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Spillovers from modern supply chains to traditional markets: product innovation and adoption by smallholders

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  • Christin Schipmann
  • Matin Qaim
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    Abstract

    There is an emerging body of literature analyzing how smallholder farmers in developing countries can benefit from modern supply chains. However, most of the available studies concentrate on export markets and fail to capture spillover effects that modern supply chains may have on local markets. Here, we analyze the case of sweet pepper in Thailand, which was initially introduced as a product innovation in modern supply chains, but which is now widely traded also in more traditional markets. Using survey data from smallholder farmers and econometric techniques, we show that sweet pepper cultivation contributes significantly to higher household incomes. Strikingly, at this stage, participation in modern supply chains does not lead to higher incomes than supplying sweet pepper to traditional markets. However, the results also indicate that missing land titles, weak infrastructure conditions, and limited access to information constituted serious constraints during the early phases of sweet pepper adoption. Such constraints need to be overcome, so that smallholder farmers are better prepared for the prompt reactions needed under rapidly changing market conditions. Copyright (c) 2010 International Association of Agricultural Economists.

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    Bibliographic Info

    Article provided by International Association of Agricultural Economists in its journal Agricultural Economics.

    Volume (Year): 41 (2010)
    Issue (Month): 3-4 (05)
    Pages: 361-371

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    Handle: RePEc:bla:agecon:v:41:y:2010:i:3-4:p:361-371

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    Cited by:
    1. Grovermann, Christian & Schreinemachers, Pepijn & Berger, Thomas, 2012. "Private and Social Levels of Pesticide Overuse in Rapidly Intensifying Upland Agriculture in Thailand," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 126341, International Association of Agricultural Economists.
    2. Gómez, Miguel I. & Ricketts, Katie D., 2013. "Food value chain transformations in developing countries: Selected hypotheses on nutritional implications," Food Policy, Elsevier, vol. 42(C), pages 139-150.
    3. Rao, Elizaphan J.O. & Brummer, Bernhard & Qaim, Matin, 2011. "Farmer Participation in Supermarket Channels, Production Technology, and Efficiency: The Case of Vegetables in Kenya," Discussion Papers 113508, Georg-August-Universitaet Goettingen, GlobalFood, Department of Agricultural Economics and Rural Development.
    4. Abebe, Gumataw K. & Bijman, Jos & Pascucci, Stefano & Omta, Onno, 2013. "Adoption of improved potato varieties in Ethiopia: The role of agricultural knowledge and innovation system and smallholder farmers’ quality assessment," Agricultural Systems, Elsevier, vol. 122(C), pages 22-32.
    5. Schipmann, Christin & Qaim, Matin, 2011. "Supply chain differentiation, contract agriculture, and farmers’ marketing preferences: the case of sweet pepper in Thailand," Discussion Papers 108349, Georg-August-Universitaet Goettingen, GlobalFood, Department of Agricultural Economics and Rural Development.
    6. Rao, Elizaphan J.O. & Qaim, Matin, 2011. "The supermarket revolution and impacts on agricultural labor markets: Empirical evidence from Kenya," Discussion Papers 107745, Georg-August-Universitaet Goettingen, GlobalFood, Department of Agricultural Economics and Rural Development.
    7. Reardon, Thomas, 2011. "The global rise and impact of supermarkets: an international perspective," Conference Proceedings 2011 125312, Crawford Fund.
    8. Schipmann, Christin & Qaim, Matin, 2011. "Modern food retailers and traditional markets in developing countries: Comparing quality, prices, and competition strategies in Thailand," Discussion Papers 108348, Georg-August-Universitaet Goettingen, GlobalFood, Department of Agricultural Economics and Rural Development.
    9. Rao, Elizaphan J.O. & Qaim, Matin, 2013. "Supermarkets and agricultural labor demand in Kenya: A gendered perspective," Food Policy, Elsevier, vol. 38(C), pages 165-176.
    10. Ito, Junichi & Bao, Zongshun & Su, Qun, 2012. "Distributional effects of agricultural cooperatives in China: Exclusion of smallholders and potential gains on participation," Food Policy, Elsevier, vol. 37(6), pages 700-709.
    11. Rao, Elizaphan J.O. & Qaim, Matin, 2011. "Supermarkets, Farm Household Income, and Poverty: Insights from Kenya," World Development, Elsevier, vol. 39(5), pages 784-796, May.

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