Extended Quality Processes in Internationalized Agro-Industrial. Rural Collaborative Economy: Capital Accumulation and the Association of Small Farmers

Extended Quality Processes in Internationalized Agro-Industrial. Rural Collaborative Economy: Capital Accumulation and the Association of Small Farmers

Uriel Hitamar Castillo-Nazareno (Universidad Católica de Santiago de Guayaquil, Ecuador), Jessica Silvana Matute-Petroche (Universidad Católica de Santiago de Guayaquil, Ecuador) and María Teresa Alcívar-Avilés (Universidad Católica de Santiago de Guayaquil, Ecuador)
Copyright: © 2021 |Pages: 14
DOI: 10.4018/978-1-7998-5036-6.ch005
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Abstract

Exploring agricultural production and derived products is one of the challenges that countries like Ecuador have today. The crises in the agrarian economies could find formulas to be reversed if capital is built and distributed so that accumulation is visible in each of the processes that make up the value chains. One formula proposed is the productive strategic partnership in the collaborative line: the little ones must always go together. A perspective of this collaborative model with comprehensive quality processes is proposed in the global market. To this end, two productive attempts in the province of Chimborazo (Ecuador) are studied. The first one from Alausí canton, and the second production and export criterion already developed, is located in Colta Canton of the same province and is called COPROBICH. Based on these elements, the chapter proposes to incorporate theoretical and technical aspects that will make it possible to achieve greater efficiency in the process of internationalization of these business drives
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Introduction

The canton Alausí locates in the south of the province of Chimborazo (Ecuador), 84 km from Riobamba and 2,374 meters above sea level. The canton has eight rural parishes: Alausí, Achupallas, Guasuntos, Huigra, Multitud, Pistishí, Pumallacta, Sevilla, Sibambe, and Tixán (GADPCH, 2016; Instituto Nacional de Estadísticas y Censos, 2010).

In this canton, 75.8% of the population is engaged in agriculture, stockbreeding, forestry, and fishing; 4.8% in wholesale and retail trade; 4.2% in construction activities. These three activities account for 84% of the total, so it suggests that improvements in this area will have a significant impact on the territory (Instituto Nacional de Estadísticas y Censos, 2016).

According to the last 2010 census, the Economically Active Population (EAP) at canton Alausí is 17,158, ranking the fifth place in Chimborazo. Rural population is 14,731 (85.85%) having a greater representation compared to urban one (2,427, 14.15%). Most of the rural population labor in activities related to agriculture, livestock, and forestry.

Today, agricultural producers have problems related to the system of marketing and distribution of their products. They are a determining factor of poverty and affect the social and economic situation of the producers in the canton. Despite this fact, in the Development and Territorial Planning Plan of the Alausí Canton (2015), no centers for the collection of agricultural products have been identified, and, as far as marketing is concerned, only two markets are registered in the cantonal capital: Municipal and Jesus Square.

The destination of its agricultural production is mainly Guayaquil, the most populated city of Ecuador, and Riobamba, the capital of the province where the canton Alausí is located. Locally, producers sell their products in small fairs situated in various parishes of the canton.

In general, both the Ministry of Agriculture, Livestock, Aquaculture and Fisheries (2016) and GADPCH (2015) affirm that the main problems facing the province are (a) the low level of access to the means of production, such as land, labor, irrigation, credit, and seeds, among others; (b) low value-added to production; (c) an inefficient marketing system; (d) low crop yields; and (e) low and weak level of production planning, which results into a low level of family income.

The Productive Problem in Alausí

From this perspective, it should be stressed that most of the canton's agricultural production is stationary. At a particular time, there is overproduction, but generally, there is a shortage, so production never equals to the market demand. Often, this fact mainly affects farmers who receive prices below production costs (Secretaría Nacional de Planificación y Desarrollo, 2017). A study of market demand is not carried out to plan production and cash balance yields.

Another difficulty is the inefficient transport system to connect rural areas with local markets, which worsens for small agricultural producers to have good marketing management (MAGAP, 2016). We argue for the urgency of finding a feasible solution to facilitate this logic of production and commercialization, a systematic impoverishment for the population that can be observed every time the market is reached. As a result, economic heritage is lost.

According to the GADPCH (2015), the cantonal gross value added (GVA) is 4.23% of the province of Chimborazo; Riobamba (capital of the region) has a GVA of 73.35%. In absolute terms, the GVA of Alausí is $55,952,000.00, representing a per capita of only $1,272.00 or a monthly income of barely $100, which shows the poverty population.

Key Terms in this Chapter

Strategic Partnership: It is the unit of small and micro with the idea of taking control of the market.

Equivalence: It recognizes the time involved in the chain by redistributing risks and provides the corresponding monetary flows. The longer the time, the higher the returns.

Collaborative Economy: It is a sort of economy that allows the confluence of many small and micro businesses in coordination and management, as if it were a single company.

Compensation: Recognition of all participants in the value chain and provides relevant income and wealth. It eliminates losses in the first links of the value chain.

Supply Chain: Logistics specially designed to keep the processes of strategically associated primary and final producers aligned.

Internationalize Agro-Industry: It is the capacity to generate competitive agricultural finished products in the foreign market.

Extended Quality Partnership: It involves the business concept as a set of actors according to their role in the chain in two perspectives: their size (micro and small) and their activity (producer, processor, trader, financier).

E-Commerce: Dynamics of digital commerce.

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