Towards to the Transaction Costs Reduction in the Participatory Guarantee Systems Through Collective Action in Bolivia

Eduardo López Rosse and José Nuñez del Prado Ph.D

AVSF-Bolivia, AOPEB, CIDES-UMSA, Mercados Campesinos

Preliminary Results

A mixed quantitative and qualitative approach has been chosen. The employed methods were a survey for the identification and scoring of the transaction costs, a key-informant interview and participatory observation.

 

This work is being carried out in the localities of Cercado and Tiquipaya from the Department of Cochabamba, Batallas, La Paz and Caracollo, Oruro. Participatory Guarantee Systems (PGS) are being implemented since 2004 in our country, but a regulatory and legal framework was recently created through the PGS Normative which dates from January of 2012. This normative allows producers to organize themselves to fulfil the asked requirements for an ecological-sound production, processing and commercialization according to the “Well-Being” Paradigm. PGS are third party certification alternatives which involves costs reduction and direct commercialization between producers and consumers but requires the involvement and compromise of all actors in the productive chain through a social and monitoring control. In the reality, costs can be higher than the conventional channels as stated by Hellin et al (2005). The costs issue is not taken seriously by the actors involved in the PGS because of the promotion taken by State to support the certification process but in the nearest future, a price for this service will be required. In order to create awareness on this issue, the preliminary stage of this study is to identify the most important Transaction Costs involved in two study cases: The Bio-Tiqui and The Eco-Feria ecologic fairs in Cochabamba

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Background information: Methodology and Methods

According to the obtained results, the transportation (29%) and the control and monitoring (26%) issues were identified for producers; Control and monitoring (26%), marketing strategies (26%) for processors: the lack of understanding and coordination (70%) for service providers and PGS information (49%) for consumers. These results showed that there were some transaction costs that are not considered in the costs analyses but because their characteristic they were embedded such as the PGS information and the control and monitoring costs. The results also reflect a higher grade of lack of knowledge of the PGS by consumers whom should be more involved according to the PGS normative.

Expected Results

ÊTo develop a solidarity model among the ecological actors in the region to reduce Transaction Costs

Ê To create a database with information of productive parameters of performance for producers

ÊTo create direct relationships between producers and consumers

ÊTo employ alternative means of transportation and strategies oriented to develop a solidarity economic model through collective action

Photo 1. The Eco-Fair which is celebrated every Wednesday at La Torre Park in Cochabamba city where many fresh and processed ecological produce are commercialisated.

• 36 surveys were made and were performed to the actors of the ecological productive chains (producers, processors, distributors, service providers)

The principal objective was to provoque concern and interest in the Transaction Costs Economics. The Specific objectives were:

• To identify the most important Transaction Costs involved in the ecological productive chains in two study cases

• To score the Transaction Costs involved

• To sketch strategies oriented to reduce these costs

Figure 1. Identification of the actors involved in the two ecological chains The Bio-Tiqui and the Eco-FeriaObjectives

Photo 2. A survey is being filled with the participation of the producer and a student from the the master’s programme

• 16 interviews were made to the actors (10 producers and 6 service providers

In order to provide a better analysis of the roducers link a Productive Systems Analysis Survey is being made employing the Livelihoods Approach (Ellis 1999) which will be helpful to provide a better understanding of the Transaction Costs involved in the producer link

Figure 2. Transaction Costs and their scoring made by the actors involved

Photo 3. Six different crops in Sipe-Sipe, Cochabamba

Photo 4. A potatoe crop in Batallas, La Paz

Photo 5. A fossil fuel powered trucks employed for transportation of fresh produce to local markets at Vinto, Cochabamba

Acknowledgements: I would like to thanks to the UNRISD qualification committee, AVSF, CIDES-UMSA, Mercados Campesinos and AOPEB-Bolivia for this opportunity

Eduardo López Rosse is a Ph. D candidate at the Development Sciences Doctoral Program at CIDES-UMSA

José Nuñez del Prado is a Ph. D Professor at the Development Sciences Doctoral Program at CIDES-UMSA and a rural economics interantional expert and principa tutor for this study