At least initially, NTX production led to large increases in earnings among cooperative members whose total expenditures were 20 percent higher than those of non-members (von Braun et. al., 1989a).<sup>7</sup> On a per capita basis, cooperative members were found to spend more on both food and nonfood items, and the average value of their consumption of own-production was also higher than the comparable figure for non-members.<sup>8</sup> The positive spillover effects of NTX adoption on staple food production, mainly through higher fertilizer and labor use per hectare, seemed temporarily to put to rest concerns over the potentially negative impact of NTX production on food security.

Since “comparative advantage may not be a ‘given’ but rather the product of land tenure, investment, state policies, and institutional arrangements” (Barham et. al., 1992: 54), numerous risks to the sustainability of NTX production among smallholders were identified in the midst of the boom. These risks included (i) increased dependence on market conditions for farm inputs and outputs, (ii) potential crop failures and agronomic problems, (iii) heightened price variability and deterioration due to increased regional competition as well as market saturation for export crops, and (iv) breakdown of institutions that smallholders rely on for credit, technical assistance and marketing of agricultural produce (von Braun et. al., 1989a; von Braun and Immink, 1994; Thrupp et. al., 1995; Barham et. al., 1995; Carter and Barham, 1996). Throughout the 1990s, the simultaneous realization of several aforementioned risks strained the risk-bearing ability of Santiago Sacatepéquez’s NTX producers, raising concerns about the sustainability of the development impact of NTX production.

Starting in the late 1980s, farm-gate prices for NTXs started to decline in real terms due to increased regional competition and high rates of domestic inflation. As seen in Figure 1, this trend continued throughout the 1990s and into recent years. In particular, the 2005 survey indicates that close to 60 percent of the former adopters cited uncertain and low prices as their primary reason to stop cultivating snow peas. Production costs also surged in the medium-term, in part due to the currency devaluation and elimination of implicit import subsidies for agricultural inputs (Immink et. al., 1995). The excessive use of pesticides led to increased pesticide resistance that required more pesticide applications, leading to a substantial increase in the cost of NTX production. Excessive agrochemical use also contributed to increasing soil degradation and lower productivity which, paradoxically, led to the curtailing of plot rotation practices – a natural method to eliminate pest and increase yields – resulting in even lower productivity.<sup>9</sup>

> 7 In 1985, the net returns per hectare of snow peas were, on average, 15 times greater than those of maize, which is the staple crop in the surveyed communities, and 60 percent higher than net returns from traditional vegetables produced for local markets The high capital-intensity of NTX production, hence the importance of rural credit, was also evident from the fact that per hectare input costs of snow peas were 13 times as high as those of maize (von Braun et. al., 1989a).

> 8 Despite the higher levels of food expenditures among cooperative members cooperative membership did not lead to significant improvements in children’s nutritional status and it was not a statistically significant determinant of household food budget share (von Braun et. al., 1989a; von Braun and Immink, 1994)

> 9 The survey data indicates that while the average pounds of snow peas production per hectare was 4,906 in 1985, the respective figure was 3,537 by 2005, representing close to 30 percent decline.

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