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New trends in supermarkets procurement system in South Africa: the case of local procurement schemes from small-scale farmers by rural-based retail chain stores

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  • Bienabe, Estelle
  • Vermeulen, Hester
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    Abstract

    In contrast to the centralised fresh produce procurement systems of South African retailers relying on preferred commercial suppliers, this paper draws on an in-depth analysis of the innovative procurement schemes of two rural-based supermarket chain stores in the Limpopo Province to source fresh vegetables locally from small-scale farmers. The objective is to derive lessons to guide public and private sector actors in promoting greater participation of small-scale producers in dynamic supply chains, through the exposure of the key drivers and success factors affecting the inclusion of small-scale vegetable farmers. The critical factors affecting the up-scaling and / or replication of this type of procurement relates to operation in a remote, emerging market, franchise stores with flexible procurement options, small-scale farmers with potential and land in close proximity to the supermarket, good communication and coordination, long term commitment, technical support, interest-free farm loans and diversity in product supply among farmers. Key indicators of mutually beneficial engagement are consolidated farming systems, improved farming income, low cost procurement of fresh vegetables (short supply chain), as well as fostering of the stores' broader community involvement strategy. Up-scaling/replicating the scheme would probably require the involvement of external actors and the definition and establishment of public private partnerships. These should be tailored to the specific local conditions and capacities of the different stakeholders. Specific emphasis should be put on support towards the development of critical skills at local community level to empower small-scale farmers to sustain beneficial participation in the market.

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    Bibliographic Info

    Paper provided by European Association of Agricultural Economists in its series 103rd Seminar, April 23-25, 2007, Barcelona, Spain with number 9394.

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    Date of creation: 2007
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    Handle: RePEc:ags:eaa103:9394

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    Keywords: Agribusiness;

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    1. Frank Ellis, 1998. "Household strategies and rural livelihood diversification," The Journal of Development Studies, Taylor and Francis Journals, vol. 35(1), pages 1-38.
    2. 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.
    3. Ortmann, Gerald F., 2005. "Promoting the competitiveness of South African agriculture in a dynamic economic and political environment," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 44(3), September.
    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. Perret, Sylvain R. & Anseeuw, Ward & Mathebula, F., 2005. "Poverty and livelihoods in rural South Africa: Investigating diversity and dynamics of livelihoods. Case studies in Limpopo," Working Papers 60885, University of Pretoria, Department of Agricultural Economics, Extension and Rural Development.
    6. Liesbeth Dries & Thomas Reardon & Johan F. M. Swinnen, 2004. "The Rapid Rise of Supermarkets in Central and Eastern Europe: Implications for the Agrifood Sector and Rural Development," Development Policy Review, Overseas Development Institute, vol. 22, pages 525-556, 09.
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