Dynamics of smallholder participation in horticultural export chains: evidence from Ecuador

We study the dynamics of smallholder participation in export value chains focusing on the example of small†scale broccoli producers in the highlands of Ecuador. Combining cross†sectional data from a household survey with 11†year longitudinal data on export market transactions, we explain the hazards of dropping out of a high†value export chain. We apply a multispell cox duration model that allows us to consider multiple entries and exits from the supply chain. We also provide evidence on the welfare impacts associated with participation. The results suggest that small†scale farmers’ exit from the export sector is accelerated by high transaction risks experienced in the past. While we find no particular evidence for the exclusion of small†scale farmers from the export sector, we do find that poorer households and female†headed households tend to drop out faster, especially as long as the sector is still prospering. Finally, when considering welfare effects, we do not find evidence that participation translates into tangible benefits for broccoli farmers. We discuss some measures that could help improve the long†term sustainability of smallholder integration in high†value chains.