398 Graciela Ghezán, Mónica Mateos and Laura Viteri
wholesalers, in a critical financial plight as they struggle with new price competition
and commercial requirements.
As already noted, only some of the wholesale operators opted to convert into
distributors to supermarkets. The option was practicable for wholesalers handling large
volumes. In contrast, the main client of the small wholesalers continues to be the
traditional small shop, as shown in a recent study carried out in an intermediate city.7
The weakening of wholesale markets by the direct purchase practices of
supermarkets is exacerbated by the development of informal or alternative market
channels. The latter involve sales carried out by producers or assemblers, who buy in
the production zone and sell to traditional small merchants and/or consumers. However,
the CMBA still has an important role in the determination of benchmark prices in the
Argentine produce market.
Impact on small and medium horticultural producers As the FFV supply
systems for supermarkets evolved in Argentina over the past decade, very little or no
link with small producers was observed. Although there are some isolated cases of
relatively successful associations of small producers supplying FFV to supermarkets,
these have not been sustained over time.8
The constraints for small farmers in attempting to sell to supermarkets is linked to
their weak capacity to meet the requirements of the supermarkets, their organising
capacity, and their bargaining power. Among their key problems are: (i) insufficient
economies of scale for them to be competitive in cost terms; (ii) lack of access to
financial capital to make investments in greenhouses, packing plants, and cold chains;
(iii) difficulties in meeting the supermarkets’ requirements in terms of volume, quality,
and delivering consistently over time; (iv) lack of liquidity to withstand the long
payment delays of supermarkets; (v) problems in associating with other farmers; and
(vi) lack of access to market information.
The weakness of small farmers, combined with the changes in the FFV marketing
channels and increased competition, led to concentration in the sector. Again, because
of lack of national-level data, we cite an example of an expanding green belt in the
municipality of Partido de General Pueyrredón, in Mar del Plata, in the southern part of
the Buenos Aires region, taking into account the Horticulture Censuses of 1978 and
1994 and two studies (Hamdan and Huarte, 1986; Di Napoli, 2001). Comparison of the
censuses shows that the total horticultural crop area doubled over the period, whereas
the number of farms only increased by 12%, which implies an increase in the average
size of horticultural farm. Moreover, between 1985 and 2000, the share of the local
wholesale markets in the total horticultural volume sold dropped from 40% to 10%.
7. Ghezan et al. (1999) show that in cities in the interior of Argentina where the expansion of large
supermarket chains has been more recent, and where the wholesale market is still important as a supplier
of FFV, supermarket purchases represent 45% of the total volume sold by the wholesale market. The study
also shows that the supermarkets buy from large wholesalers (more than 1000 hundred-weight sacks per
day), whereas small wholesalers (less than 100 sacks a day) make 65% of their sales to small vegetable
shops.
8. Between 1992 and 1996, a co-operative of 19 farmers was formed in a region without a horticultural
tradition, in the province of Buenos Aires, in Chascomús. The co-operative operated 15 hectares in
greenhouses, and specialised in 3 vegetable crops for a supermarket chain in Buenos Aires. The problems
mentioned in the text led to the bankruptcy of the co-operative, and only a few producers survived, shifting
to supplying the local market.