Agri-food, innovation and sustainable development

L'innovation durable dans l'agro-alimentaire
170
Article Index
Non-sustainability of the agro-industrial model…
Virtuous circle of sustainable labels
Sustainability of local products
170

The sustainable development of systems of production, processing and food distribution is a challenge for the twenty first century. The technical innovations of the green revolution (1960-1990) and those of the agri-food sector, along with the associated processes of economic concentration and the financialization of agricultural and food sectors, have created an agro-industrial model that has become dominant (or conventional) in Northern countries, and is undergoing strong expansion in Southern ones. This model, which is based on the rationale of mass supply, has been able to ensure food security for a proportion of the world's population, despite its rapid growth, but its limitations are clear. The model has led to the degradation, or even exhaustion, of natural resources, the impoverishment of farmers and massive rural exodus.

It is thus becoming increasingly evident that other solutions and other forms of organization must affirm themselves to sustainably feed the nine billion people that will occupy the planet in 2050. This conclusion points to the reconsideration of so-called alternative systems, which in the North and South have existed alongside the development of the agro-industrial model (short supply chains, local products...), or have been developed or (re)defined relatively recently (organic farming, fair trade...). For a long time, these systems have been given little consideration because of their relative marginality (although this is much less true in recent times) and their inability to 'feed the world'. It is now becoming increasingly accepted that a different type of agriculture would be able to supply enough food for the planet (the generalization of organic farming in particular, according to the FAO (2007), could meet global food demand). Some prospective studies have been carried out which consider two possible models of production and trade: the agro-industrial model and a model based on family farming and local networks (Rastoin, 2012). The latter appears viable and able to meet global food demand (Paillard, Treyer and Dorin, 2010).

It has been suggested that the most likely option would be 'the pursuit of a third scenario of coexistence between the two models', and that this is necessary due to the inertia of the system and the lack of a strong political will (Rastoin, 2012). The coexistence of different models of production and trade has always been the rule for feeding different societies. In fact, alternative and conventional systems interact within the same meta-system (which we refer to here as the food system), in which they are interrelated, complementary and competitive in a process of co-evolution (Colonna et al., 2013; Fournier and Touzard, 2013):

* Interrelated, because at the different levels of the industry, from the producer to the consumer, there is a coexistence of various supply chains: farms and cooperatives, for example, which often sell their produce through different channels (short, conventional, certified...); and the same applies at the consumer level, where in most cases there is a diversification of supply sources (supermarkets, farmers' markets, organic stores...).

* Complementary: the coexistence of these different types of food supply chains is an advantage for producers, who can diversify their incomes and strategies. For consumers, this coexistence also has advantages, including the ability to choose from a wider range of products. At the scale of food systems, this coexistence is valuable in terms of food security: the risks appear lower in the case where a city, region, etc. is supplied by a diverse range of food chains (Touzard and Temple, 2012). Similarly, conventional agriculture is not competitive in many rural areas (isolated areas, mountains...), where only production with high added value can be developed.

* Competitive and in a process of co-evolution: competition with the agro-industrial sector often leads alternative models towards progressive forms of 'conventionalization' (intensification, seeking economies of scale and lower costs). We emphasize here the influence that alternative models have on the agro-industrial model. Alternative supply chains provide an avenue for criticism of the agro-industrial model, and also an opportunity for experimenting with technical and organizational solutions that are often, once their viability has been demonstrated, integrated into the strategies of stakeholders in the dominant model. There are numerous examples of such integration, from organic farming and fair trade to short supply chains, all of which are now widely present in supermarkets. The conventional and alternative models are thus a constant influence on each other.

This conceptualization of food systems, based on different models interacting with each other, leads to a quite different understanding of alternative supply chains. Beyond the low market share percentage they represent, these supply chains are complementary to the agro-industrial system and have a strong ability to influence it; they are therefore of primary importance in the development trajectory of food systems.

We therefore propose a new interpretation of the different organizational innovations that have transformed food systems in recent decades: sustainable standards (Fouilleux, 2012) and the revival of local supply chains (short and/or local, or the maintenance of a strong link between local production and consumers who are connoisseurs of these products). In both cases, we try to show the basis of their sustainability, the challenges these innovations are faced with due to competition with other models of production and trade within food systems, and the recombination of these systems that they cause.

Sustainable labels: the reaffirmation of ethical values, the fight against intensification and a strengthening of the capacity for collective action

The coffee sector is proving to be a very relevant example for understanding the effects of sustainable standards. Coffee culture, which has globalized between the seventeenth and twentieth centuries, has played an important role in ecosystems: it is the only practicable culture in many steeply sloping mountainous areas in the tropics and it helps to protect the soil (provides resistance to erosion) and preserve biodiversity (fauna and flora) if practiced under shade. Its importance from a social and economic perspective has become equally essential: it currently sustains 125 million people and is a vital income source for more than 40 countries.

The development of agro-industrial sectors

The sustainability of this sector began to be questioned during the twentieth century when a number of countries, including Brazil, began major deforestation programmes for the development of large plantations. From the 1960s, the green revolution also introduced new practices, that were more harmful to the environment, which gradually resulted in the replacement of traditional coffee growing: maximum productivity was sought in coffee growing zones located in direct sunlight through the heavy reliance on chemical inputs. This intensification also led to standardization: the most productive varieties spread globally and crop management techniques were homogenized, both at the agricultural and the post-harvest levels, while regional specificities were no longer enhanced.

International trade increased during the nineteenth and twentieth centuries. This globalization did not go smoothly. While the growth in demand occurred at a relatively steady pace, it was not the same for the supply, which was subject to considerable fluctuations due to weather conditions. Crises of overproduction tended to follow periods of shortage. The resulting price instability was problematic for producers. In the 1930s, solutions were sought at the national level in producing countries (stabilization funds, marketing boards...), and then internationally (international coffee agreement, signed in 1962 by producer and consumer countries, which remained in force until 1989), although this did not seem to be sufficient to stabilize prices (Daviron and Ponte, 2005).

Another factor was added to price instability, threatening the sector's sustainability: the share of the price paid by the final consumer (in importing countries) that went to the producer was decreasing significantly. There are various reasons behind this development and the strong horizontal concentration of the industry at the coffee roaster level is often cited as one of the main ones.

Five multinationals hold almost half of the market share globally: Nestlé, Philip Morris/Kraft, Tchibo, Procter and Gamble, Sara Lee/Douwe Egberts.

However, accompanying this trend has been a major process of sectoral development: symbolic attributes have gradually become more important than the intrinsic quality of the coffee (Daviron and Ponte, 2005). Through global sourcing and the necessary skills to create coffee brands with specific and stabilized flavour profiles, and an active and expensive marketing strategy, large downstream groups in the sector have been able to appropriate these symbolic attributes and have taken up a dominant position, allowing them to exert constant pressure on producer prices, whose green coffee has become a commodity. During periods of low prices, the only choice for growers is to increase production (by using more chemical inputs) or to abandon production altogether, which is not beneficial considering the environmental services derived from this type of cultivation.

There is, however, another way. Shaded coffee plantations and more qualitative practices produce a crop with superior organoleptic qualities that exhibit their specific terroir, i.e. flavour profiles typically associated with a certain region that are appreciated by connoisseurs. These shaded plantations can significantly reduce input use and promote the maintenance of biodiversity. There is therefore a strong link between organoleptic and environmental quality, a systemic dimension of sustainability: the guarantee of remunerative markets is an essential condition for growers to make the necessary investments in the development of these new practices. A virtuous circle of sustainability can be put in place: better remuneration for growers, greener practices, better quality coffee, etc. This virtuous circle, however, has to cope with the supply chains that are currently in place: without certainty on the possibilities of economically enhancing sustainable production, growers cannot easily develop.

Emergence of sustainable labels

Different actors have attempted to overcome the status quo and to change the way the sector functions. Since the 1970s, fair trade coffee initiatives have multiplied, ensuring that consumers in Northern countries fairly remunerate producers. In the late 1980s, there was an evolution in fair trade with the appearance of labels. Various national initiatives, now gathered within Fairtrade International (FLO), provided an opportunity for coffee roasters to sell certified products, offering a guarantee to consumers that producers would be fairly paid. The certification of producers requires them to gather into cooperatives, which allows local development processes in production areas. Environmental protection is also sought, with environmental standards for all certified production.

As a result, a new sustainability scheme was put in place. A label, which guarantees fair remuneration for producers, the improvement of their capacity for collective action and environmental protection, and which also helps educate consumers, to retain their custom through the supply of quality products, and thus to sustain the industry.

The reactions of macro actors

Alongside the organic and fair trade labels, new labels quickly appeared (Utz certified, Rainforest Alliance...), and the certified coffee market grew.

There has been a two-stage reaction from the large coffee roasting (and distribution) companies. First, a majority of these companies tended to create their own specifications and labels and to undertake communication strategies that best demonstrated their corporate responsibility. Starbucks provides probably the most emblematic example of this trend, with its Coffee And Farmer Equity (CAFE) Practices, which were developed in the late 1990s with the NGO Conservation International. These specifications gave an assurance to consumers that the company was taking economic, social and environmental dimensions into account. Other companies have also developed their own specifications, such as the Common Code for the Coffee Community (4C), which was ​​created in 2003. A recent trend is for these large companies to develop specific alliances with individual labels.

At the same time, supermarkets tend to systematically introduce these sustainable coffees onto their shelves, which has enabled the growth in demand to be maintained.

The fact that multinational companies (roasters and distributors) entered into the world of sustainable labels has had multiple consequences: firstly, there was a change of scale, the leading labelling organizations and certification bodies had to cope with increasing volumes. Undeniably, the increase in the market share of certified coffees had a positive impact on the overall sustainability of the sector, although the 'professionalization' of certified channels that followed has been subject to some criticism regarding the conventionalization of business practices within the labelled channels.

Competition between labels has also increased, a situation that was initially viewed as potentially positive: the most transparent, persuasive and demanding label would win the votes of consumers, assert itself and encourage others to increase the stringency of their requirements. However, the structure of the coffee industry is such that consumer choices tend to be driven by the prior decisions of large roasters. And roasters may move towards labels that are the most compatible with the requirements of economic efficiency, and not to those that provide the highest standards, which would have the most significant impact on costs. An increasing tension has therefore emerged between the less demanding labels and those that have maintained more progressive objectives, while market forces have seemed to reinforce the former. This has led to some authors calling for stronger state intervention, as it appears to be the only way of ensuring minimum requirement levels for labels (Raynolds et al., 2007).

Results

The scaling up of certified channels, a long sought objective by their promoters, has now occurred. Certified coffee as a whole already accounted for 8% of world trade in green coffee in 2009, but forecasts on the basis of the average annual growth rate achieved over the period 2006-2009 are of the order of 20% to 25% per year (in comparison, the conventional coffee market was only growing by 2% per year), leading to the estimation that they could represent 25% of the market share in 2015 (Pierrot et al., 2011).

These figures could suffice to demonstrate the success of such initiatives, but the various criticisms mentioned above (possible conventionalization and impact reduction) raise some doubts. Scaling up has necessitated an adaptation to agro-industrial practices.

However, the great upheaval caused by the introduction of these standards into the coffee sector is an indication of their importance: giving consumers the ability to express their preferences for more sustainable production and trade systems, and thus to influence the practices and strategies of those involved, these standards have played a vital role in the process of strengthening the sustainability of long supply chains such as the coffee sector. Their development has focused consumer attention on the modes of production and their impacts or on the remuneration of producers, for example, and has coerced the macro actors into incorporating these sustainable standards into their strategies, and to communicate on these different aspects for an increasing number of products in their ranges.

Nevertheless, it is often stressed that these sustainable labels are currently at a crossroads. If we maintain that their incorporation into the strategies of actors from the dominant model can be seen as an element of success of the initial project, there are clearly some significant risks. The big players can indeed, as we have seen, seek to reduce the constraints imposed by these sustainable standards, thereby reducing the impacts on farming communities. These initiatives can then be confined to a niche market, serving as a safety net for populations that have been marginalized by the dominant system and as a means of minimizing the environmental impact within an agro-industrial model that, in this case, they would complement (Daviron, 2010; Lemay et al., 2010). It is indeed unlikely that they could represent the entire agro-industrial sector, even in the medium term, at least if there are no major political changes in the rules of international trade. However, it is also possible that these sustainable standards could continue to be a force for change and, probably through new innovations, demonstrate that it is possible to achieve success in the building of sustainable supply chains.

One of the main contributions of sustainable standards is therefore to have increased the information given to consumers, thus progressively raising their awareness of modes of production. Other models of production and trade, recently boosted by various innovations, can help to establish stronger links between consumers and producers.

A return to local: territorial anchorage and the reconnection of consumers and producers

The return to local production appears as another important innovation in food systems. For many consumers, it is a guarantee of greater sustainability, it allows the sourcing of quality products while helping to maintain local agriculture, or more distant agriculture but that which respects traditional modes of production. The consumer desire for a return to a focus on the local level has resulted in two distinct paths, but ones that follow the same rationale, a reconnection with farmers.

Patterns of local or localized production and trade

The first path concerns local systems (of production and trade), and consists of multiple initiatives to enable the maintenance of a traditional (or peasant) agriculture through the enhancement of short supply chains

Defined here as short supply chains that consist of no more than one intermediary between the producer and the consumer, in accordance with the definition given by the French Ministry of Agriculture in 2009.

. While these chains have always existed, and even remained dominant in many Southern countries, different actors (consumers, producers, agricultural and rural development agencies, local authorities...) have sought to reinvigorate them, mainly in Northern countries. Their motivations are twofold: to improve the economic situation of (small) producers, and to reduce the environmental impact of food systems through the limitation of transportation. A number of organizational innovations have thus been introduced to meet the varied expectations and procurement practices of consumers, leading to a wide variety of short supply chains (direct sales, farmers' markets, AMAP (French model of community-supported agriculture), box schemes, online selling...) (Chiffoleau, 2008).

The second path that has led to the reconsideration of the local level involves an increased focus on the terroir of products (systems that can be described as localized), marketed through chains of varying lengths. In almost all regions of the world, specific know-how (agricultural or agri-food related) has been developed over the long term by farming communities, allowing the valorization of local natural resources. In many cases, these local techniques have enabled the creation of local produce with a territorial character (Casabianca et al., 2008). The sustainability of local production is based on several factors, but a major element differentiates this type of production from the agro-industrial model: the identity and symbolic value of products. On the producer side, the role of terroir products in the local cultural heritage can thus be seen as an obstacle to possible intensification, which would distort these products. On the consumer side, it creates a willingness to pay.

This renewed attention on local produce does not necessarily constitute a recent innovation in European countries, where Geographical Indications (GI) have offered protection since the beginning of the twentieth century; but on the global scale, and more specifically in Southern countries, this movement truly established itself during the last decade.

The signing of agreements on Trade Related Intellectual Property Rights (TRIPS) in 1994 within the World Trade Organization, marks the beginning of this process.

Two Argentinian case studies enable the better understanding of the basis of sustainability offered by this type of production system, but also the potential threats that they face.

Salami from Colonia Caroya (Argentina): the risk of scaling up

The town of Colonia Caroya, in the Province of Córdoba (Argentina), was founded by Italian immigrants in the late nineteenth century. These migrants came from Italy's Friuli region, where there is an important charcuterie tradition (cooked meats and pork products). They built their homes on the same model as in Italy, with a cellar (sótano) dedicated to the drying of cured meats; and they developed a method of salami production, initially only for their own consumption. The immigrants adapted their expertise to suit the local resources: while Friuli salami is based only on pork, the Colonia Caroya variation can consist of up to 50% beef. Production was traditionally on a domestic, small volume scale: a family working with neighbours and friends would butcher and process two or three pigs and perhaps a single cow from the same farm. Maintaining the quality and typicality of the salami was guaranteed by the strong proximity that existed within the restricted circles of producers and consumers. From the 1950s, however, production started to become more market orientated. Salami producers took advantage of their proximity to a major road (going through Argentina from north to south), where they could sell their products by the roadside, leading to a greater distribution of the salami across the country. While the reputation of the gringo

Nickname given to the Italians and their first descendants in Argentina.

salami from Colonia Caroya grew steadily, its domestic scale of production remained unchanged for several years.

By the late 1970s, however, several local stakeholders had moved into larger scale production, focusing on the national market. This commercial salami production boomed throughout the 1980s and 1990s, with various consequences. First, a disconnection between producers and consumers emerged, with salamis being sold to consumers via increasingly long (and intermediated) supply chains. In this way, consumers became less able to recognize the quality and uniqueness of the product. This development opened up a window for the introduction of technical innovations to meet the growing demand, such as the replacement of traditional sótanos (cellars) with cold rooms allowing the drying of much larger volumes of salami, together with the introduction of plant proteins and starter bacteria to reduce the drying time. The opening in the domestic market and the increasing demand have therefore caused a loss in the product's uniqueness, that could in the short term question the sustainability of the production system (which is based on the acceptance of the consumer to pay more). The product faced increasing competition with the production of salami from other regions (which sometimes assume the identity of the Colonia Caroya salami), which has prompted some local businesses to continue their strategy of intensification and industrialization. A strong horizontal concentration has resulted, three companies (out of 30) account for 58% of the total production (Boué, 2012).

Since 2008, a GI registration project has been in existence for the salami, the benefits of which can be significant as it enables consumers to identify typical products on the market, which can help sustain small-scale producers that have retained traditional techniques (Boué and Champredonde, 2013).

Beef from the Argentine Pampas: when supermarkets challenge traditional breeding

The beef from the Pampas region of Argentina has a high reputation in domestic and international markets. Its specific qualities are associated with grassland production systems, the expertise of gauchos (farmers) and with British cattle breeds, Aberdeen Angus and Hereford. Production involves such practices as the fattening of castrated cattle and heifers on grass and their slaughter at an early age (15-20 months) and at light net weight. The resulting meat is not only tender, succulent and well marbled, but also has a good balance of unsaturated and saturated fats. Traditionally, these products are offered to consumers through short channels (direct sales or via butchers) and a certain amount of expertise exists at the consumer level to assess the quality of the meat. This type of agriculture contributes to the preservation of the environment (ensuring the renewal of nitrogen in the soil to maintain fertility and thus allowing the minimization of fertilizer use), and the maintenance of biodiversity (wild fauna and flora), while having a positive impact on human health.

This traditional mode of production was relatively stable until the 2000s. Thereafter, it was challenged by the rise of farming activities, including the cultivation of soybeans, the increase in the size and level of intermediation chains, and finally by the changing demands of consumers: by aiming to provide customers with a guarantee of meat tenderness, rather than its typicality, supermarkets have offered higher prices for cattle fed in feedlots, or that have been fed significant amounts of supplements (silage, grain or industrial supplements). A reduction of consumer knowledge, initiated by the development of long supply chains, has worsened with the development of supermarket quality criteria.

The traditional Argentine Pampas beef production system owes its preservation mainly to the existence of independent butchers who only offer beef from pastoral systems and are able, if asked, to describe the meat's origin to the consumer. A possible GI certification system is currently under consideration, but it seems that the extra costs such a scheme would entail is incompatible with consumer expectations, given the current awareness of the differences induced by the various farming methods. Short supply chains allow traditionally farmed produce to be sold at similar prices to those of intensively reared supermarket-sold meat.

Results: model sustainability and development trajectories

These examples clearly demonstrate firstly the ability of local or localized production to build special relationships between producers and consumers. The initial connections that exist between these actors give consumers a certain level of knowledge about producers or production areas, their possible constraints and the techniques used; and strengthens their propensity to buy these local products at a higher price. This price premium may be the guarantor of the maintenance of good quality agricultural and processing practices that preserve the environment and biodiversity. The sustainability of these traditional supply chains thus appears guaranteed.

This type of supply chain, however, is facing multiple threats. Scaling up often proves problematic, as illustrated by the example of the Colonia Caroya salami. It can lead to a form of conventionalization. But ultimately, it is confrontation and competition with other forms of production, which are more agribusiness-like, which calls into question the sustainability of these traditional systems, as also seen from the example of beef from the Argentine Pampas.

The examples discussed here show the value that innovations such as the ones mentioned above can deliver: in this process of confrontation between models or production modes, it is innovations such as short supply chains or geographical indications which may help maintain these systems.

These local or localized industries always appear relatively marginal when the entire food distribution system is considered as a whole, at least in the North. However, they involve a large number of small farmers

For example, it is estimated that 18% of French farms sell at least part of their production via short supply chains, according to the General Agricultural Census of 2010.

, for whom they provide a livelihood. And, in the same way as the aforementioned sustainable labels, they have a strong ability to influence the entire food system, their recent (re)development having sparked a whole movement, where many actors are now promoting their products with information such as geographical origin and even the identity of producers.

Conclusion

The agro-industrial model has created a distancing of producers and consumers that is economic (due to intermediation between industries), physical (linked to urbanization) and cognitive (the technicization of agriculture and the agri-food industry has made knowledge of techniques less accessible to consumers). This distancing on three counts has led to a disconnection, making consumers much less aware of agricultural developments and encouraging them to seek food at the lowest possible price. In turn, those involved in the supply chain have sought to develop economies of scale and implement technological innovations to reduce production costs, sometimes at the expense of product quality. This approach has significantly strengthened downstream sectors and impacts heavily on the ability of farmers to maintain environmentally friendly practices, since optimum performance is instead the main objective.

Faced with this development, different organizational innovations have proven their ability to reconnect producers and consumers, and in so doing, to give new meaning to food (Marsden et al., 2000). The first such innovations, described in the first part of this paper, are sustainable labels that provide information and assurances to consumers on modes of production and/or trade at the early stages of the chain. A second innovation, which was the subject of the second part of this article, represents a higher level of (re)connection between consumers and producers through direct or very weakly intermediated relationships, and/or guarantees about the production area and techniques (use of GI).

These alternative systems ensure greater sustainability. They represent, despite the limitations mentioned above, another model of production and exchange, which is opposed to the agro-industrial model in many ways:

* Product standardization is an essential aspect of the agro-industrial model to enable large-scale production and a globalized trade, while alternative systems enhance the typicality of local production.

* This allows these alternative systems to open new areas of growth, since economic efficiency is not based on economies of scale, but on the valorization of specific attributes.

* The agro-industrial model encourages the competitiveness of farms and agribusinesses at the individual level, alternative models as a whole promote instead the search for a collective efficacy within a localized network.

* The role of consumers is very different in the agro-industrial model, in which the price factor coordinates all exchanges, as compared to alternative models, in which the values of identity, ethics and citizenship​ are involved.

Alternative supply chains thus have the ability to fulfil the functions for which the agro-industrial model is insufficient, such as the valorization of agricultural land in marginalized regions. More generally, controversies persist as to their ability to feed the world, but they often prove necessary to market the products of small farms

The number of small farmers (defined as those who farm areas of less than 2 hectares) is estimated to be 500 million in developing countries (HLPE, 2013).

, and thus involve a large number of farmers.

There are limitations however. In the examples presented here, competition for these alternative supply chains has sometimes created a form of conventionalization. Labelled supply chains can also be a source of exclusion and do not always create the territorial development processes expected in the production areas. It should also be noted that some studies have not confirmed whether short supply chains do in fact have smaller environmental footprints in all cases (because transport accounts for a small proportion of greenhouse gas emissions in food production, while the last kilometre, i.e. the distance the consumer travels to shop for food, is more significant) (Esnouf et al., 2011). Doubts are also raised regarding the economic profitability of farms that sell through such supply channels when the hourly wages of farmers is brought into the analysis.

These limitations may still be largely attributed to the persistent confrontation between alternative supply chains and the agro-industrial approach. The alternative models also strongly influence the agro-industrial system, and are able to trigger change in all food systems. They promote consumer awareness to the issues of food sustainability, which is then disseminated by the media and seems to spread at the societal level. Ultimately, they serve to obligate actors in the agro-industrial system to review their strategies. The diversity of models within food systems thus strengthens their capacity for innovation and adaptation. In this respect, they must be protected and promoted by public authorities.

Organizational innovations within systems that are now considered as alternative therefore play an important role in the modification of the dominant food systems, even though they remain marginal. However, there is a possibility that this marginality will not persist. The dominance of the agro-industrial model derives from its ability to provide food at very competitive prices, but once we take into account and monetize its negative externalities, this competitiveness is called into question. In addition, the agro-industrial model relies heavily on the availability of fossil fuels; and their depletion will eventually cause a total reshuffle.

Non-sustainability of the agro-industrial model in the coffee sector

Show Media

Virtuous circle of sustainable labels

Show Media

Sustainability of local products

Show Media