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Smallholders and niche markets: Lessons from the Andes

Research reports

Research in Bolivia, Peru and Ecuador focused on the extent to which producers of two widely traded crops, bananas and coffee, are able to take advantage of expanding global markets. In Ecuador, banana production is largely in the hands of independent producers while a handful of companies control the export trade. These companies have considerable influence on the prices paid to farmers. The majority of farmers are hardly able to cover their production costs. Coffee producers are confronted with a market where over-supply in recent years has led to a fall in coffee prices. The banana and coffee sectors demonstrate that smallholder producers often find themselves disempowered and unable to benefit from conventional commodity markets. Several non-governmental organisations (NGOs) are working with banana and coffee producers to tap into niche markets, which include organic, fair trade and gourmet markets. These offer greater benefits to farmers, by paying them a higher price for their produce, but demand new skills and forms of organisation.

Jon Hellin and Sophie Higman