The Impact of Increased Consumer-orientation in Global Agri-food Chains on Smallholders in Developing Countries

The economic position of small-scale developing country farmers has been observed to weaken in many global agri-food chains. Several studies in the global commodity chain tradition suggest that recent consumer trends in developed country markets are the ultimate cause. However, these studies have not come up with a conceptual framework in which the effects of changing consumer preferences on farmer earnings can be explicitly analysed. This paper makes a first attempt towards building such a framework by drawing mainly on Lancaster's product characteristics approach. Within this framework it is shown how enhanced consumer-orientation in the global food system leads to adverse power shifts for small farmers in low-income countries. As signalled by previous global commodity chain studies, smallholders in developing countries will face growing inequality in intra-chain surplus distribution as well as a higher risk of exclusion from global agri-food chains. We discuss how thinking in terms of product characteristics may also help smallholders to reap a larger share of the surplus in the chain.