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Globalization and poverty (2) - varnamvarnam
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Globalization and poverty (2)

Globalization has the power to bring people out of poverty, but it also has the capability to push people who don’t adapt into poverty.

The case study is the arrival of global food chains in Latin America. These chains after changing the way food is distributed have now started affecting the way food is grown and this has hit the small farmer as they are not able to produce according to the supermarket specifications.

Its feeble attempts to sell to major supermarkets illustrate how the odds are stacked against small farmers, as well as the uneven effects of globalization itself. Many small farmers in the region are getting left behind, while medium-sized and larger growers, with more money and marketing savvy, are far more likely to benefit.

Most fruits and vegetables in the region are still sold in small shops and open-air markets, but the value of supermarket purchases from farmers has soared and now surpasses that of produce exports by two and half times, researchers say.

The bottom line: supermarkets and their privately set standards already loom larger for many farmers than the rules of the World Trade Organization. [Survival of the Biggest; Supermarket Giants Crush Central American Farmers ]

The problem is that small farmers lack the expertise to keep away diseases as well as the finances to afford pesticides. But co-ops which have adapted to this new economy are surviving.

Not too far from Palencia, in the city of Chimaltenango, is Aj Ticonel, an association of small farmers that has thrived because it has something Mr. Chinchilla’s co-op lacked: a shrewd and enterprising businessman to run it.

But even for a savvy company like Aj Ticonel, success came not from supplying choosy supermarket chains but rather from its ability to exploit a global market.

Aj Ticonel sells three million pounds of mini-vegetables and snow peas for export to the United States, but only 80,000 pounds to supermarkets. Alberto Monterroso said he gave up on growing broccoli for La Fragua. He found the chain bought inconsistent amounts. “There are a lot of competitors here,” he said, “a lot of small farmers trying to sell to them, so the prices are low.”

The company’s success has been built instead on sales of pricey vegetables for export. It now sells the same to La Fragua, and its membership has risen from 40 families in 1999 to 2,000 today.


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