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Farmer participation in supermarket channels and technical efficiency: The case of vegetable production in Kenya

Author

Listed:
  • Elizaphan J.O. Rao

    (University of Göttingen)

  • Matin Qaim

    (University of Göttingen)

Abstract
Supermarkets and high-value exports are currently gaining ground in the agri-food systems of many developing countries. While recent research has analyzed income effects in the small farm sector, impacts on farming efficiency have hardly been studied. Using a survey of Kenyan vegetable growers and a stochastic frontier approach, we show that participation in supermarket channels increases mean technical efficiency by 19%. This gain is bigger at lower levels of efficiency, suggesting the potential for positive income distribution effects. However, disadvantaged farms often have problems in meeting strict supermarket requirements. Innovative market linkage initiatives can increase the probability of participation significantly.

Suggested Citation

  • Elizaphan J.O. Rao & Matin Qaim, 2009. "Farmer participation in supermarket channels and technical efficiency: The case of vegetable production in Kenya," Courant Research Centre: Poverty, Equity and Growth - Discussion Papers 18, Courant Research Centre PEG.
    • Handle: RePEc:got:gotcrc:018
    as

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    File URL: http://www2.vwl.wiso.uni-goettingen.de/courant-papers/CRC-PEG_DP_18.pdf
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    More about this item

    Keywords

    supermarkets; small farms; technical efficiency; stochastic frontier; sample selection; Kenya;
    All these keywords.

    JEL classification:

    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity

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