Smallholder Participation in Supermarket-Driven Agri-Food Supply Chain: A Case Study of Reliance Fresh

Using primary survey data collected from farmers growing cauliflower and spinach in the outskirt of Jaipur city, the paper examines the question of smallholder participation in the supermarket-driven agri-food system in a context dominated by smallholders. Our empirical results add to the thin but emerging evidence in the international literature that in an agrarian setting marked by preponderance of smallholders, size of land holding is not necessarily a barrier to participation in the supermarket-driven marketing channel. Even within the context of smallholders dominance, exclusion from supermarket channel still occurs based on access to non-land assets. The result further shows that while transaction costs of selling harvest to the supermarkets may be lesser than those incurred in the traditional market channel, such advantage may be nullified if the farmer fails to meet the quality and standards demanded by the supermarket chain. Policy measures to bring asset-poor farmers within the ambit of supermarket-driven marketing system should include better provision of rural education, rural infrastructure and extension facilities by the government. Institutional innovation such as producer group should be encouraged to give farmers better bargaining power and reduce transaction costs to ensure a more inclusive supermarket-driven agri-food system.