Rising food costs are putting pressure on the Indian government to open up the country's retail sector
India may be on the brink of opening up its tightly regulated retail sector as the pressure of rising food prices mounts.
]]>Rising food costs are putting pressure on the Indian government to open up the country's retail sector
India may be on the brink of opening up its tightly regulated retail sector as the pressure of rising food prices mounts.
As he announced his budget on Friday, finance minister Pranab Mukherjee stated the country must find ways to reduce agricultural wastage and improve the efficiency of its supply chain, reported the Financial Times.
"We need greater competition and therefore need to take a firm view on the opening up of the retail trade," Mr Mukherjee said.
"It will help in bringing down the considerable difference between the farm gate prices, wholesale prices and retail prices
Full story at http://www.fruitnet.com/content.aspx?cid=5983&rid=
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SNV in Latin America focuses its efforts on advancing Inclusive Business, an entrepreneurial initiative which contributes towards poverty reduction by including low-income communities within the value chain - as consumers, providers, or distributors - while creating mutual value for both business and the low-income segment.
]]>SNV in Latin America focuses its efforts on advancing Inclusive Business, an entrepreneurial initiative which contributes towards poverty reduction by including low-income communities within the value chain - as consumers, providers, or distributors - while creating mutual value for both business and the low-income segment.
From early 2006, SNV and the World Business Council for Sustainable Development (WBCSD) have engaged in a strategic partnership to contribute to sustainable poverty reduction, through job creation and the delivery of products and services through the involvement of the private sector in Inclusive Business activities.
http://www.snv-la.org/en/ http://www.inclusivebusiness.org/
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Through this initiative, women in Peru will become more involved in their family's farming operations. In addition, farmers will improve their agricultural operations, expand production, and gain better access to both local and export markets.
"Walmart is committed to empowering women to improve their livelihoods and enhance their economic opportunities," said Margaret McKenna, president, Walmart Foundation. "Agriculture is an important source of income in rural areas of Peru, and we are excited that strategies will be implemented in this project to ensure women are actively involved in training workshops, enabling them to exercise more decision-making in their family farming operations."
The project will focus on developing more productive artichoke, white corn, avocado, and other fresh vegetable value chains. Technical assistance providers will work closely with the growers to implement strong agricultural, environmental, and water resource management practices, strengthen business and negotiating skills, promote access to credit, and develop relationships with local buyers and exporting companies. The project will take place in the Huaylas, Yungay, Carhuaz, Huaraz and Ancash provinces in the north-central highlands of Peru.
Full article at http://walmartstores.com/FactsNews/NewsRoom/9653.aspx
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Indian retail/wholesale joint venture Bharti Wal-Wart has stated that it is positive that the Indian government will allow Foreign Direct Investment in the retail sector, given the "progressive" nature of the current government.
]]>Indian retail/wholesale joint venture Bharti Wal-Wart has stated that it is positive that the Indian government will allow Foreign Direct Investment in the retail sector, given the "progressive" nature of the current government.
Bharti Wal-Mart MD and CEO Raj Jain said that they are positive that India's progressive government will move ahead with its policies of economic and social reforms, including allowing FDI in front-end retail. Jain attributed his positivity to Finance Minister Pranab Mukherjee's budget speech, saying it underscores the need to lessen the significant wastages in storage and also in the operations of the existing food supply chains in India.
Copyright www.planetretail.net
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Middlemen can play a big part in promoting sustainability in the food system, said Richard Schneiders, recently retired chief executive officer of Houston-based Sysco Corporation.
]]>Middlemen can play a big part in promoting sustainability in the food system, said Richard Schneiders, recently retired chief executive officer of Houston-based Sysco Corporation.
Schneiders spoke at the Feb. 18 U.S. Department of Agriculture's Agricultural Outlook Forum, making a case that Sysco and other middle market operators in the supply chain can play important roles even though they are largely invisible to the consumer.
Sysco is working to integrate mid-sized fruit and vegetable producers into its delivery system, Schneiders said.
"One of the key learnings is that no farmer on his or her own produces enough products for an economically feasible pick-up," he said.
"We all have to sit down together, big and small, local and foreign, grower and distributor and customer, in a spirit of cooperation," he said.
Full story at http://thepacker.com/Middlemen-can-help-create-sustainable-supply-chain/Article.aspx?oid=993198&tid
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Thailand's modern grocery sector - composed primarily of hypermarket, "cash and carry," and convenience store formats - continues to grow, but market saturation, changing consumer behaviors, and new regulations will intensify the battle for share of wallet across all channels.
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Thailand's modern grocery sector - composed primarily of hypermarket, "cash and carry," and convenience store formats - continues to grow, but market saturation, changing consumer behaviors, and new regulations will intensify the battle for share of wallet across all channels.
Full article available for download at http://csia.mckinsey.com/Home/Knowledge_by_region/Asia/Thailands_modern_grocery_at_a_crossroads.aspx
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Journal of Economic Geography Volume 9, Issue 4Pp. 511-537
Abstract
Economic geographers are directing increasing attention to international expansion by leading retail transnational corporations (TNCs). However, there has been minimal examination of the financing methods of these firms and, while the major retail TNCs have supply relationships in sub-Saharan Africa, so far none have opened stores on the continent. Therefore, in this article we analyse expansion into sub-Saharan Africa by a second tier retail TNC (Shoprite) and explore its financing strategy. We find that the food retail sector in sub-Saharan Africa is experiencing strong growth with high financial returns. We identify a pecking order to financing the firm-with a preference for internal funding through retained earnings preceding long-term debt, and limited issuance of equity as a last resort. Given the efficiencies of debt financing, this preference is interpreted as reluctance to dilute returns to shareholders and as a pragmatic approach to financing expansion in ‘particularistic' business environments.
Journal of Economic Geography Volume 9, Issue 4Pp. 511-537
Abstract
Economic geographers are directing increasing attention to international expansion by leading retail transnational corporations (TNCs). However, there has been minimal examination of the financing methods of these firms and, while the major retail TNCs have supply relationships in sub-Saharan Africa, so far none have opened stores on the continent. Therefore, in this article we analyse expansion into sub-Saharan Africa by a second tier retail TNC (Shoprite) and explore its financing strategy. We find that the food retail sector in sub-Saharan Africa is experiencing strong growth with high financial returns. We identify a pecking order to financing the firm-with a preference for internal funding through retained earnings preceding long-term debt, and limited issuance of equity as a last resort. Given the efficiencies of debt financing, this preference is interpreted as reluctance to dilute returns to shareholders and as a pragmatic approach to financing expansion in ‘particularistic' business environments.
Available for download at http://joeg.oxfordjournals.org/content/9/4/511.abstract
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Executive summary
Indonesia, the fourth largest market in the world with a population of 220 million in 2005, is forecast to reach almost 250 million people by 2015, making it a large food market.
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Executive summary
Indonesia, the fourth largest market in the world with a population of 220 million in 2005, is forecast to reach almost 250 million people by 2015, making it a large food market.
Consumption of fresh food is increasing and urban based consumers are becoming more health and convenience conscious. This has opened up opportunities for the modern retail sector to expand further into fresh foods, such as the offer of hydroponic and organic vegetables.
Indonesia has over 17,000 islands and this provides a major challenge to distribute fresh products nationally. Most of Indonesia's locally produced fresh vegetables (cabbage, potato and chilli) are distributed throughout Indonesia in non refrigerated transport. However, there is increased use of airfreight for select high value fresh vegetables for inter-island trading where there is shortage of local supplies.
The traditional wet markets still dominate fresh food trade however there is an increasing trend of food purchases at modern retail outlets. Most supermarkets and hypermarkets in Indonesia have expanded their share of the retail market with the opening of new stores throughout major cities in Indonesia and with an increased emphasis on fresh food and higher value lines, such as hydroponic and organic vegetables. Both Matahari Hypermart and Hero supermarkets are now offering a full range of ingredient vegetables and other food items essential for Indonesian cooking. In the vegetable section, there is now a full range of chilli (five varieties), ginger, onions, garlic, pepper etc.
Indonesia's vegetable production has increased by an average of 8% per year since 2001 from 6.9 million tons to reach more than 9 million tons (excluding almost 31 million tons of mushrooms) in 2005, from almost one million hectares of land; an average yield of 9.6 tons per hectare. The main vegetables grown in Indonesia (besides mushrooms) are cabbages, chilli, potato, shallots/onions and tomato.
There are 33 provinces in Indonesia that produce over 20 types of vegetables; however 85% of all vegetables are grown on the islands of Java and Sumatra. The major vegetable producing provinces are: West Java (35.6%), Central Java (13.3%), East Java (11.9%) and North Sumatra (10.3%); these four provinces account for over 70% of all vegetable production.
Imported vegetables accounted for only 4% of total consumption in Indonesia in 005.
East Indonesia accounted for only 11.6% of the volume of all vegetables produced in Indonesia in 2005 yet has 16.0% of the population; this represented an average of 28.7 kg per capita compared to an average across Indonesia of 39.8 kg per capita. Therefore Eastern Indonesia is a net importer of vegetables, with supply mainly from Java.
North Sulawesi (274,134 tons) and South Sulawesi (256,153 tons) are the main vegetable producing provinces in Eastern Indonesia in 2005 with 52% share of all vegetables from the 13 provinces in Eastern Indonesia.
The province of South Sulawesi has a topography and climate that is suitable for vegetable production and hence grows a wide range of vegetables for local consumption and inter-island trading. South Sulawesi produces about 256,000 tons of vegetables from almost 55,000 hectares of land; an average yield of 4.7 tons per hectare. The main vegetables grown in South Sulawesi are: cabbage (25.4%), chilli (15.3%), yardlong bean (7.9%), leek (6.5%) and tomato (6.3%).
The main issues, related to vegetable supply, for retailers in Makassar, the capital of South Sulawesi are:
• Consistency in quantity with a lack of local vegetable supply from Sulawesi, especially in the rainy season with retailers requiring to source supply from Java.
• Lower quality of local fresh produce compared to product sourced from Java.
• Large price fluctuations for some vegetables like chilli.
Production of chilli in Indonesia has been increasing by an average of 20% per year since 2001 to reach over 1 million tons in 2005 from about 190,000 hectares; accounting for about 12% of vegetable production. Over 60% of chilli is produced in Java with west Java (198,000 tons) being the major source of large chilli and east Java (143,000 tons) being the major source of small chilli. There is a wide variation in yields of large and small chilli.
The chilli sauce manufacturing industry is based on the island of Java (which has over 60% of all chilli production for fresh and processing) with 10 major companies and 12 manufacturing plants.
A value chain analysis of four supply chains of chilli found that supply to supermarket gives the highest return to farmers. The lowest value chain is a channel to traditional markets.
The major issues facing the chilli industry in South Sulawesi are:
1. Low productivity
2. Benefiting from opportunities for value adding on the farm
3. No post harvest or cold chain management
4. Market development opportunities
5. Weak farmer bargaining power
It is recommended that there is a need to link smallholders to more dynamic markets such as channels to modern retailers and the food processing industry. Technical assistant to farmers is also needed on more efficient cultivation technology to increase productivity and the application of post harvest handling.
Available for download at http://www.aciar.gov.au/system/files/sites/aciar/files/node/3943/Final+report+SMAR-2007-042.pdf
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Small producers, supermarkets, and the role of intermediaries in Turkey's fresh fruit and vegetable market
by Céline Bignebat, Ahmet Ali Koç, Sylvaine Lemeilleur
[img_assist|nid=2501|title=|desc=|link=none|align=left|width=76|height=100]
Small producers, supermarkets, and the role of intermediaries in Turkey's fresh fruit and vegetable market
by Céline Bignebat, Ahmet Ali Koç, Sylvaine Lemeilleur
Agricultural Economics Volume 40 Issue s1 , Pages 715 - 825 (November 2009)
[img_assist|nid=2507|title=|desc=|link=url,http://www.sciencedirect.com/science?_ob=ArticleURL&_udi=B6VC6-4X8BPDJ-2&_user=10&_coverDate=11%2F30%2F2009&_rdoc=1&_fmt=high&_orig=browse&_sort=d&view=c&_acct=C000050221&_version=1&_urlVersion=0&_userid=10&md5=b229b3954f3d7509d103a0f5983630b9|align=left|width=75|height=100]Producing and Procuring Horticultural Crops with Chinese Characteristics: The Case of Northern China. by Honglin Wang, Xiaoxia Dong, Scott Rozelle, Jikun Huang and Thomas Reardon.
World Development Volume 37, Issue 11, November 2009, Pages 1791-1801
Patterns of restructuring food markets in South Africa: The case of fresh produce supply chains by Chikazunga D., Joordan D., Biénabe E., and Louw A.
AAAE Conference Proceedings (2007) 53-55
Regoverning agrifood markets in CEEC - Poland's pork and apple markets by Jerzy Wilkin, Małgorzta Juchniewicz and Dominika Milczarek
University of Warsaw seminar
Dairy food chain restructuring in Poland - Causes and impacts. by Dominika Milczarek, Agata Malak-Rawlikowska, Jan Fałkowski. in: Petrick, M. and Buchenrieder, G. "Sustainable rural development: What is the role of the agri-food sector?", IAMO, Halle 2007, pp.200-218.
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Abstract : A wide range of empirical studies show the extent to which the rise of supermarkets in developing countries transforms domestic marketing channels. In many countries, the exclusion of small producers from so-called dynamic marketing channels (that is, remunerative ones) has become a concern. Based on data collected in Turkey in 2007 at the producer and the wholesale market levels, we show that intermediaries are important to understanding the impact of downstream restructuring (supermarkets) on upstream decisions (producers).
Agricultural Economics Volume 40 Issue s1 , Pages 715 - 825 (November 2009)
Abstract : A wide range of empirical studies show the extent to which the rise of supermarkets in developing countries transforms domestic marketing channels. In many countries, the exclusion of small producers from so-called dynamic marketing channels (that is, remunerative ones) has become a concern. Based on data collected in Turkey in 2007 at the producer and the wholesale market levels, we show that intermediaries are important to understanding the impact of downstream restructuring (supermarkets) on upstream decisions (producers). Results show first that producers are not aware of the final buyer of their produce, because intermediaries hinder the visibility of the marketing channel, thereby restricting a producer's choice to that of the first intermediary. Econometric results show that producers who are indirectly linked to the supermarkets are more sensitive to their requirements in terms of quality and packaging than to the price premia compensating the effort made to meet standards. Therefore, the results lead us to question the role of the wholesale market agents who act as a buffer in the chain and protect small producers from negative shocks, but who stop positive shocks as well, and thereby reduce incentives.
The original version of this article was prepared for the 111 EAAE-IAAE Seminar "Small Farms: Decline or Persistence" held at the University of Kent, Canterbury, U.K., 26-27 June 2009.
Availabe at http://www3.interscience.wiley.com/journal/123189755/issue?
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Abstract : A wide range of empirical studies show the extent to which the rise of supermarkets in developing countries transforms domestic marketing channels. In many countries, the exclusion of small producers from so-called dynamic marketing channels (that is, remunerative ones) has become a concern. Based on data collected in Turkey in 2007 at the producer and the wholesale market levels, we show that intermediaries are important to understanding the impact of downstream restructuring (supermarkets) on upstream decisions (producers).
Agricultural Economics Volume 40 Issue s1 , Pages 715 - 825 (November 2009)
Abstract : A wide range of empirical studies show the extent to which the rise of supermarkets in developing countries transforms domestic marketing channels. In many countries, the exclusion of small producers from so-called dynamic marketing channels (that is, remunerative ones) has become a concern. Based on data collected in Turkey in 2007 at the producer and the wholesale market levels, we show that intermediaries are important to understanding the impact of downstream restructuring (supermarkets) on upstream decisions (producers). Results show first that producers are not aware of the final buyer of their produce, because intermediaries hinder the visibility of the marketing channel, thereby restricting a producer's choice to that of the first intermediary. Econometric results show that producers who are indirectly linked to the supermarkets are more sensitive to their requirements in terms of quality and packaging than to the price premia compensating the effort made to meet standards. Therefore, the results lead us to question the role of the wholesale market agents who act as a buffer in the chain and protect small producers from negative shocks, but who stop positive shocks as well, and thereby reduce incentives.
The original version of this article was prepared for the 111 EAAE-IAAE Seminar "Small Farms: Decline or Persistence" held at the University of Kent, Canterbury, U.K., 26-27 June 2009.
Availabe at http://www3.interscience.wiley.com/journal/123189755/issue?
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Trading policy in Johannesburg aims to remake the appearance of the inner city, and transform power relationships through two key elements. (1) By removing traders from the streets, and to place them in council-provided markets; and (2) to develop informal trading into a more dynamic and commercially viable activity for those people who earn their living from it. This CRP report has looked critically at this policy objective, and underpins a number of problems in assimilating formal and informal policy networks.
]]>Trading policy in Johannesburg aims to remake the appearance of the inner city, and transform power relationships through two key elements. (1) By removing traders from the streets, and to place them in council-provided markets; and (2) to develop informal trading into a more dynamic and commercially viable activity for those people who earn their living from it. This CRP report has looked critically at this policy objective, and underpins a number of problems in assimilating formal and informal policy networks.
Available for download at http://www.research4development.info/PDF/Outputs/FutureState/polbrief26.pdf
See also Research Dialogue
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Maurits de Koning | Bart Steenhuijsen Piters, de
Bulletins of the Royal Tropical Institute | ISBN 9789460220395 | KIT Publishers, Amsterdam | Paperback | 120 p. | 2009
This bulletin is written for people who want to learn more about the challenges and opportunities of ‘farmers as shareholders', that is, including small-scale farmers' groups and associations in the ownership of companies that add value and market their produce.
Maurits de Koning | Bart Steenhuijsen Piters, de
Bulletins of the Royal Tropical Institute | ISBN 9789460220395 | KIT Publishers, Amsterdam | Paperback | 120 p. | 2009
This bulletin is written for people who want to learn more about the challenges and opportunities of ‘farmers as shareholders', that is, including small-scale farmers' groups and associations in the ownership of companies that add value and market their produce.
Following the general overview of the issues and prospects presented in Chapter 1, Chapter 2 provides four detailed cases which examine the ‘state of the art' in this complex area. The cases look at farmers' organizations who produce cocoa, coffee, tea and organic cotton, in two African countries (Ghana and Rwanda) and Peru, in South America. The emphasis is on how they became shareholders in companies that market their product in the North, the challenges faced and benefits gained for the different parties involved. To round out the picture, brief examples of another marketing initiative in India known as Zameen, and additional background on the work of TWIN Trading are provided.
In Chapter 3, the authors provide a synthesis of experience and offer insights into the different motives for promoting shareholding by producers/farmers. After presenting the perceptions of different stakeholders - the companies, the donors and the farmers' organizations - as described in the cases, a section is devoted to the all-important issue of sustainability (for shareholding by farmer organizations).
At the end, there are annexes that provide answers to several common questions on farmers as shareholders, and a list of selected websites where the reader may go to get current news on the many organizations and fair trade companies discussed in the book.
Order this book at KIT Publishers at http://www.kitpublishers.nl/smartsite.shtml?id=33740&ItemID=2764
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