FINAN, Timothy J. - Market Relationships and Market Performance in Northeast Brazil

7/26/2019 FINAN, Timothy J. - Market Relationships and Market Performance in Northeast Brazil

1/17

Market Relationships and Market Performance in Northeast Brazil

Author(s): Timothy J. FinanSource: American Ethnologist, Vol. 15, No. 4 (Nov., 1988), pp. 694-709Published by: Blackwell Publishingon behalf of the American Anthropological AssociationStable URL: http://www.jstor.org/stable/645514

Accessed: 30/10/2010 23:56

Your use of the JSTOR archive indicates your acceptance of JSTOR's Terms and Conditions of Use, available at

http://www.jstor.org/page/info/about/policies/terms.jsp. JSTOR's Terms and Conditions of Use provides, in part, that unless

you have obtained prior permission, you may not download an entire issue of a journal or multiple copies of articles, and you

may use content in the JSTOR archive only for your personal, non-commercial use.

Please contact the publisher regarding any further use of this work. Publisher contact information may be obtained athttp://www.jstor.org/action/showPublisher?publisherCode=black.

Each copy of any part of a JSTOR transmission must contain the same copyright notice that appears on the screen or printed

page of such transmission.

JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of

content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms

of scholarship. For more information about JSTOR, please contact [email protected].

Blackwell PublishingandAmerican Anthropological Associationare collaborating with JSTOR to digitize,

preserve and extend access toAmerican Ethnologist.

http://www.jstor.org
http://www.jstor.org/action/showPublisher?publisherCode=blackhttp://www.jstor.org/action/showPublisher?publisherCode=anthrohttp://www.jstor.org/stable/645514?origin=JSTOR-pdfhttp://www.jstor.org/page/info/about/policies/terms.jsphttp://www.jstor.org/action/showPublisher?publisherCode=blackhttp://www.jstor.org/action/showPublisher?publisherCode=blackhttp://www.jstor.org/page/info/about/policies/terms.jsphttp://www.jstor.org/stable/645514?origin=JSTOR-pdfhttp://www.jstor.org/action/showPublisher?publisherCode=anthrohttp://www.jstor.org/action/showPublisher?publisherCode=black


2/17

market

relationships

and

market

performance

n

NortheastBrazil

TIMOTHY .

FINAN-University

of Arizona

The

major

contribution of economic

anthropologists

to the

study

of

agricultural

markets has

been to demonstrate that

price

and

quantity

alone do

not suffice as

predictors

of market be-

havior. Since Mintz's

(1961)

pioneering

study

of Haitian

market

women,

it has become

clear

that economic and social

objectives

are often

intermingled,

or that

middlemen

commonly

em-

ploy strategiesof a social content to achieve their economic intent. Often these strategies in-

volve

implicit,

noncontractual

agreements

between

buyer

and seller

that

long-term

steady

and

exclusive market

relationships

are

preferable

to short-term

price

maximization.

In

his recent

writings,

Plattner

has characterized

these

relationships

as

equilibrating

(Plattner

1983,

1985).

Equilibrating

nteraction

functions as a

kind of social stabilizer

that counteracts

the dan-

gers

of an uncertain market

environment.

Plattner

draws

significantly

upon

Sahlins'

(1972)

no-

tion

of

balanced

reciprocity,

that

is,

long-lasting

partnerships

maintained

by

continuing

social

obligations,

and

argues

that these

relationships

become

more

intense when

the outcomes

of

market ransactions

are unknown-that

is,

high-risk-and

can

only

be evaluated

ex

post

facto.

Equilibrating

relationships

are

minimally

built

on mutual

trust,

but

in

many

cases

may

be

furthersanctioned through personal friendship, kinship, compadrio, or other social bonds that

complement

economic

interaction.

Moreover,

the traditional

ethnographic

examples

such as

suki relations

in

the

Philippines

(Davis

1973;

Dannhaeuser

1983),

pratik

among

Haitian

women

(Mintz

1961),

and onibara

in

Nigeria

(Trager

1981)

demonstrate

that

these

relationships

are

fully

institutionalized

within

society

and

explicitly

recognized by

all

market

participants.

The

internal

logic

of

equilibrating

relationships

has

been discussed

from several

perspectives.

For

Mintz,

pratik

relations

generate

economies

of scale

in

a

highly competitive,

capital-scarce

market.

Tragerpresents

onibara

as

an anti-risk

mechanism

useful

in

long-distance

yam

trading

where there are

no

public

channels

of

information

about

supply

and demand.

. .

(1981:137).

Dannhaeuser's

study

of suki

relations

in the

Philippines

illustrates

how these

individual

strat-

egies

comprise

the

basic

mechanism

of marketchain

integration

from

supplier

to retailer to

customer:

Suki,

in

short,

is an

informal

way

to stabilize

commercial

relations

(Dannhaeuser

1983:52).

This

paper

analyzes

a

large regional

market

for

fruits and

vegetables

in Northeast

Brazil.

A

single

production

zone,

with its

local network

of

middlemen,

supplies

three

major

urban

centers.

As

in

many

other

markets

where risk

is

high

and infor-

mation

restricted,

these

middlemen

have

developed

equilibrating

relationships

to

impose

order

on an uncertain

environment.

These

relationships

and

their

un-

derlying logic

are discussed here. These

patterns

of

dyadic

ties are related to in-

dividual success

in the

market

and

to the

performance

of the

market

system

as a

whole.

The

analysis suggests

that

market

participants

use

familiar

social

instru-

ments-such

as

reciprocity-to

make sense

of an

uncertain

economic

environ-

ment.

[economic

anthropology,

markets,

exchange,

Northeast

Brazil,

agricultural

development]

694

american

ethnologist


3/17

Common to

this literature s the

hypothesis

that market

participants

perceive

indirect-usu-

ally long-term-benefits

in

yielding

some direct short-term

advantage.

To

mitigate

the

risks

inherent

in

a

marketing

enterprise,

the actors

interpret

mpersonal, competitive relationships

in

terms of familiar social and cultural

texts,

where trust

injects

a sense

of

predictability

into

out-

comes. As a

result,

market interaction

is

transformed;

it

becomes

personalized-to

the

per-

ceived mutual benefit of both

participants.

In this sense the market itself is but

part

of a wider

social

process whereby

people

carry

out the business of

everyday living.

This

paper

has

a

dual

objective.

It irst

contributes to

existing

ethnographic

literature

on

equi-

librating

relationships by

describing

a

fruit

and

vegetable

market in the

semiarid

Northeast

of

Brazil. The

Serra

da

Ibiapaba,

a

highland

production

zone

centrally

located

about

350

kilo-

meters

from the

coastal

city

of

Fortaleza,

is

the

principal

fruitand

vegetable

supplier

for

a

region

encompassing

the

states of

Ceari,

Piauf, Maranhao,

and Para. This market

was studied inten-

sively

during

1977-78,

during

which

time

surveys

of 62

middlemen

(about

one-half the

total)

and

61

vegetable producers

were carried

out.

There

were return visits in

1981 and 1987

to

assess

changes

in

the

market.

In

this

market,

equilibrating

relationships

shape

and

permeate

the

transactions of

buyers

and

sellers

all

along

the

market

chain.

They comprise

a form

of interaction that

is

socially recog-

nized,

long-lasting,

and

entails mutual

responsibility. Linguistically,

hese

social

and economic

ties

are

distinguished

as

fregues relationships

(the

term

fregues

in Brazilian

Portuguese

means

roughly

customer,

but with much heavier

connotations of

obligation

than

the

English

term

permits).

In this

analysis, fregues strategies

are

firstexamined in terms

of

individual

market

par-

ticipants

and the benefits

they

derive from such

interaction.

As

a second

objective,

this

paper

seeks

to

identify

the

relationship

of

individualized

equili-

brating strategies

to

the

performance

of the

market

system

as a whole. In

the

anthropological

literature,

detailed

studies of market

behavior

(forexample,

Davis

1973;

Plattner

1975) coexist

with

thorough

descriptions

of

regional

markets

(for

example,

Beals

1975;

Cook and

Diskin

1975;

Smith

1976).

This

analysis

examines

the

social

dynamics

that

bridge

human

behavior

and

the

functioning

of

the

system.

It

thus

focuses on

the

causal

relationships

between

individ-

ual,

risk-reducingstrategies

and the

ability

of the

market to

channel

goods

and

information.

Market

performance

is

a

technical

term,

first

formulated as a

measure of

market

efficiency

in

Bain's

(1959)

model of

industrial

organization.

In

this

model,

three

variables-structure,

con-

duct

(that

is,

behavior),

and

performance-are

causally

linked

in

a linear

fashion.1

Performance

is

described as the

system-wide

consequences

of

market

behavior,

and

the

evaluation

criteria

can

include

price

levels,

market

margins,

degree

of market

integration,

and

consumer

satisfac-

tion. In this case study of the Ibiapaba system, market integrationand marketstability are the

performance

criteria

under

consideration.

the

Ibiapaba vegetable

market,

Northeast Brazil

The

Northeast of

Brazil is a

nine-state

region

that

covers

about

18

percent

of

the total land

area and

has 39

million

inhabitants,

about 30

percent

of

the national

population.

Although

once the

economic

and

political

center

of the

country,

the

Northeast has

long

since

become

an

economically

marginalized

and

underdeveloped region

with

acute

problems

of

low

in-

come, endemic poverty, and precarious health conditions. Incontrast to the economically di-

versified

center-south

axis,

the

Northeast

remains

a

rural-based

society

whose

agriculture

is

characterized

by

a

highly unequal

distribution of

resources

among

subsistence

farms,

large

fa-

zendas,

and

export

crop plantations.

Periodic and

severe

droughts

occasion

regular

crises

of

survival

among

rural

inhabitants.

Despite

strong

rural-urban

population

flows,

Northeastern

cities have

little

industry

relative to

the

South,

and

both

unemployment

and

underemployment

constitute

serious

economic

problems.

markets

in

Northeast Brazil 695


4/17

The

Serra da

Ibiapaba

is

a

highland

plateau

that runs

just

east

of

the

Ceara-Piauf

border

squarely

in

the middle

of

the

vast semiarid

hinterland,

the sertao

(Figure

1).

It extends

about

100 kilometers

in

a north-south direction

and is about 60 kilometers

wide. At its eastern

edge,

the

plateau

rises to about 1000

meters

in

altitude,

which then declines toward the

west. In

contrast to the

sertao,

the

plateau

has substantial rainfall

during

the

moist winter

season;

for

this

reason,

the Serra

raditionally

has been a haven for

refugees

from the

drought

in the

neigh-

boring

sertao.

About

215,000

people

live on the

plateau's

4800

square

kilometers,

and

70

per-

cent of

the

economically

active

population

is in

agriculture

(CEPA

1987:25).

The

relatively

high population

density

of

the

plateau

has

engendered

a

minifundia

pattern

of

land

utilization,

where 90

percent

of the

landholdings

are

10

hectares

or less

(CETREDE

1976:175).

Under traditional

land-use

patterns,

farmers

produced

manioc

(for

processing

into

a

rough

flour)

and bush beans

on drier

soils,

while

sugar

cane

(converted

to

a rustic brown

N

Kt Inmters

4

- -

l

r%

Wt wI

WW'

+.

0

25

*

Municipio

eat

*

Municipio

district

---

Municipio

boundary

Mainnotional highway

Paved state

road

--Gravel

road

I

1Carrosco

C7

Humid

and/or

transition

$

Sertao

Figure

1. The

Serrada

Ibiapaba,

Ceara,

Northeast

Brazil.

696 american ethnologist


5/17

sugar

block called

rapadura)

was cultivated

in the

moist

valley

bottoms. The

region

also

sup-

plied

a

diversity

of

fruits,

principally

banana and

avocado.

Surrounded

by

the stark

panorama

of the

sertao,

the Serra

appears

lush

and

verdant with

its

permanent

water

sources and

tropical

vegetation.

In

fact,

these

ecological

differences

help

ex-

plain

the

Serra's

traditional role

in localized

exchange

networks

of

agricultural products.

His-

torically,

the

Ibiapaba

region

was isolated from the more

populated

coastal areas but econom-

ically

tied to

the

surrounding

sertao

(Fontenelle

1969).

Truckscarried

rapadura,

ruits,

and man-

ioc

flour to

population

centers in the

sertao and returnedwith

cowpeas,

livestock,

and manure

for

the cane fields.

During

the 1960s

sugar

cane

producers began

to feel a

slackening

of de-

mand

for

rapadura,

as refined

sugar

became more available. Local extension efforts initiated

programs

o introduce intensive

vegetable production,

principally

tomatoes,

and a

small

num-

ber of innovative farmers

began

to

experiment

with

the new

crops.

The

capital

city

of

Piauf,

Teresina

was

part

of this interior

exchange

network.

Small volume

middlemen took

sugar

cane

rum,

rapadura,

and fruits o this urban

market

350 kilometers

away

and

brought

back manufactured

wares,

dried meat and

offal,

and other consumer items. These

marketers o

Teresina,

pejoratively

called

maloqueiros

de

mil

quilos

(1000-kilo

marketeers),

began

to

transport

omatoes.2

They

encountered

a

strong

demand for

vegetable products, prin-

cipally

tomatoes,

and

through

the

agency

of these

middlemen,

the Serrabecame a

regular sup-

plier

to the

Teresina market.

What

began modestly

as

a

marketing experiment

by

a small

group

of middlemen soon blos-

somed into

a

major

transformation

of

local

agriculture.

Although

the traditional cane and man-

ioc

system

continued to

exist,

resources

shifted

rapidly

into

vegetable production.

Middlemen

then moved

into other

urban

markets,

and

production

spiraled upward. By

the middle

1970s,

the Serra had become the

major supplier

of

vegetables

for

Teresina,

Sao

Luis

(population,

564,000; distance, 600 kilometers), and Fortaleza (population, 1,588,000; distance, 350 kil-

ometers),

and a

partial supplier

for

Belem

(population,

1,121,000;

distance,

1000

kilometers).

This

expansion

from a

small,

regional

center

for

highland

products

into a

primary

vegetable

supplier

for four states

is

outlined

in

Table

1.

Residents

in

Ibiapaba

frequently

refer to these

agricultural

changes

as the tomato

fever.

Although

several

types

of

vegetables

are

cultivated,

the new

agriculture

is

associated

symbol-

ically

with

tomatoes,

the

dominant

crop. Vegetables

are

produced

on moist

valley

land and

irrigableslopes;

and

in

contrast to traditional

sugar

cane

practices, vegetable technologies

de-

mand an

intensive use

of

land and labor resources. Farmerswho

for

years

resisted the

intro-

duction of

fertilizersand chemical

products

on traditional

crops

have

readily accepted

the tech-

nological package associated with vegetable production, including fertilizer, chemical pest

control,

spacing,

and

improved

seed.

Most farmers

prefer

to

manage

several

relatively

small

fields

(average

plot

is

1.1

hectare)

at different

stages

of

the

productive cycle

and

located

in

different areas to

minimize

risks of disease. Two

seasons

are

distinguished-rainy

(December

Table1. Annual olume

of tomatoes

upplied hrough

he

Ibiapaba

market

ystem.

Annualvolumeof

marketedomatoes

metric ons)

Year

Fortaleza Teresina

Sao Luis

Belem

1974

1180.8 1302.1

617.8

474.3

1975 2440.5 1327.2 604.4 984.4

1976

6531.8

1869.6 759.7

2098.3

1977

6444.1

1869.4

971.1

966.3

1978

9239.5

2080.0 2540.7

1870.1

1979

10220.2 2624.7

2856.6

2002.5

Average

nnual

percentage

hange

80.2

16.0 44.8

53.5

Source:

Weberet al.

1978;

CEASA

markets in Northeast Brazil 697


6/17

to

June)

and

dry (July

o

November)-and

sharp

seasonal

supply

variations occur because of

production

difficulties

during

the

rainy

season

(Weber

et

al.

1978).

Nonetheless,

many

farmers

attempt

to have at

least some land

in

production

throughout

the

year.

The

shift

of

resources to

vegetables

has

occasioned

major changes

for

farmers. On the one

hand,

they

have

discovered

in their economic

environment new

opportunities

to increase in-

comes (Finan1981:141). On the other

hand,

input

and labor costs are

high,

the

crops perish-

able,

and

prices

often

unpredictable.

The

increased

integration

into

the market has

introduced

Ibiapaba

farmers

to

previously

unknown risks

related to both

production

and to

marketing.

The Serrada

Ibiapaba

has seven

political

units

(municipios)

of which six

produce

vegetables.

The

oldest

producing

municfpio,

Tiangua,

is

located on

a

major

trunk

road

connecting

Teresina

and

Fortaleza

(Figure

1),

while

the most recent

large producer,

Guaraciaba do

Norte is located

at

the far

end

of

the

Serra,

about 70 kilometers from

Tiangua.

In this

analysis,

market

patterns

from

these

two

production

zones and from

the three urban

markets

for which

Ibiapaba

is the

major

supplier

will

be described.

Despite

its

relatively

small and

homogeneous production

area,

the

Ibiapaba

market

system

has

developed

a

very

heterogeneous

structure. Itvaries

according

to

how several

critical market

functions are

divided

among participants.

Market

systems

organize

such functions as

assembly,

classification,

storage,

transportation,

and

debulking,

and the

market chain is

structured

by

combinations of middlemen that

perform

these services. Each urban

market has distinct char-

acteristics as

a result of

economic historical factors

unique

to

each

city.

Alternative chains

may

compete

to

supply

product

in

a

given

urban

market,

and

competing

chains

imply

different lev-

els and

distinct

types

of risk.

market

structures

in

the

Ibiapaba

region

In

the

Ibiapaba region,

middlemen move

in

and out

of

the market

system

with

great

fre-

quency.

Forman

and

Riegelhaupt

(1970)

have

noted

from

research elsewhere

in

the Northeast

that

marketing

attracts a

large

number of

people

in

areas

where

underemployment

is

great.

Fieldwork observations

suggest

that the total number

of

middlemen

in

the Serra varies

during

the

year

from

100 to

150,

depending

on

changing perceptions

of economic

opportunities

and

ease of market

entry.

The 1977-79

survey

of

Ibiapaba

middlemen classified marketers

by

both

function

and

economic

characteristics,

as described below.3

All

the interviewed marketers

came from

the

region

except

for one

vertically integrated

wholesaler located

in

Fortaleza.

The Ibiapabamarket is a rural-based, indigenous system, yet highly complex and variable.

From

a functional

perspective,

different

middlemen

in

the

system provide varying

combina-

tions

of market services.

In

some

cases,

a

single

middleman-here referredto as

nonspecial-

ized-performs

buying,

bulking, crating, transporting,

and resale functions. In other

cases,

middlemen

specialize

in some subset of market

functions.

Figures

2-4 outline the different

combinations

that

comprise

the

alternative

market structures for

Teresina,

Sao

Luis,

and For-

taleza,

respectively.

In

Teresina,

the

original

market

for

Ibiapaba vegetables,

the multifunction

nonspecialized

middleman

predominates.

These middlemen

maintain small-volume

operations. They pur-

chase their

produce

on the

farm,

classify,

crate,

and then

transport

t to

Teresina.

Upon

arrival

at the Teresina central marketin early morning, they sell theirvegetables a few crates at a time

to

large

numbers

of

retailers.

As

Figure

2

demonstrates,

the

wholesale sector

in

Teresina

re-

mains

underdeveloped.

Several

large-volume

middlemen market

directly

to

supermarkets,

which

account

for

about 20

percent

of total

supply.

Since

Sao

Luis

traditionally

depended

on

long-distance supply

lines for

many

basic

food-

stuffs,

an

oligarchy

of

large-volume

traders came to dominate urban

distribution networks.

These urban wholesalers

continue to control the

vegetable

market

in

Sao

Luis

(Figure

3),

and

698 american

ethnologist


7/17

TERESINA,PIAUI

- -

- -

Occasional

flow of

products

Figure

2.

Market

channels between

Ibiapaba

and the Teresina urban

market.

SAO

LUIS,

MARANHAO

90%

Specialized

So

Luis

20%

n

Rural

Assemblers

Supermorkets

90%

20%

10%

' Specialized

OI

Middlemen

u

0

Z

0

2a' u

a80%

Iblpobo

-Luis Urban

'Cooperatives

Wholesalers

Market

- --

-Occasional

flow

of

products

Figure

3.

Marketchannels between

Ibiapaba

and

the

Sao

Luis urban

market.

since

they prefer

to

deal

in

large-scale

transactions,

the

Ibiapaba

suppliers

tend to be

large-

volume middlemen themselves. To reduce the time and risk of purchasing from many small

producers

in

the

Serra,

hese

large-scale

firms

buy

from rural

assemblers,

middlemen who

spec-

ialize in

bulking, classifying,

and

crating

activities. The

assemblers

buy

vegetables

from

pro-

ducers

in

the

countryside

and

store them

in

warehouses

located

in

Tiangua

and

Guaraciaba.

On

prearranged

days,

the middleman arrives with his

truck and loads

it,

then

transports

the

vegetables

to

Sao Luisfor sale to the wholesalers. In

comparison

with

the Teresina

market,

Sao

Luis

middlemen are

fewer

in

number,

and

entry

into this

market is

limited

by

access to sub-

stantial

amounts of

capital.

In

Fortaleza,

a

more

complex

structureexists

(Figure

4).

Several

middlemen have

supply

con-

tracts

with the

supermarket

system,

which

accounts for about

20

percent

of the

total

volume

marketed.Also several urban wholesalers in Fortaleza have vertically integratedenterprises.

They

either rent land in

the Serra and install

sharecroppers,

or

they

directly

finance the

input

costs of small

independent

farmers. On

Mondays

and

Thursdays,

these

integrated

wholesalers

transport

heir

products

to

Fortaleza for

resale to urban

retailers. On

Tuesday

and

Friday

market

days,

nonspecialized

Ibiapaba

middlemen sell

to

urban wholesalers in

the

Fortaleza

market.

As the

market

unctions

vary

among

different

market

middlemen,

so do their

economic char-

acteristics. Two

major

criteria for

classifying

middlemen

along

an

economic

dimension

are

markets

in

Northeast Brazil 699


8/17

FORTALEZA,CEARA

Figure

. Market

hannelsbetween

Ibiapaba

nd the Fortaleza rbanmarket.

used in this study: scale-the average volume of vegetables marketed, and size-the level of

fixed

investment

in

the market

enterprise.

An

analysis

of economic information rom the

sample

easily

defined

two

groups-small

scale and

size,

and

large

scale and size. Between

these,

how-

ever,

lies a

more

ambiguous

residual

group

that sheds

light

on the

dynamics

of

marketing

in

Ibiapaba.

This intermediate

group

includes the middlemen who market a small volume but

own a

truck and middlemen who market a

large

volume but own no

capital equipment.

Table

2

summarizes this classification.

In

a

region

of

high unemployment, marketing

activities

constitute

a

common source of

in-

come. As

Table

2

indicates,

working

and fixed

capital requirements

for the

subgroup

I

are min-

imal and thus allow an

easy

and less risk-laden

entry

into the market. These middlemen tend

to be

young

and come from low-income families. Almost

invariably,

the available market for

low-capital beginners

is Teresina.

The absence of a wholesale market

in

Teresina reduces the

possibilities

for

large-scale

marketing

outside the

supermarket

system;

thus,

middlemen who

wish to increase the size of their

enterprise

can

opt

for two

strategies.

One is to

purchase

a truck

and

rent

space

to Teresina-bound

colleagues;

the other

such

strategy

is to increase

working

capital

and shift to a

larger

market,

such as Fortaleza or Sao

Luis.

Subgroup

II is

comprised

of

middlemen who have

adopted

these market

strategies.

In

the last

group

are found the

heavily capitalized,

large-volume

middlemen concentrated

in

the

markets

with

strong

urban wholesale

structures. These marketershave an

aggressive

en-

trepreneurialspirit

and sizable amounts

of initial

capital, including

a truck.

Several

have com-

plementary

incomes outside their market

activities.

Thus,

it is difficult to

stereotype

the middleman

in the

Ibiapaba

market

system.

Differentfunc-

tional

types operate

in different

markets,

and the functional

typology

is furthercrosscut

by great

variation

in

the economic

characteristics of the

market irms.

Some,

such

as Teresina

marketers,

perform

a wider

range

of market

unctions

yet

remain small-volume.

Others sell

large quantities

of

product

to a

more restricted market.

The Fortaleza

market has

a

dual

structure that varies

according

to the

day

of the

week. Such

widespread

variation

in channel structure between

marketsand within markets further

mplies

that middlemen face

varying

costs and risks

at dif-

ferent links of each chain.

It is as a

response

to these uncertainties

that the

fregues equilibrating

relationships

become

significant.

market risks and

fregues strategies

Ibiapaba

middlemen are

nightriders.

They prepare

their loads

during

the

day

of

the

journey,

then travel

at

night

over

long

distances

on

precarious

roads. Serious

accidents

and even death

are not uncommon

consequences

of this routine.

Despite

such

dangers

to

life and

limb,

mid-

700 american

ethnologist


9/17

Table 2. Economic

classification

of

Ibiapaba

middlemen

according

to

economic

cha

Economic

characteristics

(medians)

Summer

Winter

Working

Fixed

Total

For

volume

volume

capital

capital

debt

Subgroups

kgs/trip

1978

Cr$

1.

2125

1900

6333

840

286

Ilb

9500

7100

20333

5250

17000

IIIc 10350 7550 41000 294600 132500

P-Value

(Kruskal-Wallis)

Cr$

1.00

(Farmgate)

margins margins

declared

declared above

declared

Cr$per

kiloof

tomatoes

Percent

f

totalobservations

Fortaleza 0.61

(Tiangua)b

1.00

(N

=

64)

-

0.39

35.9

17.2

Fortaleza 2.60

(Guaraciaba)c

1.00

(N

=

85)

1.60

2.4

76.5

Teresina 3.30

(Tiangua)

1.80

(N

=

64)

1.50 18.8

62.5

Sao

Luis 2.58

(Guaraciaba)

2.10

(N

=

78)

0.48 43.5 43.4

Sources:SIMA

Servico

Nacionalde

Informacao e

Mercado

Agrfcola);

biapaba

Middleman

roject

aAlI

prices

n 1978 cruzeiros

Cr$)

bOnlyTuesday

nd

Friday

market

ays

cOnlyMonday ndTuesdaymarket ays

Ethnographic

nterviews

help

to

understand the

significance

of

the

price

and

market

margin

information. Middlemen

agreed

that

there was little movement

between markets

in

response

to

price

signals.

Even

those

marketerswho

travel to Sao Luisand

pass through

Teresina

en route

would

not be

tempted by

higher profits

to

unload

part

of their

cargo

in

the closer

market. In

effect,

middlemen considered

it

foolhardy

to switch destinations in

response

to

wholesale

price

differences,

because

the risk of

entering

a new market without a confirmed

buyer

was

simply

too

high.

And

the time and

effort needed to cultivate

new

reciprocal relationships

were suffi-

ciently demanding

to dissuade

impulsive

leaps

from one market to another.

As an illustrativecase in point, the growers' cooperative in Guaraciaba do Norte decided to

begin marketing

its

members'

production

in the Sao

Luis market.

Cooperative

officials con-

tacted a wholesale

buyer

and

made

arrangements

for

a

truckload

at an

agreed price.

Some

Ibiapaba

middlemen viewed

this new

colleague

as a threat

to their market

position,

but most

anticipated

the-in

their minds-inevitable

outcome.

After several

trips,

the

cooperative rep-

resentative

unwittingly accepted

a check without

funds from the

Sao Luis

buyer,

and

the co-

operative-its capital

lost-stepped

out of the

market.

This

example

demonstrates the

types

of

effective blocks to market

entry

that can reduce

integration.

The

impact

of

fregues

relationships

on the

market

system

now becomes

a relevant theoretical

issue. It is

possible

that as

a

strategic

response

to

existing

market

risks,

this

equilibrating

inter-

action imposes a measure of rigidityon the system. Figure5 presents a conceptual model of

how

equilibrating

relationships

can influence

market structure. Under

ideal conditions of

per-

fect

competition,

buyers

and sellers

can

interact in

any

combination

in

any

marketplace.

But

where

conditions

of risk

predominate,

middlemen

devise

strategies

to carve

out and

segment

the market.

In

effect,

entry

into alternative

markets is not

open

and

free,

as economic models

would have

it,

because the

market

itself is

organized

more on

strong dyadic principles

of re-

ciprocity

ratherthan

on

impersonal

market

exchange. Simply

stated,

Ibiapaba

middlemen do

not shift

from

one

market to

another

in

response

to

price

changes.

It s indeed

possible

that other

factors-such

as

capital requirements-restrict

entry

into

spe-

cific

markets,

and that

poorly

structured

market

channels,

rather

han

behavioral

strategies,

are

responsible for marketsegmentation. Causal linkages are not easy to establish because fregues

bonds are themselves

a

response

to

existing

conditions.

However,

Schwimmer

has

suggested

that in

Ghanian

fish

and

yams

markets

enduring

market

relationships

constitute

an

aspect

of

marketstructure

n themselves

and

have an effect

upon

the level

of

competition

and the

regu-

lation of

existing supply

and distribution

structures

(1979:699).

So,

too,

in the

Ibiapaba

sys-

tem,

the

fregues

agreements

act

as

a

glue

in which economic

transactions

are

set-with

a

dampening

effect

upon

competitive

forces.

706 american ethnologist


15/17

PERFECT

COMPETITION

Sao

Luis

Teresina

Fortoleza

BARRIERS TO ENTRY

(Equilibrating

relations)

Sao

Luis

Teresina

Fortolezo

* Ibiapoba middlemen

()

Urban

wholesalers

Figure

.

A

conceptual epresentation

f

the

impacts

f

equilibrating

elations n

market

ntry.

The

same

glue,

however,

also

enhances

stability

in

the market.

The

complex

arrangements

among

market

participants,

including

farmers,

certainly

function

to maintain the flow

of

prod-

ucts and

information under conditions of

high uncertainty

and considerable risk. To some

ex-

tent,

this

stability

is achieved because the market is

organized

much

along

the lines of the

wider

society.

In

his book on

middleman

exploitation

(1959),

Chaturvedi

argues

that relative

positions

of marketparticipants n society also structure he distributionof marketpower. If,then, North-

east

Brazil is a

society

characterized

by unequal positions

of

power

articulated

through recip-

rocal

interaction,

the

Ibiapaba

marketers have learned to survive in

their market

by

following

the same

survival tactics

practiced

in all

their social interaction.

summary

The

Serra da

Ibiapaba

is an

agricultural region

that

has

experienced

rapid change

over the

last

two decades. This

process

might

well

be described as

economic

development

insofar as

farm

technologies

have

modernized and farmer

ncomes

have

increased.

Marketmiddlemen-

much maligned in many agriculturalsocieties-have played a dynamic role in this transfor-

mation,

by promoting

the

increased

integration

of local farmers into a

market

economy.

This

change

has

occurred in a

precarious

environment of

uncertainty

and

risk,

and

market

partici-

pants

have had

to

develop

adequate

risk

management

behaviors

to assure their

economic

sur-

vival.

This

advance of the

market

economy

in

Ibiapaba

has followed traditional

patterns

of

orga-

nization.

Middlemen and

farmers

alike have

resorted to time-tested

social

relationships

to in-



16/17

terpret

and determine their economic

transactions.

The

fregues

bonding

patterns

have

provided

the

necessary

instruments to work

within the

context of

high

risks

and,

consequently,

to en-

hance

individual success. These social

ties

ultimately represent

a trade-off

in

which short-term

gain

is

sacrificed

for

permanence.

At

a

system

level,

analogous

trade-offs

are

observed. The

Ibiapaba

market does not adhere

to the ideal model of an

integrated

market because this

locally

understood

reciprocity

rather

than

impersonal

exchange

organizes

the

participants.

The result of these

relationships

is

that

the market

maximizes

stability

instead of

integration.

This

regional

market resembles

many

others in

rural societies. The

principles

of market ex-

change

do not

gain

full dominance even when the

economy

is

undergoing

major

change.

Ex-

isting analytical

models of

economic

behavior

only

approximate

the

reality

of

market interac-

tion,

because

participants modify impersonal

exchange

to

conform to familiar social

surround-

ings.

It is this

effort to recreate

society

within the market

system

that best

explains

the behavior

of

Ibiapaba

middlemen

and their

fregueses.

notes

Acknowledgments.

A

version of this

paper

was

presented

to the

1985

Annual

Meetings

of the

American

Association

for the Advancement

of

Science

in Los

Angeles,

California. Carlos

Velez-lbanez

and

James

Greenberg

have

provided

critical

commentary

on

these

ideas;

I

wish to thank and

exonerate

them

from the

responsibility

for

possible

error.

'The

structure-conduct-performance

model has been

applied frequently

to

agricultural

market studies

in

developing

countries. The

dominant

logic

is that the structureof a

market-measured

primarily

n terms

of

the number

of

buyers

and sellers and ease of

entry-results

in a set of

predictable

market

behaviors

(monopoly

pricing,

for

example),

which in turn determines the

efficiency

of

the market

n

distributinggoods

and

information. The model has

provided

useful

analytical categories;

however,

the

unilineal causation

poorly

reflects the

reality

of market

dynamics.

2Maloqueiros

are a

locally recognized

institution

in

the Serra da

Ibiapaba.

The

derivation

of the

word

itself

provides

insights

into

its social

significance.

In

the

Northeast,

a

maloca is a

band

of

suspicious-

acting

marginals

who

live out in the brush and merit no trust. The

maloqueiro

is not

usually

considered a

member of

mainstream

society.

3This

study

has

adopted

a technical

vocabulary

to

describe

the

middleman

sample,

discriminated

by

function.

The

following

table summarizes

this

functional

terminology:

Middleman

Sample

N Functions

Urban market

Specialized

rural

Assembly,

Fortaleza,

assemblers

9 Classification

Sao

Luis

Nonspecialized Assembly, Teresina,

middlemen

41

Classification,

Fortaleza

Transportation,

Debulking

Specialized

Transportation

Fortaleza,

middlemen

11 Sao

Luis

Integrated

Production,

Fortaleza

wholesaler

1

Assembly,

Classification,

Transport,

Debulking

Source:

Ibiapaba

Middleman

Project

4Allprice data in this analysis are for first-class tomatoes. Although middlemen also marketother vege-

tabes,

tomatoes are the dominant

crop

and constitute more

than half the

weight

of

any

truckload.

Thus,

this

analysis

assumes that

price

variation for the

secondary vegetables

does not

significantly

differ from that

of

tomatoes,

and

that middlemen

will

seek

to attain the

same

per-kilo

margin

for these

vegetables

that

they

do

for

tomatoes.

SThe

Bel6m

market was not included

in this

analysis

because

it is has a

seasonal demand

for

Ibiapaba

tomatoes. The

tomatoes

from

Belem's other

major

supplier,

Sao

Paulo,

are treated as a differentiated

prod-

uct

by

consumers,

but not so in

published

price

data.

It is

thus

impossible

to

separate

these

two

products

in

the market

at a

given

time.

708

american

ethnologist


17/17

6Thedeclared

minimum

margins

are

reported

from interviews with middlemen

to the different

markets.

The declared

minimum

was

expressed

as

the difference between

buying

and

selling prices

that would

cover

market

expenses

and

provide

the

necessary

returns o remain in the business. Estimated

margins

were

cal-

culated from

the

price

data,

using

wholesale

and

producer

prices

(the

latter

agged

one

day

to reflect

actual

time of

purchase).

references cited

Bain,

Joe

S.

1959

Industrial

Organization.

First

edition. New York:

John

Wiley

and Sons.

Beals,

Ralph

L.

1975

The Peasant

Marketing System

of

Oaxaca,

Mexico.

Berkeley: University

of

California

Press.

CEPA

(Comissao

Estadualde

Planejamento

Agrfcola)

1987

Relat6rio de Avaliacao do

Projeto

de Desenvolvimento Rural

Integrado

da

Ibiapaba.

Analise das

Tendencias da

Economia

Agricola

Regional.

Volume

2.

Fortaleza.

CETREDE

(Centro

de Treinamento em Desenvolvimento Economico

Regional)

1976

A

Serrada

Ibiapaba.

Fortaleza,

Ceara.

Chaturvedi,

J.

N.

1959 The Theoryof Marketingin Underdeveloped Countries. Allahabad: KitabMahal.

Cook,

Scott,

and Martin

Diskin,

eds.

1975

Markets

n

Oaxaca.

Austin:

University

of

Texas Press.

Dannhaeuser,

Norman

1983

Contemporary

Trade

Strategies

in the

Philippines.

New Brunswick:

Rutgers

University

Press.

Davis,

William G.

1973

Social Relations in a

Philippine

Market:

Self Interest

and

Subjectivity.

Berkeley: University

of

California Press.

Finan,

Timothy

J.

1981

Peasant Middlemen and Market Processes

in

Northeast

Brazil.

Ph.D.

dissertation. Ann

Arbor:

University

of

Michigan

Microfilms.

Fontenelle,

L. F.

Raposo

1969

Rotina e Fome em

uma

Regiao

Cearense. Fortaleza:

Imprensa

Universitariado

Ceara.

Forman,Shepard,and Joyce Riegelhaupt

1970

Market Place and

Marketing

System:

Toward

a

Theory

of

Peasant Economic

Integration.

Com-

parative

Studies in

Society

and

History

12(2):188-212.

Mintz,

Sidney

1961

Pratik:Haitain Personal

Relationships.

Proceedings

of the Annual

Spring

Meetings

of

the

Amer-

ican

Ethnological Society.

pp.

54-63. Seattle:

University

of

Washington

Press.

Plattner,

Stuart

1975

The Economics of

Peddling.

In Formal

Methods

in

Economic

Anthropology.

S.

Plattner,

ed.

pp.

55-76.

Washington,

DC:

American

Anthropological

Association.

1983

Economic Custom in

a

Competitive

Market Place.

American

Anthropologist

85:848-858.

1985

Equilibrating

Market

Relationships.

In

Marketsand

Marketing.

Monographs

in

Economic

Anthro-

pology

No.

4.

S.

Plattner,

ed.

Landham:

University

Press. of America.

Sahlins,

Marshall

1972 Stone Age Economics. Chicago: Aldine Press.

Schwimmer,

Brian

1979

MarketStructure

and Social

Organization

in

a Ghanian

Marketing

System.

American

Ethnologist

6(4):682-701.

Smith,

Carol A.

1976

Regional

Economic

Systems:

LinkingGeographical

Models and

Socioeconomic

Problems. In Re-

gional

Analysis,

Vol.

I,

Economic

Systems.

Carol

A.

Smith,

ed.

pp.

3-68. New York:

Academic

Press.

Southworth,

V.

Roy,

William 0.

Jones,

and

Scott

R.

Pearson

1979

Food

Crop

Marketing

in

Atebubu

District,

Ghana. Food Research

Institute Studies

xvii(2):157-

196.

Trager,

Lillian

1981

Customers and

Creditors: Variations in

Economic Personalism in a

Nigerian

Marketing System.

Ethnology

20:133-146.

Weber, Michael T., Roberto de Azevedo, and Izairton Martinsdo Carmo

1978

Analise Potencial

de Mercado

da

Producao

de Tomate na

Ibiapaba,

Ceara.

Fortaleza:

Universi-

dade

Federal

do

Ceara.

submitted

27

February

1987

revised

version

submitted 24

February

1988

accepted

25

April

1988


FINAN, Timothy J. - Market Relationships and Market Performance in Northeast Brazil

Documents

Transcript of FINAN, Timothy J. - Market Relationships and Market Performance in Northeast Brazil