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The Rapid Rise of Supermarkets in Developing Countries: Induced Organizational, Institutional, and Technological Change in Agrifood Systems

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  • Thomas Reardon

    ()
    (Michigan State University)

  • Peter Timmer
  • Julio Berdegue

Abstract

There has been extremely rapid transformation of the food retail sector in developing regions in the past 5 to10 years, accompanied by a further consolidation and multi-nationalization of the supermarket sector itself. This organizational change, accompanied by intense competition, has driven changes in the organization of procurement systems of supermarket chains, toward centralized and regionalized systems, use of specialized/dedicated wholesalers and preferred supplier systems, and demanding, private quality standards. These changes in the system have in turn determined the very recent rise of the use of contracts between supermarkets and agrifood producers in these regions to cover provision of services and provision for risk management, as well as requirements for demanding quality and safety attributes, which require substantial investment in technological change and ‘upgrading’ at the producer level. This paper presents a brief discussion of these trends, followed by a conceptual framework to explain this phenomenon, illustrated with empirical evidence drawn mainly from Latin America.

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Bibliographic Info

Article provided by Food and Agriculture Organization of the United Nations in its journal The Electronic Journal of Agricultural and Development Economics.

Volume (Year): 1 (2004)
Issue (Month): 2 ()
Pages: 168-183

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Handle: RePEc:fao:tejade:v:1:y:2004:i:2:p:168-183

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Keywords: supermarket chains; procurement systems; quality standards; agrifood producers;

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References

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  1. Fernando Balsevich & Julio A. Berdegué & Luis Flores & Denise Mainville & Thomas Reardon, 2003. "Supermarkets and Produce Quality and Safety Standards in Latin America," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(5), pages 1147-1154.
  2. Reardon, Thomas & Codron, Jean-Marie & Busch, Lawrence & Bingen, R. James & Harris, Craig, 1999. "Global Change In Agrifood Grades And Standards: Agribusiness Strategic Responses In Developing Countries," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association (IAMA), vol. 2(03/04).
  3. Hueth, Brent & Ligon, Ethan & Wolf, Stephen & Wu, Steven, 1999. "Incentive Instruments in Agricultural Contracts: Input Control, Monitoring, Quality Measurement, and Price Risk," Staff General Research Papers 5237, Iowa State University, Department of Economics.
  4. Jean-Marie Codron & Zouhair Bouhsina & Fatiha Fort & Emilie Coudel & Aurélie Puech, 2004. "Supermarkets in Low-income Mediterranean Countries: Impacts on Horticulture Systems," Development Policy Review, Overseas Development Institute, vol. 22, pages 587-602, 09.
  5. Dave D. Weatherspoon & Thomas Reardon, 2003. "The Rise of Supermarkets in Africa: Implications for Agrifood Systems and the Rural Poor," Development Policy Review, Overseas Development Institute, vol. 21, pages 333-355, 05.
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Citations

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Cited by:
  1. Vermeulen, S. J. & Aggarwal, Pramod & Ainslie, A. & Angelone, C. & Campbell, B. M. & Challinor, A. J. & Hansen, J. W. & Ingram, J. S. I. & Jarvis, A. & Kristjanson, P. & Lau, C. & Nelson, G. C. & Thor, 2010. "Agriculture, food security and climate change: outlook for knowledge, tools and action. Background paper prepared for The Hague Conference on Agriculture, Food Security and Climate Change, 31 October ," IWMI Research Reports H044643, International Water Management Institute.
  2. Wells, Patricia Bryn & Saghaian, Sayed H. & Osborne, William, 2013. "The Expansion of Food Retail in Developing Countries and Its Effects on the Hunger Index," 2013 Annual Meeting, February 2-5, 2013, Orlando, Florida 142630, Southern Agricultural Economics Association.
  3. Chemnitz, Christine & Grethe, Harald & Kleinwechter, Ulrich, 2007. "Quality Standards for Food Products - A Particular Burden for Small Producers in Developing Countries?," 106th Seminar, October 25-27, 2007, Montpellier, France 7926, European Association of Agricultural Economists.
  4. Trebbin, Anika, 2014. "Linking small farmers to modern retail through producer organizations – Experiences with producer companies in India," Food Policy, Elsevier, vol. 45(C), pages 35-44.
  5. Vamsidhar Reddy, T.S. & Hall, Andy & Sulaiman V., Rasheed, 2010. "New Organisational and Institutional Vehicles for Managing Innovation in South Asia: Opportunities for Using Research for Technical Change and Social Gain," MERIT Working Papers 054, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
  6. Julie Subervie & Isabelle Vagneron, 2013. "A drop of water in the Indian ocean? The impact of GlobalGap certification on lychee farmers in Madagascar," Working Papers 189575, Institut National de la Recherche Agronomique, France.
  7. Julie A. Caswell & Siny Joseph, 2007. "Consumer Demand for Quality: Major Determinant for Agricultural and Food Trade in the Future?," Working Papers 2007-4, University of Massachusetts Amherst, Department of Resource Economics.
  8. Bastiaensen, Johan & Marchetti, Peter, 2010. "Microfinanzas Rurales y Cadenas de Valor Agropecuarias," IOB Working Papers 2010.02, Universiteit Antwerpen, Institute of Development Policy and Management (IOB).
  9. Hendrikse, G.W.J., 2011. "Pooling, Access, and Countervailing Power in Channel Governance," ERIM Report Series Research in Management ERS-2011-009-ORG, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus Uni.
  10. Asfaw, Abay, 2007. "Supermarket purchases and the dietary patterns of households in Guatemala:," IFPRI discussion papers 696, International Food Policy Research Institute (IFPRI).
  11. Kersting, Sarah & Wollni, Meike, 2011. "Public-private partnerships and GLOBALGAP standard adoption: evidence from small-scale fruit and vegetable farmers in Thailand," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114761, European Association of Agricultural Economists.
  12. Bastiaensen, Johan & Van Hecken, Gert, 2009. "The Potential and Limitations of Markets and Payments for Ecosystem Services in Agricultural Landscape Restoration Critical Reflections Inspired by an Assessment of the RISEMP Program in Matiguás-Rí," IOB Discussion Papers 2009.02, Universiteit Antwerpen, Institute of Development Policy and Management (IOB).
  13. Prabhu Pingali, 2004. "Westernization of Asian Diets and the Transformation of Food Systems: Implications for research and policy," Working Papers 04-17, Agricultural and Development Economics Division of the Food and Agriculture Organization of the United Nations (FAO - ESA).

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