Horticultural Commodity Chains: The Impact of UK Supermarkets on the African Fresh Vegetables Industry (IDS Working Paper 96)

Production of fresh vegetables for export has grown rapidly in a number of countries in sub-Saharan African over the past decade. The fresh vegetables trade has many of the characteristics of a buyer-driven global commodity chain. In such chains, retailers play the key role in governing the chain of activities that links widely dispersed producers to consumers in developed countries. An analysis of decision-making in the chain provide insights into how the chain is structured and how it is developing. In the UK, the large supermarkets have captured most of the market for imported fresh vegetables. The supermarkets do not own farms, processing facilities or import companies. Nevertheless, they play a critical role in defining what is produced, how and by whom. Their size and market power means that the decisions they take to win customers and comply with food standards regulations define what the other actors in the chain have to do. The requirements they specify for cost, quality, delivery, product variety, innovation, food safety and quality systems help to determine what types of producers and processors are able to gain access to the fresh vegetables chain and the activities they must carry out. The requirements of the UK supermarkets act as an effective barrier to participation in the chain by small exporters and, to some extent, small producers. However, for those firms that can participate, the reward can be considerable. Vegetables are not only picked and shipped, but also chopped, washed, combined into multi-product packs, labelled are barcoded. Increasingly, these tasks are being transferred to Africa, generating many jobs in the horticulture sector. The paper analyses the way in which the supermarket export business has structured the export horticulture industries of Kenya and Zimbabwe. In spite of the considerable growth of the industry, new countries are entering the sector all the time, and competition is fierce. The paper considers the strategies that might be used by African exporters to maintain and improve their position within the chain. The strategies include moving into more complex processing and packaging, playing a more effective role in product innovation and diversifying markets