PR - Smallholder Farmers Participating In Commercial Agri-food Chains: Learning From Eksteenskuil Raisin Producers

The strict rules and regulations associated with supplying agricultural products to commercial agri-food chains often contribute to the exclusion of smallholder farmers from the formal market. New Institutional Economics theory is used in this paper to investigate the way how a group of smallholder raisin producers from South Africa cope with the strict rules and regulations associated with supplying raisins to the Fairtrade market. The findings show that, instead of viewing the rules and regulations as a fatal stumbling block, the farmers from Eksteenskuil created additional rules and regulations to help them coping with the strict requirements of the Fairtrade initiative. The conclusion is that, if incentives are correctly aligned and the financial benefit for the farmers is significant, the farmers will find a way to cope with the requirements to successfully participate in the formal market.

Keywords: linking farmers to markets, New Institutional Economics, smallholder farmers