The Rise of Supermarkets and Vertical Relationships in the Indonesian Food Value Chain: Causes and Consequences

This paper reviews the causes of the emergence of modern retailing and the vertical relationships in the Indonesian food value chain, and the consequences of these changes on market organization and value distribution. The findings of this paper suggest that there are both demand- and supply-side factors that contribute to the emergence of modern retailing. The evolution of vertical relationships between farmers and modern retailers observed in Indonesia is a direct response to risks and quality uncertainty. In the vertical relation, large-scale retailers may earn a monopsonistic rent, and there are risks of exclusion of small-scale farmers from the emerging food value chain. However, there are alternative channels through which farmers may sell their products, albeit at a lower price compared to the modern channels, and measures can be instituted to protect them against monopsonistic rents. The findings have important policy implications for developing countries.


Editor(s):
Balisacan, Arsenio M.
Issue Date:
2005-12
Publication Type:
Journal Article
DOI and Other Identifiers:
1656-4383 (Other)
PURL Identifier:
http://purl.umn.edu/165779
Published in:
Asian Journal of Agriculture and Development, Volume 02, Number 1-2
Page range:
39-48
Total Pages:
10
Series Statement:
Asian Journal of Agriculture and Development




 Record created 2017-04-01, last modified 2017-08-27

Fulltext:
Download fulltext
PDF

Rate this document:

Rate this document:
1
2
3
 
(Not yet reviewed)