Smallholders from Kiambu District supply Nakumatt stores in Nairobi.
Photo: J. Boethling


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Agricultural supply chains in developing countries are undergoing a transformation towards higher-value products, stricter standards, and vertical integration. This can have far-reaching consequences for rural development. Recent research has concentrated on the export sector. But domestic supply chains are changing, too, often driven by supermarkets and their procurement channels.

In many developing countries, supermarkets are expanding very rapidly, so the term “supermarket revolution” is sometimes used. We have analysed impacts in the Kenyan small farm sector in a project funded by the German Research Foundation (DFG). We collected data from 400 randomly selected farm households in Kiambu District, where the two biggest Kenyan supermarket chains, Nakumatt and Uchumi, source vegetables for their stores in Nairobi. Foreign supermarket chains so far play a minor role in Kenya. Our sample includes farmers that supply vegetables to supermarkets as well as farmers that sell in traditional channels.

Farmers produce leafy vegetables, including exotic ones such as spinach and kale, and indigenous ones such as amaranthus and black nightshade. Traditional sales are spot-market transactions between farmers and traders without any prior agreement. Depending on the demand and supply situation, prices are subject to wide fluctuation. In contrast, supermarkets have contractual agreements with farmers regarding prices, quality, hygiene, and consistency in supply.

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