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Horticulture Farmers and Domestic Supermarkets in Kenya

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  • Reardon, Thomas
  • Odera, Michael M.
  • Neven, David

Abstract

Are the rural poor excluded from the market opportunities created by the rise of supermarkets in developing countries? We analyzed the farm-level impact of supermarket growth in Kenya's produce sub-sector which is dominated by smallholder producers. Two main findings emerged. First, the existence of a threshold capital vector at the entrance of the supermarket channel does hinder the entry of small, rainfed farms. Instead, the main supply response has come from a new group of medium-sized, fast-growing farms managed by well-educated farmers. Second, the heavy reliance on and higher wages paid to hired farm workers on supermarket-channel farms help to alleviate poverty for rural households with little land.

Suggested Citation

  • Reardon, Thomas & Odera, Michael M. & Neven, David, 2006. "Horticulture Farmers and Domestic Supermarkets in Kenya," Staff Papers 11534, Michigan State University, Department of Agricultural, Food, and Resource Economics.
  • Handle: RePEc:ags:midasp:11534
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    File URL: http://purl.umn.edu/11534
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    References listed on IDEAS

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    1. David Neven & Thomas Reardon, 2004. "The Rise of Kenyan Supermarkets and the Evolution of their Horticulture Product Procurement Systems," Development Policy Review, Overseas Development Institute, vol. 22(6), pages 669-699, November.
    2. Battese, George E., 1992. "Frontier production functions and technical efficiency: a survey of empirical applications in agricultural economics," Agricultural Economics, Blackwell, vol. 7(3-4), pages 185-208, October.
    3. 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.
    4. 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.
    5. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 31(3), pages 129-137.
    6. C. Dolan & J. Humphrey, 2000. "Governance and Trade in Fresh Vegetables: The Impact of UK Supermarkets on the African Horticulture Industry," Journal of Development Studies, Taylor & Francis Journals, vol. 37(2), pages 147-176.
    7. Battese, George E., 1992. "Frontier production functions and technical efficiency: a survey of empirical applications in agricultural economics," Agricultural Economics of Agricultural Economists, International Association of Agricultural Economists, vol. 7(3-4), October.
    8. Tjalling Dijkstra & Matthew Meulenberg & Aad van Tilburg, 2001. "Applying marketing channel theory to food marketing in developing countries: Vertical disintegration model for horticultural marketing channels in kenya," Agribusiness, John Wiley & Sons, Ltd., vol. 17(2), pages 227-241.
    9. Feder, Gershon & Just, Richard E & Zilberman, David, 1985. "Adoption of Agricultural Innovations in Developing Countries: A Survey," Economic Development and Cultural Change, University of Chicago Press, vol. 33(2), pages 255-298, January.
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    Cited by:

    1. Hildegunn E. Stokke, 2009. "Multinational supermarket chains in developing countries: does local agriculture benefit?," Agricultural Economics, International Association of Agricultural Economists, vol. 40(6), pages 645-656, November.
    2. Jalang'o, Dorcas Anyango & Otieno, David Jakinda & Kosura, Willis-Oluoch, 2016. "Factors influencing smallholder farmers’ participation in domestic high value markets for African Indigenous Vegetables in rural Kenya," 2016 AAAE Fifth International Conference, September 23-26, 2016, Addis Ababa, Ethiopia 246390, African Association of Agricultural Economists (AAAE).
    3. Neven, David & Katjiuongua, Hikuepi & Adjosoediro, Ingrid & Reardon, Thomas & Chuzu, Pia Nwanza & Tembo, Gelson & Ndiyoi, Mukelabai, 2006. "Food Sector Transformation and Standards in Zambia: Smallholder Farmer Participation and Growth in the Dairy Sector," Staff Papers 11701, Michigan State University, Department of Agricultural, Food, and Resource Economics.

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    Marketing;

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