importing agency, causing both a considerable financial loss to the export company
and a loss of belief in the capacity of local farmers to engage in collective efforts to
comply with strict food safety standards for fresh fruit exports. ‘Learning the hard
way’ was thus an essential component of the learning process for major actors in the
network.
9.5.2.5 Convergence of Expectations: Negotiating Trade Terms
and Balancing Power Differentials
The convergence of expectations among actors in a network – a third principle of
the SNM concept – is closely linked with the principle of experiential learning.
Here, various interaction patterns were created within the litchi processing and
marketing network aimed at sharing knowledge and experience on market demands
and mechanisms, the private companies’ structures and logistics and product
specifications, as well as the Hmong farmers’ practices and litchi production and
processing systems. These dynamic exchanges required ongoing adjustments of the
partners’ roles and of the venture’s objectives and strategies for implementation
(Tremblay and Neef 2009). The major expectations of the actors in the network are
summarized in Table 9.4.
Hmong litchi growers and processors were relatively homogeneous as regards to
their expectations of the new trade arrangements with the hypermarket chain, Thai
exporters and European companies; they wanted to obtain prices higher than those
offered by middlemen or at the wholesale market in Chiang Mai, and they expected
a timely payment after delivering their produce. Being risk-averse, as smallholder
farmers they were interested in having secure market channels over the entire
season and in discussing terms of trade prior to the beginning of the harvest, and
this risk aversion meant they continued to maintain their economic and social ties
with the middlemen.
The expectations of the purchasers of fresh and dried litchi, in contrast, were
much more varied, though they all had the common objective of developing longterm business relations. The hypermarket chain did not want to negotiate with
individual Hmong farmers, but preferred to operate via a Thai cooperative vendor.
By eliminating the middlemen from the value chain and dealing with farmers’
cooperatives, it pursued a twofold strategy: increasing its profit margin and improving its corporate image as “a company that helps smallholder farmers in Thailand”.
The company was not very strict with regard to agrochemical use in terms of
orchard management, as long as no residues could be found on the fruits. The
French natural food retailer, in contrast, had a strong commitment to ‘natural’ or
chemical-free production processes, while being more flexible with regard to the
business relations, which could be concluded either with individual growers or with
groups of farmers, though it preferred to work through intermediary actors, in this
case a Thai exporter and the Uplands Program. The German-based fair-trade
organization expected to work with farmer groups that adhered to certain social
standards rather than with individual producers, and placed somewhat less priority
358
A. Neef et al.
and a loss of belief in the capacity of local farmers to engage in collective efforts to
comply with strict food safety standards for fresh fruit exports. ‘Learning the hard
way’ was thus an essential component of the learning process for major actors in the
network.
9.5.2.5 Convergence of Expectations: Negotiating Trade Terms
and Balancing Power Differentials
The convergence of expectations among actors in a network – a third principle of
the SNM concept – is closely linked with the principle of experiential learning.
Here, various interaction patterns were created within the litchi processing and
marketing network aimed at sharing knowledge and experience on market demands
and mechanisms, the private companies’ structures and logistics and product
specifications, as well as the Hmong farmers’ practices and litchi production and
processing systems. These dynamic exchanges required ongoing adjustments of the
partners’ roles and of the venture’s objectives and strategies for implementation
(Tremblay and Neef 2009). The major expectations of the actors in the network are
summarized in Table 9.4.
Hmong litchi growers and processors were relatively homogeneous as regards to
their expectations of the new trade arrangements with the hypermarket chain, Thai
exporters and European companies; they wanted to obtain prices higher than those
offered by middlemen or at the wholesale market in Chiang Mai, and they expected
a timely payment after delivering their produce. Being risk-averse, as smallholder
farmers they were interested in having secure market channels over the entire
season and in discussing terms of trade prior to the beginning of the harvest, and
this risk aversion meant they continued to maintain their economic and social ties
with the middlemen.
The expectations of the purchasers of fresh and dried litchi, in contrast, were
much more varied, though they all had the common objective of developing longterm business relations. The hypermarket chain did not want to negotiate with
individual Hmong farmers, but preferred to operate via a Thai cooperative vendor.
By eliminating the middlemen from the value chain and dealing with farmers’
cooperatives, it pursued a twofold strategy: increasing its profit margin and improving its corporate image as “a company that helps smallholder farmers in Thailand”.
The company was not very strict with regard to agrochemical use in terms of
orchard management, as long as no residues could be found on the fruits. The
French natural food retailer, in contrast, had a strong commitment to ‘natural’ or
chemical-free production processes, while being more flexible with regard to the
business relations, which could be concluded either with individual growers or with
groups of farmers, though it preferred to work through intermediary actors, in this
case a Thai exporter and the Uplands Program. The German-based fair-trade
organization expected to work with farmer groups that adhered to certain social
standards rather than with individual producers, and placed somewhat less priority
358
A. Neef et al.