MSU Agricultural, Food, and Resource Economics
Dissertations, Theses and Plan B Papers -- Abstract
, Juan Manuel. A Sub Sector Overview of the Guatemalan Bean Industry: Constraints and Opportunities for Vertical Coordination and Sustainable Growth
Major Professor: Bernsten.
Conventional wisdom highlights the inherent benefits to farmers, derived from
the growth of the food industry, by providing a new outlet for their crop. However,
Guatemala's success in expanding bean processing, it has not benefited bean producers.
Production, and per capita consumption of beans have declined by 30% in the last
fifteen years, while the bean canning industry import most of its bean supply.
Several possible reasons have been offered to explain this phenomenon. First,
absence of coordination, opportunism, and high transaction costs. Second, generalized
distrust against intermediaries. Third, inexistence of long-term relationships
between producers and intermediaries. Finally, high quality standards set by
the bean canning industry. By applying the subsector approach, as presented by
Staatz in 1997, as a framework for analysis, this study found that poor adoption
of improved varieties, reduced the access to credit, weak institutional framework
and non-competitive markets have constrained the profitability of bean production.
Thus, the apparent decrease in bean production is the result of a reduction in
commercial bean farming, which has been offset by production at household level,
not detectable through the government's conventional data collection techniques.
In addition, this study concludes that given the price advantages of the international
bean markets, coordination among producers and the canning industry is not a
yet a viable alternative.