Transformation of the Agrifood Industry in Developing Countries - The Oxford Topic of Food, Politics, and Society - page 806

4. Largeprocessingirms(likelargeretailchains)havegreatercapacitytoputin
place more efficient marketing systems; large processors put in place distribution
centersandlogisticsleets.
Moreover, innovation on the input side, such as vegetable seeds that allow harvest at
a single time rather than staggered over the season, or greater shelf life, allow large-scale
plants to fill capacity and source threshold volumes. Multinational seed companies help
drive this innovation, in symbiosis with large processing companies.
Finally, there has emerged a “symbiosis” between large-scale processors and super-
market chains. The latter drive down consumer prices and extend the market, as dis-
cussed next.
The Two-stage Transformation of Food
Retail in Developing Countries
First Stage of Transformation of Food Retail—Driven Mainly
by the Public Sector
Many developing-country governments have actively worked to develop modern
retail—regardlessofwhethertheytermedtheirefortsso.herearethreetypesofpub-
licsectorcumcooperativeretailthatlourishedmainlyinthe1970s/1980s,andthen
were dismantled or privatized, although some continued into the 1990s/2000s and
“morphed” into competitors with modern private chains. These included the following.
First, governments developed “food security focused” state retail chains dedicated to
thesubsidizeddistributionmainlyofstaples.ExamplesoftheseincludetheFairPrice
ShopsinIndia,theGrainStoresinChina,theSAMstoresinMexico.heseweregener-
allyinforward-integrationfromgrainparastatals.Inmostcountries,theseretailchains
wereprivatizedordismantledalongwiththeprocessingparastatalsintheearly1990s.
Somesurvivedintotheliberalizationera,suchasinIndia,wheretheFairPriceShops
formabout15 percentofurbanfoodstaplesretail,andhaveabout$600 millionofsales,
rankingthemamongtheleadingchains(Reardonet al.2010;Gaihaet al,thisvolume).
Second, closely related to the aforementioned were chain stores in forward-integration
fromstate-supportedorstate-subsidizedcooperatives.hiswascommoninCentral
andEasternEuropeandIndia,amongothercountries.hemostcommonwasindairy,
butitwasalsodoneinmeatandotherprocessedgoods(Drieset al.2004).Inmany
casestheseweredismantledorprivatizedwhentraditionalstatecooperativesdeclined
inthe1990s.AlthoughthiswasinducedbySAPs(StructuralAdjustmentPrograms)and
strong competition from the rise of private modern retail in developing countries, it par-
alleledtheriseandthendeclinebythe1950sofcoopstorechainsintheUnitedKingdom
andtheUnitedStates.Somehavesurvivedintotheliberalizationera: anexampleisthe