Agriculture Reference
In-Depth Information
Chapter 33
Transformation of the
Agrifood Industry in
Developing Countries
Thomas Reardon and C. Peter Timmer
Introduction
The agrifood industry has been transforming rapidly over the past three decades in
developing countries. What took a century in the United States and Western Europe
hasbeenaccomplishedinseveraldecadesinmanycountries,oteninwayscontrary
toexpectations.Inretail,forexample,a“supermarketrevolution”contradictedboth
broadlysharedself-perceptionsindevelopingcountries,aswellasthepre-1990retaillit-
erature—whereotenonereadthat“traditionalfoodculture,”densecities,lowopportu-
nity cost of labor, and “habit of frequent shopping” militated against modern retail. Both
market forces and government policy have shaped transformations of the sector; foreign
directinvestmentprovidesthemainvectorofefectsonagrifoodglobalization.hese
transformationshavepotentialtoafectfarmersviaincreasedincomesandmodernized
technologies, and consumers via cheaper and safer food. On the other hand, modern-
izedagrifoodindustrysegments(wholesale/logistics,processors,retailers)arebroadly
competitivewith—andapparently,overthelongerterm,broadlydestructiveof—their
counterparts in the traditional sector. Consolidation within these segments, and syner-
gies across them, have emerged far faster than in currently wealthier countries, with still
poorlyunderstoodconsequencesfortheunitsthatmatterforwelfareanalysis—con-
suminghouseholdsandsmallfarms.hischapteranalyzesthesectorfromitswholesale
and logistics operations, which connect to farmers, through processing to retail estab-
lishments, which connect to consumers.
By transformation we mean changes in structure and in behavior. Structural changes
includeconsolidationandmultinationalization;changesinbehaviorincludetheorga-
nizationandinstitutionsandtechnologiesofprocurement,processing,anddistribution
Search WWH ::
Custom Search