Cultivating sources of competitive advantage: Opportunities for small-scale African farmers in global value chains

Small-scale farmers in developing countries often appropriate little of the value created in global value chains. The farmers typically receive only a fraction of what consumers pay for a certain product. In the current thesis we studied which resources farmers have access to that enable them to appropriate more of the value created. We studied access to resources at both the level of the individual farmer as well as at the level of the collective (the cooperative). Data have been collected among sesame seed farmers in Ethiopia. We learn from our findings that we can explain approximately 30% of the performance differences between ostensibly homogeneous farmers in terms of differences in access to and deployment of so-called strategic resources. We also learn that the potential of collective action currently remains unrealized. The failure to realize this potential is rooted in the neglect of conditions for success of collective action. Farmers in Ethiopia are encouraged to cooperate, but the importance of trust and variances between farmers in ambitions and willingness to take risks, are being neglected. In addition we studied the influence of the institutional environment (rules, norms, values, agreements) on entrepreneurial behavior of farmer cooperatives. We analyzed how certain institutions prescribing entrepreneurial behavior conflict with others institutions dissuading entrepreneurial behavior. The choice for either kind of institution can explain part of the success and failures of farmer cooperatives.