Governance in Colombian food retail: a case study

ABSTRACT

We characterized three food retail models that coexist in Colombia: corporate, traditional, and alternative, and investigated the governance within each model in terms of regulation and transparency through a case study. We established the geographic density of the three models and found that in Colombia, the corporate model is widespread; the traditional model has low concentration, but a high presence; and the alternative model has a growing albeit low presence. Through our case study we found that these models have different behaviors in their core production, distribution activities, and forms of governance. Even though private regulation prevails in the corporate and traditional models, the traditional model contains specific characteristics of public regulation, while the alternative model is grounded on social regulation.

KEYWORDS:

• Food retail
• retail governance
• food supply
• democratic legitimacy

Introduction

Food distribution in Colombia is characterized by the growth of three unregulated models: traditional, corporate, and alternative. Unplanned growth has been experienced within each model. Still, they lack the presence of a national or municipal public policy to regulate food retail and its constituent elements, such as consumer prices, protection of national producers, working conditions of food producers, standards for food production, among others. This situation is similar to many developing countries (Wegner and Belik 2012) due to the imposition of the neoliberal model that dismantled the intervention of the state to authorize the free market from all human economic activities in 1970 (Mancilla, Álvarez, and Pérez 2016). Particularly in Colombian food retail, the institutions and regulatory policies of supply and distribution were eliminated (Ballesteros 1998).

There is a need for public policy that plans and regulates food retail and the relationship between its agents to improve social justice. This policy should overcome the problems brought on by neoliberalism and respond to new challenges and expectations from current society, such as transparent and legitimate trade rules, consumer protection (especially for the poor), promotion of sustainable forms of production, and equity for producers and consumers.

To characterize food retail models in Colombia and analyze the legitimate governance of food retail using regulation and transparency criteria, we conducted a collective case study in three retail models (corporate, traditional, and alternative). According to Stake (2004), this type of case study offers in-depth knowledge about food retail models. We analyzed similarity (redundancy) and variety in each case (Stake 2000, 2004).

This work is relevant in several aspects: it reveals governance problems within the three models, it proposes criteria for its analysis and evaluation, and it identifies some basis for improving food retail policy. Thinking about this public policy is fundamental, especially now when various phenomena such as the climate crisis, poverty, deforestation, and new diseases challenge the production, commercialization, and consumption of food. These phenomena also question the neoliberal model and the free market as the basis of the economy.

The article is organized as follows: in the literature review, we describe the criteria for analyzing food retail models; in the background, we explain how food retail has evolved in Colombia; in the methods, we show the type of study that was conducted and the collection of the data; in the results, we describe the deficiencies and strengths of each model under the defined criteria, and finally, in the discussion we provide elements that we consider necessary for food retail public policies to solve current problems and respond to challenges that the context demands.

Literature review

The main mission of any social organization engaged in rendering public goods, such as food, is to ensure the legitimate governance of those required to enforce regulations. Legitimacy guarantees that the selection made by policymakers and their adopted rules of engagement are subject to public scrutiny and results have valid consequences for those who abide by these regulations (Sama et al. 2018). To gain legitimacy, decision-makers must be chosen and are responsible for making procedures on rules, implementation, monitoring, and enforcement, all of which are meant to safeguard the proportionality of rules and measures, the inclusion of all relevant interests, and redress procedures for victims (Fuchs and Kalfagianni 2010; Fuchs, Kalfagianni, and Havinga 2011).

Raynolds, based on Polanyi, highlights the need for state and social regulation in the food retail sector as follows: “human economy is an instituted process that is embedded and enmeshed in institutions, economic and noneconomic” (Raynolds 2012). Polanyi, cited by Raynolds, counters the neoclassical view of the autonomous self-regulating market by arguing that economic activity is always shaped by social and political institutions. Polanyi demonstrates how ongoing state action is necessary to maintain competitive markets and manage the supply and demand for the “fictitious commodities of land, labor, and money and avoid the demolition of society by market forces” (Raynolds 2012).

Social regulation directs food retail governance criteria and motivations in several ways. Driven by the concern for individual, environmental, and social safety, citizens and organizations may propose and comply with quality and protection standards for each component of the value chain, that is, production, transportation, consumption, and waste management. This facilitates communities’ use of power, especially their purchasing power, to steer the labor and social regulations that govern food system actors (Wang et al. 2019).

According to political definitions, governance is associated with greater involvement of non-governmental actors (Brouchoud and Fernanda 2010). “All interested actors with resources, etc., should be involved in networks related to each decision-making context from the beginning of participation” (Brouchoud and Fernanda 2010).

However, it is necessary to recognize the power inequalities between the actors, which questions the democratic legitimacy of governance. This is particularly important in the food system governance where, according to Fuchs and Glabb, the ability of public actors to govern may have decreased during globalization. In contrast, private actors have increased their power in this position (Fuchs and Glabb 2011).

Private actors in public policy networks do not have democratic legitimacy (Brouchoud and Fernanda 2010). Public actors obtain political legitimacy through formal electoral processes. On the other hand, non-state actors’ legitimacy comes from public trust in an actor’s expertise and willingness to represent the public interest (Fuchs and Kalfagianni 2010). One must also be careful with using the term “governance,” which, in certain cases, can imply horizontal cooperation and self-regulation. This favors corporatist models and justifies liberalization and deregulation policies. All of this implies that, in addition to participation, the application of the transparency and accountability principles is desired (Brouchoud and Fernanda 2010).

Transparency means that regulations and standards are clear and known across sectors. They should also be stable so that everyone, especially vulnerable sectors such as small farmers and low-income consumers, may make medium- and long-term plans. “[Transparency] is an important dimension of legitimacy because it enhances public scrutiny and visibility in complex environments, strengthening meaningful participation and ensuring accountability.” Transparency in food retail must be internal and external, that is, information available to members and the general public (Fuchs and Kalfagianni 2010; Fuchs, Kalfagianni, and Havinga 2011).

For Martínez Brouchoud 2010, transparency in governance aims to eliminate restrictions on information circulating in food networks for access and public use. It also establishes horizontal accountability mechanisms so institutions of public power can detect inefficiency, abuse, etc. (Brouchoud and Fernanda 2010).

Background

Food retail governance has shifted from public to mainly private regulation, characterized by the spread and acceptance of corporate management models for defining the standards to produce and render public goods and services. It is a phenomenon that has taken place in the food sector, and almost every sector adopts certain private mechanisms, such as self-regulation, co-regulation, and corporate responsibility (Fuchs, Kalfagianni, and Havinga 2011). Although the state has transferred many of its roles to the private sector, we agree with Clapp and Fuchs (2010) and believe that legitimate governance requires state and social regulation because commercial actions, which involve an exchange of essential goods, are not exclusively mercantile exchanges.

In Colombia, state action in food retail gathered momentum in the 1950s with the creation of the Instituto de Mercadeo Agropecuario (IDEMA in Spanish) (Fedesarrollo 1976), an entity in charge of actions geared toward farmers, agricultural activity, internal supply, and consumers (Arbeláez and Mejía 1983; Tobón and Valencia Correa 1986). When state actions were implemented, they “favored commercial regulation and bolstered the local food economy by channeling agricultural production to consumption centers, which managed to distribute food to low-income communities by rendering products included in the national household shopping ration¹; regulating prices; countering speculation; and avoiding unjustified price increases during periods of scarcity” (Herrera 2018). At that time, foods such as rice, sugar, corn, oil and salt were a priority (Tobón and Valencia Correa 1986).

Between 1977 and 1982, IDEMA underwent a severe institutional crisis that affected the supply and distribution of food in Colombia. Internal problems included storage inefficiencies, deterioration of infrastructure and equipment, inadequate import decisions, corruption at all levels of operation, and the favoring of large capitals from the agribusiness sector. This context was marked by climate problems that affected agriculture, economic problems related to the recession, and high interest rates and devaluation (Tobón and Valencia Correa 1986).

During the 1990s, policies were adopted to reduce state involvement in central supply markets. As a result, both federal and local governments became passive members and lost power as regulating bodies while traditional wholesalers seized control (Guarín 2013; Mendoza Villalobos 1999). Since then, some markets were handed over through concessions, gratuitous bailment, or other devices, to organizations within the solidarity sector that grouped traders (Ballesteros 1998; República de Colombia et al 1996). Currently, no public institutions in Colombia fulfill these same public duties in food retail. Most instruments that allowed the state to regulate the food market disappeared, and these duties were taken on by private actors (trade unions and traders).

As Machado (2002) indicates, during “trans-nationalization the state withdraws from the productive sector where it is inefficient, privatizes goods and services and reduces general transfers to agriculture, leaving the market to operate and define the use of resources. There is a strong relationship between agriculture and agro-industry; however, with the economic opening, some subsectors separated because they preferred that industrialists buy raw materials in international markets. The larger food industry prefers to import final goods to distribute instead of integrating with agriculture. In the 1900s, economic liberalization policies expanded, public resources were transferred to businesses, and modern agriculture increased. Agriculture is integrated into the urban-industrial system, which fits into the trans-nationalization model and subordinates itself to the industry” (Machado 2002).

The structural reforms adopted over the last two decades of the 20^th century drastically favored the consolidation of the modern or corporate model. The deregulation of almost all economic sectors and every segment of the food supply chain in which the state participated was essential (Gasca and Torres 2014).

Colombia made structural adjustments starting in 1987 by adopting the multilateral WTO (World Trade Organization) agreements; this drove the establishment of multiple trade agreements that particularly favored agro-industrial systems (Vargas-Alzate et al. 2012; Torres 2013). These structural adjustment policies have been consolidated to date, and private capital – both Colombian and international – has gained force and legitimacy.

The consolidation of a dominant food distribution model in Colombia with diverse structures, ranging from supermarkets to discount and convenience stores, then emerged. The modern model has achieved the greatest growth and penetration across social strata since then. This model is the dominant food retail model considering its increasing presence in most municipalities and cities, and its capacity to reach new places and social strata (Bahn and Kifle Abebe 2017; Gasca and Torres 2014). These structures mainly belong to trans-national chains such as the Casino Group, Makro, Cencosud, Koba and Price Smart. These chains are in main Colombian cities, which have witnessed a steep increase in convenience stores. Only three brands with local presence, Olímpica Supermarkets, La 14 (currently in liquidation), and Colsubsidio, remain national investments.

The modern model has gained similar validity and positioning all over the world because of urban infrastructure, growing revenues, privatization, shrinking state size and intervention, and the economic and political strength of multinational companies in food retail and across the food system (Gasca and Torres 2014; Reardon et al. 2019).

“The environmental discussions, the effects of the dominant model, openings to new markets, and the political support reflected in innovative regulations and ethical positions, explains the emergence of multiple agroecology experiences in Colombia.” Specifically, the private sector had an important role in the consolidation of agroecological markets and policies (León-Sicard et al. 2017). Adriana Chaparro-Africano outstands that alternative distribution was introduced in Colombia in the 1980s when some government-backed producer organizations launched a strategy to distribute agricultural products in public spaces, especially parks, through mercados campesinos (farmers markets). These markets were born as a form of rural farmer and community action that grew into public policy, especially in Medellín and Bogotá (Africano, Adriana María 2019).

By the end of the 20^th century, small-scale food producers, both individually and collectively, started adopting agroecological practices driven by individual and environmental safety concerns. Urban middle-class consumers with medium to high education levels started to change their food patterns, individually and as part of civil society organizations, looking for food produced without intensive agrochemicals and under fair trade conditions. As a result, the alternative model arose in Colombia, with transformations initially accelerated by producers and subsequently by consumers in response to the negative impact of conventional production and distribution on environment, health, and farmers’ lifestyle (Cadavid-Castro et al. 2019).

By the end of the first decade of the 21^st century, there was a rise in agroecological markets networking through community-based organizations (León-Sicard et al. 2017). Currently, there are several alternative food networks in the largest Colombian cities. Though the classical form of farmers markets remains effective, some retailers have moved their distribution systems to online channels. Consumers are still middle- and high-income groups concerned with individual, environmental, and social safety, although collaborative social action networks were created to conduct public political actions for healthy food (Sánchez Hernandez 2009; Álvarez et al. 2019).

According to Jarosz, the alternative food networks have four differentiating features: a) shorter distances between producers and consumers; b) small farm size and scale and organic or holistic agriculture; c) alternative food purchasing models and venues, such as cooperatives or farmers’ markets; and d) a commitment to the social, economic, and environmental dimensions of sustainable food production, distribution, and consumption (Jarosz 2008). Similar to most countries, the alternative model does not have any physical format in Colombia; in some cases, it consists of farmers markets in which family farmers sell fresh food in city parks (the oldest method), and in other cases, it involves small stores that sometimes merge offline and online sales (Di Masso 2012).

The alternative model is a form of resistance against the global neoliberal model that involves extensive and large-scale production and distribution; it is fueled in Latin America by associations such as Vía Campesina and farming communities that promote these movements (Di Masso 2012). Fair trade has several facets: in some cases, it is considered an alternative social movement to corporate capitalism; in others, it is deemed a manner of empowering two parts of the food chain: developing countries producers, particularly family farmers, and northern consumers (Dolan 2010; Ruerd and Fort 2012; Smith 2013). Other fair-trade considerations include moral demands for workplace well-being, fair prices, and environmental care, which, theoretically, connect producers and consumers. Fair trade assumes that food consumption is not an individual practice but rather an ethical and political practice with deep social and environmental consequences (Zerbini, Tania Vergura, and Latusi 2019). Thus, it facilitates conscious consumption of products grown under environmental standards and employment practices free of child and forced labor. Therefore, daily consumption practices become a form of political activism. “Fair trade distinguishes itself from other initiatives via its breadth in incorporating social and environmental conditions and its depth in regulating production and trade relations. Fair trade engages a variety of broad social values, mechanisms of social coordination, and social actors in novel and potentially powerful ways. Fair trade emanates from global civil society and advances an agenda for human rights equity and sustainable development” (Raynolds 2012).

Materials and methods

We conducted a qualitative methods collective case study. The research study was divided into two phases. During the first phase, we defined the geographic density of the three food distribution models in Colombia. To this end, research from secondary sources was conducted on the number of establishments per department for each model based on several sources of information (Table 1). To determine the concentration of each retail model, we conducted a quartile distribution analysis. To consolidate the information, maps were made using ArcGis 10.0.

Table 1. Sources of information.

	Model of Food Retail
	Alternative	Traditional	Corporate
First phase	The websites of mayors’ offices, provincial governments, regional autonomous corporations, Colombian Family Farming Network (RENAF: Red Nacional de Agricultura Familiar). Social network sites, such as Facebook and Instagram Media websites	Departamento Administrativo Nacional de Estadísticas (DANE- in Spanish) Departamento Nacional de Planeación (DNP in Spanish). The Colombian Network of Central Supply Markets The Colombian Association of Market Squares and Galleries	The official websites of warehouse stores with national presence
Second phase	Favored experiences: the use of short marketing circuits; fair trade; agroecology or family and small-farm agriculture; constitution on a collaborative basis. Once the case bank was constituted with initiatives that made it possible to detect these traits, final selection focused on aspects such as: year of origin, socioeconomic stratum, variety of distributed foods, and those who market fresh food	Central and satellite market squares in each city were selected	Hypermarkets, supermarkets, and express and convenience stores. In each definition, sales area, available products, additional services, target populations, and location were considered. Some managed to remain independent of business mergers and others represent the cooperative sector, family compensation funds, and some multinational companies that operate strictly under the corporate model. We considered cases involving quick and recent expansions and dissolutions. In instances of non-response in some cases, other cases were included that offered some of the previously mentioned points of interest.

During the second phase, we used theoretical sampling. We included cases identified as hallmark² cases upon collecting information (Table 1). We chose the following five cities: Bogotá (the capital city, situated in central Colombia); Medellín (the second-largest city, located in mid-western Colombia); and Pereira, Armenia, and Manizales, the capitals of the three departments that make up the Colombian coffee growing axis. With this selection, areas having different sizes, locations, and relations with the food-supplying rural areas were included.

Two teams were assembled to conduct the research: a scientific team and a technical team. The former was made up of researchers and the latter was made up of a group of professionals in each selected city. Team members were supported by undergraduate students of Nutrition and Dietetics from Universidad de Antioquia and postgraduate students of the Universidad Nacional de Colombia, who participated in the interviews, observation, and data analysis.

Managers or owners of distribution channels, directors, coordinators or advisors of organizations, traders, farmers, sellers or dealers, and employees engaged in food purchases were interviewed. Interviewees were asked to mention the producers that provide them with the following fresh products: fruits, vegetables, cereals, root vegetables, legumes, dairy products, or eggs. Producer information was mainly collected in food production areas (rural or peri-urban areas) Authorities in charge of food and nutrition security in each city were interviewed (Table 2).

Table 2. Numbers of food retail models included and interviews conducted.

	Model of Food Retail
	Alternative	Traditional	Corporate	Total
Retail models by city						Authoritiesinterviewed
Bogotá	8	3	7	18		7
Medellín	15	4	5	24		9
Pereira	4	2	2	8		5
Armenia	4	2	0	6		3
Manizales	1	2	1	4		7
Total	32	13	15	60		31
Interviews conducted
Distributors	36	32	18	86
Producers	22	11	10	43
Total	58	43	28	129

The information was analyzed in three levels: first, it was ordered using ATLAS/ti 8.0; second, open coding or conceptualization was utilized; and lastly, the categories were integrated and refined (Table 3).

Table 3. Categories analyzed.

Category	Subcategories
Farmer Characteristics	Type of fresh product producer for supply purposes
	Producers’ quality of life
	Form of production promoted
	Use of ancestral practices of growing food
	Marketing channels
	Producer – consumer relationship
Regulation	Private regulation
	Social regulation: relationships and cooperative work
	Public regulation
Transparency	Price setting
	Establishment of food quality and safety standards
	Party that assumes market risk
	Possible signing of commercial agreements
	Stability of commercial agreements
	Food quality certification

Results

Coverage of the three food retail models in the departments of Colombia

The corporate (or modern) food retail model is widespread across Colombia, especially in the departments with high urbanization levels and monetary wealth; it is most prominent in the departments of Cundinamarca, Antioquia, and Valle del Cauca. The traditional model is losing presence in almost every country, in favor of growing the modern model in new niches and social classes. The traditional and alternative models have a lower concentration but strong presence across the country. A significant number of retailers fall under the alternative model in Cundinamarca and Antioquia; the model spread faster in the capital cities of these departments (Bogotá and Medellín, respectively) and nearby municipalities (Figure 1).

Figure 1. Number of each food retail model in Colombian departments.

Production characteristics by food distribution models

We analyzed the producers linked to each food distribution model, their production practices, and producer – consumer relationships (Table 4).

Table 4. Results by Analytical Category.

Category	Subcategories	Traditional model	Corporate model	Alternative model
Farmer Characteristics	Type of fresh product producer for supply purposes	Small, medium and large producers and suppliers of fresh products.	Major producers and business people.	Small producers
	Producers’ quality of life	Low socio-economic status and little or no education. They are also characterized by limited access to land resources, capital, loans, advisory services, and technical assistance; agriculture is their main source of income.	There is intensive use of capital, land, water, input, knowledge, and modern technology.	Low socio-economic status. Albeit some producers have high educational levels and better incomes.
	Form of production promoted	Agro-industrial production systems and the aggregate production of small producers using traditional combined with conventional techniques.	Agro-industrial production prevails.	Ecological farming, some have been fully implemented while other models are undergoing a transition from conventional models.
	Use of ancestral practices of growing food	Sometimes.	No.	Yes.
	Marketing channels	Long chain.	Combination of intermediate chains and direct purchases from the producer.	Short channels.
	Producer – consumer relationship	There is no direct connection.	Nonexistent.	Favors a direct relationship.
Regulation	Private regulation	Mix between cooperative and corporate management models	Yes. Corporate management models.	No. Cooperative management models
	Social regulation	Some social regulation governed by distributors.	No social regulation.	Social regulation governed by producers and distributors.
	Public regulation	The state plays a role in: Ensuring food quality and safety. No price controls, only a monitoring mechanism. Some local governments participate in marketplace management.	The state plays a role in: Ensuring food quality and safety.	The state plays a role in: Ensuring food quality and safety. Some local governments play a role in: Promotion of proximity circuits, small-scale production, denominations of origin strategies
Transparency	Price setting	Distributors exert a dominant power. No criteria were found for establishing fair prices.		Distributors exert a dominant power, although they are usually also the producers. Set fair prices focusing on producers.
	Establishment of food quality and safety standards	The most important criteria for quality are size, form and appearance.		The most important criterion for quality is a form of secure production.
	Party that assumes market risk	Producers and suppliers.	Small and medium-sized suppliers.	Producers
	Possible signing of commercial agreements	Informal agreements between producers, suppliers and sellers.	The producers establish business relationships with the distributor supported by commercial agreements.	Commercial agreements.
	Stability of commercial agreements	Agreements with price stability are not found.	The agreements ensure the purchase of food at stable prices in the medium term.	The agreements ensure the purchase of food at stable prices in the long term.
	Food quality certification	Quality certifications are not common.	Requirement of conventional quality certificates.	Generation of trusted certificates. Some require product data sheets or organic food certification.

Farmers and production practices

The corporate model favors food products from major producers and highly technical businesspeople. The producer or supplier usually conducts all the processes to ensure that the distributor receives the product in the conditions required by the buyer. These agro-industries employ many people. Normally, they use their own funds and access loans from private banking institutions.

We generate about 70 direct employment positions, which increases by 10% or 15% during harvesting; most of the manpower is concentrated on the farms as well as in marketing and delivery, which includes drivers, the people that receive and deliver tomatoes, the sellers, and two technical agronomists (producer in the corporate model_PMM1).

There is intensive use of capital, land, water, input, knowledge, and modern technology in the production system associated with the corporate model. Producers adhere to monoculture practices that use genetic engineering, fertilizers, herbicides and pesticides of chemical synthesis or agrochemicals. It was found, to a lesser extent, that some producers adopt good agricultural practices (GAP) and clean production techniques to fertilize the land and to control pests and diseases. In general, it is unclear if distributors verify whether goods sold to consumers meet the pre-harvest interval required for the use of agrochemicals on crops to protect the health of end consumers.

It would be ideal not to use insecticides, fungicides, or similar pesticides, but due to the temperature in our highly unstable tropical climate, they are needed. Also, because these big box stores -supermarkets prefer products with no insects we have faced quality issues many times, but I’d rather face those problems than products contaminated with pesticide (producer in the corporate model_PMM2).

The food products distributed through the traditional model include the supply of agro-industrial production systems and the aggregate production of small producers. Small-scale agriculture is characterized by a production model driven by family labor, which tends to be scarce because of changes in the family structure and number of family members, resulting in low generational changeover. These families have a low socio-economic status and little or no education. They are also characterized by limited access to land resources, capital, loans, advisory services, and technical assistance; agriculture is their main source of income. In general, the working areas of their production units are smallholdings under 10 hectares with limited technology, generally characterized by a lack of large-scale production and the use of rudimentary tools with production mainly depending on the farmers’ physical capacity. Only a few are wage employees, and producers themselves engage in farming, harvest, and postharvest activities because, among other reasons, they do not have sufficient financial resources to pay for labor.

Similar socio-economic characteristics as small-scale production were found in the alternative model, albeit in the latter, some producers have higher educational levels and implement some technical but small-scale production and distribution models.

In the traditional model, the food sold in market squares is produced using conventional agro-industrial models or grown by small farmers using traditional or ancestral models combined with conventional techniques. Like the corporate model, some producers perform processes under GAP, and others adopt a clean agriculture program.

I use many fertilizers. We use Furadán for white grubs and Lorsban for moths. This has been a long-term habit; we used compost and no chemicals at first. But it doesn’t work anymore. We sometimes use compost, but we don’t use it much because it requires more time and work, and we are not allowed to collect fallen leaves from the woods. So, we must use chemicals (producer in the traditional model-PTM2).

The food available in alternative distribution channels is produced using models based on ecological farming; some of them have been fully implemented, while other models are undergoing a transition from conventional models. The alternative model focuses on safety, ensuring the absence of pesticide residue and guaranteeing quality of freshly harvested food, food sanitation, and hygiene. Food is produced near the cities where the products are traded, thus ensuring short distribution periods with respect to the harvest. Small volumes are preferred to avoid waste. This model also includes practices such as self-reliant or native seed management. Mixed cropping is employed, which includes a large variety of vegetables, legumes, tubers, aromatics, condiments, medicinal plants, and fruits; as well as animals to produce eggs, dairy products, or white meat. Some of this food is for self-sufficiency; the remaining goes to agroecological, green or farmers markets, fair trade shops, restaurants and upper- to middle-class supermarkets.

Marketing channels

The marketing channel used in the corporate distribution model is characterized by a combination of intermediate chains. The first one directly connects producers and distributors. These relationships are common between business professionals, given their production and trading capacities that facilitate negotiation. Direct relationships with small producers are less frequent and were only found in certain cases for very specific products. The second channel is characterized by long-chains and is more commonly found. This type of channel requires several intermediaries; the first buys the crop, then it may be traded to a second intermediary who, according to their logistical capacity, will deliver it for final distribution or to new intermediaries that are connected to the modern market.

The marketing model varies; there are companies that use direct marketing; that is, they trade with small dealers and producers themselves, but they use intermediaries to handle the large volumes for supermarkets. These intermediaries collect crop and producers deliver them to an intermediary, and that intermediary, based on quality, classifies and delivers them to customers. Supermarkets do not generally have a direct relationship with producers because the produce is usually season-based; producers grow crops, then they appear in six months or a year, and return with the following harvest, and a supermarket cannot have stock outs for a year; they need to have products on a daily basis (distributor in the corporate model_DMM5).

The food traded in the traditional model is generally bought in central supply markets after being traded by a certain number of dealers. Therefore, distributors do not know the characteristics of food producers. However, producer-distributor relationships are not completely broken, especially in retail squares or central supply markets of smaller cities where traders have closer relationships with and more knowledge of local or regional farmers.

It is important to note the role of collectors who work near crops, either in farms or municipal heads, required by some small- and medium-sized producers who meet one or several of the following characteristics: a) depend on their own labor to sustain production processes; b) engage in conventional monoculture practices; c) have little negotiation capacity; d) obtain small quantities of produce; and d) prefer to dedicate themselves exclusively to production. The activities performed by these collectors are praised within the system, because they are considered a connecting link centered on the trust placed by farmers in the traders.

I sell to collectors because if I go to Medellín I would neglect the farm, so I sell to intermediaries or negotiators who deliver the products to Medellín. They frequently say that we need to remove intermediaries, and I tell them that intermediaries will never disappear, because if there were no negotiators, we would have to leave the farm. I will not leave the farm to work at the market, because I don’t have somebody I can trust” (producer in the traditional model_PTM3).

The alternative model mainly uses short chains channels for trading purposes. Trade is mainly conducted through physical means in nearby markets in local and regional settings. Over the past few years, virtual marketing initiatives have been introduced to facilitate consumer access to alternative distribution, because the dynamics adopted in big cities may hinder access to smaller trading structures. The intermediate channel is short or nonexistent in both forms of marketing (virtual and physical) because distributors perform connection efforts rather than intermediation actions; besides, in general, producers engage directly in supply.

Producer-consumer relationship

The producer-consumer relationship is almost nonexistent in the corporate model; the information made available to consumers on the origin and content of what they consume is insufficient, and distributors are not interested in forging this connection.

We don’t know where the products go, we can even buy the product ourselves and we don’t know if it belongs to us or not, we have no direct relationship, no (producer in the corporate model_PMB1).

We carry out campaigns with some producers, with some suppliers, but it is not institutionalized. That is, it has been done sporadically but that type of contact has been made (distributor in the corporate model _DMPe1).

In the traditional model, although market squares were created to connect producers and consumers, there are currently fewer farmers trading directly in market squares. Instead, there are retailers or a combination of retailers and wholesalers. Therefore, in the current operating framework, there is no direct connection between producers and consumers, but there is a close relationship between dealers and consumers, who build commercial and social relationships, which are pillars of the traditional model and a distinctive element that is valued by consumers who choose these distribution channels to purchase food.

Unlike prior models, the alternative model favors a direct relationship between producers and consumers at retail locations, markets, and fairs, which is consolidated through field knowledge of venues and production forms. These characteristics have positive effects on educating consumers and favor trusted endorsements granted by consumers to producers. When individuals or organizations engage solely in distribution, the mechanisms are used to understand producers and their lifestyle. Their production model is shared by generating content for social media and other websites, through communication and information technologies, or by promoting activities in distribution and production venues, like trainings, guided tours, and agriculture and gastronomy workshops.

Regulation

The primary findings show that there are limited state and social regulations, and that private regulation prevails in food supply and distribution (Table 4). The state plays a role in ensuring food quality and safety compliance by enforcing international trade agreements. We found few interventions, especially from regional governments, which are still in the early phases and focused on the promotion of proximity circuits. The policies adopted by the national government, although similar, place greater importance on efforts that favor international trade and the sanitary and commercial conditions required. Therefore, marketing strategies seek to connect food producers with actors who may add value through industrialization or export processes. The statement below reflects some distributors’ perceptions of the state’s role:

We receive no support from local authorities, they only control us. The Health Department and the INVIMA [Colombian Drug and Food Administration] control imported products and issue related certifications […]. Customs police are always aware of us […] (market square manager_1).

Local authorities have recently started drafting supply plans, which examine a large array of strategies. However, once implemented, they materialize in three types of actions: 1) those that further develop programs, such as farmers markets; 2) projects targeting market dealers and storekeepers, such as networking sessions, trainings, and affiliation as suppliers of food aid programs; and 3) pilot projects to transform market squares into venues where local governments can engage in food supply and distribution. These projects have been led by the mayor’s offices in Bogotá and Medellín to shorten the supply chain and buy directly from associated producers, modernize infrastructure and logistics, improve the management of biodegradable waste, and better adjust to safety standards.

Denominations of origin strategies were also adopted to boost food production and favor short marketing channels.

The strategy of public procurement is also gaining ground in Colombia. This was first advanced by the Instituto Colombiano de Bienestar Familiar (ICBF), which established the requirement to purchase 20% local products under its general terms and conditions for contracting. The latest legislative sessions issued projects to establish, ensure, and promote public procurement of 30% food products from family farms, and on August 6th, 2020, Law 2046 was approved. This law establishes ways to promote the participation of small local agricultural producers, as well as family and community agriculture in public food procurement markets (Congreso de la República de Colombia 2020). Previously, there were food assistance programs that performed analyses to ensure their implementation; however, the parties that set up these programs have not managed to implement them because of the limited capacity of family farming.

The food bonus program approached the farmers market program so that farmers could supply fruits and vegetables, but they did not have full technical and delivery capacity, so we were unable to reach an agreement. This same exercise was conducted with the school food program, with similar results (food safety authority_1b).

Another strategy that is commonly adopted in public food security policies is small-scale production. This secures family consumption needs in rural and peri-urban areas while producers with surplus production participate in local trade programs. These strategies also promote the social and productive inclusion of women and homeless people and encourage agroecology.

The mayor’s office provides food production programs. We train small producers who have gardens for self-consumption in planting planning, record management, marketing techniques, negotiation, etc., so that they can later participate in farmers markets (food safety authority_2).

We did not find price controls on food in Colombia, but only a monitoring mechanism in the form of the Price Information System (SIPSA in Spanish), which, although mentioned by most producers and distributors across models, is not widely used to establish negotiations between farmers and merchants.

To be honest, SIPSA is not useful for us [the producers]; instead of being a benefit for the producer, it benefits the buyer that has a reference price to buy below market values … in other words, it doesn’t work (producer in the corporate model_PMB3).

Regarding social regulation in the traditional model, although most dealers present in market squares are related to cooperatives, they do not perform collective actions to trade food and mainly manage physical spaces. Producers who supply through this model generally are not involved in any partnerships. In the corporate model, distributors assert that partnerships are not useful to accomplish their aims because they compete with colleagues. The producers that supply through this model do not adopt partnership strategies, except for dairy cooperatives.

Some producers and distributors from the alternative model relate through formal associations, characterized by close communal ties, and strengthened through the processes of empowerment and training of rural women and partnership support from academia, non-governmental organizations, and government entities. However, we found cases of people who preferred making individual efforts over partnerships because they found the latter useless.

Transparency

Findings show that distributors exert a dominant power in establishing the operating rules of food distribution in key aspects such as price and other commercial arrangements, and usually disregard producers’ and consumers’ needs, barring some exceptions found in the alternative model, which sets fair prices focusing on producers (Table 4).

The type of product, the possibility of maintaining stable prices over time, product seasonality, purchase volumes, perishability, product turnover, and profit margin affect producer pricing in the modern model.

Naturally the products that rotate a lot have very small margins and the products that rotate little have higher margins. The products with the highest turnover are less profitable (1–5%) (distributor in the corporate model_DMM1).

There are very susceptible products such as eggs, milk, products where people check the price more, they are more susceptible for the customer, these have a low percentage. In other products we manage them with a 10–13% return. In vegetables, as it is a perishable product, we handle around 30%, because there are many losses (distributor in the corporate model_DMM2).

Quality is not a generalized criterion for establishing purchase prices in the cases analyzed in the corporate model because the products bought are generally high-quality products, while average and lower-quality brands are sold in the traditional model. However, the companies that have distribution channels across different social strata make a full harvest and purchase with price differentiation for producers, as seen in this distributor quote:

We know the tree produces everything: premium, average, and lower quality products. We apply a full harvest model, so we purchase the primary product with a data sheet for certain warehouses; we purchase average products with another data sheet of a lower brand for other type of warehouses, and we purchase lower quality products for other solutions (distributor in the corporate model_DMM3).

Small and medium-sized suppliers of fresh products in the traditional and modern model take huge production and distribution risks because they have no business partners or state assistance. Thus, several situations may affect producers’ income and increase losses; such situations include draughts, flooding, road closures, transportation cost increases, promotions, product advertising and momentum, and returns due to rejected quality based on size, shape, and appearance, which is a pertinent issue faced by producers in the modern model.

Negotiations with warehouse stores are very complicated because we do not sell but rather deliver in consignation, so if we provide 100 tomatoes and only 20 are sold, they return 80 damaged tomatoes; they do not care if they return half of the order because they love having full fridges, which is something that the consumers love (producer in the corporate model_PMB2).

We do not set the terms, the warehouses do, and they say: I will buy your products, but I will pay in 45 days, and you will assume the discount. This is a confidential discount that all warehouses make (producer in the corporate model_PMB1).

The traditional model has no criteria to set purchase prices for producers and sale prices for consumers. Traders state that the relationship between supply and demand exerts the greatest effect on price changes, and that pricing is controlled by wholesale buyers.

Wholesalers go to market squares and offer, for example, $38 per box, so they set the price; you cannot ask for more because they won’t buy it (producer in the traditional model_PTB1).

Even in the alternative model, food prices are established by distributors. However, in these cases, they are usually established by the producers. When producers sell products to specialized distributors and institutional markets, prices are usually agreed upon between the parties. In some cases, the market prices adopted in the traditional or corporate markets are used as benchmarks, while in other cases they refer to the SIPSA. Sometimes different methods are used to establish producers’ fair payment, which is understood as the price that covers production, transportation, and distribution costs and yields profit to ensure a dignified livelihood.

The amounts paid to producers are fixed with them in advance, regardless of market prices: we base ourselves on production costs, including the labor of those who produce (distributor in the alternative model_DBA1).

When the producer is going to offer a food in the market, he simply invents a value because he compares it with what is suddenly being sold in the conventional market (distributor in the alternative model_DMzA1).

Regarding the stability of commercial agreements, the producers who supply through the corporate model establish business relationships with the distributor through agreements or relationships that ensure food purchases at stable prices for some months. However, producers in this model have little room to negotiate because distributors impose the rules of engagement related to price, quality, and payment dates. Even so, producers prefer to be suppliers in the corporate market because of stable negotiations. Such commercial agreements with price stability are not found in the traditional model.

There are platforms that establish prices for three or four months, that standardize prices; so, the advantage of these big supermarkets is that the order is issued, and the price does not have to be negotiated, whereas self-employed workers at market squares need to negotiate prices daily (producer in the corporate model_DMM3).

In the alternative model, safety is emphasized over pricing; therefore, some distributors may visit producers to understand production and trusted certificates. Some require product data sheets or organic food certification. In some cases, these quality and safety criteria are used to set a higher price than in traditional or modern markets.

Discussion

Our findings show that the corporate, traditional, and alternative food retail models coexist in Colombia in different formats in the Colombian departments. Despite the high coverage of the corporate model, its growth is concentrated only in certain regions, whereas the traditional model is present throughout Colombia. Ayala and Castillo (2014) documented the gradual loss of participation in the Mexican market of traditional commerce (Ayala and Castillo 2014) and research conducted in Latin America describes the transformation of agri-food systems because of the rapid rise of supermarkets (Reardon et al. 2003). Triches and Schneider (2015) generated the critic and response movement (Triches and Schneider 2015), which initiated the alternative model.

The corporate and traditional models favor agro-industrial systems, do not offer fair conditions for small producers, promote a type of food production that harms the environment, and do not foster relationships between producers and consumers. The alternative model includes small producers, supports fair trade, agroecology, and producer-consumer relationships; it targets educated urban middle and upper-middle classes, not including poor and rural consumer sectors, nor any population with low purchasing power. Low purchasing power restricts the possibility of acquiring sufficient and healthy food in any food distribution model. There are limitations to obtaining them in the alternative model, such as having distribution centers located far from communities. Although there is alternative production in rural areas, it is only for self-sufficiency, and the rest is sold to urban areas.

Our analysis demonstrates that the three food retail models in Colombia have different forms of governance. The corporate model prevails over private regulation; the traditional model has a mix of cooperative and corporate management models; and the alternative model has solid social regulation.

We concluded that public policy food retail in Colombia need meets legitimate governance criteria. The contributions of the theories about commons goods governance (Ostrom 2010) provide elements for redefining the governance of different types of goods and systems (Pérez 2014).

First, we propose that a public policy should consider food retail as a common resource. As proposed by Pérez (2014), “They are shared goods, and their sustainable use requires cooperation.” This implies that food retail management should advance to cooperative models rather than competitive models. The corporate model bases its actions exclusively on competition and does not consider cooperation, whereas the traditional model does not consider cooperation to manage the central activities that drive the supply and distribution of food. In the alternative model, cooperation is not fully consolidated. Thus, cooperation is required so food distribution models can coexist and supply food. Therefore, it will be necessary to recognize the type of inter- and intrarelationships between these models and to promote those that favor a more efficient, but above all, more equitable and inclusive food operation of food that is made available to the population.

Suggestions such as those offered by democratic governance can be “a guide for interaction between interdependent actors, a more cooperative way of governing, through which public and nonpublic institutions and actors participate and cooperate in formulating and applying policies and regulations” (Brouchoud and Fernanda 2010). Kooimman (1993) cited by Martínez Brouchoud indicate that no single actor, public, social or private, has the knowledge or information to solve complex, dynamic and diversified problems (Brouchoud and Fernanda 2010) such as the guarantee of having stable access to a supply of healthy food. This implies promoting participation in governance such that public, social and private actors participate in the regulation and provision of services.

An important role that the state could play in network governance is to support the principle of coherence to call that the actors involved in managing food supply systems involve various sectors. Termeer et al, cited to Siddiki and Candel indicate that “approaching food from a system perspective reveals and in turn enhances important governance challenges and opportunities, because it requires more holistic forms of governance. By its nature, food governance institutions are fragmented and cut across the usual boundaries between sectors, administrative jurisdictions, public and private domains, temporal and spatial scales, and diverse normative frameworks. The interdependencies of actors, activities, and problems within the food system challenge the efficacy of traditional modes and strategies of governance (Siddiki et al. 2015). It is an attractive proposal for actors with an agenda to emphasize that food cannot be dealt with appropriately by the current fragmented institutional architecture, and that therefore, “the governance system should be made more coherent and harmonized, better integrated and coordinated, and more inclusive” (Candel, 2014). This research team proposes five interrelated principles for appropriate food system governance arrangements: system-based problem framing; boundary-spanning structures; adaptability; inclusiveness and transformative capacity (Termeer et al. 2018).

Second, food retail should exert polycentric governance, which integrates independent yet coordinated forms of government to foster exchange between producers, distributors, and consumers (Ostrom 2010). Thus, producer associations organized under democratic management systems will supply food through carriers that are also managed democratically, to democratic, transparent, efficient, and interdependent marketing structures, capable of jointly assuming the operational risks at stable and fair prices (Ostrom and Gardner 1993).

Third, the characteristics of food production and marketing found in the food distribution models combine localized and delocalized practices (Kneafsey et al. 2008), with greater emphasis on the former for the alternative and traditional model, and on the latter for the corporate model. This indicates that today’s food retail distribution systems require “governance at levels ranging from global to local” […] and employ institutional types, such as hierarchies, that follow several rules to change incentives, increase information, monitor usage, and induce compliance (Thomas, Ostrom, and Stern 2003).

The liberalization and globalization of agriculture and food-chains have influenced the organizational structure of the [agrifood] system, actor constellations and the interaction within the system. They have fostered the diffusion of norms from the global to the local level and vice versa. The resulting picture is an intricate and multifaceted power play, where global and local forces interact, state as well as non-state actors are both able to take agency, and norms create opportunities and constraints for agri-food governance. Not surprisingly, the complexity of the interaction of these various forces makes understanding the processes and outcomes of agri-food governance extremely difficult (Fuchs and Glabb 2011).

In this context, proposals on political agroecology (Gonzalez de Medina et al. 2021) may be useful for studying the most ideal way to participate and make institutional change possible (pg. 27). Specifically, agroecological multilevel collective action proposes strengthening or building local cooperative institutions, while acting on a more complex political/state scale (pg. 102). Political agroecology is interested in maintenance, reinforcement, democratization of politics, multilateral institutions, and intermediary supranational political structures. The design of global democratic regulatory institutions poses enormous theoretical and practical difficulties for international actors, but the ecological and social need to move toward a world rule of law is evident (pg, 109) (Gonzalez de Medina et al. 2021).

Fourth, it could be said that in food retail most producers and consumers do not design the rules they are expected to follow so they are less likely to agree to the necessity and legitimacy of the rules. A new model of food retail should give them the right to regulate internal use patterns and transform food retail (Schlager and Ostrom 1992).

This polycentric governance will make it easier for governments and social organizations of consumers, local producers, and small dealers to participate in pricing, production criteria, and harvesting methods and schedules; as well as food safety, distribution channels, and transportation, among other essential processes involved in supply and distribution systems.

Conclusions

In general, food retail in Colombia needs legitimate governance. The logistics of private regulation are privileged, and there is weak public and social regulation. Retailers have absolute power to establish rules of procedure and, in general, fair trade. Balancing interests of producers, consumers, and distributors is not followed, except for some cases in the alternative model. Thus, the norms and standards through which the food distribution system is governed are unclear and create unfair conditions for small producers and consumers, especially the poor. There are various consequences to this situation, such as a rise in food shortages in more impoverished areas, speculation in food prices, multinational monopolies in large cities, mafias controlling some food trade, exploitation of small farmers who cannot negotiate out of harmful regulations, and the exclusion of consumers from decision making.

To ensure that public food retail policy meets the criteria of legitimate and democratic governance. We hope that the entities in charge of national, departmental, and municipal social policies will use the findings from this study to build public food retail policies. We also hope that experts in the food distribution research area will find our proposed criteria applicable to demonstrate the current problems each food retail model faces and apply them in comparative analyses.

Disclosure statement

No potential conflict of interest was reported by the authors.

Additional information

Funding

This research work was financed by the Departamento Administrativo de Ciencia, Tecnología e Innovación de Colombia (COLCIENCIAS, now Ministry of Science, Technology and Innovation) through Call No. 744 of 2016 for science, technology, and innovation projects in health and was co-funded by Universidad de Antioquia, Universidad Nacional de Colombia, and Universidad Pontificia Bolivariana.

Notes

1. In Colombia, DANE builds baskets of goods and services from National Income and Expenditure Surveys that have been carried out since the 1950s. DANE has established the consumer price index, which includes the top items of household spending, the items that most households demand and that show a growing trend in the share of spending, and the items where demand can grow significantly in the short and long term. According to DANE, the term “family basket” applies only when the goods and services can be demanded by any household in the country, regardless of their income level.

2. Emblematic cases for the ability to represent the retail models. The cases were selected to better understand and theorize a more widespread number of cases (Stake 2000, 2004).