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Modern Supply Chains and Product Innovation: How Can Smallholder Farmers Benefit?


  • Schipmann, Christin
  • Qaim, Matin


There is an emerging body of literature analysing how smallholder farmers in developing countries can benefit from modern supply chains. However, most of the available studies concentrate on export markets and fail to capture spillover effects that modern supply chains may have on local markets. Here, we analyse the case of sweet pepper in Thailand, which was initially introduced as a product innovation in modern supply chains, but which is now widely traded also in more traditional markets. Using survey data from smallholder farmers and econometric techniques, we show that sweet pepper cultivation contributes significantly to higher household incomes. Strikingly, at this stage, participation in modern supply chains does not lead to higher incomes than supplying sweet pepper to traditional markets. However, the results also indicate that missing land titles, weak infrastructure conditions, and limited access to information constituted serious constraints during the early phases of sweet pepper adoption. Such constraints need to be overcome, so that smallholder farmers are better prepared for the prompt reactions needed under rapidly changing market conditions.

Suggested Citation

  • Schipmann, Christin & Qaim, Matin, 2009. "Modern Supply Chains and Product Innovation: How Can Smallholder Farmers Benefit?," 2009 Conference, August 16-22, 2009, Beijing, China 51046, International Association of Agricultural Economists.
  • Handle: RePEc:ags:iaae09:51046

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    References listed on IDEAS

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    Cited by:

    1. Elizaphan J.O. Rao & Matin Qaim, 2009. "Farmer participation in supermarket channels and technical efficiency: The case of vegetable production in Kenya," Courant Research Centre: Poverty, Equity and Growth - Discussion Papers 18, Courant Research Centre PEG.

    More about this item


    Adoption; Duration analysis; Impact assessment; Modern supply chains; Product innovation; Sweet pepper; Thailand; Community/Rural/Urban Development; Marketing; Research Methods/ Statistical Methods; C21; C25; C41; Q13;

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
    • C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies
    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness


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