Agrifood industry transformation and farmers in developing countries

In this paper, Thomas Reardon, Christopher Barrett, Julio Berdegué and Jo Swinnen review existing literature on developing country trends in agrifood industry transformation and its impact on farmers. There has been rapid restructuring in the 1980s-2000s, with a significant modernization of procurement systems, including a shift from public to private standards, from spot market relations to vertical coordination (using contracts and market inter-linkages), and from local sourcing to sourcing via national, regional and global networks. In general, companies tend to source from larger farmers, although there are exceptions to this pattern in contexts where small farmers dominate the agrarian structure. When companies source from small farmers, they tend to source from those with the requisite non-land assets such as irrigation, farmers associations, farm equipment, and access to paved roads. However, where companies need or want to source from small farmers but the farmers lack credit, inputs, or extension, companies sometimes use "resource-provision contracts" to address those constraints.