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New trends in supermarkets procurement system in South Africa: the case of local procurement schemes from small-scale farmers by rural-based retail chain stores

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  • Bienabe, Estelle
  • Vermeulen, Hester

Abstract

In contrast to the centralised fresh produce procurement systems of South African retailers relying on preferred commercial suppliers, this paper draws on an in-depth analysis of the innovative procurement schemes of two rural-based supermarket chain stores in the Limpopo Province to source fresh vegetables locally from small-scale farmers. The objective is to derive lessons to guide public and private sector actors in promoting greater participation of small-scale producers in dynamic supply chains, through the exposure of the key drivers and success factors affecting the inclusion of small-scale vegetable farmers. The critical factors affecting the up-scaling and / or replication of this type of procurement relates to operation in a remote, emerging market, franchise stores with flexible procurement options, small-scale farmers with potential and land in close proximity to the supermarket, good communication and coordination, long term commitment, technical support, interest-free farm loans and diversity in product supply among farmers. Key indicators of mutually beneficial engagement are consolidated farming systems, improved farming income, low cost procurement of fresh vegetables (short supply chain), as well as fostering of the stores' broader community involvement strategy. Up-scaling/replicating the scheme would probably require the involvement of external actors and the definition and establishment of public private partnerships. These should be tailored to the specific local conditions and capacities of the different stakeholders. Specific emphasis should be put on support towards the development of critical skills at local community level to empower small-scale farmers to sustain beneficial participation in the market.

Suggested Citation

  • Bienabe, Estelle & Vermeulen, Hester, 2007. "New trends in supermarkets procurement system in South Africa: the case of local procurement schemes from small-scale farmers by rural-based retail chain stores," 103rd Seminar, April 23-25, 2007, Barcelona, Spain 9394, European Association of Agricultural Economists.
    • Handle: RePEc:ags:eaa103:9394
    DOI: 10.22004/ag.econ.9394
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    References listed on IDEAS

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    1. 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.
    2. Perret, Sylvain R. & Anseeuw, Ward & Mathebula, F., 2005. "Poverty and livelihoods in rural South Africa: Investigating diversity and dynamics of livelihoods. Case studies in Limpopo," Working Papers 60885, University of Pretoria, Department of Agricultural Economics, Extension and Rural Development.
    3. 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.
    4. repec:bla:devpol:v:22:y:2004:i::p:525-556 is not listed on IDEAS
    5. Anseeuw, Ward & Laurent, Catherine & Modiselle, Salome & Carsten, Johan & van der Poll, Sakkie, 2001. "Diversity of the rural farming households and policy issues: an analysis based on a case study in the Northern Cape Province in South Africa," MPRA Paper 23768, University Library of Munich, Germany.
    6. Frank Ellis, 1998. "Household strategies and rural livelihood diversification," Journal of Development Studies, Taylor & Francis Journals, vol. 35(1), pages 1-38.
    7. Ortmann, Gerald F., 2005. "Promoting the competitiveness of South African agriculture in a dynamic economic and political environment," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 44(3), pages 1-35, September.
    8. Thomas Reardon & Julio A. Berdegué, 2002. "The Rapid Rise of Supermarkets in Latin America: Challenges and Opportunities for Development," Development Policy Review, Overseas Development Institute, vol. 20(4), pages 371-388, September.
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    Cited by:

    1. Jordaan, Henry & Grové, Bennie & Backeberg, Gerhard R., 2014. "Conceptual framework for value chain analysis for poverty alleviation among smallholder farmers," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 53(1), February.
    2. Peter Dannenberg, 2013. "The rise of supermarkets and challenges for small farmers in South African food value chains," Economia agro-alimentare, FrancoAngeli Editore, vol. 15(3), pages 15-34.
    3. repec:ags:ijag24:345268 is not listed on IDEAS
    4. Dev Narayan Sarkar & Kaushik Kundu & Himadri Roy Chaudhuri, 2016. "Developing a conceptual model of small independent retailers in developing economies: the roles of embeddedness and subsistence markets," AMS Review, Springer;Academy of Marketing Science, vol. 6(3), pages 176-193, December.
    5. Proctor, Felicity J. & Vorley, Bill, 2008. "Innovation in Business Models and Chainwide Learning for Market Inclusion of Smallholder Producers," BANWA: A Multidisciplinary Journal, University of the Philippines Mindanao, vol. 8(2), pages 1-17.
    6. Lydia Nyambura & James Mutuiri & David Mutwiri & Jeffrey Maina & Dennis Njiru & Peterson Obara Magutu, 2018. "Lean Supply Chain Management Practices and Procurement Performance of Leading Supermarkets in Nairobi, Kenya," Noble International Journal of Business and Management Research, Noble Academic Publsiher, vol. 2(12), pages 101-112, December.

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