative vegetable producer organizations in both Honduras and El Salvador include fewerthan 5 percent of total horticultural producers. This is due to producer organizations’ limitedbusiness skills and non-replicable organizational models for linking producers to markets. Thereis less incentive for maize farmers to organize themselves to access output markets as thetransaction costs associated with market access are relatively low: there are so many buyers andsellers that farmer organizations would have little impact on, for example, prices. The benefits offarmer organization are clearer when it comes to accessing credit, seed, and fertilizer. Farmerorganization is a critical factor in making markets work for the poor particularly in high valueproducts, but the role and timing of the substantial public and private investment needed toestablish and maintain these organizations is poorly understood.