Social Science Research Council

“Small Farmers and Big Retail: Nicaraguan Producers Operating in New Output Markets”

My research collects and analyzes a unique household-level data set essential to the study of an important question: the economic impacts on Nicaraguan small farmers of the rapidly expanding market power of supermarket produce buyers. Research has already documented the determinants of the rapid growth of supermarkets in developing countries: increased openness of developing economies to foreign direct investment in retail; rising urbanization and incomes; growing populations of women with jobs outside of the home; improved access to refrigeration and transportation.  Supermarkets in developing countries source large amounts of agricultural products of consistent quality and quantity, and these expanding procurement channels can represent new market opportunities for some local and regional producers. Participation brings new challenges, however. The supermarket often exerts unprecedented authority over crop varieties, production practices, packing and processing methods, and delivery schedules.  In such an environment, which smallholders will join and succeed as suppliers in these new market opportunities? And when farm households are included, how does participation impact household incomes and assets?

These are simple questions, but convincing answers require careful study of several interconnected dynamics. My dissertation takes a unique, integrated approach to the study of these questions, offering a complete analysis to date of smallholder participation in new supermarket-led agri-food markets and household welfare effects attributable to participation. Building on recent studies by the Nicaraguan government, my project will generate proper longitudinal data matching market participation patterns over time, pertaining to the evolution of household welfare indicators. This study addresses an issue of central importance in the changing context of world agriculture: can small-scale farmers benefit from new markets evolving amid globalization? Or will these producers become casualties in this global process?