Recently the rapid growth of supermarkets as a new food supply chain in developing countries is a topic that has generated considerable debate among academics because of the impact they have on food policy and the agricultural sector.
Timmer (2004) shows how three “drivers” “globalization, urbanization and technology” have contributed to the growth of supermarkets developing countries. In addition, Chowdhury et al. (2005) assert that, as wealth has increased and more people live in urban areas and there are more women in the workforce, lifestyles have changed in Indonesia. So people demand more convenience. Other economic conditions such as increased amounts of money, due to Foreign Direct Investment (FDI) have also contributed to the demand for more convenient access to shops.
Timmer (2004) also explains how food consumption patterns are now more diversified related to improving of health knowledge and nutrition education in the household level. Chowdhury et al. (2005) show many choices of available food such as “cereals, high value food (fish, meat, milk and fresh fruits and vegetables (FFVs), and prepared food and beverages”.
According to meet consumers’ preferences supermarkets have a high quality and safety standards for their product. Not surprisingly then the growth in number of supermarkets in developing countries denies many smaller farmers to the access food supply chain. For example, in Latin America, small farmers rapidly lose access to supermarket supply chain because they are unable to meet the high food standards demanded by supermarkets (Timmer, 2004). In addition, Chowdhury et al., (2005) mention that small farmer probable exclude from the supermarkets supply chain because of economics reason such as the high fixed transaction costs and the implement grades and standards. Furthermore, there are also entry barriers for small farmers such as investment in physical capital (Chowdhury et al., 2005) and lack of information and technology (Timmer, 2004). For example, in Indonesia, small farmers have “difficulties in ensuring credit and attaining technical know-how on new products” (Chowdhury et al., 2005).
In contrast, Minten et al., (2005) claim that small farmers in developing countries could be successfully included in supermarkets supply chain. They show that small farmers in Madagascar were able to participate in the contracts with the company exporting vegetables to supermarkets. In this contract, small farmers were able to benefit from improved to inputs such as seeds, fertilizers and pesticides, credit, extension services, technology adoption and enhanced income stability. This result surprisingly to give evidence of the impact of supermarkets on small farmers is positive.
Similarly, Chowdhury et al. (2005) focus on the integration of small scale farmers in the food supply chain and the specific products such as fruits and vegetables (FFVs). They describe that the emergence of supermarkets providing vertical relationships between supermarkets and farmers. However, they illustrate how to reduce the information gap between the needs of supermarkets and those of farmers, vendors are needed. Chowdhury et al’s research highlighted that linked to the supermarkets supply chain a reduction in price and production risks can benefit farmers. However, they also claim that the difficulties of small farmers in supplying to supermarkets may increase further.
As these studies show it is still not clear whether supermarkets have a positive or negative impact upon small farmers. So, the growth of supermarkets with their heightened concern regarding food quality, consistent volumes, and food safety represent a threat and an opportunity for small farmers. Timmer (2004) suggests that in the long run, the food policy could give point of view how to assist small farmers to compete in the food supply chain. Furthermore, he suggests that of greater concern is the rising concentration in global food supply chain. Similarly, Chowdhury et al. (2005) suggest the government of developing countries need to build policies to increase small farmers’ participation in the supermarkets supply chain.
Then, any subsequent research is needed to measure the impact of supermarkets not only on small farmers but also wholesalers and other intermediaries.
0 comments:
Post a Comment