Supply Chain And Its Effect On Farmers - 1087 Words

Supermarket expansion not only affects farmers in the supply chain, but also the rest of the food retail sector. Traditional retailers face extra competition and potential loss of market share, but may benefit from foreign supermarkets through spillover effects of the latest retail techniques. Large supermarket chains are also likely to affect the average retail prices in the markets they operate. These issues are studied by Basker (2005, 2007) There is a growing empirical literature indicating that supermarkets impose a positive productivity effect on farmers in their supply chain. Based on field interviews with supermarkets and a farm survey among tomato growers in Guatemala, Hernandez et al. (2007) find that farmers who are supplying†¦show more content†¦The results suggest that the supermarket expansion will continue, but not at an explosive rate. There is no consensus in the empirical literature on whether the agricultural sector benefits from the presence of supermarkets. Empirical analyses find that supermarkets represent both opportunities and challenges for local farmers. Their contribution is the construction and calibration of a Ramsey growth model to identify the consequences of supermarket expansion for agricultural productivity and structural change. The methodological approach clarifies the underlying adjustment mechanisms involved, and allows for endogenous interaction between agricultural productivity and supermarkets’ dependence on local suppliers. Numerical simulations show how the two-way relationship between supermarkets and local farmers acts to reinforce dynamic processes, either decreasing the chances of escaping a low productivity trap or strengthening technological catch-up. This kind of model simulation supplements econometric analyses that struggle with causality issues and are unclear about the channel of effects (Stokke, 2009). Our incorporation of the productivity linkage between supermarkets and local farmers offers a possible interpretation of the conflicting results in the empirical literature: depending on the extent of local constraints related toShow MoreRelatedmr. Davis solman1300 Words   |  6 Pagescontinue  that expansion amid increased competition from the likes of Starbuck and Nespresso, and an inherently limited supply of high quality raw material, while maintaining the luxury soul of his product. Reason for changing from supply chain to direct supply a. Higher quality bean(coffee) b. Fair Trade In the 1990s they made a decision to buy their coffee directly from producers (Farmers) because of inquest of higher standard beans (coffee) and fair trade. Illy, came up with the first high pressure  espressoRead Moremars chocolate supply chain process1046 Words   |  5 PagesMARS CHOCOLATE SUPPLY CHAIN PROCESS. 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