Download industrial food systems

Bigger is not always Better
Tom Vaclavik
Czech Presidency high level conference on agricultural product quality, 12
– 13 March 2009, Prague
Quality gaining important over price
Quality is gaining importance over price in the EU consumers’ food purchase
decisions. BUT how is quality created?
Quality is not an inherent and objective feature of food products. It is
socially and politically constructed through the complex and interrelated
practices of different actors and the incorporation of social values into
products.
Quality does not refer exclusively to the physical properties of the food. It
also embraces the processes of production, distribution and retailing.
The new concept of quality food refers to the turn away from the logics
of cost reduction by standardization, consistency, predictability and mass
production that characterize the industrialized food sector, towards food
systems that are embedded in place, tradition, and trust.
These “alternative” food systems redistribute value-added gains across
the whole food chain, reconvene “trust” between producers and
consumers, and articulate new forms of political and market governance.*
*The School Food Revolution: Public Food and the Challenge of Sustainable Development, Kevin Morgan
& Roberta Sonnino
Organic products viewed by consumers as high quality
The globalization of our food supply has seen our food reduced to a
commodity in an increasingly volatile global marketplace. Although
year-round availability makes for good marketing in the eyes of the
biggest retailers, the costs to the environment are immense.
The organic movement was born out of a commitment to provide local
food for local people, and so it is logical that organic marketing
encourages localisation.
As we enter an age of unprecedented food insecurity, it is essential that
our consumption reflects not only what is desirable, but also what is
ultimately sustainable.
EU consumers connect organic food with high quality. It embodies most,
if not all, of the consumers’ sought after criteria for food purchases:
– Safe and “clean”
– Healthy and nutritious
– From known, trustworthy source
– Made in an environmentally, animal and worker friendly way
– Great taste
Organic Agriculture and Food in the EU – space to grow
Despite unquestionable benefits, only a small part of EU agriculture
is organic, only a minor share of food consumption is made of
organic food.
Why? After all, EU citizens want quality, healthy and safe products!
These barriers slow down wider acceptance of organic food:
-Organic food is not available (some parts of EU)
-Prices of organic food are too high for some consumer groups
-Low trust in organic farming system (not enough information,
information not convincing)
-Too high barriers to change buying habits (huge sums spent on
promotion of unhealthy, low price food)
How to overcome the barriers?
1. Creating one single EU market
The positive side of big, international market is
- organic food availability to large number of consumers (via supermarkets)
- lower prices for organic food (but high cost to society in externalities)
The negative implications are much numerous:
By unifying the market into a single one, we are in danger of loosing some
important quality properties. As single market requires large quantities of
standardized products of uniform packaging and taste, travelling along large
distances, we are likely to fall into the trap of “industrialization of organic
agriculture”, thus betraying the very principles of organic agriculture AND consumer
expectations.
With “industrial organic agriculture” we are likely to lose the benefits organic
agriculture brings, namely:
- Diversity in all aspects of food production and marketing
-
Traceability and transparency - easily identifiable place of food origin
-
Connection between the food producer and consumer - Integrity eroded
-
Place based artisanal crafts and skills
Flaws of “industrial food systems”
Despite ability of the industrial food system to deliver ample quantities of foods to a
large population, a growing number of people are raising concerns about its
impacts on the environment, farm households, consumers, food safety, and
quality of life in rural communities. Sustainable regional/local food systems are
therefore being suggested as viable alternatives.
The industrial food system’s pprofitability is achieved by replacing labour with
capital, maximizing throughput, controlling nature with technology, fossil fuel and
chemicals, and by specializing and systemising tasks.
Flaws of industrialized food systems:
• Long distance transportation – heavy traffic, pollution, noise, road construction
and maintenance costs, accidents, spread of diseases
• Oil based system (gas, fertilizers, pesticides).
• Prioritizing lowest price at all costs (externalities)
• Low income for farmers, loss of jobs as local businesses close - „dead“
countryside
• Power concentration (trade, retailing, seeds and other farm supplies...)
• Lower safety and nutritional value of food
• Loss of diversity and choice on all levels
• Loss of landscape when traditional farming practices are discontinued
•Globally, agriculture is responsible for between 17 – 32% of the world's total greenhouse gases.
•Globally the production and use of artificial fertilisers are the largest single source of nitrous oxide, a greenhouse gas 310 times more damaging
than carbon dioxide.
•To make one tonne of artificial fertiliser takes 108 tonnes of water, emits 7 tonnes of carbon dioxide, and uses one tonne of oil.
•Organic farming typically uses 26% less energy to produce the same amount of food as non-organic farming.
•Across Europe, soil erosion and degradation seriously affects near 157 million hectares (16% of Europe, nearly 3 times the total surface of
France)
Source: Soil Association
How to overcome the barriers?
2. Developing wide range of regionally and locally based diverse markets
Local and regional food systems
- operate at a human scale with strong attention to environmental integrity,
economic self-reliance and social well being
- encourage a more sustainable use of land, by promoting more environmentally
friendly farming methods and linking the production of food to the landscape
- bring wide diversity of food, produced in sustainable way
- enable shorter marketing chains – bigger gains for the local farmers and
entrepreneurs, reduce the traffic congestion, noise and pollution
- create jobs that help ensure the long-term health of local rural economies –
through the production and retailing of food, through the creation of “value-added”
products, by ensuring more money is kept in the local economy and through
demand for secondary services
- link shoppers with farmers and improve access to fresh, healthy produce
- attract tourists to vibrant communities, which become recognised and valued for
the food they produce and sell
In the end, locally based food systems make food cheaper both to the society and the
consumer.
Situation in CEE and SEE countries
Countries with emerging organic markets in Central, Eastern and
South-Eastern Europe have introduced support schemes for
organic farming that focus mainly on the supply side. Since
domestic markets are not developed yet, farmers have mostly
turned towards exports of raw materials.
In countries where no export networks or domestic market exists,
organic food is mainly sold as conventional food.
At the same time, due to the lack of domestic processing
infrastructure, many organic processed food products are
imported from established markets and sold at very high prices.
 How to overcome this imbalanced domestic organic market
development in emerging organic markets?
Constraints for domestic market development
Underdeveloped market structures
•
Production too small (mainly milk, fruit/veg, pork and poultry meat, eggs)
•
Supply chain infrastructures not developed (processors, wholesalers,
distributors)

Lack of local advisory support
•
Lack of supermarket involvement in local sourcing, over reliance on imports
•
Lack of market information + data, low market transparency

Potential entrepreneurs and existing business uncertain about market
potential
Low consumer confidence
•
Competition from near organic alternatives (traditional, natural foods)
•
High prices for (imported) organic food

Broad mass of consumers with (very) low income
•
Consumers not aware of additional benefits of organic food – environmental,
social and health aspects
•
Lack of credibility in the organic certification system
•
Missing national organic logos and/or regional labels

Some governments lack a vision of organic agriculture as the modern
agricultural system of tomorrow
Recommendations
Market structures (supply side measures):
• New Farmers – critical need for more farmers to convert or start organic
production
• Better targeted support for local infrastructure - abattoirs, milk processing units,
vegetable/fruit storage. Protect local retail.
• Make market transparent - market data should be collected and made public
(production and processing volumes, trade and retail prices, supply/demand
bottlenecks)
• Support development of new marketing channels
– organic food in the public catering, food service and the hospitality sector
– direct marketing channel development: box schemes, farmers markets and
farm shops
• Encouraged retailers to purchase domestic organic produce via long term
contracts with farmers and distributors
• Establish a platform for growers, processors, retailers and marketers to discuss
market issues in order to support supply chain cooperation and development
• Target grants at small/medium on-farm processing units
• Provide training to raise expertise in (on-farm) processing
• Provide education, training, information and advice on all aspects of
entrepreneurship and marketing
• Support regional producer marketing groups and initiatives
• Create demonstration farms and business enterprise networks as Best Practice
examples
Recommendations
Consumer confidence (demand side measures):
As the EU Organic Action Plan rightly says, we also need to concentrate on
information-led development of the organic food market, by increasing consumer
awareness and providing more information and promotion to consumers.
Consumer confidence is crucial to the development of the organic market. We
can only achieve a steady and significant growth of the organic food share if the
products satisfy wide quality expectations of the public.
The ongoing EU information campaign on OA in the member states is a step in the
right direction, but is hugely under budgeted. The fast food industry spends
billions of euro on advertising every year, while the EU campaign has a budget of
only one million a year.
Recommendations
• National and cross-border public education and information campaigns are
necessary to create and sustain confidence in the O. production system and
inform public about the “sustainability benefits”, the animal welfare benefits
and the employment benefits of organic agriculture.
• Use open and participatory dialogue with consumers via experience based
communication, involve them in the development of the organic food system
• Support innovative connections between consumers and producers via publicsector-driven and governed “economy of quality” in form of public food
procurement schemes
Public food system as a way forward
In Rome and some other parts of Europe local authorities are designing an
“economy of quality” that has the potential to deliver the environmental,
economic, and social benefits of sustainable development - in and beyond the
food system.
Procurement policies and funding provide public authorities with the political
and economic power to create top-down food systems in which the meaning
of quality extends beyond the relationship between food products and their
production context. *
The Out of Home Food consumption in EU is over € 600 billion a year. If only
10 % of that food was organic, total EU organic food consumption would rise
3 fold!
As we have School milk and School fruit scheme, why not introduce School
organic food scheme? After all, today’s children are tomorrow's consumers!
Recommendation
Introduce a EU wide School organic food scheme with a target of 15 percent
of organic food in all public school food catering by 2015.
*The School Food Revolution: Public Food and the Challenge of Sustainable Development, Kevin Morgan
& Roberta Sonnino
Conclusions
•EU consumers are turning towards quality food in their buying decisions
•Quality is not inherent in food, it is created in the process of production,
processing, marketing (and eating)
•Public generally views organic food as high quality food
•Share of organic agriculture and food is nevertheless still very small
•Single market approach could bring organic food fast into shops, but with
negative environmental, economical and social consequences
•Approach supporting wide range of locally and regionally based marketing
initiatives is necessary in order to achieve long-term sustainable growth
•Public bodies must find a balance between support of supply and demand
•In the supply side measures leading to more new organic farmers,
infrastructure and supply chain development need to be supported
•In the demand side we need to make sure public understands all benefits and
principles of OA. We need to involve them in participatory education activities
•Public procurement schemes based on “quality criteria” and organic food can
bring numerous advantages on the way towards sustainability.
Thank you for your attention
Tom Václavík
Green marketing
T: +420 541 263 456
E: [email protected]
W: www.greenmarketing.cz
Skype: tom.vaclavik.green.marketing
Bigger is not always better