Farmer Participation in Supermarket Channels, Production Technology and Technical Efficiency: The Case of Vegetables in Kenya

Elizaphan J.O. Rao, Bernhard Brümmer and Matin Qaim
Selected Paper prepared for presentation at the Agricultural & Applied Economics
Association's 2010 AAEA, CAES & WAEA Joint Annual Meeting, Denver, Colorado, July 25-27, 2010.

Supermarkets are currently gaining ground in the agri-food systems of many developing countries. While recent research has analyzed income effects in the small farm sector, impacts on farming efficiency have hardly been studied. Productivity effects in previous studies are also estimated with respect to different frontiers. Using a survey of Kenyan vegetable growers and a meta-frontier approach, we control for self-selection using propensity score matching and show that participation in supermarket channels increases farm productivity by 35-38%. Effects on technical efficiency are, however, insignificant.

Supermarket expansion therefore presents opportunities for realizing agricultural growth, thus enhancing poverty alleviation and rural development.

http://ageconsearch.umn.edu/bitstream/61190/2/AAEA_2010_10933a.pdf