Chapter 55 Transformation of Markets for Agricultural Output in Developing Countries Since 1950: How Has Thinking Changed?

This chapter traces the evolution of the agricultural economics literature on agrifood output markets over the past 50 years, emphasizing research approaches and policy issues. The analysis of agrifood systems encompasses the demand and supply side of output markets. The analysis in this chapter is set within the conceptual framework of how the agrifood economy develops during the agricultural and structural transformation. The related paths of development of policy and policy issues, and research themes and methods, are analyzed in parallel. The chapter examines the shift from broad and atomistic “commodity” markets to differentiated and more concentrated “product” markets over the half century. Spurred by massive retail sector foreign direct investment (FDI) to which was added competitive investments from domestic capital, a profound retail transformation has occurred in the past decade – the “supermarket revolution”. This revolution has been the leading edge of globalization of domestic agrifood systems, not, as the literature currently emphasizes, opening to international trade. The chapter ends with a focus on the challenge for researchers in the next several decades, especially the need for new research methodologies that are suitable for understanding the role and influence of a small number of large-scale, multi-national firms, and for analyzing the impacts of the consolidation of the downstream segments of the agrifood system – the food industry – on upstream segments of the domestic agrifood systems, on rural development, and on trade.