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New from MSU: Small Farmers and Big Retail: trade-offs of supplying supermarkets in Nicaragua

by Hope Michelson, Thomas Reardon, Francisco Perez

Michigan State University Department of Agricultural, Food, and Resource Economics  Staff Paper 2010-02 April, 2010

Abstract

In Nicaragua and elsewhere in Central America, small-scale farmers are weighing the risks of entering into contracts with supermarket chains. We use unique data on negotiated prices from Nicaraguan farm cooperatives supplying supermarkets to study the impact of supply agreements on producers' mean output prices and price stability.

We find that prices paid by the domestic retail chain approximate the traditional market in mean and variance. In contrast, we find that mean prices paid by Wal-mart are significantly lower than the traditional market but that Wal-Mart systematically reduces price volatility compared with the traditional market. We find some evidence, however, that farmers may be paying too much for this contractual insurance against price variation.

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March 6, 2010 | Walmart Foundation and CARE Launch Agricultural Economic Development Initiative in Peru

BENTONVILLE, Ark., Feb. 16, 2010 - The Walmart Foundation and CARE today launched the Peru Agricultural Economic Development Initiative, which seeks to help 2,300 small-scale farmers in Peru. The program is expected to increase participants' incomes by 30 percent and create more than 300 new jobs in the region.

June 25, 2009 | WAL-MART launches ‘Sustainability Pact' in Brazil

Planet Retail 25 Jun 2009

Wal-Mart has launched a ‘Sustainability Pact' in order to seek out more sustainable practices in the entire supply chain in Brazil. The project will gather over 300 suppliers and 200 NGOs as well as government authorities, partners and associates.

May 1, 2009 | 3 casos de negocios inclusivos en Bolivia – video de WBCSD-SNV

Alianza WBCSD-SNV para los Negocios Inclusivos y el Consejo Empresarial para el Desarrollo Sostenible (CEDES) Bolivia, April 16, 2009

En este video se presentan 3 casos bolivianos de negocios inclusivos que contribuyen a la superación de la pobreza a través de la incorporación de ciudadanos de menores recursos en la cadena de valor de las empresas.

March 26, 2009 | Wal-Mart - Small but fertile

Ethical Corporation, 16 Feb 2009 

Wal-Mart's adoption and adaptation of a farmers' capacity-building programme in Central America shows the big retailer can think small

March 25, 2009 | ¿Qué estrategias generan los pequeños productores frente al cambio de precios agrícolas?

El Grupo Chorlaví he publicado una nueva entrada que da cuenta de las dificultades que enfrentan los pequeños productores ante los cambios de los precios agrícolas, e invita a discutir en torno a las estrategias que ellos están utilizando. www.grupochorlavi.org/blog

March 8, 2009 | Recession challenges Fair Trade in Latin America

MEXICO CITY, Feb 20 - The world economic recession is threatening the progress Latin America has made in fair trade. Ruben Ravera, spokesperson for the Argentine Fair Trade Network, is among those who see a gloomy outlook. It is very likely that because of economic contractions "the consumer's commitment to fair trade will decline," he said.

February 5, 2009 | SHV MAKRO to open 15 stores in Peru

Planet Retail 4 Feb 2009

Dutch [cash and carry] retailer SHV Makro has announced plans to open 15 stores in Peru in the next four years. The company will invest more than USD100 million in the country and stores will open in both Lima and provinces. The opening of the first outlet is expected for the second half of the year.

September 1, 2008 | WAL-MART interest in Peru

Plenet Retail 26 Aug 2008

Wal-Mart is interested in investing in Peru, according to a report from the state news agency Andina, quoting Trade and Tourism Minister Mercedes Araoz. "We met with representatives of the Wal-Mart chain, and they told us that they want to invest in our retail sector," she was quoted as saying. "They didn't tell us when they would want to enter into Peru," she added. In a statement to Dow Jones, Wal-Mart said it had no concrete plans to enter Latin American countries. But the company added that it sees "opportunities to grow our sourcing relationships" in Peru.

July 29, 2008 | CASINO CBD launches tracking programme for perishables in Brazil

Planet Retail 29 Jul 2008

In Brazil, Casino-owned CBD has announced the development of a tracking programme that will monitor, from the crop to the store, all production of perishables sold at the company's almost 600 stores. In the last two years, the group has already invested BRL3 million (USD1.85 million) in the programme, including software development and supplier validation processes.

May 11, 2008 | Una encuesta sitúa a América Latina a la vanguardia de una nueva tendencia empresarial dirigida a los más desfavorecidos

May 2, 2008

El sector privado cubre el vacío de los gobiernos al incorporar en la economía declarada a 360 millones de pobres de la región en calidad de productores y consumidores.

Una encuesta realizada en más de 500 empresas importantes de América Latina y el Caribe, que se ha publicado hoy durante la Reunión Anual del Banco Interamericano de Desarrollo celebrada en Miami, ha revelado que casi la mitad de dichas empresas participa en iniciativas empresariales destinadas a incorporar a los ciudadanos más desfavorecidos del continente en la economía formal.

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