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Supermarkets in Malyasia's Food Supply Chain: Influence on Traditional Supply Chain and Implications for Contract Farmers

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  • Chin, Denise

Abstract

Urbanization, growing incomes and changing diets have facilitated the supermarket revolution in Malaysia. Contract farming has been used as a tool to incorporate farmers into the modern supermarket supply chain, mediated by Malaysia’s Federal Agricultural Marketing Authority (FAMA). This study examines the influence of supermarkets on Malaysia’s traditional food supply chain, and the emergence of the supermarket-farmer relationship with smallholder farmers through contract farming, as a result of the new supply chain. Based on an extensive literature review and interviews with FAMA and supermarket representatives, this study finds that the supermarket dominance is present but the relationship between supermarkets and farmers is distant and indirect. While FAMA’s contract farming is a useful effort to increase farmer involvement in the supermarket supply chain, there has been little participation from supermarkets due to their efficient network of suppliers that can adhere to their high quantity and quality demands better than small farmers can.

Suggested Citation

  • Chin, Denise, 2015. "Supermarkets in Malyasia's Food Supply Chain: Influence on Traditional Supply Chain and Implications for Contract Farmers," 2015 Conference, August 9-14, 2015, Milan, Italy 211464, International Association of Agricultural Economists.
    • Handle: RePEc:ags:iaae15:211464
    DOI: 10.22004/ag.econ.211464
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    References listed on IDEAS

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    1. 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.
    2. Fatimah Mohamed Arshad, 2012. "The New Supply Chain: Implications to the Fresh Fruits and Vegetables Sector in Malaysia," International Journal of Business and Social Research, MIR Center for Socio-Economic Research, vol. 2(4), pages 256-282, August.
    3. Arumugam, Nalini & Arshad, Fatimah Mohamed & Chiew, Fook C. Eddie & Mohamed, Zainalabidin, 2011. "Determinants of Fresh Fruits and Vegetables (FFV) Farmers’ Participation in Contract Farming in Peninsular Malaysia," International Journal of Agricultural Management and Development (IJAMAD), Iranian Association of Agricultural Economics, vol. 1(2), pages 1-7, June.
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    Keywords

    Food Consumption/Nutrition/Food Safety;

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