Agricultural products brokers and trade of cash crops: a study on embeddedness of local market

CHEN Yiyuan1

(1.College of Humanities and Development Studies, China Agricultural University)

【Abstract】By a theoretical framework of embeddedness, this paper focused on the operation of local market for cash crops and explored how rural social relations were involved in local trade to interpret the formation of market order. By fieldwork in two cash crop-producing counties, we found that various obstructions prevented middlemen from trading directly with small producers. The technical barriers in marketing, a wide gap of trading volume between small producers and middlemen, and information asymmetry caused intentionally by middlemen could all result in failures of trade between middlemen and direct producers. As a result, the rural social resources of agricultural commodity brokers as middlemen agents could well help trade. The rural social networks of these brokers enabled them to find proper suppliers soon, whereas trust of fellow villagers allowed them to guarantee whenever necessary. Moreover, their renqing (favor) and mianzi (face) in the rural community could not only help to resolve conflicts between middlemen and small producers but also allow the former as outsiders of the village to avoid prejudice. As a matter of fact, the brokers’ rural social resources, functioning as lubricant, help them to trade with small producers at a low cost, solve the conflicts between the two parties within the social relations between brokers and their fellow villagers, and guarantee a good order of local market.

【Keywords】 broker; middleman; cash crop; local market; embeddedness;

【DOI】

【Funds】 Youth Project of the National Social Science Fund of China (17CSH071) Youth Project of Social Science Foundation of Beijing (16SRC029)

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    Footnote

    [1]. ① We chose the two cash crops because ginger has storage stability and winter jujubes as fresh fruit could not be preserved for long. The difference between the two agricultural products also causes other differences in the circulation, so this study examined the local markets for the two agricultural products. However, in general, the difference is secondary, but the logic and mechanism of the two are generally consistent. [^Back]

    [2]. ① The agent means the local broker. A middleman from any other region, when coming to purchase winter jujubes, usually stays at the home of any broker who helps the merchant to buy, bargain, and so on. Meanwhile, the merchant pays some rewards to the broker, known as agent fees. [^Back]

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This Article

ISSN:1002-8870

CN: 11-1262/F

Vol , No. 12, Pages 117-129

December 2018

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Article Outline

Abstract

  • 1 Introduction
  • 2 Dilemma of small farmers directly dealing with middlemen
  • 3 Local market embedded in village society: social basis of the connection between middlemen from other regions and small farmers
  • 4 Conclusions
  • Footnote

    References