Opportunities and challenges in a changing market 

Small farmers in Africa risk being swept out of agriculture by a wave of supermarket expansion unless they can participate in the new market, the UN Food and Agriculture Organization (FAO) warned on Wednesday. 

"If we don't help small farmers tap into the supply game and become players in this new market they will be left on the sidelines," said FAO's Kostas Stamoulis, "It could be catastrophic."

At an FAO workshop on globalization, urbanization and food systems in developing countries Thomas Reardon, of Michigan State University, argued that the rapid proliferation of supermarkets across East and Southern Africa was transforming the food systems which form the economic backbone of many developing countries.

Changes to the supply and distribution of produce in countries such as South Africa, Kenya, Zimbabwe, Zambia, Namibia, Botswana and Swaziland will have a direct impact on the lives of millions of small farmers, he said.

It may force them out of farming unless they are able to supply what supermarkets demand, he added.

Change catalyst

Despite the traditional image of the supermarket as the shopping store of the middle class, the larger-scale format is spreading through urban centres and even rural towns across Africa, rapidly catering for the urban poor. 

In South Africa, for example, supermarkets already account for more than 55 percent of national food retail. Their impact can be felt in the fruit and vegetable market in the region which has become integrated into a single, larger market.

"There has been an explosion in the number of supermarkets in parts of Southern and Eastern Africa over the past five to ten years," Reardon explained.

"Kenya alone has some 200 supermarkets and 10 hypermarkets, equivalent in sales to some 90 000 small shops and accounting for up to 30 percent of food retail in the country," he said.

"Supermarkets in Kenya are already buying three times more produce from local farmers than Kenya exports to the rest of the world."

Propelled by the forces of globalization and urbanization, the rise of supermarkets across the developing world is an inevitable reality, FAO's Stamoulis said.

In the year 2000 nearly two billion people lived in cities and this number is expected to more than double by 2030 according to UN figures.

An ever increasing number of city dwellers will depend on supermarkets rather than traditional markets as their main food source.

And the rise of supermarkets in the developing world is rapid.

Farming for a new market

"A steep increase in the pace of urbanization combined with globalization and the influx of foreign direct investment mean that Africa will see far more dramatic changes in its food supply system than we have seen in developed countries," Stamoulis said.

According to FAO, farmers need to have the resources and training to be able to actively participate in the rapidly transforming domestic market.

Potential assistance might include:

• help organizing cooperatives and effective associations in order to be able to meet the scale and volume needed to supply a supermarket;

• credit schemes to obtain the technology needed to be able to meet the stringent quality and safety standards demanded and

• knowledge dissemination to place farmers in a stronger position ahead of complex negotiations.

Stamoulis said that supermarket expansion should also be seen as an opportunity for small firms and farmers if they are enabled to participate.

"The onslaught of supermarkets will improve the quality and safety of food sold locally as farmers strive to meet supermarket's quality standards for the domestic market," he said.

And raising the quality of produce sold on the domestic market would make it easier for countries to export, Stamoulis said.

Supermarkets, he added, could provide a stable, dependable market for farmers' produce, may boost employment in cities and surrounding areas by providing jobs in transport and distribution. In addition, it will also improve the quality and lower the price of food for urban populations.

Jobs might also be lost along the way, he added, explaining that the net effect would vary case by case.

"This is also an opportunity for the private sector, non-governmental organizations (NGOs) and international development organizations to work together," Stamoulis said,

"We cannot stop change but we can shape it.