MSU Agricultural, Food, and Resource Economics
Bogota, Colombia's capital and largest city, also has the country's fastest rate of population growth. Between 1950 and 1970, the population of Bogota was quadrupled. Yet diagnostic studies in 1970, indicated that the food marketing system serving this city and its growing population, and particularly the channels serving middle and low income consumers, were changing slowly and performing unsatisfactorily.
Corabastos, a semi-public agency, was created in 1970 to formulate and implement programs in order to correct this situation by inducing innovations in the food marketing system. Initially, Corabastos followed a market improvement strategy recommended by the Latin American Planning Center of Michigan State University. Under this approach the following programs were formulated and implemented: construction and operation of a central wholesale market, neighborhood stores chains, commodity exchange, and market information. But later Corabastos set up a risky direct intervention program of buying, selling and processing, which produced huge financial losses. Initially, the shift in approach and later, the very difficult financial situation, weakened the reform programs and prevented the formulation and implementation of new programs. Nevertheless, the population growth and the urbanization process continued and demands for faster changes are becoming apparent.
This research had the following objectives:
1. To identify the LAMP market reform approach and to conceptualize an evaluation framework for reforms attempted under that model;
2. To evaluate both the organization (Corabastos and subsidiaries) as an institution built to promote socially desirable changes in the food marketing system and the direct intervention programs which include fruit and vegetable processing and exports, beef processing and wholesaling and potato storing and wholesaling;
3. To evaluate the impact of the market reform program on the food marketing system in Bogota's food shed area and, in particular, the impact of specific reform programs on farmers, assemblers, wholesalers, retailers and consumers. The market reform programs being evaluated were: operation of the new central wholesale market, commodity exchange, retailers' cooperative, wholesale-retail voluntary chains and market information;
4. To make recommendations on research methodology, market reform approach programs and institution building.
A modified structure, conduct and performance framework combined with an institution building approach was developed as a conceptual framework to guide the research activity. Data for the evaluation of the organization in charge of market reform were obtained from in-depth case studies with Corabastos' leaders and government officials. However, a significant percentage of the reform benefits has remained with the innovators.
Traditional channels have changed slowly and have prevented middle and low income consumers from taking full advantage of reform benefits. Consequently, operation of Corabastos' pilot wholesale-neighborhood store chains has indicated that there are significant opportunities to improve efficiency and innovation and to create counter-vailing power. Moreover, human resources development and new market institutions seem to be crucial to the support of new self-reinforcing changes in the food marketing system in the area of influence of Bogota.