Global Retail Chains and Poor Farmers: Evidence from Madagascar

26 Pages Posted: 8 Feb 2006

See all articles by Bart Minten

Bart Minten

Cornell University - Food and Nutrition Policy Program; Catholic University of Leuven (KUL) - Department of Agro-Engineering and Economics

Lalaina Randrianarison

Independent

Johan F. M. Swinnen

KU Leuven - Centre for Institutions and Economic Performance (LICOS); European Commission, DG II

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.

Suggested Citation

Minten, Bart and Randrianarison, Lalaina and Swinnen, Johan F.M., Global Retail Chains and Poor Farmers: Evidence from Madagascar. Available at SSRN: https://ssrn.com/abstract=881729 or http://dx.doi.org/10.2139/ssrn.881729

Bart Minten (Contact Author)

Cornell University - Food and Nutrition Policy Program ( email )

BP 6313
Antananarivo 101
Madagascar
033 11 38520 (Phone)
261 20 2222198 (Fax)

Catholic University of Leuven (KUL) - Department of Agro-Engineering and Economics ( email )

Kardinaal Mercierlaan 92
Heverlee, B-3001
Belgium

Lalaina Randrianarison

Independent ( email )

Antananarivo
Madagascar
+261 (0) 32 02 167 37 (Phone)
+261 (0) 20 22 605 27 (Fax)

Johan F.M. Swinnen

KU Leuven - Centre for Institutions and Economic Performance (LICOS) ( email )

Waaistraat 6
Leuven, B-3000
Belgium

European Commission, DG II ( email )

Wetstrath 200
Office 15172
1049 Brussels
Belgium
+32-2-2960442 (Phone)
Not available (Fax)

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
273
Abstract Views
2,109
Rank
203,786
PlumX Metrics