Mercado de trabajo en el que se encuentran insertadas las migrantes caucanas y

The literature suggests certain conditions, which are favourable to the successful inclusion of smallholders into vertical coordination arrangements. However, it was found that the KASCOL model fell short on some of the main ones offered, which are: the availability of alternative markets; the availability of alternative sources of income; previous experience with multinational corporations on the part of the smallholders; ownership of production assets; and the type of commodity cultivated. These will now be discussed.

6.3.1. Alternative markets

The model under investigation operated in a monopsonic environment, where the Zambia Sugar Co. was the only buyer available for the sugarcane produced in the Mazabuka district. Although this condition tends to benefit the buyer of the produce, in that it prevents the seller from defaulting on their supply contract (Glover & Kusterer, 1990; Singh, 2002b), it is said to be detrimental to the bargaining power of the smallholders involved in the arrangement, because they tend to have little say in the quoted price and thereby their satisfaction is likely to be affected. This was actually a source of disputes between the smallholders and KASCOL because, when the smallholders were not happy with the price quoted to them, they automatically blamed their agent, KASCOL, whilst KASCOL pushed the blame onto the Zambia Sugar Co. As a result, a small hint of mistrust was evident, since some smallholders spoken to felt that sometimes KASCOL did not give them a good deal on their cane or that KASCOL would change the quoted price in the course of the year and then blame it on the Zambia Sugar Co. However, KASCOL did express the predicament of it being a price-taker, since the Zambia Sugar Co. was indeed the only buyer of their cane in the district. Therefore, in order to resolve this problem, researchers recommend the availability of alternative markets for smallholders, so that they are able to hold an increased bargaining power (Sriboonchitta & Wiboonpongse, 2005; Warning & Key, 2002).

6.3.2. Alternative sources of income

Another area of deviation for the KASCOL model was that the smallholders basically depended on the production of sugarcane for their income. Upon joining the project, the smallholders were each given an additional ½ Ha plot, upon which to build their houses and to grow some subsistence crops. The smallholders expressed the fact that this land was not adequate for them to engage in meaningful agricultural activities, although one smallholder spoken to had a large garden of vegetables, from which he was able to supplement his sugarcane income (See Figure App-1.2 in Appendix 1). However, it is encouraging that a number of the smallholders interviewed had begun to invest their sugarcane incomes outside of the project and into real estate and farms: and some of them had formed groups in which they were engaging in other business activities (See Figure App-1.5 in Appendix 1 for a photograph of such activities). Nevertheless, sugarcane was their primary source of survival, a situation which could put them in a poor bargaining position, as indicated by some researchers (Glover & Kusterer, 1990; Porter & Phillips-Howard 1997).

6.3.3. Previous experience

Again, contrary to the suggestions by Porter and Phillips-Howard (1997) that previous

experience with “multinational corporations” assisted smallholders by reducing their naivety, only the first eight smallholders had such an experience, because they happened to be ex-employees of KASCOL. The majority of the smallholders, who joined the project later in time, had been living on their parents’ lands growing mainly subsistence crops, prior to joining KASCOL. They did not have any experience of working with multinational corporations or any large companies, for that matter. Therefore, it would be expected that they would be agreeable to whatever promises given to them by the other stakeholders involved in the model.

6.3.4. Ownership of production assets

One other area of difference for the KASCOL model lay in the ownership of production assets. The smallholders, under the KASCOL model, did not bring any assets to the model and they did not own any production assets, except for their labour. They were dependent

on KASCOL for the land to produce their cane and to build their houses. They were also dependent on the Zambia Sugar Co., through KASCOL, for irrigation water. Such a condition has the potential of putting them in a position where they have no voice in the arrangement, as observed by Porter and Phillips-Howard (1997), from their study on some smallholder schemes in Africa. These authors suggested that smallholders should have ownership of land and water, because it is very hard to argue from a position of weakness, when you do not own the land and any production assets.

6.3.5. Type of commodity

Furthermore, the smallholders under the KASCOL model were engaged in the production of sugarcane, which is largely capital intensive. This is contrary to the recommendation by Patrick (2004) that smallholders need to be involved in the production of crops that are more labour intensive, in order for them to be able to utilise their family’s labour, which they can afford. It is also contrary to what Porter and Phillips-Howard (1997) suggested: that smallholders should be involved in the production of crops that utilise technologies with which they are more familiar and which they can easily switch to another production line, in the event that the firm they were dealing with was taking them for granted.

Regardless of all the points previously mentioned, in which the KASCOL model appears to

be deficient, the model was still able to increase the smallholders’ participation, overtime. How was it then that this was able to happen in an eventually sustainable enterprise? The following section presents the factors, which have been found to have contributed to this success.

6.4. Factors contributing to the success of the KASCOL model