Smallholders at a Crossroad: Intensify or Fall behind? Exploring Alternative Livelihood Strategies in a Globalized World

The chocolate market is experiencing a wave of market differentiation thanks to the emergence of the bean-to-bar movement. Cacao is seeing both a rise in demand for mass markets and a process of market bifurcation into more specialized, high-quality products for wealthy urban consumers. For the specialized market, the quality and origin of the beans are important attributes. Direct trading between chocolate makers and famers seeks to promote the conservation of rare cultivars and traditional agroforestry systems, while lifting farmers out of poverty. Here we assess whether these alternative configurations of the global value chain truly offer smallholders new opportunities, beyond the traditional intensification or marginalization pathways that are generally offered to them. We conducted detailed socio-economic and biophysical surveys with a sample of farms in three of the largest cacao producing provinces of Ecuador. Our results show that, even though smallholders lack the assets needed to join mainstream commodity markets, they have been able to capitalize on the qualities of their traditional varieties to access niche markets. Through strong cooperatives, the knowledge held by buyers about what constitutes a high-quality bean has been transferred to farmers. A unique natural capital may provide smallholders with rewarding pathways to develop their agriculture, exploiting new market opportunities offered by globalization. Copyright © 2018 John Wiley & Sons, Ltd and ERP Environment