Who and what set the price of walnuts for small-scale farmers in Southwest China?

Abstract

Purpose

Domestic demand for walnuts has been on the rise for the last decades. Consumption outstrips domestic production capacities, which led to increasing prices until recently. Small-scale farmers are at the centre of walnut tree planting and walnut collection efforts. Farmers are now integrated into rapidly expanding agrifood value chains. The purpose of this paper is to investigate the walnut value chain originating in Yunnan (the dominant producer of walnuts in China). The authors are especially interested in the position of small-scale farmers in the chain and the factors affecting the price that they receive.

Design/methodology/approach

Price and intra-chain governance information were collected through structured interviews with value chain actors like certified and conventional small-scale farmers, traders, processors, food manufacturers and wholesalers. The resultant price data set was analysed using a multiple regression analysis.

Findings

Timing of harvest, distance to market and sales volume are correlated with the village-level price. Farmers are in a market governance segment of the chain. Lead firms (e.g. supermarkets) are price-setters and determine the value distribution, with farmers receiving a smaller share relative to downstream actors’ shares.

Research limitations/implications

Improved connectivity to markets, transparency of standards and price (formation), processing and certification could improve farmers’ profits.

Originality/value

The authors contribute to the growing literature of value chain studies focussing on farmers’ integration into food systems at different scales. The authors investigated the price determinants at the village level and additionally provide information on an organic marketing arrangement.

Citation

Yan, M., Terheggen, A. and Mithöfer, D. (2017), "Who and what set the price of walnuts for small-scale farmers in Southwest China?", Journal of Agribusiness in Developing and Emerging Economies, Vol. 7 No. 2, pp. 135-152. https://doi.org/10.1108/JADEE-10-2015-0047