TY - JOUR
AU - Neilson,, Jeffrey
AB - Abstract Recent advances in global production network theory, known as GPN 2.0, provide a theoretically sophisticated framework for understanding the articulation of global production systems with regional development trajectories. However, this framework was largely derived from lessons out of empirical analyses of the strategic coupling and value capture trajectories of firms in certain manufacturing and service sector ‘hot spots’, primarily in East and Southeast Asia, and its wider applicability for other contexts remains uncertain. This paper aims to address this lacuna by examining the potential for GPN 2.0 to understand regional development trajectories in agricultural production landscapes in the Global South dominated by smallholder-based farms that generate outputs for national and international markets. The distinctive characteristics of smallholders throw up significant challenges for the explanatory applicability of GPN 2.0 for rural development, at least as it has been developed so far. A key challenge is that smallholders cannot be considered equivalent to ‘firms’ as conceived in GPN 2.0. To overcome this problem, this paper argues for bringing a livelihoods perspective to bear on GPN 2.0. We illustrate the usefulness of this approach through reference to a case study of potato contract farming in Maharastra, India. 1. Introduction The ‘new generation’ of Global Production Network (GPN) analysis, dubbed ‘GPN 2.0’ (Coe and Yeung, 2015), offers a more sophisticated framework through which to theorise global production and uneven regional economic development. Building on antecedents in the global commodity chain (GCC) and global value chain (GVC) literature, GPN 2.0 advances the GPN framework from its earlier iteration as a methodological approach that was applied to unravelling the complexities of global economic organisation. The original formulation of the GPN framework (GPN 1.0) was adept at applying the network concept to understanding uneven geographies of production and regional economic integration and organisation through analysis of the cross-border activities of lead firms and restructuring of specific industrial sectors (e.g. Henderson et al., 2002; Coe et al., 2004, 2008). However, it struggled to holistically explain the dynamics of how and why the global economy produced and reproduced uneven regional development. Coe and Yeung (2015), in their exposition of GPN 2.0, have put forward a much more ambitious explanatory theory of global, and regional, economic development. According to the authors, GPN 2.0 aims to ‘provide a powerful framework for explaining patterns of uneven development—both between and within countries—in the contemporary global economy’ (Coe and Yeung, 2015, 2). GPN 2.0’s claim is that the dynamics of production networks are the driver of the uneven outcomes of the global economy, with development as the ‘ultimate dependent variable’ (McGrath, 2018). The strength of the ambitious claims put forward in Coe and Yeung (2015) serves as the impetus for our contribution to this special issue. In particular, writing as sympathetic observers of the GPN project, we are interested in how GPN 2.0 treats rural development and rural livelihoods in the Global South, an area with a substantial legacy of scholarly engagement by geographers and political economists (e.g. Chambers, 1983; Bernstein et al., 1992; Ellis, 2000; Rigg, 2006; Scoones, 2009). Given that the theoretical apparatus of the GPN approach germinated primarily from a geographic focus on the newly industrialised countries of East Asia, its empirical focus has largely remained on industrial, manufacturing and services production networks and their lead firms. For example, the GPN framework has provided incisive analysis of the rise of East Asian lead firms, and hence regional economic development within the region, through specific sectoral case studies including telecommunications (Hess and Coe, 2006), IT and computer manufacturing (Wang and Lee, 2007; Yang, 2009), food and clothing retailing (Hughes et al., 2008) and oil extraction (Bridge, 2008). However, stemming from this industrial and service-sector centrism, the GPN literature has had limited engagement with agricultural production in the Global South and the value capture trajectories of smallholder households.1 One exception is Neilson et al. (2018), who recently applied the GPN framework to an assessment of the value capture potential of geographical indications within Indonesian smallholder communities. That study recognised the challenges of treating rural households as firm equivalents but focused more explicitly on the role of path-dependent institutional environments in shaping value capture potential in a region. Hassler and Franz (2013; see also Franz and Hassler, 2010) also use the GPN framework to analyse the role of intermediaries in connecting smallholder pepper farmers in southern India to the global economy. However, their focus is on the implications for cultures of consumption, rather than the development trajectories of smallholder households per se. Other GPN studies that do engage with agricultural production landscapes in the Global South tend to do so through the prism of labour (e.g. Barrientos, 2013a,, 2013b; Baglioni, 2018), lead firms (e.g. Neilson et al., 2018) or other intermediaries (e.g. McCarthy et al., 2012), or do not offer an adequate theorisation of the smallholder household as a distinct actor (e.g. Biles et al., 2007). Conversely, the rich literature on agri-food value chain restructuring and producer upgrading in areas characterised by smallholder production (e.g. Fold, 2008; Daviron and Gibbon, 2002; Neilson and Pritchard, 2009; Amanor, 2009; Nelson and Tallontire, 2014) has not thoroughly engaged with the GPN framework. The apparent reticence of GPN theorists to consider smallholder systems and, vice-versa, of smallholder researchers to utilise GPN analytical tools, raises telling questions about GPN 2.0’s claim to broader explanatory power regarding global uneven development. We suggest there are four key characteristic features of smallholder systems that present specific challenges to the direct application of GPN approaches to regional development. First, smallholders represent the key sites of value creation (and sometimes enhancement) in many areas of the rural Global South and are therefore central actors in GPNs that touch down in these areas. In other words, they are directly incorporated into GPNs, rather than being peripheral actors. Second, smallholders bear the imprints of how globalisation produces and reproduces uneven development. Put simply, regional development trajectories in the rural Global South are closely tied to the livelihood fortunes of smallholder households. Their livelihoods are often dependent at least in part on producing agricultural commodities for the global economy whose price and sale conditions are governed by global market relations, and they remain some of the poorest people on the planet (Wiggins et al., 2010). Third, there is a long tradition in rural sociological research that understands the smallholder household as having a distinct social and economic identity to that of a firm or labour. This raises some critical questions about the applicability of the GPN 2.0 framework to rural development in the Global South. This is because although GPN theory has broadened the chain-centric focus of GVC to multiple actors, in practice GPN research still maintains a ‘firm-centric’ focus (Horner, 2017), or focuses on the role of labour (Barrientos, 2013b). Fourth, while smallholder households do engage in GPNs, their economic activities (and hence value capture trajectories) are increasingly characterised by livelihood diversification—into different on-farm and off-farm activities, and into non-farm labour markets, often involving migration (Rigg, 2006; Rigg et al., 2016). Our argument in this paper is that while GPN 2.0 can explain some aspects of uneven development in smallholder landscapes in the rural Global South, its ontological apparatus means it also misses a lot about how regional development trajectories are constructed within these spaces, including questions of value capture and distribution. We therefore argue for bringing a livelihoods perspective (Scoones, 2015,, 2009) to bear on the GPN literature. If claims that GPN 2.0 has broader explanatory power about uneven development are to hold weight, the question of what place for smallholder households in GPNs is an important one to consider. Utilising a livelihoods perspective to bring the experience of rural households in GPNs front and centre of analysis of uneven development in rural spaces can also address the ‘inclusionary bias’ of much GPN analysis identified by Bair and Werner (2011; Werner, 2018). The paper proceeds as follows. First, we critically review the GPN 2.0 framework, focusing on the concepts of strategic coupling and value capture trajectories. Then, we consider the problem of how smallholders fit as actors within the model, arguing they cannot be adequately conceptualised as either firms or labour. Third, we propose a way forward from this problem by contending that a livelihood pathways perspective enables a more adequate conceptualisation of the articulations between smallholder engagement in GPNs and regional development trajectories in the rural Global South. While our paper is primarily a theoretical engagement with GPN 2.0 (and in particular Coe and Yeung’s, 2015 volume), the final section presents an extended vignette from a recent household-scale study of livelihood pathways and potato contract farming in Maharashtra, India that is illustrative of the benefit of bringing a livelihoods perspective to bear on GPN analysis, and that can form the basis for future development of this approach at different scales. The livelihoods lens we advocate for in this paper, we propose, widens the empirical possibilities of applying GPN 2.0 to sectors and regions that hitherto have been marginal to the development of the framework. 2. The conceptual underpinnings of GPN 2.0 GPN analysis (GPN 1.0) emerged from the work of the ‘Manchester school’ of economic geographers (e.g. Henderson et al., 2002; Coe et al., 2004) and has been reviewed extensively elsewhere (Neilson et al., 2014). Here, we focus on the ‘enhanced’ theorisation of the GPN framework (GPN 2.0) outlined by Coe and Yeung (2015; Yeung and Coe, 2015). As Werner (2018) argues, Coe and Yeung (2015) aim to transform GPN from a heuristic framework to a broader dynamic theory that can ‘enhance the ability of GPN thinking to contribute to explanations of patterns of uneven territorial development in the global economy’ (Coe and Yeung, 2015, 22). The GPN 2.0 framework asserts that regional economic trajectories are defined by the arrangements in which regional assets are incorporated into (extra-territorial) GPNs via processes of strategic coupling with lead firms (Coe and Yeung, 2015, 168). This framework relies crucially on two conceptual premises. First, GPNs are defined as organisational arrangements ‘comprising interconnected economic and noneconomic actors coordinated by a global lead firm and producing goods or services across multiple geographic locations for worldwide markets’ (Yeung and Coe, 2015, 32). This framework explicitly emphasises the catalytic role of lead firms as the agents that make globalisation happen. Coe and Yeung’s (2015) conception of lead firms is analytically catholic, with these entities potentially taking many forms. Within a single GPN, moreover, different firms may coordinate different value-creation segments. The question of what economic characteristics in GPNs give rise to particular types of lead firms is explained by Coe and Yeung (2015) by the argument that the economic actors that constitute a particular GPN are subordinated to three basic competitive dynamics, namely optimising cost–capability ratios (the balance between the continuous competitive pressure in a capitalist economy that compels firms to lower costs, and the need of a firm to maintain or enhance its capabilities), sustaining market development (the processes of developing and sustaining market reach and access, seeking market dominance and concentration to maximise value capture, responding to customer pressures, and maximising time-to-market), and working with financial discipline (the role of finance and the imperative to maximise shareholder value). These competitive dynamics—interconnected with and managed according to different types of risks—forms the causal conditions for the actor-specific strategies. Specific combinations of high and low importance of the competitive dynamics and risks transform into four strategies that are pursued by lead firms: intra-firm control, inter-firm control, inter-firm partnership and extra-firm bargaining. These strategies configure the organisation and internal relations of the particular GPN. The second premise relates to the problem of how these competitive dynamics are rendered in spatial form. This is addressed through the concepts of value capture trajectories and strategic coupling. GPN 2.0 argues that the networks that comprise global production systems are regionally articulated through their territorial relationships. Hence, regional development depends upon the process of strategic coupling, where region-specific economies complement the needs of lead firms in GPNs: Regional assets can become an advantage for regional development only if they fit the strategic needs of global production networks. (Coe and Yeung, 2015, 20) This framework presents strategic coupling as an intentional and active process, requiring intervention by both region-specific institutions and lead firms. However, it is not axiomatic that strategic coupling is always successful. Regional development is an evolutionary process, punctuated by periods of coupling, decoupling and recoupling. The joint consideration of GPNs/lead firms, and regional assets/strategic coupling, reflects the relational ontological foundations of the approach. GPNs are co-constituted by the activities and operations of firms embedded in particular regions and the extra-territorial actors within the network. Furthermore, once a region is articulated into a GPN, regional firms participating in the GPN can create and possibly enhance value, but it is the extent to which value is captured by these firms in the region that conditions the trajectory of regional development (Coe and Yeung, 2015). According to GPN 2.0, value capture trajectories reflect the dynamics of how regionally embedded firms are able (or not) to capture the gains from enrolment in a GPN. The extent to which the development potential is realised hinges on the ability of the firms to capture and re-deploy surplus value created in GPNs within the region. If the surplus value is transferred and appropriated by extra-territorial parts of the same firm or a different firm, the scope of regional economic development will be reduced. Value capture at the firm level is a dynamic and non-deterministic variable; it may vary over time and value may be enhanced through numerous mechanisms. The point is that over time it is theoretically possible to ‘map’ the value capture trajectory of a firm that operates in a certain region. According to GPN 2.0, at the regional level, the value capture trajectories of firms embedded in different GPNs aggregate up to regional developmental outcomes. The more GPNs that are grounded in the region the more complex the aggregation. There is no presumption that all value capture trajectories move in the same direction or display the same trend. At the regional level, these value capture trajectories of individual firms may coalesce into dominant modes of strategic coupling that are indicative of the potential of regional value capture. Coe and Yeung (2015) identify three abstract modes of strategic coupling; indigenous, functional and structural. Each has distinctive characteristics (including the direction of power relations and degree of autonomy), network dynamics (organisational, technological and spatial fixes) and coupling mechanisms (industrial organisation, state and institutions and transnational communities). These modes of strategic coupling are dynamic in nature and the co-existence of different types of strategic couplings is indicative of some kind of transformative and evolutionary period where the region moves from one type to another. Strategic coupling is also not unambiguously positive. This is prevalent in structural couplings where regional assets may be locked-in by competitive logics by lead firms and heavily exploited with no long-term consideration for regional growth. On a more abstract level, these ‘dark sides of strategic coupling’ are conceptualised as ruptures and frictions (Phelps et al., 2018). 3. The challenges of using GPN 2.0 to explain smallholder value-capture and regional development trajectories The development of GPN 2.0 was informed by empirical analyses of the strategic coupling and value capture trajectories of firms in certain manufacturing and service sector ‘hot spots’, primarily in East/Southeast Asia and Europe (Henderson et al., 2002; Coe et al., 2004). In the brief space given to considering agriculture and rural territories in GPN 2.0, Coe and Yeung (2015, 157) argue that lead firm strategies in agricultural GPNs are defined by extra-firm bargaining, where firms ‘enter into bargaining relationships with extra-firm actors in order to extract greater value from their GPNs.’ This implies a largely passive role for upstream agricultural producers, who are seen primarily as victims or beneficiaries of processes of negotiation between lead firms, governments, NGOs and civil society organisations. The result is agricultural regions being strategically coupled to GPNs through the structural mode with a high degree of power asymmetry and dependence. Most actors in GPNs territorially embedded in the agricultural region appear destined to a passive role with the lion’s share of created value flowing out to extra-regional actors. ‘Commodity source regions’, as Coe and Yeung (2015, 187) call them, are therefore maintained in a subservient position that restricts the possibility to adapt and exploit opportunities with higher aggregate value capture. We certainly don’t dispute the pervasiveness of unequal power relationships between lead agribusiness firms and commodity traders on the one hand, and price-receiving farmers on the other. However, for us, Coe and Yeung’s passing consideration of how agricultural regions might be conceived within GPN 2.0 takes inadequate account of the distinctive socio-economic composition of upstream production in agricultural regions, especially where this involves smallholder or peasant households. The distinctiveness and extent of smallholder engagement in GPNs or GVCs has been well documented in the GVC literature. Neilson and Pritchard (2009, 19), for example, show how in India ‘emergent buyer-driven forms of industry governance have intersected with institutional environments’ to shape struggles over value capture and livelihoods among smallholder tea producers. In the Nilgiri region of Tamil Nadu, approximately 60,000 smallholders contribute around 40% of total tea production in South India. The struggles of tea-producing households are borne out by their problematic position as, on the one hand, producers of a commodity for the global market, while simultaneously existing as sites of reproduction and livelihood diversity in a way that differs from typical supplier firms engaged in industrial production networks (Neilson and Pritchard, 2009). That smallholder agricultural production appears to operate to different rhythms than the manufacturing and services sectors is a core argument in agrarian political economy. During the past few decades, the rediscovery of the seminal work of Karl Kautsky (1988 (1899)) on this issue has sparked new life into what is known as the ‘agrarian question’ by an array of theorists including Banaji (1990), Goodman and Watts (1997), Buttel (2001), Brookfield (2008), Akram-Lodhi and Kay (2010), Bernstein (2010) and Fairbairn et al. (2014). The key contribution to understanding smallholder producers as something distinct from capitalist firms derives from Chayanov’s (1986 (1925)) argument that ‘although the peasant unit of production is conditioned and affected by the capitalist context in which it is operating, it is not directly governed by it’ (van der Ploeg, 2014, 5). This is because smallholder agriculture typically relies on a large nonwage labour component, where family labour is deployed (although this does not preclude the additional use of hired labour). This simple but powerful difference means that the dynamics that govern value-capture processes in other parts of the capitalist economy do not translate readily to this sector. Put simply, while profit from agricultural production is not irrelevant to the decision-making matrices of these entities, production decisions are not always beholden to the profit motive. Instead, the scale and nature of smallholder or peasant production is governed by demographic characteristics and the desire of households to maintain a number of non-capitalist balances, giving rise to an ‘impressive heterogeneity of peasant agriculture’ (van der Ploeg, 2014, 6). Chayanov famously identified two key balances: that between labour and consumption, where the productive mix is influenced by the need to balance the household’s consumptive demands (often, but not always, met through markets) and the available household labour force; and that between drudgery and utility, which refers to the need to balance the extra efforts required by an individual to increase total production, and the extra benefits that can be achieved by such increases in production. Importantly, the nature of the smallholder household means it has the capacity to compete in markets as capital, but to also overcome market pressures by intensifying the amount of family labour committed to production in a way that capitalist firms cannot (known as self-exploitation). In his substantial body of work on peasant economics, Ellis (1993, 3) similarly argues that smallholder households are ‘neither fully integrated into [the capitalist world economy], nor wholly insulated from its pressures’. In short, smallholder farms are not fully capitalist farms. Rather, they are partially integrated into imperfect markets, and this position shapes their productive decisions. Ellis (1993) argues that smallholder households maintain a dual economic nature as both consumers and producers, distinguishing them from other economic actors. Smallholder households are also increasingly defined by their pluri-active livelihood activities outside of agriculture (Rigg, 2006). From a heterodox agrarian political economy viewpoint, Bernstein (2010) argues that smallholder households are better conceptualised as neither capital nor labour, but rather what he calls petty commodity producers; socio-economic actors that combine the class places of capital and labour. These diverse actors are therefore subject to the pressures of reproducing themselves as capital (as owners of their means of production—land) and reproducing the producer (the family labour unit). However, they often struggle to reproduce themselves as either under capitalist relations of production. Bernstein (2010) argues that petty commodity producers in agrarian landscapes are compelled by the forces of commodification, with land as their primary means of production. However, like Ellis (2000), Bernstein argues that these households are increasingly forced to pursue labour-based livelihoods outside of their farms for household reproduction. Such contributions suggest there is something different about the identity of smallholder agricultural producers as economic actors that is not captured by the notion of a firm. Their behaviour is governed by different dynamics to that of a capitalist firm. The unique socio-economic identities of smallholders as jointly producers and households crucially reconfigure the dynamics of how value distribution in smallholder production landscapes takes place. The point here is that understanding the social relations of production in smallholder landscapes (the political economy of value capture trajectories, or the winners and losers of strategic coupling) is crucial for understanding value distribution and rural development outcomes. The value capture trajectories of smallholders are not just governed by their ability to capture value in exchange relations with other firms in production networks; they are also governed by broader livelihood patterns and social and cultural relations within the household, between households, and between the household and external actors. These arguments have profound analytical implications for the consideration of value-creation and distribution processes in territorial landscapes that are characterised by smallholder engagement with GPNs. As currently developed, the GPN 2.0 framework does not possess the appropriate tools to progress this task. GPN 2.0 allows space for conceptualising only three types of actors: firms, extra-firm actors or intermediaries. However, none of these categories adequately describes smallholder agricultural producers as described by the literature cited above. Quite obviously, they are not extra-firm actors. Coe and Yeung (2015, 47) define these as actors who significantly shape value activity in GPNs but are not necessarily incorporated within the activities of the production network. Examples of extra-firm actors used by Coe and Yeung include the state; international organisations such as the World Trade Organisation; labour unions and civil society organisations. Neither can smallholder agricultural producers be categorised as intermediaries, which are entities that ‘bridge and connect multiple actors in a global production network, allowing them to engage in value activity of mutual benefit’ (Coe and Yeung, 2015, 50). In GPN 2.0, intermediaries play a functional role, intermediating between other actors to enable the effective functioning of a GPN. Examples include financial service providers, logistics companies and standard-setting agencies. While the category of ‘firm’ within GPN 2.0 would appear to be the most likely category for classifying smallholder agricultural producers, this too remains a poor fit. This is despite discursive attempts by lead firms, states and development agencies to present these households as firm-like ‘agripreneurs’, cast in the logic of a capitalist firm, rather than ‘peasants’ (e.g. World Bank, 2007). GPN 2.0 views firms as the ‘basic building blocks of a global production network’ (Coe and Yeung, 2015, 39). Accordingly, they are defined in terms of their network relationships with lead firms. Hence, within GPN 2.0, firms are categorised along the lines of: strategic partners (often highly specialised firms upon whose expertise in product and component design and manufacturers, sourcing and inventory management lead firms often rely on); specialised suppliers (who provide parts, components and different service such as assembly or legal services to lead firms that are integral to the value activities coordinated by the lead firm); generic suppliers (who provide mostly standardised and low-value products or services to other firms in the GPN and for whom the switching costs are low for lead firms choosing from a diverse supply base of generic suppliers) and customers who ‘pay for the goods and services produced by a variety of other firms in spatially dispersed territories’ (Coe and Yeung, 2015, 46), realising the value produced through GPNs through the act of consumption. Within this taxonomy, at face value, smallholder agricultural producers would seem to be best considered as generic suppliers, given their frequent (but not universal) role as upstream producers of outputs that are readily substitutable. The problem here is that the assumptions that undergird GPN 2.0 about how generic suppliers are inserted into a network, and how regional development trajectories flow from this, are ill-equipped to account for the distinctive behavioural properties of smallholders as economic actors. When analysing value, GPN 2.0 focuses primarily on exchange relations between generic suppliers and lead firms as a key site of value creation and capture, rendering the social relations that influence rural life and economic decision-making by smallholder households invisible. As argued by Chayanov (1986), discussed above, smallholder production is governed by a complex balancing of decision-making around market and nonmarket, and family and non-family, considerations. Smallholder households are not necessarily beholden to the capitalist dynamics underlying production networks identified by GPN 2.0. Their ability to call on (or exploit) family labour, and their frequent subsistence orientation, means they are not always driven by optimising cost–capability ratios, nor are they subject to the pressures of working with financial discipline in the same way that a generic supplier is. Their ability to exist with one foot in and one foot out of a GPN similarly absolves them from the imperative of sustaining market development. These perspectives significantly undermine the degree to which GPN theory can and should conflate smallholders with ‘generic suppliers’, and on the basis of this, read off potential regional development trajectories. For Coe and Yeung (2015), the regional development trajectories of generic supplier territories tend to be bleak, because of their high vulnerability to supplier switching and network decoupling. However, this set of assumptions does not adequately capture the situation for regions dominated by smallholder production, because of the agency of smallholders themselves to engage and disengage from networks on account of their diverse, economic/noneconomic and family/nonfamily, social positionings. Put simply, because smallholder decision-making about GPN engagement is not reducible to a simple algorithm of profit motivation, their status as sites of value-capture within a GPN needs to be understood via a framework that situates their productive activities more holistically within their life-worlds. In the next section, we move towards such holism by bringing a livelihoods perspective to bear on GPN 2.0. 4. Livelihoods perspectives and GPN 2.0 Prior to the development of GPN 2.0, analysts identified the potential shortcomings of econo-centrism within the GPN framework. Coe and Hess (2011, 136) acknowledged that GPN theory ‘needs to adopt a more comprehensive view of what constitutes value beyond the firm and development beyond the economic’, and Cumbers et al. (2008, 384) argued that ‘the social relations underpinning global production amount to something more fundamental than the strategic coupling of regional, state and corporate actors in the pursuit of value capture’. The major way in which these arguments have found voice within GPN theory has been via the concept of social upgrading of labour (Barrientos et al., 2011; Barrientos, 2013b; Gereffi, 2014), which emphasises how the economic upgrading of firms does not automatically equate to social upgrading for labour through, for example, higher wages or improved conditions. Yet although these contributions lend important insights into the potential ‘dark side’ of strategic coupling by turning the research gaze towards a broader conceptualisation of notions of value-creation, they have applied a conceptualisation of GPNs as being wholly inhabited by firms with profit-maximising objectives. The objectives specified in this paper require a much more thorough re-conceptualisation of core categories of GPN theory. An entry point towards this goal was initially developed in the GVC literature that talks of the ‘horizontal’ dimensions of economic engagements, including the role of social relations of gender, class and caste, and livelihood strategies that are embedded in the regional economy (Bolwig et al., 2010; Carswell and De Neve, 2013). Writing about labour agency in GPNs, Carswell and De Neve (2013, 62) argue that: A ‘horizontal’ approach … reveals how labour agency is not merely fashioned by vertically linked production networks but as much by social relations and livelihood strategies that are themselves embedded in a wider regional economy and cultural environment … [L]abour’s multiple and everyday forms of agency not only help to shape local developments of global capitalism but also to produce transformative effects on workers’ livelihoods, social relations and reproductive capacities. In contrast to labour, smallholder households (in their firm-like guise) have a direct role in value creation in GPNs that shapes value capture trajectories and therefore development outcomes in smallholder production landscapes. Given their unique social and economic identity, how can we adequately theorise smallholder households as actors in GPNs? We argue that bringing in a livelihoods perspective that addresses value capture trajectories at the household scale can (at least partially) resolve the tensions described above and help to link the dynamics of GPNs with uneven development outcomes in smallholder-dominated regions. Livelihoods perspectives have a rich history in development studies. Livelihoods approaches challenge researchers to account for the diversity of the actual lived experiences of local actors (Scoones, 2009). As de Haan and Zoomers (2005, 28) argue, livelihoods approaches ‘emphasize inequalities in the distribution of assets and power, but also recognize that people make their own history and even oppose the view that economic concerns are necessarily of primary importance.’ While the formalised sustainable livelihoods analysis (SLA) framework, extensively utilised in development practice by NGOs, has been criticised as overly instrumental (primarily through its uncritical application of the ‘five capitals’ approach) and as downplaying politics and power relations, livelihoods thinking as an ontological approach to understanding rural places has enduring value to development studies. As O’Laughlin (2004, 385), one of the vocal critics of the SLA framework, argues: ‘[livelihoods thinking] uses the concept as part of a general critique of old dualisms and evolutionary sequences that posit an inexorable development from agriculture to industry, from rural to urban, and from peasant to worker. Here the term livelihoods signals recognition of complexity, diversity and historical specificity, particularly in rural life.’ The GPN literature has hinted at the importance of considering livelihoods within a GPN framework, acknowledging that ‘analytically, [GPN] analysis points to the conceptual necessity to move beyond firms to look at the wider distributional impacts of strategic couplings on individual and household livelihoods’ (Coe and Yeung, 2015, 193). This is usually raised, however, in the context of labour, rather than households themselves as network actors, and there is little in the way of instruction of how to proceed along this path apart from suggesting the need for ‘a more fine-grained analysis’. However, there have been a number of useful initial contributions to developing a ‘livelihoods-take’ on the GPN (or GVC) framework (Kelly, 2009, 2013; Bolwig et al., 2010; Challies and Murray, 2011; Neilson and Shonk, 2014; Vicol et al., 2018). In a case study of the industrialising area of Cavite in the Philippines, Kelly (2013) argues that GPN analysis misses a lot about uneven development when the household is rendered invisible. According to Kelly, by defining place through the lens of strategic coupling and the value capture trajectories of firms, the GPN framework ignores other livelihood activities that may be more transformative in terms of human development, for example, migration and remittances. Kelly’s arguments are focused on the household as suppliers and reproducers of labour for GPNs, where ‘important elements of developmental change are often experienced at some degree of separation from direct connection with the global production network’ (2013, 83), rather than rural households as key actors themselves in value creation. In the GVC literature, livelihoods approaches have been used primarily to understand local scale impacts of chain incorporation. Challies and Murray (2011) address the local impacts of a raspberry GVC in Chile through integrating SLA and GVC analysis. However, the end result is primarily descriptive in regards to livelihoods, focusing on the impacts of value chain participation on different types of household ‘capital’. Similarly, in their study of smallholder coffee value chains in Indonesia, Neilson and Shonk (2014) argue that a livelihoods lens provides an important corrective to value chain-based rural development interventions, which frequently disregard the complexity of smallholder livelihoods and poverty alleviation pathways. Their approach, however, falls short of an integrated analysis of uneven development, instead providing a useful snapshot of livelihood complexity in a smallholder production landscape. Bolwig et al.’s (2010) work represents perhaps the most ambitious attempt so far in the literature at constructing a framework that integrates GPN and livelihood analysis. The authors suggest a conceptual framework that attempts to explicitly integrate the vertical dimension of production network dynamics with the horizontal elements of place, including poverty, gender and the environment. Importantly, the authors stress that understanding production network outcomes for local actors must involve not only analysis of power relations between network actors, but also those relationships of power and inequality into which local actors, including extra-network actors, are embedded. In progressing these initial contributions to bringing the livelihood dynamics of smallholder production landscapes to bear on GPN analysis of uneven development, we argue that the GPN literature can usefully engage with the literature on livelihood pathways. Whereas in regions coupled with industrial GPNs economic development is conceptualised as the aggregate of the value capture trajectories of networked firms, we argue that in smallholder production landscapes coupled with agricultural GPNs, rural development outcomes will depend on the aggregate of household livelihood pathways, defined as ‘patterns of livelihood activities which arise from a co-ordination process among actors . [which]. arises from individual strategic behaviour embedded both in a historical repertoire and in social differentiation, including power relations and institutional processes, both of which pre-structure subsequent decision-making’ (de Haan and Zoomers, 2005, 43). Such an approach therefore connects smallholder household agency with the structural processes of social differentiation within which livelihoods are pursued. Importantly, smallholder household livelihood pathways are influenced by enrolment in GPNs, but the reverse is equally true—the nature of smallholder pathways in different contexts will influence the nature of engagement with GPNs. Dorward (2009; see also Dorward et al., 2009) suggests a typology of livelihood pathways that captures the dynamic, non-linear and contingent nature of rural livelihoods. Dorward’s schema separates the aspirational pathways of rural households into three strategies/outcomes; ‘hanging in’, where households, often in adverse circumstances, maintain their current activities to ensure their survival without investing in assets; ‘stepping up’ where households expand their current activities (typically agriculture) by investing in assets to increase their production and income and ‘stepping out’ where households use their current activities to ‘accumulate assets which … then provide a base or ‘launch pad’ for moving into different activities that have initial investment requirements leading to higher and/or more stable returns’ (Dorward et al., 2009, 243). Further studies have amended Dorward’s general framework for purpose-specific circumstances, including a study of livelihood pathways2 after land reform in Zimbabwe (Scoones et al., 2012) that added a fourth strategy (‘dropping out’, to describe destitute households who are often in the process of exiting), and a study of livelihood change in north India (Pritchard et al., 2017), which added a similar ‘going backwards’ category. As Bernstein and Oya (2014, 17) suggest, Dorward’s framework also engages with classical dynamics of agrarian social differentiation: those that can only maintain or protect their social reproduction (hanging in); those that are expanding and/or accumulating within agriculture (stepping up) and those that are diversifying and/or accumulating into different livelihoods (stepping out). A livelihood pathways approach therefore enables us to fully incorporate the smallholder household as a distinct actor in agro-GPNs, while also shifting focus to the differential outcomes for such households enrolled in GPNs. To expand on this in empirical detail, the final section provides an extended vignette illustrating this approach at the household scale, via a study of potato contract farming conducted in Maharashtra, India (Vicol, 2018). 5. Potato contract farming and livelihood pathways in Maharashtra, India The development outcomes of the incorporation of smallholder households in three villages in Satara district, Maharashtra in a potato snack food GPN (detailed in Vicol, 2018) is illustrative of the need to conceptualise value capture trajectories in smallholder regions as constitutive of broader household livelihood pathways. Satara district, located directly east of the Western Ghats mountain range about 250 kms southeast of Mumbai, is known as an agriculturally productive region, although the east of the district receives much less rainfall than its western parts. Typical cropping patterns here revolve around sorghum and wheat, with sugarcane a major cash crop sold to nearby sugar mills. While irrigation projects in recent decades have enabled a increasing variety of horticultural crops to be grown, such as tomato, horticultural production is still relatively unorganised and limited to a minority of households. Due to, among other reasons, an increasinlgy unreliable monsoon and decreasing farm sizes, household livelihood patterns are increasingly focused on low-skilled non-farm activities, including temporary migration to the nearby cities of Pune and Mumbai. Landowning patterns and livelihood oppportunities are differentiated by caste; the dominant Maratha caste controls much of the farmland, while most landless households are from lower castes. It is in this context that the lead firm Frito Lay, a multinational snack food conglomerate owned by PepsiCo and headquartered in Texas, has established potato contract farming schemes in the last decade as part of their expansion into the growing snack food sector in South Asia. Independent smallholder households in the villages are enrolled into the scheme by village-based agents (who are typically well-off farmers from the area also growing contracted potato) to grow particular types of potato suitable for processing in Frito Lay’s factory in Pune. The incursion of contracting firms into Satara has been made possible by recent amendments by the state of Maharashtra to its Agricultural Produce Market Committee (APMC) act to legislate a framework through which lead firms such as Frito Lay can engage directly with smallholder farmers. In the village that formed part of this study where PepsiCo operated, potato contract farming is the dominant form of commercialised agriculture and hence engagement with GPNs. The scheme has been established in a context where contract farming is increasingly promoted by policy makers, agribusiness and donor communities as a ‘win-win’ rural development solution (Oya, 2012; Government of India, Planning Commission, 2013). Indicative of government interest to facilitate the expansion of contract farming schemes, the Government of India released the Model Contract Farming Act in 2018. This recent policy enthusiasm for contract farming is based on evidence from microeconomic analyses of contract farming that generally find an income benefit (though often marginal3) for contract farmers versus non-contract farmers in various crops (Gulati and Ganguly, 2008; Pandit et al., 2015; Mishra et al., 2018). Applying the ‘toolkit’ of GPN 2.0, the competitive dynamics and risks of the global snack food industry have driven Frito Lay to externalise some of the value activity to smallholders, agents and other intermediary actors (including credit and input suppliers) in the form of a strategy that combines inter-firm control with extra-firm bargaining. The low costs of smallholder production compared with the lead firm (in part due to smallholders’ use of family labour), as well as the inherent risks of agricultural production, drive Frito Lay to outsource direct production, while the low capabilities of smallholders mean they are easily substituted by other smallholder households in the region. Before establishing the contract scheme in one of the case study villages, PepsiCo had targeted other villages in a region to the west, which receives more rainfall and has a more diverse production base. However, from 2007, citing problems with farmer indebtedness and crop failure, PepsiCo abandoned those villages and moved its operation further east into the drier region where farmers have fewer production choices. At a national scale, the firm maintains a network of contracted farmers in different regions that it can mix supply from depending on production conditions and market demand. Frito Lay’s market imperative to maintain quality and achieve standardised production drives the firm to govern production through the contract instrument (including standard setting) and the contract agent. The politically sensitive nature of smallholder production in India compels Frito Lay to engage in CSR initiatives and maintain close relationships with government to ensure access to the smallholder production base. This includes maintaining pressure on state governments to enact the reforms to the APMC Act that legalise contract farming. All of these factors imply a structural form of coupling, with most of the value created by dependent smallholders captured by the lead firm and other actors and transferred out of the commodity source region. A value chain analysis revealed that for every packet of Frito Lay potato chips sold to consumers, contract farmers receive approximately 8% of the sale price. From this reading, while individual farmers may attain some income benefit, the trajectory of the region through a GPN lens could be characterised by dependency and the development of narrow regional assets, with the possibility of lock-in once land is committed to contract farming (although the likelihood of decoupling is also high, and indeed Frito Lay maintains a remarkable spatial mobility in its ability to shift its contracting supply base around the production landscape within Satara). However, if we apply a livelihoods lens, a more nuanced picture of the development impacts of the potato chip GPN emerges. It is evident that without taking livelihood patterns into account, a GPN view would overstate the influence of contract farming on regional development trajectories. Wealth ranking exercises4 conducted in each village show that Frito Lay is not engaging with a homogenous group of generic suppliers, but rather a complex livelihood landscape of households differentiated along caste and class lines (Table 1). Table 1 Livelihood groups in the contract farming villages Lower group Middle farmers Best off Land holding Landless or 1–2 acres 3–10 acres 10+ acres Caste SCa and OBCb Predominantly Marathac Maratha Cropping pattern Landowners grow coarse grains, wheat and lentils for local markets; vegetables for self-consumption Cereal crops dominate. Limited high value cash cropping including sugarcane, potato, ginger and onion Cash crops dominate, including sugarcane, potato, pomegranate, capsicum and tomato Education access Poor. Limited ability to access higher education for children Mixed. Accessing higher education for offspring is a key livelihood strategy Typically at least one highly skilled and tertiary educated household member Dominant income source Cereal crops (landowners). Unskilled non-farm labouring. Limited agriculture labouring Agriculture. Low-skilled non-farm activities and migration/remittances increasingly important Non-farm income dominates. Some high-value agriculture. Remittances are important Non-farming income sources Casual labouring, farm labouring, caste-based occupations House painting, construction, truck driving, low paid professions such as teaching Gold and silver shops, drug stores, professional salaried work, government positions Employ farm labour No Employ seasonal labour but struggle to access this. Labour sharing and family labour important Yes. Estimated percentage of village households 25% 60–70% 5–15% Lower group Middle farmers Best off Land holding Landless or 1–2 acres 3–10 acres 10+ acres Caste SCa and OBCb Predominantly Marathac Maratha Cropping pattern Landowners grow coarse grains, wheat and lentils for local markets; vegetables for self-consumption Cereal crops dominate. Limited high value cash cropping including sugarcane, potato, ginger and onion Cash crops dominate, including sugarcane, potato, pomegranate, capsicum and tomato Education access Poor. Limited ability to access higher education for children Mixed. Accessing higher education for offspring is a key livelihood strategy Typically at least one highly skilled and tertiary educated household member Dominant income source Cereal crops (landowners). Unskilled non-farm labouring. Limited agriculture labouring Agriculture. Low-skilled non-farm activities and migration/remittances increasingly important Non-farm income dominates. Some high-value agriculture. Remittances are important Non-farming income sources Casual labouring, farm labouring, caste-based occupations House painting, construction, truck driving, low paid professions such as teaching Gold and silver shops, drug stores, professional salaried work, government positions Employ farm labour No Employ seasonal labour but struggle to access this. Labour sharing and family labour important Yes. Estimated percentage of village households 25% 60–70% 5–15% a Scheduled caste: the official designation given to the historically most disadvantaged castes in India. b Other backward class: a term used to classify other socially and educationally disadvantaged castes. c The politically and socially dominant landowning caste in Maharashtra. Source: Vicol (2018). View Large Table 1 Livelihood groups in the contract farming villages Lower group Middle farmers Best off Land holding Landless or 1–2 acres 3–10 acres 10+ acres Caste SCa and OBCb Predominantly Marathac Maratha Cropping pattern Landowners grow coarse grains, wheat and lentils for local markets; vegetables for self-consumption Cereal crops dominate. Limited high value cash cropping including sugarcane, potato, ginger and onion Cash crops dominate, including sugarcane, potato, pomegranate, capsicum and tomato Education access Poor. Limited ability to access higher education for children Mixed. Accessing higher education for offspring is a key livelihood strategy Typically at least one highly skilled and tertiary educated household member Dominant income source Cereal crops (landowners). Unskilled non-farm labouring. Limited agriculture labouring Agriculture. Low-skilled non-farm activities and migration/remittances increasingly important Non-farm income dominates. Some high-value agriculture. Remittances are important Non-farming income sources Casual labouring, farm labouring, caste-based occupations House painting, construction, truck driving, low paid professions such as teaching Gold and silver shops, drug stores, professional salaried work, government positions Employ farm labour No Employ seasonal labour but struggle to access this. Labour sharing and family labour important Yes. Estimated percentage of village households 25% 60–70% 5–15% Lower group Middle farmers Best off Land holding Landless or 1–2 acres 3–10 acres 10+ acres Caste SCa and OBCb Predominantly Marathac Maratha Cropping pattern Landowners grow coarse grains, wheat and lentils for local markets; vegetables for self-consumption Cereal crops dominate. Limited high value cash cropping including sugarcane, potato, ginger and onion Cash crops dominate, including sugarcane, potato, pomegranate, capsicum and tomato Education access Poor. Limited ability to access higher education for children Mixed. Accessing higher education for offspring is a key livelihood strategy Typically at least one highly skilled and tertiary educated household member Dominant income source Cereal crops (landowners). Unskilled non-farm labouring. Limited agriculture labouring Agriculture. Low-skilled non-farm activities and migration/remittances increasingly important Non-farm income dominates. Some high-value agriculture. Remittances are important Non-farming income sources Casual labouring, farm labouring, caste-based occupations House painting, construction, truck driving, low paid professions such as teaching Gold and silver shops, drug stores, professional salaried work, government positions Employ farm labour No Employ seasonal labour but struggle to access this. Labour sharing and family labour important Yes. Estimated percentage of village households 25% 60–70% 5–15% a Scheduled caste: the official designation given to the historically most disadvantaged castes in India. b Other backward class: a term used to classify other socially and educationally disadvantaged castes. c The politically and socially dominant landowning caste in Maharashtra. Source: Vicol (2018). View Large Households located in the different social groupings detailed in Table 1 engage differently with the potato chip GPN, with different outcomes for livelihood pathways that in turn mediate regional development outcomes. Participation in the contract farming scheme is in fact dominated by the group of ‘middle farmers’, who hold enough assets to be productive potato farmers, but do not have access to more lucrative livelihood opportunities. Middle farmer participation is influenced by a range of dynamics that diverge from those identified by GPN 2.0. These include the lack of alternative livelihood options in the region, the attraction of access to credit and inputs supplied by the firm (which are often applied to other crops or used for different livelihood purposes), and the certainty provided by the fixed contract price. The power of Frito Lay to capture most of the value created by smallholders and the relationships of dependency created by the contract have meant that for most middle farmer participants, contract farming has reproduced livelihood pathways best described as ‘hanging in’ (Table 2). Table 2 Common livelihood pathways in the villages Livelihood group Livelihood pathway Livelihood strategy % of sample (n = 54) Description and relation to contract farming Lower group Hanging in Landless labourer 4% No land assets, compelled to sell labour. Often fragmented non-farm labour activities. Very poor and vulnerable to shocks. Do not participate in contract farming Hanging in Marginal landowner 11% Own up to six acres, but mostly uncultivable land. Very limited farm assets. Rely on low paid non-farm income. Vulnerable to shocks. Two participants in contract farming gaining some livelihood benefits Stepping out Education 7% Landless or marginal landowners attempting to get ahead through education of children or minor businesses. Often constrained by caste status and still vulnerable to shocks. Do not participate in contract farming Middle farmer Hanging in Struggling farmer 11% Medium landowners who attempt to get ahead through farming but are unsuccessful due to debt or lack of assets. Limited non-farm income. Almost all participate in contract farming; however, several households are no longer participating due to debt Hanging in Straddling farm and non-farm 17% Medium landowners who are unproductive farmers, due to poor land or lack of assets. Main income source is low-value non-farm income such as painting. Almost all participate in contract farming; however, it has not been a successful accumulation strategy for most Stepping up Cash cropping 13% Have the skills and resources to farm cash crops such as sugarcane. Held back by lack of capital and other assets. Supported by non-farm activities such as painting and driving. Most households participate in contract farming. Half of these have invested contract farming profits into other activities, while for the other half there have been few benefits Stepping out Diversification 15% Medium landowners who are diversifying into significant non-farm activities due to lack of agricultural assets. Often significant remittances from migrant workers or educated children with service jobs. Some reinvest into agriculture. Half previously participated in contract farming but stopped to concentrate on non-farm activities Best-off Stepping up Capitalist farmer 9% Large landowner accumulating through high value cash crops and horticulture. Extensive farm assets, including hiring in significant labour. Highly educated. Some capital from non-farm activities. Little ongoing participation in contract farming and insignificant to livelihoods Stepping out Non-farm accumulation 13% Large landowners who have used their land based to move into high-value and significant non-farm activities such as owning gold shops or receive extensive remittances from children. Still retain land and invest some capital into agriculture. Little ongoing participation in contract farming and insignificant to livelihoods Livelihood group Livelihood pathway Livelihood strategy % of sample (n = 54) Description and relation to contract farming Lower group Hanging in Landless labourer 4% No land assets, compelled to sell labour. Often fragmented non-farm labour activities. Very poor and vulnerable to shocks. Do not participate in contract farming Hanging in Marginal landowner 11% Own up to six acres, but mostly uncultivable land. Very limited farm assets. Rely on low paid non-farm income. Vulnerable to shocks. Two participants in contract farming gaining some livelihood benefits Stepping out Education 7% Landless or marginal landowners attempting to get ahead through education of children or minor businesses. Often constrained by caste status and still vulnerable to shocks. Do not participate in contract farming Middle farmer Hanging in Struggling farmer 11% Medium landowners who attempt to get ahead through farming but are unsuccessful due to debt or lack of assets. Limited non-farm income. Almost all participate in contract farming; however, several households are no longer participating due to debt Hanging in Straddling farm and non-farm 17% Medium landowners who are unproductive farmers, due to poor land or lack of assets. Main income source is low-value non-farm income such as painting. Almost all participate in contract farming; however, it has not been a successful accumulation strategy for most Stepping up Cash cropping 13% Have the skills and resources to farm cash crops such as sugarcane. Held back by lack of capital and other assets. Supported by non-farm activities such as painting and driving. Most households participate in contract farming. Half of these have invested contract farming profits into other activities, while for the other half there have been few benefits Stepping out Diversification 15% Medium landowners who are diversifying into significant non-farm activities due to lack of agricultural assets. Often significant remittances from migrant workers or educated children with service jobs. Some reinvest into agriculture. Half previously participated in contract farming but stopped to concentrate on non-farm activities Best-off Stepping up Capitalist farmer 9% Large landowner accumulating through high value cash crops and horticulture. Extensive farm assets, including hiring in significant labour. Highly educated. Some capital from non-farm activities. Little ongoing participation in contract farming and insignificant to livelihoods Stepping out Non-farm accumulation 13% Large landowners who have used their land based to move into high-value and significant non-farm activities such as owning gold shops or receive extensive remittances from children. Still retain land and invest some capital into agriculture. Little ongoing participation in contract farming and insignificant to livelihoods Source: modified from Vicol (2018). View Large Table 2 Common livelihood pathways in the villages Livelihood group Livelihood pathway Livelihood strategy % of sample (n = 54) Description and relation to contract farming Lower group Hanging in Landless labourer 4% No land assets, compelled to sell labour. Often fragmented non-farm labour activities. Very poor and vulnerable to shocks. Do not participate in contract farming Hanging in Marginal landowner 11% Own up to six acres, but mostly uncultivable land. Very limited farm assets. Rely on low paid non-farm income. Vulnerable to shocks. Two participants in contract farming gaining some livelihood benefits Stepping out Education 7% Landless or marginal landowners attempting to get ahead through education of children or minor businesses. Often constrained by caste status and still vulnerable to shocks. Do not participate in contract farming Middle farmer Hanging in Struggling farmer 11% Medium landowners who attempt to get ahead through farming but are unsuccessful due to debt or lack of assets. Limited non-farm income. Almost all participate in contract farming; however, several households are no longer participating due to debt Hanging in Straddling farm and non-farm 17% Medium landowners who are unproductive farmers, due to poor land or lack of assets. Main income source is low-value non-farm income such as painting. Almost all participate in contract farming; however, it has not been a successful accumulation strategy for most Stepping up Cash cropping 13% Have the skills and resources to farm cash crops such as sugarcane. Held back by lack of capital and other assets. Supported by non-farm activities such as painting and driving. Most households participate in contract farming. Half of these have invested contract farming profits into other activities, while for the other half there have been few benefits Stepping out Diversification 15% Medium landowners who are diversifying into significant non-farm activities due to lack of agricultural assets. Often significant remittances from migrant workers or educated children with service jobs. Some reinvest into agriculture. Half previously participated in contract farming but stopped to concentrate on non-farm activities Best-off Stepping up Capitalist farmer 9% Large landowner accumulating through high value cash crops and horticulture. Extensive farm assets, including hiring in significant labour. Highly educated. Some capital from non-farm activities. Little ongoing participation in contract farming and insignificant to livelihoods Stepping out Non-farm accumulation 13% Large landowners who have used their land based to move into high-value and significant non-farm activities such as owning gold shops or receive extensive remittances from children. Still retain land and invest some capital into agriculture. Little ongoing participation in contract farming and insignificant to livelihoods Livelihood group Livelihood pathway Livelihood strategy % of sample (n = 54) Description and relation to contract farming Lower group Hanging in Landless labourer 4% No land assets, compelled to sell labour. Often fragmented non-farm labour activities. Very poor and vulnerable to shocks. Do not participate in contract farming Hanging in Marginal landowner 11% Own up to six acres, but mostly uncultivable land. Very limited farm assets. Rely on low paid non-farm income. Vulnerable to shocks. Two participants in contract farming gaining some livelihood benefits Stepping out Education 7% Landless or marginal landowners attempting to get ahead through education of children or minor businesses. Often constrained by caste status and still vulnerable to shocks. Do not participate in contract farming Middle farmer Hanging in Struggling farmer 11% Medium landowners who attempt to get ahead through farming but are unsuccessful due to debt or lack of assets. Limited non-farm income. Almost all participate in contract farming; however, several households are no longer participating due to debt Hanging in Straddling farm and non-farm 17% Medium landowners who are unproductive farmers, due to poor land or lack of assets. Main income source is low-value non-farm income such as painting. Almost all participate in contract farming; however, it has not been a successful accumulation strategy for most Stepping up Cash cropping 13% Have the skills and resources to farm cash crops such as sugarcane. Held back by lack of capital and other assets. Supported by non-farm activities such as painting and driving. Most households participate in contract farming. Half of these have invested contract farming profits into other activities, while for the other half there have been few benefits Stepping out Diversification 15% Medium landowners who are diversifying into significant non-farm activities due to lack of agricultural assets. Often significant remittances from migrant workers or educated children with service jobs. Some reinvest into agriculture. Half previously participated in contract farming but stopped to concentrate on non-farm activities Best-off Stepping up Capitalist farmer 9% Large landowner accumulating through high value cash crops and horticulture. Extensive farm assets, including hiring in significant labour. Highly educated. Some capital from non-farm activities. Little ongoing participation in contract farming and insignificant to livelihoods Stepping out Non-farm accumulation 13% Large landowners who have used their land based to move into high-value and significant non-farm activities such as owning gold shops or receive extensive remittances from children. Still retain land and invest some capital into agriculture. Little ongoing participation in contract farming and insignificant to livelihoods Source: modified from Vicol (2018). View Large The exclusion of middle farmers from more lucrative livelihood pathways (i.e. ‘stepping out’) means that middle farmers are likely to stick with the contract scheme even though it typically provides marginal or no benefits in terms of economic profit. However, the patterns outlined in Table 2 of who does not engage with the potato chip GPN and the implications for understanding regional value capture trajectories are just as telling. Households in the ‘lower group’ are generally excluded from participation given their lack of key assets such as land, while households in the ‘best off’ group tend to avoid engaging with in the contract scheme. Their livelihood pathways are focused on ‘stepping out’ through the nonfarm economy, as they engage in ‘diversification for accumulation’ (Hart, 1994, 48). The point is that household livelihood pathways, and therefore regional development pathways, in smallholder production landscapes such as this are infinitely more complex than can be read off the concepts of value capture trajectories and strategic coupling, and this complexity is readily revealed through a livelihoods approach. Although some households have gained some benefits from participation, potato contract farming is not a significant source of capital accumulation in each village, even for those households accruing more benefits than others (Vicol, 2018). Moreover, when analysed within a broader livelihoods frame, despite being a prominent form of GPN engagement in the region, the potato chip GPN appears largely insignificant to value capture trajectories at the household scale. In this case, engaging with the GPN through contract farming effectively reproduced the social and economic position of middle farmers. The firm captured the majority of the value created, while better-positioned households ignored the GPN and consolidated their social-economic position through non-agricultural livelihood pathways external to the GPN. 6. Conclusion: seeing the forest and the trees in GPN analysis We have argued in this paper that in smallholder production landscapes, the development outcomes of GPNs are conditioned by dynamics different to that of firm-to-firm engagement in industrial or service GPNs. The complex and diverse interaction of smallholder livelihood pathways and potato contract farming discussed above emphasises the importance of ‘fine-grained analysis’ at the household scale of the relationship between GPNs and uneven development. We do not claim that the extended vignette presented here is representative of all types of smallholder engagement with GPNs across the Global South. Certainly, the structure of smallholder regions, the motives of smallholder households and their embeddedness in GPNs will differ from place to place (and within places). Rather, this case was presented here as illustrative of the value of bringing a livelihoods perspective to bear on GPN analysis. A more challenging task, and one requiring further work, is how to scale these insights to inform broader GPN thinking about global uneven development. At the regional level, Fold (2014) argues that scaling up of the outcomes of household pathways can be achieved through the concept of settlement trajectories, where patterns of livelihood diversification at the household scale are indicative of new settlement patterns that are in turn constitutive of regional development. This is not a simple and straightforward relationship between world market prices and settlement trajectories in the region as the interface may be mediated by state regulatory mechanisms, materiality of the agricultural crops, realised economic diversification (at settlement level), geography, etc. in periods of both booms and busts (Bair and Werner, 2011). However, identifying and understanding the causes of differential outcomes of settlement trajectories (growth, stagnation, decline) will reveal a particular regional pattern, thereby explaining the specific type of strategic coupling taking place in smallholder landscapes. Returning to the problematic posed in the ‘Introduction’ section to this paper, we have shown that the distinctiveness and complexity of smallholder engagement with GPNs reveals some important limits in GPN 2.0’s ability to theorise economic development in smallholder production landscapes. As Fold (2014) further argues, perhaps the distinctive characteristics of smallholder production landscapes and agricultural production precludes the usefulness of GPN analysis. However, given the increasing penetration of capital via GPNs into rural territories of the Global South, and the increasingly dominant narrative of value chain-led development among donors and development institutions, the GPN 2.0 framework provides an important theoretical approach to understanding the rural development dynamics of the contemporary global economy. However, strengthening its applicability to understanding economic development in rural territories will require sustained engagement with existing theories of the smallholder household. As we have argued here, economic development in smallholder production landscapes is constituted by a range of processes beyond narrow economic growth within and between firms. GPN 2.0 is unapologetically a theory of the central role of lead firms in global economic development. However, for the framework to live up to its claims as a comprehensive theory of global uneven development, it must pay attention to the myriad of non-firm processes that influence development trajectories in rural territories, including the central role of the smallholder household. This conceptual challenge, it should be noted, has equal purchase in the inherent difficulties facing the incorporation of rural-based livelihoods within the allied GVC framework. The firm centrism of these approaches may mask important differential processes both within and external to GPNs. What may look on the surface to be strategic coupling leading to value capture in rural territories may in fact be negative at the household scale, or highly differentiated between smallholder households pursuing different livelihood pathways. Moreover, the outcomes of strategic coupling, particularly in external interventions designed to ‘connect smallholders to markets’, may be unintentional (or misunderstood) if a livelihoods perspective is not incorporated. Without a sustained appreciation for rural livelihoods (requiring deep field engagement), there is a danger that the GPN framework, through its elevation of the role of the lead firm, and of firms as key actors more broadly, may not see the trees for the forest in its analysis of economic development in smallholder production landscapes. However, if GPN 2.0 is to offer a broader explanatory framework of global uneven economic development, incorporating rural territories is critical. Further work to bring a livelihoods perspective to bear on GPN 2.0 therefore provides a promising way forward to expand GPN research to smallholder production landscapes in the Global South. Footnotes 1 In this paper, we use smallholder as a descriptive term to refer to the generally recognisable category of rural households in the Global South that engage in small-scale agricultural commodity production, typically owning 2 ha of land or less (Lowder et al., 2016), often producing for markets and sometimes for subsistence, who usually deploy at least some family labour, but may also hire in wage labour and typically also pursue a diverse portfolio of other livelihood activities. Bernstein (2010) refers to such populations as petty commodity producers. The term peasant is often used interchangeably to smallholder in the literature, but has more political connotations. Bryceson (2000) defines peasants as encompassing the following criteria: farm (the pursuit of an agricultural livelihood which combines subsistence production with commodity production); family (internal social organization based on family labour, whereby the family serves as the unit of production, consumption, reproduction, socialization, welfare and risk-spreading); class (external subordination to state authorities as well as regional or international markets inferring surplus extraction and class differentiation) and community (village settlement and traditional conformist attitudinal outlook). 2 Scoones et al. (2012) also use the term livelihood ‘trajectories’. However, their definition is analogous to that of livelihood pathways given by de Haan and Zoomers (2005). 3 Ton et al. 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TI - Global production networks, regional development trajectories and smallholder livelihoods in the Global South
JF - Journal of Economic Geography
DO - 10.1093/jeg/lby065
DA - 2019-07-01
UR - https://www.deepdyve.com/lp/oxford-university-press/global-production-networks-regional-development-trajectories-and-NhpZa0XWCi
SP - 973
VL - 19
IS - 4
DP - DeepDyve
ER -