Impacts of Agrifood Market Transformation during Globalization on the Poor's Rural Nonfarm Employment: Lessons for Rural Business Development Programs
This paper presents emerging evidence pointing to the transmission to developing countries' rural spaces of the impacts of agrifood market transformation occurring at national and global levels. That transmission takes place via retail chains penetrating intermediate cities and rural towns, and urban-based food manufacturers selling products to those chains as well as to traditional shops. The paper presents and justifies three main hypotheses concerning the impacts of that penetration. (1) The direct effect is that the modern retailers and modern-sector processed products directly compete with, and present potentially major challenges to, the processed foods, farm inputs, and commercial services already being undertaken in the RNFE sector by the rural poor among others. (2) The indirect effects is that modern sector firms tend, once they have "modernized" their procurement systems, to prefer larger suppliers if available, and/or small suppliers that have the requisite levels of capital assets. This further translates to a potential labor substitution bias, in particular of unskilled labor, although it may drive skilled labor demand. (3) The production and consumption linkage effects of the above impacts on RNFE firms, laborers, and farmers, all else equal, probably implies greater demand for non-tradeable goods and services in the RNFE that correspond to the demand patterns of the upper stratum of rural consumers. Faced with the above, what can business development programs do? (1) Given the change in the market context, it will be increasingly undesirable and "un-strategic," except in the most remote, hinterland areas, to maintain the separation between competitiveness and nonfarm employment programs. At least for RNF activities that supply processed products, farm inputs, and retail commerce, RNF enterprises will need to face the same general challenge that exporters in their country face on the global market, and urban firms face, which is t
(This abstract was borrowed from another version of this item.)
|Date of creation:||2006|
|Date of revision:|
|Contact details of provider:|| Web page: http://www.iaae-agecon.org/|
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Pingali, Prabhu L. & Rosegrant, Mark W., 1995. "Agricultural commercialization and diversification: processes and policies," Food Policy, Elsevier, vol. 20(3), pages 171-185, June.
- Thomas Reardon & Johan F. M. Swinnen, 2004. "Agrifood Sector Liberalisation and the Rise of Supermarkets in Former State-controlled Economies: A Comparative Overview," Development Policy Review, Overseas Development Institute, vol. 22, pages 515-523, 09.
- Dries, Liesbeth & Swinnen, Johan F. M., 2004. "Foreign Direct Investment, Vertical Integration, and Local Suppliers: Evidence from the Polish Dairy Sector," World Development, Elsevier, vol. 32(9), pages 1525-1544, September.
- Wilkinson, John, 2004. "The Food Processing Industry, Globalization and Developing Countries," eJADE: electronic Journal of Agricultural and Development Economics, Food and Agriculture Organization, Agricultural and Development Economics Division, vol. 1(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.
- Marcel Fafchamps & Forhad Shilpi, 2003.
"The spatial division of labour in Nepal,"
Journal of Development Studies,
Taylor & Francis Journals, vol. 39(6), pages 23-66.
- Fafchamps, Marcel & Shilpi, Forhad, 2002. "The spatial division of labor in Nepal," Policy Research Working Paper Series 2845, The World Bank.
- Marcel Fafchamps & Forhad Shilpi, 2000. "The Spatial Division of Labor in Nepal," Economics Series Working Papers 44, University of Oxford, Department of Economics.
- Hamish R. Gow & Johan F. M. Swinnen, 2001. "Private Enforcement Capital and Contract Enforcement in Transition Economies," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(3), pages 686-690.
- Paul Krugman, 1990.
"Increasing Returns and Economic Geography,"
NBER Working Papers
3275, National Bureau of Economic Research, Inc.
- Escobal, Javier, 2005. "The Role of Public Infraestructure in Market Development in Rural Peru," MPRA Paper 727, University Library of Munich, Germany.
- Neven, David & Reardon, Thomas & Chege, Jonathan & Wang, Honglin, 2005. "Supermarkets And Consumers In Africa: The Case Of Nairobi, Kenya," Staff Papers 11584, Michigan State University, Department of Agricultural, Food, and Resource Economics.
- Burger, Kees & Kameo, Daniel & Sandee, Henry, 1999. "Clustering Of Small Agro-Processing Firms In Indonesia," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association (IAMA), vol. 2(03/04).
- Reardon, Thomas & Timmer, C. Peter, 2007. "Transformation of Markets for Agricultural Output in Developing Countries Since 1950: How Has Thinking Changed?," Handbook of Agricultural Economics, Elsevier.
- Anonymous & Gehlhar, Mark J., 2005. "New Directions In Global Food Markets," Agricultural Information Bulletins 33751, United States Department of Agriculture, Economic Research Service.
- Reardon, Thomas & Flores, Luis, 2006. "Viewpoint: "Customized competitiveness" strategies for horticultural exporters - Central America focus with lessons from and for other regions," Food Policy, Elsevier, vol. 31(6), pages 483-503, December.
- Dinghuan Hu & Thomas Reardon & Scott Rozelle & Peter Timmer & Honglin Wang, 2004. "The Emergence of Supermarkets with Chinese Characteristics: Challenges and Opportunities for China's Agricultural Development," Development Policy Review, Overseas Development Institute, vol. 22, pages 557-586, 09.
- Gero Carletto & Katia Covarrubias & Benjamin Davis & Marika Krausova & Kostas Stamoulis & Paul Winters & Alberto Zezza, 2007. "Rural income generating activities in developing countries: re-assessing the evidence," The Electronic Journal of Agricultural and Development Economics, Food and Agriculture Organization of the United Nations, vol. 4(1), pages 146-193.
- Hymer, Stephen H & Resnick, Stephen, 1969. "A Model of an Agrarian Economy with Nonagricultural Activities," American Economic Review, American Economic Association, vol. 59(4), pages 493-506, Part I Se.
- Key, Nigel & Runsten, David, 1999. "Contract Farming, Smallholders, and Rural Development in Latin America: The Organization of Agroprocessing Firms and the Scale of Outgrower Production," World Development, Elsevier, vol. 27(2), pages 381-401, February.
When requesting a correction, please mention this item's handle: RePEc:ags:iaae06:25556. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search)
If references are entirely missing, you can add them using this form.