Abstract:
Changes in the Scio-economic environment over the past years have contributed to the
emergence of supermarkets in Sri Lanka. Previous research studies have observed that
the procurement system of the supermarket chain with the largest number of outlets has
created an alternative channel which is different from the existing traditional vegetable
supply chains. The particular channel purchase vegetables directly from the producer
and sells directly to the consumer with the supermarket being the only intermediary in
between. It was found to be comparatively more efficient and effective as opposed to the
traditional vegetable supply chains in moving vegetables from the producer to the
consumer. The proposed study aimed to investigate this aspect further by investigating
the possible impacts the supermarket channel under consideration may have on the
farmers in vegetable producing areas.
The research was conducted in the form of a case study in Hanguranketha. The sample
of farmers was selected using the simple random sampling technique. Data was
collected using semi-structured interviews and observations from a sample of 30 farmers
who supply to the supermarket channel and 30 farmers who supply to traditional market
channels.
The research revealed that the supermarket channel pay a higher price to the farmers,
which has contributed to increase their income. It has reduced the degree of dominance
among intermediaries attached to traditional channel. Employees attached to the
supermarket provide farmers with information and advice relating to production.
However, it was found that only farmers in the near vicinity of the regional collecting
centre of the supermarket have the ability to access the particular channel. Even among
farmers who do have access, only about 29% of their total harvest was purchased by the
supermarket. There were no buy-back agreements between the supermarket and the
farmers. Hence, due to the uncertainty with respect to price and quantity, farmers were
not willing to change the production practices. Thus, it can be concluded that the
emergence of the particular supermarket channel deem to be beneficial to farmers.
However, there is a scope for possible improvements.
