Sri Lankan Journal of Agricultural Economics 6(1) 2004

The emergence of supermarkets may provide an alterative avenue through which vegetables can move from the producer to the consumer. To date, no research has been conducted to determine the functions of vegetable supply chains of supermarkets in Sri Lanka. This study aimed to fill this gap while ascertaining whether the emergence of supermarkets has created vegetable supply chains that are different from existing traditional supply chains and if so, to examine whether such alternative supply chains are comparatively more efficient and effective. The research was conducted in the form of Case studies. To establish the existing supermarket related vegetable supply chains, supermarkets were selected using the purposive sampling technique. A sample of actors involved in a given supermarket supply chain was chosen via the Snowball sampling technique. The findings of the study revealed that supermarkets do create alternative supply chains of vegetables; however, these alternative supply chains are created only with respect to supermarkets with a large number of outlets. Such supply chains deem to be comparatively more efficient and effective than traditional supply chains in terms of paying a higher price for vegetables, having a higher degree of transparency, presence of quality consciousness and accountability, passing down of quality signals, involvement of less number of intermediaries and occurrence of comparatively low post harvest losses. In some locations, the emergence of the particular supermarket supply chain has contributed to increase the level of competition among buyers leading to an increase in the farm gate price offered by the traditional supply chains. However, the benefits yielded by the farmers vary depending on the context. Due to the uncertainty in relation to price and quantity, farmers were not motivated to improve their production practices. At present, the amount of vegetables passing through supermarket supply chains deem to be comparatively very low, thus the policy focus should be to improve the efficiency and effectiveness of traditional supply chains while aiding farmers to better integrate with these new markets.

* Authors are ,respectively, lecturer, and senior lecturers, Department of Agricultural Economics and Business Management, University of Peradeniya, Sri Lanka...
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