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Connecting supermarkets and farms: the role of intermediaries in Walmart China's fresh produce supply chains

Published online by Cambridge University Press:  12 January 2017

Hope Michelson ,
Stephen Boucher ,
Xinzhe Cheng ,
Jikun Huang  and
Xiangping Jia
Hope Michelson*
Affiliation:
University of Illinois at Urbana-Champaign, Illinois, USA.
Stephen Boucher
Affiliation:
University of California, Davis and Giannini Foundation of Agricultural Economics, USA.
Xinzhe Cheng
Affiliation:
University of California, Davis, USA.
Jikun Huang
Affiliation:
China Center for Agricultural Policy, Peking University, Beijing, China.
Xiangping Jia
Affiliation:
Northwest Agriculture and Forestry University, Shaanxi, China.
*
*Corresponding author: hopecm@illinois.edu
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Abstract

This paper identifies and describes the recent emergence of a new class of private sector intermediaries in fresh fruit and vegetable (FFV) supermarket supply chains in China. These intermediaries play key roles that determine the ways in which farm households participate in and the benefits they derive from new retail-led market opportunities associated with the supermarket sector's shift from FFV procurement through wholesale markets towards more direct contracting with farm communities. This paper provides a comprehensive description of 198 FFV supply chain intermediaries working with Walmart China in 2014, including their historical background, infrastructure investments, downstream marketing and upstream sourcing. We find that these actors play an increasingly critical role in the organization of land, labor and production through contracts. Our study provides critical insights for understanding both the trends in vertical coordination of China's developing agricultural sector and the pace of the country's agricultural modernization. Walmart is a leading international supermarket chain with a growing presence in China, and evidence suggests that their supply chain strategies are similar to other large supermarkets in the region. Results are also relevant to understanding current challenges in China related to food safety and quality, a top priority in recent years.

Keywords

vertical integrationsupply chainssmall farmerssupermarketsWalmartagricultural developmentChina
Type
Research Article
Information
Renewable Agriculture and Food Systems , Volume 33 , Special Issue 1: Value Chain Development and Impacts , February 2018 , pp. 47 - 59
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Copyright
Copyright © Cambridge University Press 2017 

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