Negotiating the Value Chain: A Study of Surplus and Distribution in Indian Markets for Food

Abstract

To enhance the welfare of smallholder farmers, development agencies increasingly promote “value chain agriculture” where farmers partner with more powerful entities, such as corporations and nongovernmental organizations (NGOs), to create new sources of economic value. Via a qualitative study of how small farmers negotiate with the buyers of retail and agribusiness corporations in India, this article explores why the promise of value creation can appear so elusive on the ground. It makes two primary contributions. For global value chain scholars, it illustrates how studying value chains “below” the level of the firm illuminates complex ways in which new pathways for economic development are constrained by actually existing local economies—and how these local economies, rather than easily replaced, shape what counts as a source of value for small farmers. For negotiation scholars, it illustrates how, in some contexts, an equitable distribution of risk and social relationships may need to precede anything we call value creation.