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The Rapid Rise of Supermarkets in Developing Countries: Induced Organizational, Institutional, and Technological Change in Agrifood Systems

Author

Listed:
  • Thomas Reardon

    (Michigan State University)

  • Peter Timmer
  • Julio Berdegue

Abstract

There has been extremely rapid transformation of the food retail sector in developing regions in the past 5 to10 years, accompanied by a further consolidation and multi-nationalization of the supermarket sector itself. This organizational change, accompanied by intense competition, has driven changes in the organization of procurement systems of supermarket chains, toward centralized and regionalized systems, use of specialized/dedicated wholesalers and preferred supplier systems, and demanding, private quality standards. These changes in the system have in turn determined the very recent rise of the use of contracts between supermarkets and agrifood producers in these regions to cover provision of services and provision for risk management, as well as requirements for demanding quality and safety attributes, which require substantial investment in technological change and ‘upgrading’ at the producer level. This paper presents a brief discussion of these trends, followed by a conceptual framework to explain this phenomenon, illustrated with empirical evidence drawn mainly from Latin America.

Suggested Citation

  • Thomas Reardon & Peter Timmer & Julio Berdegue, 2004. "The Rapid Rise of Supermarkets in Developing Countries: Induced Organizational, Institutional, and Technological Change in Agrifood Systems," The Electronic Journal of Agricultural and Development Economics, Food and Agriculture Organization of the United Nations, vol. 1(2), pages 168-183.
    • Handle: RePEc:fao:tejade:v:1:y:2004:i:2:p:168-183
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    References listed on IDEAS

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    2. Fernando Balsevich & Julio A. Berdegué & Luis Flores & Denise Mainville & Thomas Reardon, 2003. "Supermarkets and Produce Quality and Safety Standards in Latin America," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(5), pages 1147-1154.
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    4. Schejtman, Alexander, 1996. "Agroindustry and small-scale agriculture: conceptual guidelines for a policy to encourage linkage between them," Sede de la CEPAL en Santiago (Estudios e Investigaciones) 31668, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
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    8. Reardon, Thomas & Codron, Jean-Marie & Busch, Lawrence & Bingen, R. James & Harris, Craig, 1999. "Global Change In Agrifood Grades And Standards: Agribusiness Strategic Responses In Developing Countries," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 2(3-4), pages 1-15.
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    More about this item

    Keywords

    supermarket chains; procurement systems; quality standards; agrifood producers;
    All these keywords.

    JEL classification:

    • Q10 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - General
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets

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