Food safety standards that developed countries impose on developing-country exports have sometimes created a barrier to market access. But in Latin America today, the standards set by supermarkets in the region affect local producers far more than do those imposed by developed countries. Latin American farmers sell 2.5 times more to supermarkets within their own countries than they export to the rest of the world.
Drawing on case studies from several Latin American countries, this brief focuses on how supermarkets in the region have gone about imposing quality and safety standards on producers of fresh fruits and vegetables for the domestic market. Supermarkets in Brazil, Costa Rica, Guatemala, Honduras, and Nicaragua hold 75 percent, 50 percent, 35 percent, 20 percent, and 10 percent of the retail food market, respectively. Supermarkets’ share of the retail market in fresh produce lags behind their overall share of the retail food market. In Brazil, for example, supermarkets claim only about 30 percent of retail trade in fresh produce; the figure in Costa Rica is barely 10 percent. But supermarket retailing is rapidly overtaking traditional forms of food retailing in all of Latin America. Supermarkets in the region have an incentive to impose quality and safety standards on fresh fruits and vegetables because doing so improves the health value of produce and the state of public health. Moreover, supermarkets have the kind of large consumer base and efficient retail approach that allows them to make profits from imposing quality and safety standards. Since supermarkets buy a significant portion of local produce and have the appropriate monitoring capacity, they can demand safety and quality from their suppliers of fresh produce. Higher standards for fresh produce may alter the structure of production in that sector and affect the rate of return of small producers diversifying into those commodities.
