Political economy of input–output markets of groundnut: A case from the groundnut value chain of Turkey

Abstract

Mainstream economics argues that value chains provide farmers better prices and incomes, thus aiding development. However, this study contradicts this consensus, revealing that the value chain generates the status of petty commodity producers for farmers. Furthermore, it demonstrates that the value chain keeps downstream actors, such as merchants, processors, wholesalers, and retailers, in a powerful position against farmers. The study delves into these phenomena by considering the historical relationship between the market, the commodification of agriculture, the state, the interconnection of markets, the value chain, and neoliberalism. This research focuses on the political economy of groundnut input–output markets in Turkey through value chain analysis. Based on thorough primary field research, the paper demonstrates that the functioning of the value chain strengthens the position of downstream actors against farmers. Additionally, it shows that the value chain creates interlinking between farmers and merchants and makes small farmers the most disadvantaged actor. Moreover, the study highlights that groundnut production costs have risen at a higher rate than incomes under neoliberal policies. Finally, the article demonstrates that mechanization in groundnut farming, while increasing productivity by meeting the chain demands, fails to significantly improve farmers' incomes and profits due to the impact of neoliberal policies on other input costs.