Horticulture Farmers and Domestic Supermarkets in Kenya

Are the rural poor excluded from the market opportunities created by the rise of supermarkets in developing countries? We analyzed the farm-level impact of supermarket growth in Kenya's produce sub-sector which is dominated by smallholder producers. Two main findings emerged. First, the existence of a threshold capital vector at the entrance of the supermarket channel does hinder the entry of small, rainfed farms. Instead, the main supply response has come from a new group of medium-sized, fast-growing farms managed by well-educated farmers. Second, the heavy reliance on and higher wages paid to hired farm workers on supermarket-channel farms help to alleviate poverty for rural households with little land.