IDEAS home Printed from https://ideas.repec.org/a/eee/wdevel/v39y2011i5p784-796.html
   My bibliography  Save this article

Supermarkets, Farm Household Income, and Poverty: Insights from Kenya

Author

Listed:
  • Rao, Elizaphan J.O.
  • Qaim, Matin

Abstract

Summary The expansion of supermarkets in developing countries may have important implications for poverty and rural development. While previous studies have compared farm profits between participants and non-participants in supermarket channels, wider income effects have hardly been analyzed. Moreover, most existing studies do not account for structural differences between the two groups. We address these issues by using endogenous switching regression and building on a survey of vegetable farmers in Kenya. Participation in supermarket channels is associated with a 48% gain in average household income, which also contributes to poverty reduction. To realize these benefits on a larger scale will require institutional support.

Suggested Citation

  • 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.
    • Handle: RePEc:eee:wdevel:v:39:y:2011:i:5:p:784-796
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0305-750X(10)00169-5
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. John Humphrey & Neil McCulloch & Masako Ota, 2004. "The impact of European market changes on employment in the Kenyan horticulture sector," Journal of International Development, John Wiley & Sons, Ltd., vol. 16(1), pages 63-80.
    2. Warning, Matthew & Key, Nigel, 2002. "The Social Performance and Distributional Consequences of Contract Farming: An Equilibrium Analysis of the Arachide de Bouche Program in Senegal," World Development, Elsevier, vol. 30(2), pages 255-263, February.
    3. Maertens, Miet & Swinnen, Johan F.M., 2009. "Trade, Standards, and Poverty: Evidence from Senegal," World Development, Elsevier, vol. 37(1), pages 161-178, January.
    4. Solomon Asfaw & Dagmar Mithöfer & Hermann Waibel, 2009. "EU Food Safety Standards, Pesticide Use and Farm‐level Productivity: The Case of High‐value Crops in Kenya," Journal of Agricultural Economics, Wiley Blackwell, vol. 60(3), pages 645-667, September.
    5. Moustier, Paule & Tam, Phan Thi Giac & Anh, Dao The & Binh, Vu Trong & Loc, Nguyen Thi Tan, 2010. "The role of farmer organizations in supplying supermarkets with quality food in Vietnam," Food Policy, Elsevier, vol. 35(1), pages 69-78, February.
    6. Ricardo Hernández & Thomas Reardon & Julio Berdegué, 2007. "Supermarkets, wholesalers, and tomato growers in Guatemala," Agricultural Economics, International Association of Agricultural Economists, vol. 36(3), pages 281-290, May.
    7. Christin Schipmann & Matin Qaim, 2010. "Spillovers from modern supply chains to traditional markets: product innovation and adoption by smallholders," Agricultural Economics, International Association of Agricultural Economists, vol. 41(3‐4), pages 361-371, May.
    8. Minten, Bart & Randrianarison, Lalaina & Swinnen, Johan F.M., 2009. "Global Retail Chains and Poor Farmers: Evidence from Madagascar," World Development, Elsevier, vol. 37(11), pages 1728-1741, November.
    9. Miyata, Sachiko & Minot, Nicholas & Hu, Dinghuan, 2009. "Impact of Contract Farming on Income: Linking Small Farmers, Packers, and Supermarkets in China," World Development, Elsevier, vol. 37(11), pages 1781-1790, November.
    10. Keith O. Fuglie & Darrell J. Bosch, 1995. "Economic and Environmental Implications of Soil Nitrogen Testing: A Switching-Regression Analysis," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 77(4), pages 891-900.
    11. Thomas Reardon & C. Peter Timmer & Christopher B. Barrett & Julio Berdegué, 2003. "The Rise of Supermarkets in Africa, Asia, and Latin America," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(5), pages 1140-1146.
    12. Michael Lokshin & Zurab Sajaia, 2004. "Maximum likelihood estimation of endogenous switching regression models," Stata Journal, StataCorp LP, vol. 4(3), pages 282-289, September.
    13. David Neven & Thomas Reardon, 2004. "The Rise of Kenyan Supermarkets and the Evolution of their Horticulture Product Procurement Systems," Development Policy Review, Overseas Development Institute, vol. 22(6), pages 669-699, November.
    14. Solomon Asfaw & Dagmar Mithöfer & Hermann Waibel, 2010. "Agrifood supply chain, private‐sector standards, and farmers' health: evidence from Kenya," Agricultural Economics, International Association of Agricultural Economists, vol. 41(3‐4), pages 251-263, May.
    15. Maddala, G.S., 1986. "Disequilibrium, self-selection, and switching models," Handbook of Econometrics, in: Z. Griliches† & M. D. Intriligator (ed.), Handbook of Econometrics, edition 1, volume 3, chapter 28, pages 1633-1688, Elsevier.
    16. Andrew Dorward, 2001. "The Effects of Transaction Costs, Power and Risk on Contractual Arrangements: A Conceptual Framework for Quantitative Analysis," Journal of Agricultural Economics, Wiley Blackwell, vol. 52(2), pages 59-73, May.
    17. Mergenthaler, Marcus & Weinberger, Katinka & Qaim, Matin, 2009. "The food system transformation in developing countries: A disaggregate demand analysis for fruits and vegetables in Vietnam," Food Policy, Elsevier, vol. 34(5), pages 426-436, October.
    18. Lee, Lung-Fei, 1978. "Unionism and Wage Rates: A Simultaneous Equations Model with Qualitative and Limited Dependent Variables," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 19(2), pages 415-433, June.
    19. Rivers, Douglas & Vuong, Quang H., 1988. "Limited information estimators and exogeneity tests for simultaneous probit models," Journal of Econometrics, Elsevier, vol. 39(3), pages 347-366, November.
    20. Narrod, Clare & Roy, Devesh & Okello, Julius & Avendaño, Belem & Rich, Karl & Thorat, Amit, 2009. "Public-private partnerships and collective action in high value fruit and vegetable supply chains," Food Policy, Elsevier, vol. 34(1), pages 8-15, February.
    21. Kaganzi, Elly & Ferris, Shaun & Barham, James & Abenakyo, Annet & Sanginga, Pascal & Njuki, Jemimah, 2009. "Sustaining linkages to high value markets through collective action in Uganda," Food Policy, Elsevier, vol. 34(1), pages 23-30, February.
    22. Reardon, Thomas & Barrett, Christopher B. & Berdegué, Julio A. & Swinnen, Johan F.M., 2009. "Agrifood Industry Transformation and Small Farmers in Developing Countries," World Development, Elsevier, vol. 37(11), pages 1717-1727, November.
    23. Bolwig, Simon & Gibbon, Peter & Jones, Sam, 2009. "The Economics of Smallholder Organic Contract Farming in Tropical Africa," World Development, Elsevier, vol. 37(6), pages 1094-1104, June.
    24. Meike Wollni & Manfred Zeller, 2007. "Do farmers benefit from participating in specialty markets and cooperatives? The case of coffee marketing in Costa Rica1," Agricultural Economics, International Association of Agricultural Economists, vol. 37(2‐3), pages 243-248, September.
    25. Neven, David & Odera, Michael Makokha & Reardon, Thomas & Wang, Honglin, 2009. "Kenyan Supermarkets, Emerging Middle-Class Horticultural Farmers, and Employment Impacts on the Rural Poor," World Development, Elsevier, vol. 37(11), pages 1802-1811, November.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Rao, Elizaphan J.O. & Qaim, Matin, 2010. "Supermarkets, farm household income and poverty: Insights from Kenya," 2010 AAAE Third Conference/AEASA 48th Conference, September 19-23, 2010, Cape Town, South Africa 95771, African Association of Agricultural Economists (AAAE).
    2. Chiputwa, Brian & Spielman, David J. & Qaim, Matin, 2015. "Food Standards, Certification, and Poverty among Coffee Farmers in Uganda," World Development, Elsevier, vol. 66(C), pages 400-412.
    3. Rao, Elizaphan J.O. & Qaim, Matin, 2011. "The supermarket revolution and impacts on agricultural labor markets: Empirical evidence from Kenya," GlobalFood Discussion Papers 107745, Georg-August-Universitaet Goettingen, GlobalFood, Department of Agricultural Economics and Rural Development.
    4. H.H. Chang & C. van Marrewijk & R. Stringer & W. Umberger, 2013. "Investment, awareness, supermarkets, and profits: heterogeneous chili farmers in Indonesia," Working Papers 13-13, Utrecht School of Economics.
    5. Maertens, Miet & Swinnen, Johan, 2015. "Agricultural trade and development: A value chain perspective," WTO Staff Working Papers ERSD-2015-04, World Trade Organization (WTO), Economic Research and Statistics Division.
    6. Elizaphan J. O. Rao & Bernhard Brümmer & Matin Qaim, 2012. "Farmer Participation in Supermarket Channels, Production Technology, and Efficiency: The Case of Vegetables in Kenya," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 94(4), pages 891-912.
    7. Bhanot, Disha & Kathuria, Vinish & Das, Debabrata, 2021. "Can institutional innovations in agri-marketing channels alleviate distress selling? Evidence from India," World Development, Elsevier, vol. 137(C).
    8. Van den Broeck, Goedele & Swinnen, Johan & Maertens, Miet, 2017. "Global value chains, large-scale farming, and poverty: Long-term effects in Senegal," Food Policy, Elsevier, vol. 66(C), pages 97-107.
    9. Andersson, Camilla I.M. & Kiria, Christine G. & Qaim, Matin & Rao, Elizaphan J.O., 2013. "Following up on smallholder farmers and supermarkets," GlobalFood Discussion Papers 158142, Georg-August-Universitaet Goettingen, GlobalFood, Department of Agricultural Economics and Rural Development.
    10. John C. Beghin & Miet Maertens & Johan Swinnen, 2017. "Nontariff Measures and Standards in Trade and Global Value Chains," World Scientific Book Chapters,in: Nontariff Measures and International Trade, chapter 2, pages 13-38 World Scientific Publishing Co. Pte. Ltd..
    11. John C. Beghin & Miet Maertens & Johan Swinnen, 2017. "Nontariff Measures and Standards in Trade and Global Value Chains," World Scientific Book Chapters, in: John Christopher Beghin (ed.), Nontariff Measures and International Trade, chapter 2, pages 13-38, World Scientific Publishing Co. Pte. Ltd..
    12. Seng, Kimty, 2016. "The Effects of Market Participation on Farm Households’ Food Security in Cambodia: An endogenous switching approach," MPRA Paper 69669, University Library of Munich, Germany.
    13. 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.
    14. repec:oup:apecpp:v:40:y:2018:i:3:p:379-401. is not listed on IDEAS
    15. Neda Trifković, 2014. "Governance Strategies and Welfare Effects: Vertical Integration and Contracts in the Catfish Sector in Vietnam," Journal of Development Studies, Taylor & Francis Journals, vol. 50(7), pages 949-961, July.
    16. Hansen, Henrik & Trifković, Neda, 2014. "Food Standards are Good – For Middle-Class Farmers," World Development, Elsevier, vol. 56(C), pages 226-242.
    17. Alim Setiawan Slamet & Akira Nakayasu & Masahiro Ichikawa, 2017. "Small-Scale Vegetable Farmers’ Participation in Modern Retail Market Channels in Indonesia: The Determinants of and Effects on Their Income," Agriculture, MDPI, vol. 7(2), pages 1-16, February.
    18. Handschuch, Christina & Wollni, Meike & Villalobos, Pablo, 2013. "Adoption of food safety and quality standards among Chilean raspberry producers – Do smallholders benefit?," Food Policy, Elsevier, vol. 40(C), pages 64-73.
    19. Amare, Mulubrhan & Mariara, Jane & Oostendorp, Remco & Pradhan, Menno, 2019. "The impact of smallholder farmers’ participation in avocado export markets on the labor market, farm yields, sales prices, and incomes in Kenya," Land Use Policy, Elsevier, vol. 88(C).
    20. Bellemare, Marc F. & Bloem, Jeffrey R., 2018. "Does contract farming improve welfare? A review," World Development, Elsevier, vol. 112(C), pages 259-271.
    21. Narayanan, Sudha, 2014. "Profits from participation in high value agriculture: Evidence of heterogeneous benefits in contract farming schemes in Southern India," Food Policy, Elsevier, vol. 44(C), pages 142-157.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:wdevel:v:39:y:2011:i:5:p:784-796. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/worlddev .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.