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Urban shopping patterns in Indonesia and their implications for small farmers

Author

Listed:
  • Minot, Nicholas
  • Stringer, Randy
  • Umberger, Wendy J.
  • Wahida

Abstract

The rapid growth of supermarkets in developing countries has raised concern that small farmers may be squeezed out of urban markets by the quality standards and other requirements of supermarkets. This study explores these issues using data from a stratified random survey of 1180 urban households in Indonesia. The results suggest that 73% of urban households use modern food retailers, but these retailers account for just 19% of food expenditure. Econometric analysis indicates that the use of modern food retailers is associated with higher income, higher education, and ownership of a refrigerator and motorbike. The impact of supermarkets on fresh vegetable growers is likely to be minimal because 98% of urban vegetables are still purchased at traditional retailers. Projections based on the current relationship between income and shopping patterns suggests that traditional retailers will continue to play an important role in fresh produce marketing for the foreseeable future.

Suggested Citation

  • Minot, Nicholas & Stringer, Randy & Umberger, Wendy J. & Wahida, 2015. "Urban shopping patterns in Indonesia and their implications for small farmers," 2015 Conference, August 9-14, 2015, Milan, Italy 212464, International Association of Agricultural Economists.
    • Handle: RePEc:ags:iaae15:212464
    DOI: 10.22004/ag.econ.212464
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    References listed on IDEAS

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    1. Sahara Sahara & Nicholas Minot & Randy Stringer & Wendy J. Umberger, 2015. "Determinants and Effects of Small Chilli Farmers' Participation in Supermarket Channels in Indonesia," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 51(3), pages 445-460, December.
    2. Dyck, John H. & Woolverton, Andrea E. & Rangkuti, Fahwani Yuliati, 2012. "Indonesia's Modern Retail Food Sector: Interaction With Changing Food Consumption and Trade Patterns," Economic Information Bulletin 127495, United States Department of Agriculture, Economic Research Service.
    3. 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.
    4. Cragg, John G, 1971. "Some Statistical Models for Limited Dependent Variables with Application to the Demand for Durable Goods," Econometrica, Econometric Society, vol. 39(5), pages 829-844, September.
    5. World Bank, 2013. "World Development Indicators 2013," World Bank Publications - Books, The World Bank Group, number 13191, December.
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    Cited by:

    1. Wendy J. Umberger & Xiaobo He & Nicholas Minot & Hery Toiba, 2015. "Examining the Relationship between the Use of Supermarkets and Over-nutrition in Indonesia," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 97(2), pages 510-525.
    2. Christophe Béné, 2020. "Resilience of local food systems and links to food security – A review of some important concepts in the context of COVID-19 and other shocks," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 12(4), pages 805-822, August.
    3. Keijiro Otsuka, 2021. "Strategy for Transforming Indonesian Agriculture," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 57(3), pages 321-341, September.
    4. Shinya Ikeda & Ronnie S. Natawidjaja, 2022. "The Sustainability of Contract Farming with Specialized Suppliers to Modern Retailers: Insights from Vegetable Marketing in Indonesia," Agriculture, MDPI, vol. 12(3), pages 1-11, March.
    5. Abdul Muis Hasibuan & Daniel Gregg & Randy Stringer, 2021. "The role of certification, risk and time preferences in promoting adoption of climate-resilient citrus varieties in Indonesia," Climatic Change, Springer, vol. 164(3), pages 1-21, February.
    6. Craig Johns & Pamela Lyon & Randy Stringer & Wendy Umberger, 2017. "Changing urban consumer behaviour and the role of different retail outlets in the food industry of Fiji," Asia-Pacific Development Journal, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), vol. 24(1), pages 117-145, June.
    7. Hoffmann, Vivian & Moser, Christine & Saak, Alexander, 2019. "Food safety in low and middle-income countries: The evidence through an economic lens," World Development, Elsevier, vol. 123(C), pages 1-1.
    8. Fanny Widadie & Jos Bijman & Jacques Trienekens, 2022. "Alignment between vertical and horizontal coordination for food quality and safety in Indonesian vegetable chains," Agricultural and Food Economics, Springer;Italian Society of Agricultural Economics (SIDEA), vol. 10(1), pages 1-19, December.
    9. Fanny Widadie & Jos Bijman & Jacques Trienekens, 2021. "Farmer preferences in contracting with modern retail in Indonesia: A choice experiment," Agribusiness, John Wiley & Sons, Ltd., vol. 37(2), pages 371-392, April.

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    More about this item

    Keywords

    Community/Rural/Urban Development; Consumer/Household Economics;

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy

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