Revolution in Asian Food Supply Chains: Implications for Farmers and Consumers

Uploaded on

Thomas Reardon, IFPRI/MSU Joint Program on Markets in Asia …

Thomas Reardon, IFPRI/MSU Joint Program on Markets in Asia
Bart Minten, IFPRI
Kevin Chen, IFPRI

  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Be the first to comment
    Be the first to like this
No Downloads


Total Views
On Slideshare
From Embeds
Number of Embeds



Embeds 0

No embeds

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

    No notes for slide


  • 1. Revolution in Asian Food Supply Chains
    Implications for Farmers and Consumers
  • 2. Thomas Reardon, IFPRI/MSU Joint Program on Markets in Asia
    Bart Minten, IFPRI
    Kevin Chen, IFPRI
  • 3. 1. Conventional wisdom vs our findings
    1.1. Conventional wisdom as assumptions in Asian food security debate: food supply chains in Asia are
    Where there is change: thought to be induced by government intervention
    … Or by export markets
    And Food Price formed mainly by farm segment costs
  • 4. 1.2. But we found opposite of conventional wisdom for the Asian food economy
    95% = domestic
    … at most 5% are imports or exports
    b) Only about 1% is touched by direct government marketing (procurement and sale)
    c) While food price debate focused on farm, about 50-70% of price is formed by off-farm segments of supply chain – midstream & downstream – as important as the farm for food security
  • 5. d) About 60-75% of food economy is urban (share of population * income factor * food’s budget share)
    e) We find that NOT SLEEPY but transforming very fast, a ferment, a churning
    … rapid rise of modern supply chains
    …. & a quiet revolution in traditional chains
    … not just in “high value ag” (non-staples) but also in staple foods
     We show that transformation by segment of the supply chain: downstream, midstream, upstream
  • 6. 2. Downstream
    2.1. Rapid rise of supermarkets (3x rate of GDP growth)
    a) Mainly in staples and processed and semi-processed
    b) But early penetration of fresh produce (compared with other regions)
    2.2. Food security effects: cheaper staples in Delhi in supermarkets
  • 7. 3) Midstream
    3.1. Modern Sector Midstream
    Rapid growth and concentration of processing
    Symbiosis with rise of supermarkets
    Specialized wholesale, 3rd party logistics, fast-tracking procurement solutions for modern processors and retail
  • 8. 3.2. Quiet Revolution in “traditional” middle segments
    Key role and expansion of wholesale markets – with disintermediation (decline of rural broker role with shortening of chain)
    Mills in China: branding, buying and selling direct, packaging, scale increase
    Cold stores in India (UP and Bihar) & Bangladesh, farm price effect, Food security effect
    “sprayer traders” in mango in Indonesia, Philippines
  • 9. 4. Upstream
    4.1. Farm level
    Quality differentiation, hybrid adoption
    Rapid intensification: herbicides, pesticides, seeds
    Land rental markets booming, China, India
    Water markets between large and small farmers, India
    But heterogeneous farm sector: farm size and/or non-land assets:
     issues of inclusion/access to inputs, subsidies, credit, and markets
  • 10. 4.2. Input Supply
    Rural business hubs in India
    Consolidation in inputs with branding
    Ferment of change in irrigation, seed, tractor sectors
  • 11. 5. Conclusions
    Rapid change and ferment/churning
    Both modern sector, and transforming traditional chain
    Implications for consumer food security and farmer incomes/inclusion
    Importance of off-farm segments of supply chain
    Importance of government indirect role