Strengthening European Food Chain Sustainability by Quality and Procurement Policy

Filippo Arfini (1) , Virginie Amilien (2) , Federico Antonioli (1) , Valentin Bellassen (3) , Mary Brennan (4) , M. Fumel (2) , Matthew Gorton (5) , Monika Hartmann (6) , D. R. Hawes (6) , M. C. Mancini (1) , G. Roos (2) , J. Schüssler (6) , Barbara Tocco (5) , H. Torjusen (2) , Angela Tregear (4) , Mario Veneziani (1) , G. Vitterso (2) , C. Yeh (6)

1 UNIPR - Università degli studi di Parma = University of Parma
2 Akershus University College
3 CESAER - Centre d'Economie et de Sociologie Rurales Appliquées à l'Agriculture et aux Espaces Ruraux
4 Edin. - University of Edinburgh
5 Newcastle University
6 Rheinische Friedrich-Wilhelms-Universität Bonn

• The territory is: i) the place of production which specific environmental characteristics (micro-climate and local varieties) are capable of qualitatively characterizing the products; ii) the place that, according to the presence of institutions and methods of interaction between the agents, facilitates the provision of the product, lowers transaction costs and contributes to the creation of its reputation; iii) for SFSC, it is the place of consumption; iv) the place where different supply chain management arrangements generate environmental, social and economic impacts. • Taking into account the aforementioned characteristics, the most effective conceptualization of the place of production is represented by the Cluster or, even better, by the Industrial District which, in the case of the agro-food industry, is a Localised Agri-Food System (LAFS) or System Agroalimentaire Localisé (SYAL). • The uniqueness of the LAFS resides in recognizing the role of the territory in terms of its social and institutional components and their ability to contribute to the creation of value within the supply chain. The specific nature of the LAFS is represented by the deep interaction between food cultures, human actions and institutions. LAFSs are the result of a process of cooperation among companies with common interests, located in an area, which organise and agree on certain production and marketing norms and rules to obtain a competitive advantage over competitors. • Looking at the characteristics of the production area, both industrial and rural LAFSs can be defined. The former is dominated by the agri-industrial characteristics and agents of the territory, while the latter are dominated by their rural dimensions highlighting the natural and environmental features of the production process. • The LAFS paradigm (either industrial or rural) supports an endogenous development model based on the intrinsic characteristics of the production system, intended in its broadest sense, which - in the case of rural development - takes the form of neo-endogenous rural development. It delineates an endogenous-based development in which extra-local factors are recognised and regarded as essential, while retaining a belief in the potential of local areas to shape their future. In contrast to the theoretical underpinnings of both exogenous and endogenous models of rural development, neo-endogenous rural development is based on the interplay of both local and external factors, so that the development strategy is built upon the link between local conditions and external opportunities. • The need to embrace extra-local factors and adopt an integrated network approach is also emphasised, although control remains within the local area rather than being dictated by extra-local influences. Therefore, the focal point of neo-endogenous development is the enhancement of local institutional capacity, to mobilise local resources while exploiting external opportunities. • The territory and its endogenous development model are complemented by a third component of the identification of a FQS: the characteristics of the value chain. The technological functions of the supply chain are combined in a more economic and managerial function. Typically, the supply chain, especially in the agri-food sector, is regarded as a tool for managing production, useful to create an appropriate product quality and develop marketing strategies aimed at creating value for all the actors of the chain. • Food chains are characterised by efficiency and the ability to transfer (or retain) value for the benefit of agents. They are dynamic structures subject to the evolution of structural and economic components under internal and external phenomena. These phenomena include: the evolution of the supply chain, the degree of openness to trade, the level and evolution of market demand, the evolution of the concept and perception of quality, as well as of it service components, the presence of standards and inter-organisational relationships. Additional elements include: the presence of agents and external institutions to the value chain that provide services and information, the extent of information asymmetry and the incidence of transaction costs. • Given the characteristics of the value chain and the relationship between the agricultural and the industrial component, as well as the relationship between companies and inter-branch organisations (when present), attention must be placed on how to develop collective commercial strategies capable of increasing the value added of the product and/or the bargaining power of the enterprises that turn to large scale distribution channels. In a nutshell, a dominant model of FQS-value chain does not exist but - rather - several typologies of FQS value chains emerge, according to the combination of their structural and management features. • However, common elements in the FQS supply chains encompass the need to comply with EU Regulations and the presence of a set of rules laid down in a code of practice, which requires establishing a system for managing the FQS (especially GI) through an organization suited to local conditions and capable of establishing a FQS strategy encompassing the whole value chain. In addition, FQS value chains feature a third party certification body which guarantees the actors’ compliance with the code of practice. • The literature shows that within value chains and LAFSs, organizations (e.g., producer organizations, inter-branch organizations and certification bodies) and local institutions operate for the benefit of all the agents. This is fuelled by a sense of belonging, by the necessity to develop chain strategies, as well as the common interests of territorial actors, and it translates into governance actions. Chain and LAFS organizations are the result of the interaction with other participating actors (e.g., companies, institutions), generating a set of dynamic forces that allows to adapt to the challenges posed by the market. • In this framework, local institutions represent stakeholders that play key roles in the process of increasing territorial competitiveness. Their role is mainly to strengthen relationships among stakeholders, with the general aim of obtaining the production of those public goods and the creation of those positive externalities which most serve the process of development, increasing the level of competitiveness of the entire local system. • Arguably, local institutions can be organised as hybrid organisations, since they represent the collective interest of individual producers, involved in the same food chain within the same territory. Indeed, according to the literature concerning the definition of collective action, local productions involve a wide range of stakeholders, operating within and outside the production area, although only some of them are directly involved in the value creation process. • The interaction among LAFS stakeholders is instrumental to the evolution process of the local system, considering the link between the territory and the food chain. The possible combinations between food chains and territories lead to three different types of agri-food systems: Closed LAFS: local agricultural outputs are processed by local food industries (mainly Small and Medium Enterprises) and are purchased at local level (mainly by local consumers). Open LAFS: agricultural outputs are not processed by local food industries and are purchased by non-local consumers (or can be purchase anywhere). Mixed Systems: a coexistence of Closed and Open LAFS. • Within the S2F project we will consider the links between the territory and the food chain, embedded in the LAFS, and the implications regarding their sustainability. • The LAFS concept provides the criteria to address the identification and the recognition of the boundaries of the LAFS area according to the characteristics of the FQS considered in the research activity: For GI productions (PDO, PGI and TSG), the LAFS is represented by the municipalities identified in the official code of practice that is part of the EU regulation published on the DOOR database; For organic products, the LAFS is not officially defined and the suggested criteria refer to the region where producers carry out their production and commercial activities; For SFSC products, in the absence of a legislative reference, the definition of the LAFS refers to the region that includes the production and consumption area that, necessarily, are contiguous to each other. In the real world, different FQS can overlap each other, generating a hybrid FQS framework (e.g.: organic-GI; Organic-SFSC, GI-SFSC; Organic-SFSC-GI). In this case, the dominant criterion is the presence of a Designation. When the GI is not considered, the dominant criterion is the SFSC. • In the S2F project, the link between quality schemes and the territory is considered as follows: Closed LAFS: all the inputs come from the territory and all the output is purchased within the territory in local markets, e.g. for SFSCs and Short Food Geographical Indications (SF-GIs), in other words SF-PDOs. Open LAFS: upstream and downstream elements of the chain are not bounded by the territory, as a consequences inputs can come from outside of the area as for some PGIs and Organic productions. In this cluster, most of the output is purchased in distant markets that can be “domestic” or “global” in nature (when consumers are in different regions with different market rules; i.e., extra-EU); Mixed LAFS: in this cluster for some FQSs some inputs can come from others regions, as for PGIs and Organic products. Moreover, most of the output is purchased in local markets but part of the outputs is also sold in “domestic” markets (when consumers are in different regions but with the same market rules, i.e., in the EU). • The level of embeddedness of the value chain with respect to the LAFS creates different categories of markets: local to local (i.e., the case of SFSC and some PSFP); local to domestic (i.e., the case of GIs and Organic); local to global (i.e., the case of GIs), and determines different (public and private) strategies and impacts (Vandecandelaere et al., 2010; Torres Salcido and Muchnik, 2012, Fischer, 2012). • In this framework, GIs, Organic, SFSC and PSFP products can benefit from the LAFS environment (reputation, institutions and governance actions) and will generate impacts, affecting sustainability. Furthermore, Convention Theory and Cultural Adaptation Work represent important methodological tools useful to evaluate how quality and management systems contribute to sustainability.

Mots clés: Conceptual Framework; Food Quality; Sustainability; Localised Agri-Food System

Domaines: Sciences du Vivant [q-bio]

Filippo Arfini, Virginie Amilien, Federico Antonioli, Valentin Bellassen, Mary Brennan, et al.. Strengthening European Food Chain Sustainability by Quality and Procurement Policy: Working paper on the conceptual framework and literature review for understanding the social, environmental and economic impact of FQS, SFSC and varying PSFP policies on agri-food chain participants and rural territories. [Research Report] auto-saisine. 2016, pp.87. ⟨hal-01630638⟩