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The impact of supermarket supply chain governance on smallholder farmer cooperatives: the case of Walmart in Nicaragua

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Abstract

Non-governmental organizations (NGOs) and governments are promoting cooperatives as key to linking smallholder farmers with modern markets to achieve inclusive development, yet the specifics of these supply relationships remain poorly understood. This article uses data from 51 interviews with supply chain stakeholders and a survey of 110 smallholder vegetable farmers in Nicaragua to investigate the impact of cooperative-supermarket supply chain relationships on cooperatives, and the role retailers and NGOs play in facilitating these relationships. The study found that in Nicaragua, cooperatives selling to Walmart became unstable, in contrast with the performance of cooperatives selling to local supermarket chain La Colonia. The results show that cooperative performance is impacted by an interaction between differences in the types of farmers reached by the two supermarket chains, in the performance of the NGOs involved in each supply chain, and in the supermarkets’ business practices. The findings suggest that NGOs should pay more attention to buyer sourcing strategies and farmer needs when designing development interventions to link cooperatives of resource-poor farmers to markets, so as not to increase the vulnerability of smallholder farmers.

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Notes

  1. For the purpose of this paper, smallholder farmers are defined as farmers producing on < 10 ha of land (see Hazell and Rahman 2014).

Abbreviations

ACORDAR:

Alliance to create rural development opportunities through agro-enterprise relationships

CARHCO:

Central American Retail Holding Company

CSU:

Corporación Supermercados Unidos

NGO:

Non-governmental organization

USAID:

United States Agency for International Development

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Acknowledgements

I am grateful to the farmers and organizations that shared their knowledge and experience with me. Special thanks are owed to my academic host in Nicaragua, Francisco Perez, and my field research team. I also thank Peter Dauvergne for his valuable suggestions, as well as Harvey James and three anonymous reviewers whose comments helped improve this manuscript. Funding: This work was supported by the Social Sciences and Humanities Research Council of Canada, the University of British Columbia, the International Development Research Centre, and the Canadian Association for Studies in Co-operation.

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  1. Institute for Resources, Environment, and Sustainability, University of British Columbia, 2202 Main Mall, Vancouver, BC, V6T 1Z4, Canada

    Sara D. Elder

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Elder, S.D. The impact of supermarket supply chain governance on smallholder farmer cooperatives: the case of Walmart in Nicaragua. Agric Hum Values 36, 213–224 (2019). https://doi.org/10.1007/s10460-019-09911-8

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