Do initiatives for collective action drive benefits for smallholders? : comparing agro-based clusters and cooperatives in the Philippines cacao sector : a thesis presented in partial fulfilment of the requirements for the degree of Master of Agribusiness at Massey University, Palmerston North, New Zealand

Abstract

The Philippines cacao sector is an emerging industry constrained by low productivity and the marginalization of smallholders due to limited bargaining power. To address these challenges, the government fosters collective action through agro-based clusters (ABC) and cooperatives. While both are recognized as vehicles for rural transformation, comparative analysis on organizational structures as drivers of farmer benefits is still lacking. This study examined how the structure of ABCs and cooperatives influence the benefits received by smallholder cacao farmers in the Davao region. A theoretical framework was developed linking organizational structures to four latent constructs of benefits: financial and economic, social, farm, and environmental performance. Using a mixed methods approach, the study combined case studies of two ABCs and two cooperatives with survey data from 186 farmers. Exploratory Factor Analysis identified the four benefit constructs, and the Wilcoxon-Mann-Whitney test assessed the differences between organizational forms. Results showed unique structural drivers of farmer benefits. ABCs, shaped by flexible membership and a coordinated network of firms and stakeholders, delivered better social, farm, and environmental performance using effective knowledge transfer, product and process upgrading, and supporting sustainable practices. By comparison, cooperatives founded on formal membership, democratic governance, and member-sourced capital, outperformed ABCs in financial and economic benefits by providing accessible financing, reduced input costs, and a stable market. Variations between organizations underscore how structural mechanisms and investment horizons drive farmer outcomes. Key insights provided evidence that organizational attributes and maturity level shaped benefit portfolios, suggesting that organizational support should be tailored to each organizational form rather than imposing one model. Policies should promote hybrid organizational models, strengthen cooperative governance through safeguards enacting rules to enhance member representation and accountability, and codify inclusive policies in buyer-supplier networks in ABCs. Recommendations support bundled services, combining learning hubs with financing, and emphasizing value chain integration that enhances competitiveness and sustainability to smallholder cacao farmers. This study adds qualitative and quantitative evidence on collective action models to the agribusiness literature. It also provides practical recommendations for policymakers, development agencies, and organization leaders aiming to integrate smallholders into high value markets.