Supermarkets and Standards

The changing structure of the global agri-food system – and the role of supermarkets and standards in particular – is increasingly having an impact on small scale farming in the developing world. Supermarkets – and their intermediary buyers – need just-in-time production meeting exacting standards of quality, presentation and food safety.

International standards – set by private sector players like supermarkets or government and international agencies alike – are increasingly a focus of concern for developing country governments and producers. Much effort is being invested in attempting to upgrade standards, with capacity building and training efforts in SPS compliance being rolled out in many African countries. Recent workshops held at IDS have explored these dynamics and their policy implications. A number of questions have been raised including: how important are major international supermarkets in practice in the retail and wholesale markets that most poorer small scale farmers in Africa engage with? Has the supermarket bandwagon, documented for Latin America and parts of Asia, been extrapolated too far? The answer is not clear, and requires more empirical research. But it remains an open question as to whether the ‘tidal wave’ scenario so eloquently propounded by Tom Reardon of MSU and others is as inevitable as they imply.

Both private and public standards, with often taxing requirements for risk and hazard assessment, reporting and traceability, are most definitely a feature of the current policy landscape. That developing countries are ill equipped to respond, and in particular to negotiate in standard setting bodies is well recognised . This is affecting an increasing array of commodities and their export to a growing range of countries and economic regions. One response – supported by many international aid initiatives – is to boost developing countries’ capacities to respond to these by upgrading facilitites, training staff and improving inspection and tracing processes. While meeting standards is clearly important for gaining access to high value export markets, particularly in Europe and N America, questions must be raised about the polticially motivated and trade protectionist origins and justifications for many standards. Science is often used as a justification for why standards are as they are, and why they are rational, neutral and objective. But closer scrutiny shows that there are different ways of seeing the risk problem and responding to it, all equally scientifically justifiable. A wider debate about risk assessment policy – in line with Codex principles – is seen as an important step forward, and one that developing countries need to engage with urgently, lest standards are set which are either inappropriate or unachievable. Thus in the case of livestock exports from Africa, a ‘commodity based approach’ is likely to fit circumstances better than the usual argument for ‘disease freedom’.

But for the case of Africa, is all this focus on standards and supermarkets the priority? Are there other markets, perhaps more local or regional, perhaps looking towards the growing demand of Asia, which are more appropriate? Is a focus on meeting retail standards the answer, or is it better to aim for perhaps lower value but more accessible wholesale markets? And is the formal marketing system, with all the constraints and pitfalls of standards requirements really where the action is, or are informal, often unregulated markets more lucrative for poorer marginal farmers and livestock keepers? These remain key empirical questions, with no doubt regional and country specific answers. It is this wider debate which sees the broader picture which the IDS workshops confirmed is clearly needed.

If changes in the purchasing patterns and the standards requirements of the agri-food sector are changing as they surely are, as a consequence of globalisation, even if in not quite as dramatic a way, particularly in Africa, as some might suggest, then what future is there for small-scale farming? Again a diversity of views were heard at the IDS workshops.

For some the scale economies of large scale commercial farming operations were increasingly apparent, especially in the high value horticulture sectors. Increasingly vertically integrated, consolidated operations were taking over, even if they had some element of outgrower production for some specialist crops.

The consequence of a shift away from small scale farming for poverty reduction and livelihood opportunities was therefore hotly debated. Some argue that the labour opportuntieis on large farms – and increasingly the social support conditions provided – improve the lot of previously struggling marginal farmers, and particularly women. Others argue that this may be the case in some instances, but the pattern is not all positive, with employment insecurity, low wages and poor conditions typifying many large scale corporate run farming operations.

The changing nature of institutions and markets is a central feature of the Future Agricultures consortium work. Empirical resutls on some of these questions will emerge from the country work in east and sourthern Africa over the coming years, hopefully contributing to some of the answers to these questions.