has had important consequences for the structure of the markets (Gutman, 2002), for small-scale producers (Ghezán et al., 2002; Gutman, 2002; Reardon and Berdegué, 2002; Schwentesius and Gómez, 2002) and for consumers (Vorley, 2003). In Brazil, as new “retailers” with integrated operations and new rules of participation expand they are displacing small and medium rural enterprises, which were playing an important role generating employment and diversifying the ways one could make a living in the Brazilian countryside (Farina et al., 2004). In addition, the new rules imposed by the supermarkets in Brazil with respect to the beef market have ruined the small butcheries, merchants and truck drivers who were involved in this market before (Farina et al., 2004). In Chile, the growth of the large supermarket chains has taken place at the expense of traditional food outlets. From 1991 to 1995, on average 22% of these traditional outlets disappeared (Faiguenbaum et al., 2002). The same trend has been documented for Argentina, Costa Rica and Mexico (Nielsen, 1999; Alvarado and Charmel, 2002; Gutman, 2002; Schwentesius and Gómez, 2002).

      The effect on small-scale producers has been equally devastating. The supermarkets are seeking a limited number of suppliers who can provide them with the volume and quantity of products they need. The supermarkets in LAC purchase 2.5 times more fresh produce (fruits and vegetables) from local producers than those which the region exports to the rest of the world (Reardon and Berdegué, 2002). With the rapid growth of supermarkets and the consolidation of that sector, local producers are increasingly subject to the rules established by a small group of transnational companies. It has been argued that for the fresh fruit and vegetables sector, the growing dominance of supermarkets may have a positive effect on producers and consumers, since the supermarkets demand a higher-quality producer (Belsevich et al., 2003). Nonetheless, these same authors conclude that
the general trend is to disfavor the small- and medium-scale producers, who lack the capital and credit needed to accommodate to the new demands of the market. The negative impact on small- and medium-scale producers has been documented for several countries of the region (Alvarado and Charmel, 2002; Ghezán et al., 2002; Gutman, 2002;
Schwentesius and Gómez, 2002).

      It is argued that on balance the growth of supermarkets has had a positive overall impact for consumers, though there are not many studies on this (Rodríguez et al., 2002). It is assumed that supermarkets are more convenient and provide greater diversity of products along with better-quality products at a lower price. Nonetheless, as supermarket chains consolidate and the competition diminishes, these benefits will deteriorate, as with milk in some regions of the United States.

     The debate continues over the impacts of the major concentration of corporations in the food sector. There is also a debate over whether the global dominance of supermarket chains is inevitable and over the possible impacts of standards and direct contracts between supermarkets and producers. Nonetheless, most of the studies in Latin America and the Caribbean indicate that this concentration and dominance in the food sales sector will have negative repercussions for small- and medium-scale producers and eventually for consumers. Although these predictions are

still tentative, the evidence for this proposition continues to accumulate.
     The transnational corporations continue their process of vertical and horizontal integration and continue penetrating food chains in the region. Throughout the food chain the inequality in power is greatest as between small-scale producers and the transnational corporations. To counter that inequality, some producers have organized in associations to increase their bargaining power over conditions and prices (Berdegué, 2001; Vorley, 2003). Yet Berdegué (2001) argues that these associations can only be beneficial when transaction costs are high, as in the case of milk. But when transaction costs are low, as it is in the case of grains and potatoes, the benefit of producers’ associations is called into question. In the context of a globalized economy, this kind of not-very-differentiated product makes all producers worldwide compete with one another for buyers. The development of cooperatives in the context of globalization and borders open to capital poses a major challenge to smallscale producers, since transnational agribusinesses can buy their produce practically anywhere in the world.

     The concentration and consolidation of these agribusiness chains have increased the gap between the prices received by food producers and the prices paid by consumers (Vorley, 2003; see Box 1-10 on soybean in Brazil). These impacts have repercussions throughout society, both rural and urban and have effects beyond the economic effects related to the displacement of small-scale producers, job losses and consumers’ ability to buy food. Food is one of the pillars of any culture; how it is produced, distributed, prepared and shared with family and friends is part of what defines a culture and that pillar is quickly eroding with the expansion and concentration of transnational supermarket chains.

      This imbalance in power has led the global organization, Vía Campesina, to begin a campaign to remove agriculture from the WTO based on the argument that food is different (Rosset, 2006). Consumers are playing an important role by demanding fair trade products, although they still represent an insignificant percentage of food purchases in the world. Another recent development is self-regulation in the corporate sector. Some corporations, in search of a competitive margin over their competitors, are beginning self-regulation programs with respect to social responsibility. Nonetheless, despite all the publicity, very few corporations have adopted the social responsibility agenda (Oxfam, 2004). Finally, another possible way to control the impacts of the concentration of markets is to attack it directly. Considering the rapidity with which the concentration of capital is taking place, monitoring the transnational corporations should be an urgent task (Vorley, 2003). Part of this work was done by the now-defunct United Nations Center on Transnational Corporations. In addition, the civil society sector is working on this through organizations such as Corporate Watch. Vorley (2003) argues that economic globalization makes it necessary to improve global governance on matters of monopoly and competition. Nowadays, there are no international standards for competition to regulate the activities of corporations from one continent to another. The law on competition within the WTO moves away from regulating monopolies, towards simplifying regulations across national borders to facilitate transnational