The Housewives Groups of Northern Thailand: An Analysis of Performance

Abstract

The food industry in Thailand comprises various types of food manufacturers, including local processors who produce so-called "cottage foods". The cottage food processing industry mainly comprises community enterprises such as the "housewives groups". These groups consist of a number of housewives who combine their food processing activities in a particular district or village. They suffer from various weaknesses in operating their businesses. Three weaknesses are particularly evident: each group produces independently and experiences diseconomies of small scale; they lack knowledge about input supply and product marketing information; and, for many, their activities are limited by the rudimentary processing technologies they employ. A modified Structure-Conduct-Performance (SCP) framework is applied in order to assess the performance of housewives groups in fruit and vegetable processing. Microeconomic theory related to efficiency and productivity analysis is used to estimate a stochastic input distance model based on a translog functional form using data on multiple inputs used by housewives groups to produce multiple outputs of cottage food products. Technical efficiency is used as a measure of performance. Variables are included in the efficiency model to account for differences between the groups in financial and administrative structure, distinctive group attributes, member characteristics and level of government assistance provided. The efficiency model also includes variables according to the nature of membership of strategic alliances.