Cooperating to Compete
Associative Peasant Business Firms in Chile
Description:... 6. Understanding that EACs are successful only if they transmit market signals. EACs are set up with the explicit purpose of providing an organizational platform for small farmers to have access to more dynamic and profitable markets; almost always this means that they will be subject to more, not less, intense competition. Understandably, public programs in support of peasant farmers want to somehow protect them from the adverse consequences of moving into fiercely competitive markets. But this is not the issue, as no one can seriously question the need to have in place mechanisms to ease the transition. The question is how do we do it. Until now we have relied almost solely on direct subsidies and subsidized loans than very often decouple EACs from the market signals they are supposed to respond to. What are the insurance systems, the risk-sharing private-public contracts, the training programs, the government regulations and legal frameworks, that can at the same time help small farmers and their EACs learn their way about the new markets, and that at the same time do not create artificial 'bubbles' that burst the very day when the external funding stops? We must stimulate and support institutional experimentation with this question in mind.
Show description