© FAO/ Alessandra Benedetti

Transaction costs in the formal and informal seed sector: Mexico


This study is intended to address the question of what drives variation in the costs farmers face in obtaining crop genetic resources and what difference this will make in terms of their welfare, as well as the costs for in-situ conservation of crop genetic resources. The main focus of the analysis will assess the transaction costs farmers face in obtaining seeds in the formal and informal sectors, and analyze how these costs affect sourcing decision. Two specific studies have been carried out under this research project.

A. Ethnographic study of informal seed system transactions costs
for maize in Oaxaca Mexico

The purpose of this study is to identify and describe various aspects of the costs farmers face in accessing seeds of different varieties and quality, and to develop quantitative indicators for their measurement. The analysis includes consideration of the cost of obtaining information about the production and consumption characteristics of seeds of different farmers’ varieties, the search costs associated with locating them, the costs of obtaining and negotiating as well as the price or exchange value for the seeds. 

Specifically, the study investigated transaction costs in seed exchanges related to search (finding information on crop varieties, seed quality and sources), negotiation (how prices are set for exchanges) and enforcement of contracts (what happens with contract default; how are payments finalized).

B.Transactions costs in commercialized maize systems: Chiapas Mexico

This work built  upon the anthropological study done in Oaxaca described above but is focused on an  area with small-scale commercialized producers.   The main objective of this case study was to understand why people do or  do not get seeds in the market, what kinds of seeds they purchase in markets,  and what the implications are for on-farm patterns of seed and varietal use.

Specific questions addressed included:

1)  Are there seeds that are desirable to farmers (in terms of both genetic content and seed quality) in the market?
2)  Do people know there are desirable seeds in the market?
3) What are the full costs associated with obtaining seeds in the market?

The area of Chiapas in Mexico in general, and La Frailesca in particular was selected as case study because it is an area where there is likely to be variation in the degree to which people use markets for seeds.

The project was implemented by the International Maize and Wheat Improvement Center –(CIMMYT). A second phase of the study was implemented under the “Using markets to promote the sustainable Utilization of CGR” project.



Courtesy of Alder Keleman