Contract farming and producer participation in the avocado industry in Michoacan: The case of Calavo de Mexico

This thesis examines the extent to which contractual arrangements with Calavo have influenced participation of small-scale farmers in the avocado export market, as well as the Michoacán avocado industry in general. The case study makes extensive use of both primary and secondary sources. Qualitative information and data were collected through semi-structured interviews and informal conversations with avocado growers, Calavo’s personnel and representatives of local organizations. I find that coordination generally occurs through an informal type of verbal marketing contract in which trust and reputation are highly important. The multinational firm has adapted to local models of negotiation and supplier selection. I argue that government-imposed quality and phytosanitary regulations have shaped the relation between Calavo and producers, and increased socio-economic stratification. Alliances between state and wealthier producers have been critical for industry expansion. My findings illustrate that contract farming is not, on its own, sufficient to guarantee integration of smaller producers into international markets.