Do intermediaries sweeten the deal? An inquiry into the activities of intermediaries and their effect on small and medium producers within the Cocoa Value Chain in Ecuador

This research paper looks at the Global Value Chain of Cocoa in Ecuador and the relationships that exist between its actors. This study focuses on the role that intermediaries have within the Cocoa Value Chain in Ecuador and the effect that their actions have on the cocoa production of small and medium producers. The interest of this research is to identify how such actions enable or limit opportunities for the development of small and medium cocoa producers in Ecuador. The Transaction Cost Economics theory is the main analytical tool used for the analysis of the transactions that take place between intermediaries and cocoa producers. Since intermediaries are identified as the main buyers of cocoa in Ecuador, an analysis for this phenomenon is also performed during this project. Also taken into consideration is the power and information asymmetries that exist in the Cocoa Value Chain in Ecuador and the reasons for this situation. To this end, this research paper aims to better inform policy makers, as well as, to formulate academic knowledge on the rationale of middlemen and, small and medium cocoa producers regarding the relationships and transactions that exist between them.