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Abstract

A wide range of the empirical studies shows to what extend the rise of supermarkets in developing countries deeply transform domestic marketing channels. In particular, the exclusion of small producers from the so-called dynamic marketing channels (that is remunerative ones) is at stake. Based on original data collected in Turkey in 2007 at the producer and the wholesale market levels, we show that the intermediaries are decisive in order to understand the impact of downstream restructuring (supermarkets) on upstream decisions (producers). The results show first that producers are not aware of the final buyer of their produce, as intermediaries hinder the visibility of the marketing channel, their choice is restricted to that of the first intermediary. Moreover, the econometric results conclude that producers who are indirectly linked to the supermarkets are more sensitive to their requirements in terms of quality and packaging than to the price premia they set accordingly to the effort made to meet their standards. Therefore, the results question the role of the wholesale market agents who act as a buffer in the chain and protect small producers from negative shocks, but who stop positive shocks as well, and reduce incentives.

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