Trade liberalization, urbanization, concentration of retailers, and quality and safety requirements are leading to rapid changes in the organization of markets. Market-driven systems are replacing supply-driven and product-oriented systems. Closed and coordinated supply chains can bypass open wholesale and spot markets. Supply chain development enables integration of market functions and linkages between different participants in the system, and it allows for better coordination and planning. Supply chain competitiveness and access to supply chains have become major issues for growth and poverty reduction in agriculture. The analysis of supply chains is important in planning investments to enhance competitiveness and market participation by small-scale farmers. Globalization, changing consumer demands, and new information and communication technologies are key driving forces in global agro-food industries. Consumers are demanding more information on the food safety, ecological, and social aspects of the products they buy. Rising per capita incomes, urbanization, the increasing numbers of women in the formal labor force, and market liberalization have spurred the rapid growth of modern retail chains. Large supermarket chains, sourcing food from global markets, increasingly act as gatekeepers for consumer markets. In developing countries, supermarkets are rapidly increasing their share in the food market. Investment in Integrated Supply Chain Systems Fully integrated and coordinated supply chains catering to modern retailers and food processors are rapidly replacing sourcing from open markets, especially for perishable food but increasingly for food staples as well. Coordinated supply chains are institutional arrangements that link producers, processors, traders, retailers, and consumers. They regulate the flow of products, payments and capital, technology, ownership rights, and information among these participants and exploit synergies for market expansion and cost reduction. Closed chains perform the same functions within one company that controls various stages in the product chain. The development, organization, and management of supply chains is primarily a function of the private sector and requires private investment in inputs, equipment, market information, technology, and skills. The public sector’s role is to create favorable conditions for supply chains to develop, for public-private cooperation to emerge, and for smallholders and small enterprises to be included in supply chains. Supply-driven systems producing heterogeneous commodities in uncertain quantities and qualities, once typical of agriculture, are becoming obsolete. They are being replaced by demand-driven supply chains, requiring major changes in production, technology, and logistics. Coping with these challenges exceeds the capacity of most individual entities. Public investment associated with policy and regulatory reform, improved infrastructure services, demand-driven public research and development, training, and advisory services may be beneficial for boosting the competitiveness of supply chains.
    
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