Supermarkets, wholesalers and tomato growers in Guatemala

MSc Thesis, Michigan State University Agricultural, Food and Resource Economics, 2009. This thesis shows the asset-related determinants and the impacts of the participation of small farmers in supermarkets versus traditional market channels in Guatemala. The research comprises: product value chain studies of tomatoes; cross-section farm household surveys of 164 farmers. In a comparison between supermarket channels and traditional channels, farmers selling to supermarkets tend to be in the upper end of the ‘small farmer’ category, have more capital, and are much more specialized in commercial horticulture in general and in tomatoes in particular, than traditional farmers. While they have higher yields, they also have higher input use, including agrochemicals. In fact, they severely use pesticides and fungicides. Moreover, these greater input expenditures mean that their profit rates are roughly similar to those of farmers in the traditional channel. Supermarket-channel farmers prefer the more demanding wholesale-supermarket channel because it offers a lower risk and lower transaction cost outlet for the variety of their qualities and grades, all year. In turn, the supermarkets, who do not buy direct but rather source from a few dedicated wholesalers, rely on this year-round supply, lower transaction costs, and consistency. This publication forms part of the Regoverning Markets project.