The power of supermarkets
Supermarkets are immensely
powerful players in the food business. We buy most of our food from
them. The food people buy from Tesco, Sainsbury,
Asda and Safeway makes up1/3 of all the grocery sales in the UK.
We can now eat any food we want at anytime of the year because
supermarkets fly in produce from all over the world. Supermarkets dictate
size, shape and varieties of fresh fruit and vegetables they sell
as well as the price. The trade that supermarkets do with countries
all over the world has created opportunities for farmers in poorer
countries to sell their food to countries in Europe – but
it has also created some problems.
Fresh produce from Kenya
In Kenya exports of fresh fruits, vegetables and cut flowers for sale
in European supermarkets have soared to more than US$300 million
per year. Smallholders who grow for the export market enjoy significantly
higher incomes than nonparticipating households. A recent study found
that if non-participating rural households were able to take up growing
horticultural crops for export, their poverty rate would decrease
by approximately 25%. But as the scale of Kenya's exports has grown,
the share produced by smallholders (people with small farms) has
dwindled. Before the horticultural export boom in the 1990s, smallholders
produced 70% of vegetables and fruits shipped from Kenya. By the
end of the 1990s, 40% of the produce was grown on farms owned or
leased directly by importers in the developed countries and another
42% on large commercial farms. Smallholders produced just 18%.
Difficulties for small producers
life difficult for smallholders because they have strict demands for
the produce to standards for quality and reliability
which may require substantial investments in irrigation, greenhouses,
trucks, cooling sheds and packing technology. This type of technology
is expensive and not many smallholders are able to afford to buy it.
Empowering small producers
Supermarket transaction costs may be significantly higher for negotiating
and managing contracts with small producers. Smallholders who have
succeeded as suppliers for supermarkets have generally overcome these
obstacles by forging cooperatives or enrolling in "outgrower" schemes.
Often they have benefited initially from information, training and
start-up funds provided by public and private sector development initiatives.
Project originally funded by EU and Dfid with support from Tower Hamlets LEA