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Modern Supply Chains and Product Innovation: How Can Smallholder Farmers Benefit?

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  • Schipmann, Christin
  • Qaim, Matin
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    Abstract

    There is an emerging body of literature analysing 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 analyse 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.

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    Bibliographic Info

    Paper provided by International Association of Agricultural Economists in its series 2009 Conference, August 16-22, 2009, Beijing, China with number 51046.

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    Date of creation: 2009
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    Handle: RePEc:ags:iaae09:51046

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    Related research

    Keywords: Adoption; Duration analysis; Impact assessment; Modern supply chains; Product innovation; Sweet pepper; Thailand; Community/Rural/Urban Development; Marketing; Research Methods/ Statistical Methods; C21; C25; C41; Q13;

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    1. Ira Matuschke & Matin Qaim, 2008. "Seed Market Privatisation and Farmers' Access to Crop Technologies: The Case of Hybrid Pearl Millet Adoption in India," Journal of Agricultural Economics, Wiley Blackwell, vol. 59(3), pages 498-515, 09.
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    15. Sanzidur Rahman & Aree Wiboonpongse & Songsak Sriboonchitta & Yaovarate Chaovanapoonphol, 2009. "Production Efficiency of Jasmine Rice Producers in Northern and North-eastern Thailand," Journal of Agricultural Economics, Wiley Blackwell, vol. 60(2), pages 419-435.
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    Cited by:
    1. Elizaphan J.O. Rao & Matin Qaim, 2009. "Farmer participation in supermarket channels and technical efficiency: The case of vegetable production in Kenya," Courant Research Centre: Poverty, Equity and Growth - Discussion Papers 18, Courant Research Centre PEG.

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