@article{7a5cb72f28af479fb0ca1d1297451f3e,
title = "Small Farmers and Big Retail: Trade-offs of Supplying Supermarkets in Nicaragua",
abstract = "In Nicaragua and elsewhere in Central America, small-scale farmers are weighing the risks of entering into contracts with supermarket chains. We use unique data from cooperatives supplying supermarkets to study the effect of supply agreements on producers' mean output prices and price stability. We find that prices paid by the domestic retail chain approximate the traditional market in mean and variance while mean prices paid by Walmart are significantly lower than the traditional market. However, the Walmart contract is found to systematically reduce price volatility. We find some evidence, however, that farmers may be paying too much for this contractual insurance against price variation.",
keywords = "Contracts, Latin America, Nicaragua, Small farmers, Supermarkets, Walmart",
author = "Hope Michelson and Thomas Reardon and Francisco Perez",
note = "Funding Information: This publication was made possible by support provided in part by the US Agency for International Development (USAID) Agreement No. EDH-A-00-06-0003-00 awarded to the Assets and Market Access Collaborative Research Support Program (AMA CRSP). The data and qualitative details in this analysis were gathered in Nicaragua between September 2007 and July 2008 in a collaboration between Cornell University, Michigan State University, and the Nitlapan Institute at the Universidad Centro Americana. Producer cooperatives with ongoing supply relationships with the two major food retail groups operating in Nicaragua provided data on prices received and quantities sold over time and traditional market data were accessed through Nicaragua{\textquoteright}s governmental statistical agency. Additional funding for this research was provided by: AAEA McCorkle, Cornell Latin American Studies Program, Social Science Research Council IDRF. Thanks to Chris Barrett, Marc Bellemare, and AEM 7650 participants for helpful comments throughout. All views, interpretations, recommendations, and conclusions expressed in this paper are those of the authors and not necessarily those of the supporting or collaborating institutions. ",
year = "2012",
month = feb,
doi = "10.1016/j.worlddev.2011.07.013",
language = "English (US)",
volume = "40",
pages = "342--354",
journal = "World Development",
issn = "0305-750X",
publisher = "Elsevier BV",
number = "2",
}