Growth of small and medium-sized agricultural enterprises and export market integration by smallholder farmers

Abstract

Small and medium-sized enterprise (SMEs) growth and survival constitute opportunities for the smallholders to become integrated into the export market. Smallholders can gain additional incomes from their transactions with SMEs and in turn, poverty problem could be alleviated. This article aims to better understand how export SMEs’ growth and survival strengthens smallholders’ market integration development and livelihood improvement. We collected data from 52 SMEs involved in the cassava and shea butter sectors in Benin. Interviews were organized, based on the need of value market access, with cassava producers in the Center Region, and women collecting and transforming shea nuts into butter in the Center and Northern Regions. When developing the measurement instrument, its validity and trustworthiness are concerned. SPSS was used for descriptive statistics and R was used for Multiple Correspondence Factor Analysis. Results suggest that 96% of SMEs exporting firms perceived exporting as profitable and resources generation tool. 95% of smallholders appreciate SMEs as value added markets for their products. SMEs are institutional context for smallholders exchange experience in value added process, customers’ needs and expectations satisfaction. They earn more profits from their selling when export SMEs grow and survive. Growth and survival are explained by export selling, share of exporting in total selling, satisfaction of Teklehaimanot exporting, manager perception of success and profitability and export profit.