Advanced Search
MyIDEAS: Login

Small Farmers and Big Retail: Trade-offs of Supplying Supermarkets in Nicaragua

Contents:

Author Info

  • Michelson, Hope
  • Reardon, Thomas
  • Perez, Francisco

Abstract

In Nicaragua and elsewhere in Central America, small-scale farmers are weighing the risks of entering into contracts with supermarket chains. We use unique data from cooperatives supplying supermarkets to study the effect of supply agreements on producers’ mean output prices and price stability. We find that prices paid by the domestic retail chain approximate the traditional market in mean and variance while mean prices paid by Walmart are significantly lower than the traditional market. However, the Walmart contract is found to systematically reduce price volatility. We find some evidence, however, that farmers may be paying too much for this contractual insurance against price variation.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.sciencedirect.com/science/article/pii/S0305750X11001884
Download Restriction: Full text for ScienceDirect subscribers only

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Bibliographic Info

Article provided by Elsevier in its journal World Development.

Volume (Year): 40 (2012)
Issue (Month): 2 ()
Pages: 342-354

as in new window
Handle: RePEc:eee:wdevel:v:40:y:2012:i:2:p:342-354

Contact details of provider:
Web page: http://www.elsevier.com/locate/worlddev

Related research

Keywords: small farmers; supermarkets; contracts; Walmart; Latin America; Nicaragua;

Other versions of this item:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Abadie A., 2002. "Bootstrap Tests for Distributional Treatment Effects in Instrumental Variable Models," Journal of the American Statistical Association, American Statistical Association, vol. 97, pages 284-292, March.
  2. Johann Kirsten & Kurt Sartorius, 2002. "Linking agribusiness and small-scale farmers in developing countries: Is there a new role for contract farming?," Development Southern Africa, Taylor & Francis Journals, vol. 19(4), pages 503-529.
  3. Chavas, Jean-Paul & Holt, Matthew T, 1996. "Economic Behavior under Uncertainty: A Joint Analysis of Risk Preferences and Technology," The Review of Economics and Statistics, MIT Press, vol. 78(2), pages 329-35, May.
  4. 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.
  5. Michelson, Hope & Reardon, Thomas & Perez, Francisco, 2012. "Small Farmers and Big Retail: Trade-offs of Supplying Supermarkets in Nicaragua," World Development, Elsevier, vol. 40(2), pages 342-354.
  6. Reardon, Thomas & Barrett, Christopher B., 2000. "Agroindustrialization, globalization, and international development: An overview of issues, patterns, and determinants," Agricultural Economics, Blackwell, vol. 23(3), pages 195-205, September.
  7. David Boselie & Spencer Henson & Dave Weatherspoon, 2003. "Supermarket Procurement Practices in Developing Countries: Redefining the Roles of the Public and Private Sectors," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(5), pages 1155-1161.
  8. Maertens, Miet & Swinnen, Johan F.M., 2009. "Trade, Standards, and Poverty: Evidence from Senegal," World Development, Elsevier, vol. 37(1), pages 161-178, January.
  9. Johan F. M. Swinnen & Miet Maertens, 2007. "Globalization, privatization, and vertical coordination in food value chains in developing and transition countries," Agricultural Economics, International Association of Agricultural Economists, vol. 37(s1), pages 89-102, December.
  10. 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, 05.
  11. Key, Nigel & Runsten, David, 1999. "Contract Farming, Smallholders, and Rural Development in Latin America: The Organization of Agroprocessing Firms and the Scale of Outgrower Production," World Development, Elsevier, vol. 27(2), pages 381-401, February.
  12. Peter Gibbon, 2003. "Value-chain Governance, Public Regulation and Entry Barriers in the Global Fresh Fruit and Vegetable Chain into the EU," Development Policy Review, Overseas Development Institute, vol. 21(5-6), pages 615-625, December.
  13. Jose Blandon & Spencer Henson & Towhidul Islam, 2009. "Marketing preferences of small-scale farmers in the context of new agrifood systems: a stated choice model," Agribusiness, John Wiley & Sons, Ltd., vol. 25(2), pages 251-267.
  14. C. Dolan & J. Humphrey, 2000. "Governance and Trade in Fresh Vegetables: The Impact of UK Supermarkets on the African Horticulture Industry," Journal of Development Studies, Taylor & Francis Journals, vol. 37(2), pages 147-176.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Michelson, Hope & Reardon, Thomas & Perez, Francisco, 2012. "Small Farmers and Big Retail: Trade-offs of Supplying Supermarkets in Nicaragua," World Development, Elsevier, vol. 40(2), pages 342-354.
  2. 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.
  3. Michelson, Hope & Boucher, Steve & Bai, Junfei & Jia, Xiangping & Huang, Jikun & Chen, Xinzhe, 2013. "Supermarket Supply Chains with Chinese Characteristics: The Case of Walmart's Direct Farms," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150441, Agricultural and Applied Economics Association.
  4. Hope C. Michelson, 2013. "Small Farmers, NGOs, and a Walmart World: Welfare Effects of Supermarkets Operating in Nicaragua," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 95(3), pages 628-649.
  5. Barrett, Christopher B. & Bachke, Maren E. & Bellemare, Marc F. & Michelson, Hope C. & Narayanan, Sudha & Walker, Thomas F., 2010. "Smallholder Participation in Agricultural Value Chains: Comparative Evidence from Three Continents," MPRA Paper 27829, University Library of Munich, Germany.
  6. 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.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:eee:wdevel:v:40:y:2012:i:2:p:342-354. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei).

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 references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link 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 profile, as there may be some citations waiting for confirmation.

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