Humboldt-Universität zu Berlin - Quarterly Journal of International Agriculture

Quarterly Journal of International Agriculture No. 1/07

Institutional innovations for improving smallholder participation in high-value agriculture: a case of fruit and vegetable growers’ associations in India

Pratap S. Birthal and P.K. Joshi
National Centre for Agricultural Economics and Policy Research, New Delhi, India


Indian agriculture is gradually diversifying towards high-value food commodities. This is expected to benefit millions of farmers especially smallholders, who rely on agriculture for their livelihood. Smallholders are efficient in production of high-value commodities but are constrained to expand their scale of production due to a lack market access and higher transaction costs. This paper examines role of institutions in facilitating smallholders’ access to markets and reducing their transaction costs. The study uses information from a survey of vegetable producers associated with fruit and vegetable growers’ associations. The evidence indicates that innovative institutions contribute in reducing transaction costs and augmenting farm profits. Smallholders share larger benefits from their participation in such innovative institutions. Public policies should create an enabling environment for up-scaling and strengthening of such institutions so that smallholders actively participate in high-value agriculture.

Keywords: smallholders, high-value agriculture, growers’ association, transaction costs, revenue

JEL: Q 120, Q 130, D 230, Q 180

Vol. 46 (2007), No. 1: 49-67