This paper uses a duration analysis based on adoption data spanning more than 25 years from six communities in the Central Highlands of Guatemala. The analysis explores how household characteristics and external trends play into both the adoption and diffusion processes of non-traditional exports among smallholders. Adoption was initially widespread and rapid, which led nontraditional exports to be hailed as a pro-poor success, reaching all but the smallest landholders. However, over time more than two-thirds of adopters eventually dropped out of production of nontraditional exports. Based on the analysis, production of nontraditional exports appears to have delivered less prosperity to adopters than initially promised. Although smallholders may be enticed into entering into nontraditional exports markets when conditions are favorable, they may lack the capacity to overcome the difficulties that inevitably arise in complex types of cultivations and in highly variable global agricultural markets. Governmental and non-governmental organizations can attempt to mitigate these difficulties, but market forces may overwhelm their efforts, with some adopters still unable to compete in global markets.

This study documents the long-term welfare effects of household non-traditional agricultural export (NTX) adoption. The analysis uses a unique panel dataset, which spans the period 1985-2005, and employs difference-in-differences estimation to investigate the long-term impact of non-traditional agricultural export adoption on changes in household consumption status and asset position in the Central Highlands of Guatemala. Given the heterogeneity in adoption patterns, the analysis differentiates the impact estimates based on a classification of households that takes into account the timing and duration of non-traditional agricultural export adoption. The results show that while, on average, welfare levels have improved for all households irrespective of adoption status and duration, the extent of improvement has varied across groups. Long-term adopters exhibit the smallest increase in the lapse of two decades, in spite of some early gains. Conversely, early adopters who withdrew from non-traditional agricultural export production after reaping the benefits of the boom period of the 1980s are found to have fared better and shown greater improvements in durable asset position and housing conditions than any other category.

This paper uses a duration analysis based on adoption data spanning more than 25 years from six communities in the Central Highlands of Guatemala. The analysis explores how household characteristics and external trends play into both the adoption and diffusion processes of non-traditional exports among smallholders. Adoption was initially widespread and rapid, which led nontraditional exports to be hailed as a pro-poor success, reaching all but the smallest landholders. However, over time more than two-thirds of adopters eventually dropped out of production of nontraditional exports. Based on the analysis, production of nontraditional exports appears to have delivered less prosperity to adopters than initially promised. Although smallholders may be enticed into entering into nontraditional exports markets when conditions are favorable, they may lack the capacity to overcome the difficulties that inevitably arise in complex types of cultivations and in highly variable global agricultural markets. Governmental and non-governmental organizations can attempt to mitigate these difficulties, but market forces may overwhelm their efforts, with some adopters still unable to compete in global markets.

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