This paper attempts to contribute to the emerging literature with focusing on one important high-value agricultural product in Indonesia: chili. More specifically we examine the factors that determine chili farmers participation in supermarket channel and to investigate the impacts of this participation on their income. This study focuses on chilies for several reasons. First, chilies are a main ingredient in Indonesian daily diet and are produced by small farmers. Second, unlike other fresh vegetable products that can be harvested at the same time, farmers can harvest chili crop weekly or fortnightly. Therefore, for small farmers this crop provides a steady cash flow. Third, although only small amounts of chilies end up in supermarkets, this commodity is the main item in fresh produce sections of supermarkets, and it is estimated that the share will be increased along with rapid rise of supermarket in Indonesia.