The aim of this research was to investigate the effectiveness of building long-term relationships and horizontal coordination on smallholder farmer performance. To this end we employed a cross-sectional study design using semi-structured interviews and structured questionnaires. 600 farmers involved in the production and marketing of mango were interviewed. Data were analyzed using structural equation modeling, factor analysis and ordinary least squares regression in order to understand the relationships between producers and buyers. Propensity score matching was used to analyze the impact of collective action on smallholder welfare and probit and negative binomial regressions were used to assess the determinants of smallholders' participation in collective sale and producer group governance.

First, the results showed that smallholders’ perceived price satisfaction is a multidimensional concept and the three dimensions price fairness, price reliability and relative price are important determinants of the producers’ trust in the buyer. Moreover, trust mediates the relationship between smallholders’ price satisfaction and producer loyalty to the buyer.
Second, we found that fairness, closeness and trust are key determinants of supplier/producer performance, while trust plays a moderating role between fairness and producer financial performance.
Third, we showed that collective action through producer organizations increases smallholder income and asset holdings thereby reducing rural poverty. Lastly, we found that the determinants of smallholders’ participation in collective sale are trust in other producer group members, the farmer’s level of education and the production capacity in terms of the number of trees owned. Similarly, group size, farmer age and trust in the producer group leadership were identified as determinants of smallholder’s participation in group governance.

The thesis concludes that improving the performance of value chains involving smallholders requires both increased collaboration and coordination through the building of long-term relationships between producers and buyers and effective horizontal coordination among farmers through producer organizations.