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The purpose of this paper is to determine the extent of risk rationing among potential rural borrowers in Mexico and China.

Using primary survey data from 730 farm households in the Shaanxi province of China and from 372 farmers in northeastern Mexico, the authors investigate factors associated with risk rationed, price rationed and quantity rationed farmers. The survey was instrumented to self-identify borrower typologies. In addition the authors created within the survey a discrete-choice credit demand build to determine borrower credit demand elasticities. The analysis applies a linear probability which the authors found to be consistent with multinomial and binary logit models.

The authors find in China the incidence of risk rationing in farmers to be 6.5, 14 percent for quantity rationed and 80 percent for price rationed. In Mexico, 35 percent of the sample is risk rationed, 10 percent quantity rationed and 55 percent price rationed. The results from China support the hypothesis that the financially poor are more likely to be quantity rationed; in Mexico, however, the level of education is found to be important in determining quantity rationed. In both countries, asset wealthy farmers are less likely to be risk rationed; however, income does not appear to have an impact. The paper provides evidence that the elasticity of demand for credit is different among the three credit rationed groups: risk rationed, price rationed and quantity rationed. Risk aversion and prudence are significantly correlated with risk rationing in China, while only risk aversion is significant in Mexico. The results suggest that efforts to enhance credit access must also deal with risk and risk perceptions.

Risk rationing is an important concept in the understanding of rural credit markets. The findings that only 6.5 and 35 percent of Chinese and Mexican farmers are in stark contrast to each other. For agricultural economies such as Mexico with a significant number of farmers being risk rationing, more effort should be put into financial education and financial practices, including perhaps the use of risk-contingent credit to remove collateral risk. As property rights in China evolve, and new laws are promulgated to permit borrowing against land use rights, the collateralization issue will become much more important in rural credit markets.

This paper is the first to investigate risk rationing in China and Mexico and one of the few research studies empirically investigating risk rationing. A comparative analysis of Mexico and China is enlightening because of the structural differences in the respective agricultural economies. The use of a credit demand build and the enumeration of individual credit demand elasticities is an original contribution to this literature.

The purpose of this paper is to identify important elements of a strategy to facilitate small farmer participation in international supply chains for fresh produce.

The study employs survey data collected from a national sample of US fresh produce importers. Their concerns and suggestions regarding potential for transactions with small Mexican farmers were assessed, with factor analysis providing a thematic summary of their perspectives.

Results of the study reveal that US importers are not uniformly pessimistic about the ability of small farmers to meet their demands. On the contrary, almost one‐third said they probably would work with small farmers in the near future. In general, importers are interested in transactions in which the product meets consumer and government expectations and is grown on the buyer's terms, the grower is reliable over time, the transaction is simplified, and the grower handles transportation. Importers rate small farmers poorly on their ability to achieve the last two factors, but these are also the items rated least important to the importers. New approaches to building market capacity in small farmers are also highly valued by the importers, including government investment guarantees, and arrangements for facilitating contact between importers and growers. More traditional methods, such as cooperatives and use of brokers, were not rated as highly.

The study relies on cross‐sectional, self‐report data from one side of the grower/importer dyad. Incorporating longitudinal data with a dyadic perspective could provide additional insight.

A practitioner perspective on the challenges in international fruit and vegetable supply chains, particularly as relates to developing countries, is of considerable value. Not only can governments choose improved policies for improving market readiness for the growers, but also members of supply chains themselves can identify tactics for ensuring successful transactions by enhancing coordination. The prospects for a win‐win outcome for growers and importers are improved.

Effective in 1994, the North American Free Trade Agreement (NAFTA) has substantially lowered tariffs and other trade and investment restrictions. Consequently, three-way trade expanded exponentially as did inward and outward investment in Mexico, Canada, and the United States through 2000. However, both trade and investment decreased in 2001 and 2002 because of a global recession. Critics of NAFTA argue that jobs have been destroyed and wages suppressed in both Mexico and the U.S. But these claims do not hold up to careful scrutiny. Though many points of friction remain among the three NAFTA partners, the agreement must be considered a qualified success.

The effect of trade on poverty is an open question. Although trade may create opportunities in the form of new markets, producers must be able to switch their production and access these markets to reap the benefits from trade. Those producers that cannot change may be stuck trying to sell products in a market with increased competition from imports. In this chapter, we consider which Mexican farmers have been able to adapt to market changes afforded by North American Free Trade Agreement (NAFTA). We find that although some farmers, particularly those with access to outside information through education or technical assistance, have moved out of corn production, a number of both subsistence and market producers have increased the fraction of their land in corn after NAFTA. We also find that market producers respond quite differently from subsistence farmers to agricultural and other infrastructural factors.

While recent research has established that businesses can benefit from engaging with people at the bottom of the pyramid (BOP), the authors know little about the practices that managers can use to effectively strategize this ethically sound and financially attractive proposition and turn it into new business.

To address this gap, the authors reported on an action research study in which the authors collaborated with a major Mexican agribusiness, ANSA, to expand its market through value co-creation with the country’s poorest farmers. To shape the strategizing, the authors combined dynamic capability theory and options theory, and the authors used the asset hexagon framework to understand the BOP population’s needs.

The authors offer a detailed account of how ANSA’s management team collaborated downstream with distributors and farmers and upstream with suppliers to grow a new micro-franchise business that increases the well-being of the poorest farmers and creates additional business opportunities. The research describes how firms can strategize and implement new business ventures for co-creating value with the BOP population. The results are a process model and related propositions for strategizing value co-creation with BOP.

The authors offer new empirical insights, a grounded process model and model-related propositions on strategizing BOP options. As such, the study contributes to the BOP literature by joining critical ethics with actionable knowledge of how such efforts may unfold and by demonstrating how theory may be enacted and developed in the process.

Biotechnology involves the use of modern biological procedures to enhance economically desirable traits exhibited by plants, animals and micro‐organisms. These new technologies are currently reaching the stage of commercial application in agriculture. Developing countries will face a major challenge over the next decade as they attempt to develop policies and administrative structures which will allow the successful introduction of agrobiotechnologies while minimizing the socio‐economic disruptions which may accompany rapid technological change. Attempts to provide public sector managers with an operational planning framework which will allow them to anticipate the impacts of biotechnologies in advance of their introduction and, hence, take steps to mitigate the costs associated with their introduction.

To summarize the shocks and stresses that peasants in Mexico have been subjected to since the 1940s and to examine the responses of sons of peasants working as semi-informal beach vendors in Cabo San Lucas as to what they define as the worst problems of the peasantry in their hometowns.

This chapter offers an analysis of the responses of 32 sons of peasants interviewed on Medano Beach in Cabo San Lucas in October of 2012 partially as concerns whether they would like to be peasants themselves and as to what they define as the worst problems of the peasantry in their hometowns.

Twenty-five of the thirty-two vendors interviewed would be happy to be peasants. According to all of the vendors, the overwhelming problems facing the peasantry were primarily droughts or floods (related to climate change) and lack of government aid (related to neoliberalization).

The peasantry in Mexico is being and has been marginalized both by a number of stresses and shocks, currently identified by some of those at risk as factors related to climate change and neoliberalization.

This paper aims to consider the challenges facing small rural businesses in Mexico in their efforts to be enterprising and sustainable when confronted with severe exogenous pressures. Extant literature on farm diversification has a developed economy focus (Pyysiäinen et al., 2006; McElwee, 2008; McElwee and Smith, 2013), but relatively little has been published in developing economies.

This paper considers diversification activities of Mexican farmers. It uses case studies, workshops and interviews to determine the barriers facing farmers and farm advisors.

Farm businesses, particularly those located in drought-prone regions, have benefited from government-sponsored support, but this support needs to now be targeted to develop the entrepreneurial potential of individuals and collectives.

Carried out in one region of Mexico only, and thus, the findings may not be transferable to other regions.

Recruitment of well-qualified, honest farm advisors with entrepreneurial skills is necessary. Farmers need to be given additional training and support to develop both technological and entrepreneurial skills.

Encouraging and supporting rural enterprises in Mexico helps to provide opportunities for regions to be economically and socially sustainable.

A first attempt to look at farmers ' diversification strategies using an entrepreneurial framework.

This paper aims to develop a market-driven mechanism for commodity price insurance in developing countries lacking access to futures markets or other forms of hedging products.

The model incorporates futures, exchange rate and local basis risk under the Black-Scholes framework to develop quanto (quantity adjusting option). When the domestic price of a commodity in a developing country is strongly correlated to the price in a futures market, price support premiums can be estimated. The authors use daily corn futures prices, exchange rate MXP/USD, and prices of corn and sorghum at several locations in Mexico.

The authors calculated the price insurance premium at various local markets in Mexico for corn and sorghum. The results are consistent with those for the USA, showing that relative price premiums are similar.

The results provide a benchmark to estimate the net welfare effects of government programs for agricultural price support.

The model shows that privately provided agricultural price insurance is feasible under certain conditions for developing countries without an established futures market.

This paper provides market-based agricultural options in Mexico which contributes to the existing government price support program.