Farmers' satisfaction with group market arrangements as a measure of group market performance: A transaction cost analysis of Non Timber Forest Products' producer groups in Cameroon

This paper evaluates the performance of Non Timber Forest Product (NTFP) group market initiatives by examining whether these groups meet the objectives for which they were created. Group marketing has often been cited as one way through which farmers can increase their access to markets by improving their negotiation/bargaining power and the competitiveness of their production as well as reduce transaction costs. However, these suppositions need to be verified especially as some of them are solely based on theory. This study uses data on producers' perceptions of expected benefits attainment through group sale initiatives to analyse the case of two NTFP producer groups in Cameroon. Results show that by joining groups, farmers can reduce some transaction costs while other costs may increase. Although overall negotiation power may increase following interventions from group activities, certain elements of negotiation are fundamental to success like bargaining better prices commensurate to efforts put in by members to meet quality standards set by traders. By using transaction cost theory, the study identifies certain elements hidden in the attributes of the transactions between producer groups and traders such as the nature of products and roads, or dispersed settlement of producers that may frustrate group market initiatives and may account for differences in performance between one group and another.

► Expected benefits of group sales are used as indicators of group market performance.
► The price a group negotiates for its members is an important element of success.
► Access to micro finance is crucial to enable group members negotiate better prices.
► Perceived transaction costs are lower in group sales compared to door to door buying.
► Settlement pattern, nature of roads, and ease to determine product quality affect group market performance.