Good for who? : supermarkets and small farmers in South Africa : a critical review of current approaches to market access for small farmers in developing countries

Date
2010-12
Authors
Van der Heijden, T.
Journal Title
Journal ISSN
Volume Title
Publisher
Stellenbosch : University of Stellenbosch
Abstract
ENGLISH ABSTRACT: Small‐scale agriculture is one of the few tools available to support improved rural livelihoods on a significant scale in South Africa. Access to output markets is a key obstacle for small farmers in generating higher incomes. Thus, the rise of modern markets (supermarkets in particular) is generally viewed as positive for the rural poor, although most commentators accede that there are challenges to be overcome in obtaining access to such markets. A literature survey indicates a mainstream point of view about the reasons for modern market exclusion, as well as the most appropriate policy responses. This viewpoint is characterized by an assessment that the “fault” for market exclusion lies largely with small producers – their personal characteristics, their production methods, and their location – rather than with these markets themselves. The corresponding logic is that if these issues are addressed small farmers will almost certainly be included in modern market supply chains. It is this study’s assertion that much of the research that has been undertaken to date is in fact incomplete, because it has excluded two key issues: The dominant supermarket business model; and the actual position of small farmers in those countries with high levels of supermarket concentration. An examination of the supermarket model suggests it is inherently hostile towards most producers, and that modern supermarket supply chain management strategies aim to maximize the extraction of value from other chain participants. Smaller producers are particularly hard hit by this strategy. The South African food retail market structure resembles that of industrialised countries rather than developing countries, and the largest local supermarkets probably have sufficient market share to exercise significant market power. Therefore, we should expect that the position of South African small farmers is similar to that of small farmers in industrialised countries, who are increasingly excluded by modern supermarket‐led supply chains. In light of this analysis, most of the current policy initiatives responses to address market exclusion seem woefully inadequate. Improving the quality of production, and small farmers’ access to skills and assets is important and necessary, but this study proposes that these actions on their own are not sufficient to guarantee access into modern supply chains. Insufficient research attention has been given to understanding how markets themselves become barriers to entry. This is a vital gap in local rural development policy: A market system that favours large over small farmers has the potential to exacerbate rural inequality and to neutralize policy aimed at supporting small farmers. Government needs to take the development of marketing opportunities specifically for small farmers more seriously, understanding that they face a very different set of market access challenges than do large farmers. They need to encourage and support the type of food networks and marketing structures that will have the greatest positive benefit on small farmers and the communities that they live in. This requires a different view of the workings of market networks, and a more critical assessment of how these impact on rural livelihoods.
AFRIKAANSE OPSOMMING: Kleinskaalse landbou is een van die min hulpmiddels beskikbaar vir ondersteuning op beduidende skaal van ’n beter bestaan in landelike Suid‐Afrika. Toegang tot produksiemarkte is een van die struikelblokke wat kleinboere in die gesig staar wanneer hulle meer produseer. Die opkoms van moderne markte word algemeen beskou as positief vir armes op die platteland, alhoewel kommentaar meestal daarop dui dat daar uitdagings is wat te bowe gekom moet word ten einde toegang te verkry. ʼn Literatuurstudie dui op ʼn hoofstroomstandpunt ten opsigte van die redes vir markuitsluiting, asook die mees gepaste beleidsreaksies. Hierdie standpunt word gekenmerk deur ʼn mening dat die “fout” vir markuitsluiting hoofsaaklik by die produsente lê – hulle persoonlike eienskappe, hulle produksiemetodes, en hulle ligging – eerder as by hierdie markte self. Die ooreenstemmende logika is dat, as kleinboere die gehalte en standvastigheid van hulle produksie verbeter, dan sal hulle feitlik verseker by moderne markte ingesluit word. Hierdie studie voer aan dat baie van die navorsing wat tot dusver onderneem is, in werklikheid onvolledig is, weens die feit dat twee belangrike aangeleenthede: die dominante supermark‐sakemodel, en die posisie van kleinboere in daardie lande met hoë vlakke van supermarkkonsentrasie buite rekening gelaat word. ʼn Ondersoek van die supermarkmodel dui daarop dat dit inherent vyandig is teenoor die meeste landbouprodusente. In teenstelling met die siening van gelyke vennote wat in die rigting van ʼn gemeenskaplike doelstelling saamwerk, is die moderne supermarkvoorraadketting daarop ingestel om soveel moontlik waarde uit ander deelnemers aan die ketting te trek. Kleiner produsente kry veral swaar as gevolg van hierdie strategie. Die struktuur van die Suid‐Afrikaanse voedselkleinhandelmark toon ooreenkomste met dié van geïndustrialiseerde lande eerder as met dié van ontwikkelende lande, en die grootste plaaslike supermarkte het waarskynlik voldoende markaandele om aansienlike markkrag uit te oefen. Ons moet dus verwag dat die posisie van Suid‐Afrikaanse kleinboere soortgelyk is aan dié van kleinboere in geïndustrialiseerde lande, wat toenemend uitgesluit word as gevolg van voorraadkettings wat deur moderne supermarkte gelei word. In die lig van hierdie analise skyn die meeste van die reaksies van die huidige beleidsinisiatiewe in ’n poging om markuitsluiting die hoof te bied, bedroewend ontoereikend. Verbetering van die gehalte van produksie en kleinboere se toegang tot vaardighede en bates is belangrik en nodig, maar is op sigself nie voldoende om toegang tot moderne voorraadkettings te waarborg nie. Onvoldoende aandag is tot dusver in navorsing gegee aan begrip van hoe markte self hindernisse op die pad na toegang word. Dit is ʼn kardinale leemte in plaaslike landelike ontwikkelingsbeleid: ʼn markstelsel wat groot boere eerder as kleinboere bevoordeel, het die potensiaal om landelike ongelykheid te vererger en beleid gemik op steun aan kleinboere te neutraliseer. Die regering moet die ontwikkeling van bemarkingsgeleenthede – in die besonder vir kleinboere – ernstiger opneem, en begryp dat laasgenoemde voor baie andersoortige uitdagings ten opsigte van marktoegang te staan kom as groot boere. Hulle moet die soort voedselnetwerke en bemarkingstrukture wat die grootste positiewe voordele vir kleinboere en die gemeenskappe waarin hulle woon sal hê, aanmoedig en ondersteun. Dit vereis ʼn ander siening van die werking van marknetwerke, en ʼn meer kritiese waardebepaling van die invloed wat dit op landelike bestaan het.
Description
Thesis (MComm (Agricultural Economics)--University of Stellenbosch, 2010.
Keywords
Small farmers -- Market access -- Developing countries, Supermarkets -- Developing countries, Dissertations -- Agricultural economics, Theses -- Agricultural economics
Citation