Abstract
Over the last two decades there has been explosive growth in agroindustry in the developing world. This process mimics that in the industrialized world, with the growth of agroprocessing, new distribution systems, and changes in product composition, technologies, and market structures. One way these changes are manifested is in the rise of supermarkets, which followed changes in demand and supply systems. The impact of supermarkets on farmers in developing countries has been a popular topic in the development literature partly because this phenomenal growth has necessitated changes in procurement systems, including an increasing use of specialized wholesalers and contracting directly with farmers, which help to ensure the timing and quality of the product delivered. While these changes have paralleled an increased demand for higher quality and higher value products, which can yield a financial gain to producers, there have been complaints that the spread of these new procurement systems takes advantage of farmers has well. One common complaint among farmers in developing countries is that contracts are not enforceable, large quantities of produce are rejected on quality grounds, and that quality standards change or are not well defined (Boselie et al, 2003; Reardon and Berdegue, 2002). If the buyers use a rejection rate that is not only dependent on quality, but on the market conditions they face or their capacity, they may be able to benefit by influencing the price the farmer receives in both the contract and spot markets.
Published Version
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call