Global supply chains, standards and the poor
01 Jan 2007-
About: The article was published on 2007-01-01 and is currently open access. It has received 195 citations till now. The article focuses on the topics: Supply chain.
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TL;DR: The authors reviewed the literature from the late 1980s to the present and found evidence first of food processing then retail transformation, and mixed evidence of impacts on small farmers, both inclusion (particularly with resource-providing contracts) and exclusion (sometimes from scale-constraint, sometimes from inadequate non-land assets).
Abstract: Summary This article introduces this special issue on the rapid transformation of the agrifood industry in developing countries and its effects on small farmers. We review the literature from the late 1980s to the present and find evidence first of food processing then retail transformation, and mixed evidence of impacts on small farmers, both inclusion (particularly with “resource-providing contracts”) and exclusion (sometimes from scale-constraint, sometimes from inadequate non-land assets). The special issue papers contribute to the debate by confirming the mix of cases of inclusion and exclusion. The cases are main in horticulture and dairy, key hopes for smallholder development.
832 citations
Cites background from "Global supply chains, standards and..."
...This was observed in the Chilean fruit export boom areas (e.g., Jarvis and Vera-Toscano, 2004) and in vegetable export zones in Guatemala (von Braun et al., 1989) and Senegal (Maertens and Swinnen, 2007)....
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...…specialization/differentiation, and organizational and institutional change via the rise of vertical coordination (via contracts and market linkage arrangements) and private grades and standards (Reardon et al. 1999, Reardon and Barrett, 2000, Reardon and Timmer, 2007, Swinnen 2007)....
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TL;DR: In this article, the authors quantify income and poverty effects of high-standards trade and integrate labor market effects, by using company and household survey data from the vegetable export chain in Senegal.
Abstract: An emerging literature on standards, global supply chains, and development argues that enhanced quality and safety standards are major trade barriers for developing country exports and cause the marginalization of small businesses and poor households in developing countries. This paper is the first to quantify income and poverty effects of such high-standards trade and to integrate labor market effects, by using company and household survey data from the vegetable export chain in Senegal. First, horticultural exports from Senegal to the EU have grown sharply over the past decade, despite strongly increasing food standards in the EU. Second, these exports have strong positive effects on poor households' income. We estimate that these exports reduced regional poverty by around 12 percentage points and reduced extreme poverty by half. Third, tightening food standards induced structural changes in the supply chain including a shift from smallholder contract-based farming to large-scale integrated estate production. However, these changes mainly altered the mechanism through which poor households benefit: through labor markets instead of product markets. Moreover, the impact on poverty reduction is stronger as the poorest benefit relatively more from working on large-scale farms than from contract farming. These findings challenge several basic arguments in this research field.
771 citations
TL;DR: In this article, the authors quantified income and poverty effects of high-standards trade and integrated labor market effects, by using company and household survey data from the vegetable export chain in Senegal.
Abstract: Summary In the debate on trade and poverty it is argued that standards act as trade barriers and cause marginalization of the poor. This paper quantifies income and poverty effects of high-standards trade and integrates labor market effects, by using company and household survey data from the vegetable export chain in Senegal. We find that exports grew sharply despite increasing standards, contributing importantly to rural incomes and poverty reduction. Tightening standards induced a shift from smallholder contract farming to integrated estate production, altering the mechanism through which poor households benefit: through labor markets instead of product markets.
608 citations
TL;DR: In this paper, the impact of supermarkets on small contract farmers in the Highlands of Madagascar has been analyzed based on primary data collected to measure the effect of supermarkets' private standards on farmers' welfare, income stability and shorter lean periods.
Abstract: Global retail companies ("supermarkets") have an increasing influence on developing countries, through foreign investments and/or through the imposition of their private standards. The impact on developing countries and poverty is often assessed as negative. In this paper we show the opposite, based on an analysis of primary data collected to measure the impact of supermarkets on small contract farmers in Madagascar, one of the poorest countries in the world. Almost 10,000 farmers in the Highlands of Madagascar produce vegetables for supermarkets in Europe. In this global supply chain, small farmers' micro-contracts are combined with extensive farm assistance and supervision programs to fulfill complex quality requirements and phyto-sanitary standards of supermarkets. Small farmers that participate in these contracts have higher welfare, more income stability and shorter lean periods. We also find significant effects on improved technology adoption, better resource management and spillovers on the productivity of the staple crop rice. The small but emerging modern retail sector in Madagascar does not (yet) deliver these benefits as they do not (yet) request the same high standards for their supplies.
529 citations
TL;DR: In this paper, the impact of supermarkets on small contract farmers in the Highlands of Madagascar has been analyzed based on an analysis of primary data collected to measure the effect of supermarkets in the country.
Abstract: Summary Global retail companies (“supermarkets”) have an increasing influence on developing countries, through foreign investments and/or through the imposition of their private standards. The impact on developing countries and poverty is often assessed as negative. In this paper we show the opposite, based on an analysis of primary data collected to measure the impact of supermarkets on small contract farmers in Madagascar, one of the poorest countries in the world. Almost 10,000 farmers in the Highlands of Madagascar produce vegetables for supermarkets in Europe. In this global supply chain, small farmers’ micro-contracts are combined with intensive farm assistance and supervision programs to fulfill complex quality requirements and phyto-sanitary standards of supermarkets. Small farmers that participate in these contracts have higher welfare, more income stability and shorter lean periods. We also find significant effects on improved technology adoption, better resource management and spillovers on the productivity of the staple crop rice. The small but emerging modern retail sector in Madagascar does not (yet) deliver these benefits as they do not (yet) request the same high standards for their supplies.
402 citations