A Case Study involving Supermarkets and Smallholders in Thailand

Abstract

This study explores the implications of supermarket expansion in the developing world for actors, particularly small-scale farmers, along the supply chains, by examining a case from Thailand. Supermarkets exert monopsonistic power by pushing a range of processing and marketing costs on to suppliers and instituting a short-term tendering process among suppliers. The scale of the farming operation is not a barrier to entering the chain, but important financial and social capital investments are necessary. Returns compared to traditional farming can be high, and appear sustainable at least in the medium term.