Good for whom? Supermarkets and small farmers in south africa – a critical review of current approaches to increasing access to modern markets

Small-scale agriculture is one of the few tools available to support improved rural livelihoods on a significant scale in South Africa. Access to output markets is a key factor in generating higher incomes. The rise of modern markets (supermarkets in particular) is generally viewed as positive for the rural poor, although most commentators accede that there are challenges to be overcome in obtaining access to such markets. These challenges are generally perceived as supply-side issues: That is, the “fault” for market exclusion lies largely with small producers – their production methods, their business organisation and their location – rather than with these markets themselves. This study asserts that much of the research that has been undertaken in this area is in fact incomplete, because it has excluded two key issues: The likely impact of the dominant supermarket business model on small farmers; and the actual position of small farmers in those countries with high levels of supermarket concentration. A closer examination of the supermarket model suggests it is inherently hostile towards smaller producers. The South African food retail market structure resembles that of industrialised countries rather than developing countries. Therefore, we should expect that the position of South African small farmers vis-à-vis supermarkets is similar to that of small farmers in industrialised countries, who are increasingly excluded from these value chains.