Small Farmers, NGOs, and a Walmart World: Welfare Effects of Supermarkets Operating in Nicaragua

Abstract

Despite more than a decade of NGO and government activities promoting developing world farmer participation in high‐value agricultural markets, evidence regarding the household welfare effects of such initiatives is limited. This article analyzes the geographic placement of supermarket supply chains in Nicaragua between 2000 and 2008 and uses a difference‐in‐differences specification on measures of supplier and nonsupplier assets to estimate the welfare effects of small farmer participation. Though results indicate that selling to supermarkets increases household productive asset holdings, they also suggest that only farmers with advantageous endowments of geography and water are likely to participate.

Standards for Development: Food Safety and Sustainability in Wal‐Mart's Honduran Produce Supply Chains

“…While an abundance of literature has examined the question of whether compliance to standards has excluded growers from transnational supermarket supply chains, the findings presented here shift the question of exclusion onto development agencies' projects and programs. Recent research from a study of Wal‐Mart's produce supply chains in Nicaragua suggests that NGOs may play a role in integrating producers who, due to geographic location or past farming experiences, might not otherwise be able to participate in this market (Michelson ). This same study suggests nonetheless that producers with access to water and with higher educational levels may have an advantage in accessing the market through NGO relationships, a finding that is supported by similar research (Bitzer )…”

Farmers’ preferences for supermarket contracts in Kenya

“…Contracted smallholders may benefit from higher and more stable prices, as well as better access to inputs, technology, and information (Berdegué et al, 2005;Sartorius and Kirsten, 2007;Blandon et al, 2009a;Barrett et al, 2012;Reardon and Timmer, 2014). Indeed, recent studies show that supermarket contracts have contributed to higher farm productivity and household welfare in some smallholder situations (Minten et al, 2009;Rao and Qaim, 2011;Rao et al, 2012;Michelson, 2013;Chege et al, 2015). However, some also show that smallholders are sometimes unable to participate in supermarket channels (Hernández et al, 2007;Neven et al, 2009), or they drop out of contracts for reasons that are not always entirely clear .…”

Toward a Just, Nutritious, and Sustainable Food System: The False Dichotomy of Localism versus Supercenterism ,

“…For example, Walmart increasingly sources directly from small-and medium-sized farmers in low-and middle-income countries. Although data are scarce, a recent independent analysis in Nicaragua reported an increase in household annual income of $200 (;15% of mean income in the sample) among small-farm workers who participated in the supermarketÕs supply chains (60). To our knowledge, the impact of shifting food production locally in the United States on the lives of farm workers in low-and middle-income countries has yet to be explored.…”