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Urban Shopping Patterns in Indonesia and Their Implications for Small Farmers

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

Abstract

In developing countries, the expansion of supermarkets and other modern food retailers has raised concerns about the potential impact on traditional retailers and fruit and vegetable farmers. Will small farmers, in particular, be squeezed out of this growing, remunerative market by the quality standards imposed by supermarkets? In an attempt to answer this question, we analyse data from a stratified random sample of 1,180 urban households in Indonesia. We find that only a small share of fruits and vegetables are purchased from modern outlets, even among high-income urban households. On the basis of the relation between income and shopping patterns in our data, we project that even after 15 years of income growth, supermarkets will account for less than 40% of urban food spending. The impact of supermarket standards on small farmers may be less dramatic than has been feared.

Suggested Citation

  • Nicholas Minot & Randy Stringer & Wendy J. Umberger & Wahida Maghraby, 2015. "Urban Shopping Patterns in Indonesia and Their Implications for Small Farmers," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 51(3), pages 375-388, December.
  • Handle: RePEc:taf:bindes:v:51:y:2015:i:3:p:375-388
    DOI: 10.1080/00074918.2015.1104410
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    References listed on IDEAS

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    1. 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.
    2. 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.
    3. 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.
    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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    Citations

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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

    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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