The rise of supermarkets in developing countries: Implications for credit markets

Abstract

The rise of supermarket in developing countries has important implications for the agricultural system in these countries. To lessen the intense price competition in retail markets, supermarkets have introduced private food standards. While the literature has pointed out the additional financial burden for producers, associated with the introduction of supermarket standards, it has ignored its positive demand effect. This paper examines the relationship between downstream product competition and upstream credit access for agricultural producers. In doing so, the analysis shows that as long as there is coexistence of the supermarket and domestic marketing system the entry of supermarket should broaden the financial opportunities of the agricultural producers.Agribusiness,