Indigenous Social Capital in Traditional Agro-Food Marketing Systems: The Role of Trust in Governance Structure Selection in the Philippine Highlands

The decision-making of indigenous Ibaloi and Kankanaey growers in seven highland communities of Benguet, Cordillera region Philippines was captured in three models. The models explain factors affecting their selection of primary transacting partners. The farmers three main primary marketing links are commissioners, wholesalers and contractors. Commissioner-led governance structures are market-based and the relationship is motivated by profit. Wholesaler-led governance structures are partly-market and partly-hybrid-based and are characterized by the motivations of profit, relationship and safeguard benefits. Contractor-led transactions are hybrid modes of organization that are motivated strongly by trust. In governance structure selection, farmers attempt to balance expected profit and relationship factors in their choice.