Supermarket contracts and smallholder farmers

Implications for income and multidimensional poverty

Bibliographic Data

ID11932090
AuthorsSylvester Ogutu (0000-0003-4221-7825, University of Göttingen, corresponding author), Sylvester Ochieng Ogutu, Dennis O Ochieng (0000-0002-4769-1713, African Institute for Development Policy), Matin Qaim (0000-0003-4143-0763, University of Göttingen)
Year2020
Volume95
Pages101940-101940
Publication date2020-07-18
Open AccessYes
TypeARTICLE
VenueFood Policy (JOURNAL)
Journal identifiersISSN: 0306-9192 • E-ISSN: 1873-5657
PublisherElsevier BV (PUBLISHER)
DOI10.1016/j.foodpol.2020.101940
OpenAlexW2998718081
LanguageEN
Citations received10
References cited45

Food systems in developing countries are changing rapidly with a growing role of modern supermarkets. Supermarkets influence supply chains and the way agricultural products are sourced from farmers. Especially for the procurement of fresh fruits and vegetables, supermarkets often contract farmers directly to ensure consistent and high-quality supply. One important question, which is addressed here, is whether smallholder farmers benefit from supermarket contracts. Previous studies address this question, but mostly focus on income effects without exploring implications for other dimensions of household welfare, such as nutrition, health, or housing conditions. Moreover, most existing studies rely on cross-section data. We add to the literature by analyzing effects of supermarket contracts on income and multidimensional poverty using three rounds of panel data collected from smallholder vegetable farmers in Kenya and econometric models with household fixed effects. On average, supermarket contracts increase household income by over 40%. We also find significant reductions in income poverty and multidimensional poverty. Quantile regressions show that farmers in all income groups benefit, but richer households benefit more than poorer ones in absolute terms. However, supermarket contracts cause the strongest reductions in multidimensional deprivations among the poorest households

Agricultural economics · Agriculture · Business · Contract farming · Developing country · Distribution (mathematics · Economic growth · Economics · Geography · Household income · Microeconomics · Panel data · Poverty · Procurement · Production (economics · Public economics · Welfare · Agricultural risk and resilience · Income, Poverty, and Inequality · Poverty, Education, and Child Welfare · Marketing

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