Transformation of the Agrifood Industry in Developing Countries - The Oxford Topic of Food, Politics, and Society - page 798

thenoccurredsomewhatbeforeretail,withthelattermainlyinthelate1990sandinto
the2000s.Asweshowinthefollowingsection,theretailrevolutiononlytookofinear-
nestinthemid-2000sinIndiaandVietnam,andthengrewrapidly.InIndia,although
FDIliberalizationinretailhasnotyetoccurred,thesalesofmodernretail'sleading
food-sellingchainsleaptfrom$200 millionin2001to5billionin2009(Reardon,Gulati,
andMinten2010)—mainlydrivenbydomesticconglomerates,themselvescreaturesof
the economic boom. This also happened in Russia and South Korea. There was also, as a
lagged part of the third wave, a relatively weak emergence of processing and retail trans-
formation in a few countries in East/Southern Africa.
There were some striking anomalies in the waves, however, and, in particular, in the
thirdwave.Forexample,Indiahadasearlyapublic-sectortransformationofthethree
segments as any first-wave country, and kept this public-sector apparatus to the present,
notonlyintactbutenlarged—whereastransitioncountriessuchasChina,Russia,and
Vietnamhadalreadymovedtoprivatizingstateprocessingandretailinginthe1990s.
Finally,difusionofthetransformation(inallthreesegments)tendedtooccurearli-
est in more urban and later in more rural areas, and earliest and fastest in processed,
then semi-processed, and then fresh products.
The Two-stage Transformation of the
Wholesale/Logistics Segment
Public-Sector Induced Transformation of the Wholesale Sector
The “regulated” or state wholesale markets were substantial investments by cities or
provinces,andwereputinplaceinwavesmainlyfromthe1960son,startingwithmain
cities, then secondary cities, and so on. A typical pattern was a hub-and-spokes model,
with a set of primary wholesale markets in big cities and then “feeder” or secondary
wholesalemarketsinsmallercitiesandruralareas,suchasoneindsinBrazil,China,
Indonesia,Mexico,andIndia.helargemarketsarehuge: todayDelhi'sAzadpurmar-
ketmoves4 milliontonsoffreshproduceperyear;Beijing'sXinfadi,8 milliontons;the
markets in Mexico City and Sao Paulo are each much larger yet. The growth of pub-
licmarketswasspectacular.Forexample,China'swholesalemarketvolumeincreased
11,000 percentfrom1990to2000(Huanget al.2007;Ahmadi-EsfahaniandLocke,
1998),andIndia'sregulatedwholesalemarketswentfrom450regulated(formal)whole-
salemarketsin1948to5,500wholesalemarketsin2008(Reardonet al.2010).A similar
rapidgrowthhadoccurredintheirst-andsecond-wavecountriesinthe1960s-1970s.
The massive investments in public wholesale markets partially transformed this seg-
ment—substantially“de-fragmenting”andintegratingmarkets,byproviding“econo-
mies of agglomeration” and channeling wholesale from field brokers into a network of
covered markets with in situ wholesalers, and thus also altering both technology and