The share of resources allocated to food marketed through super-markets and their marketing channels has grown at an unprecedented rate in developing countries during the 1990s. This expansion has caused some resources to depart traditional channels. Differences in the relative capital intensity of the modern marketing channels in con-trast to the traditional channels is shown to explain at least part of this evolution as the process of economic growth and capital deepen-ing, even when the food share of total expenditures declines. In this case, incomplete markets and policy distortions can exacerbate the effects of adjustment in traditional agriculture, placing a greater need for policy makers to address these shortcomings
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