Will retailers support farm income?

Retailers pretending or genuinely doing agricultural and rural policy?

It seems the 2007-2008 global food crisis had more than direct economic impacts. It has now clearly put the food value chain on the global political agenda. The example of the EU 'better food supply chain' strategy and the recent Walmart Sustainable Agriculture program illustrates this statement and highlights the main point of this new 'paradigm'.

Walmart, the American (Arkansas) retailer now first in the world ranking (US $405 billion, 1st world retailer, more than 8,600 stores under 55 different banners in 15 countries, 2.1 million employees), released a sustainable index strategy (16/07/2009) and now (14/10/2010) more specific global sustainable agriculture goals. The first strategy includes 3 steps: surveying the one thousand suppliers on their practices and use (greenhouse gas emissions, waste and water use, environmental compliance, employment and product/ingredients safety), supporting and launching a sustainable consortium to conduct research and development for more life cycle analysis benchmarks estimates, provide consumers with tools to take their purchasing decision according to the estimates value. The survey, which was sent to food production businesses, also indicates that suppliers will then be evaluated as 'below' or 'above' or 'in' the corresponding targets. The commitment of the supplier is well summarised here:'The measurements and behaviors we ask about in this questionnaire have significant potential to drive down costs and/or enhance quality while helping our suppliers be more sustainable.' As a result, the retailer is clearly setting conditions to fulfill to remain a Walmart supplier in the long term, investing in 'sustainable practices and exchange data and information'.

The new ‘goals’ clarifies how suppliers like farmers could be involved in this process, with three main objectives: supporting farmers and their communities, producing more food with less waste and fewer resources, sustainably sourcing key agricultural products. The increase to reach US $ 1 billion of sale of products sourced from small, medium and local farmers is in line with an investment of the same amount in Walmart 'supply chain'. Farmers’income involved in the program is to increase by 10 to 15%. It is not specified whether this increase is supposed to come from the savings resulting from the sustainability criteria, or from a better price paid to the supplier. The actual details of the future contracts between suppliers and the retailer would be really informative on the possible opportunities and real impact of this retailer strategy.

Meanwhile the EU Commission is also clearly including the food value chain in the preparation of the next Common Agricultural Policy (CAP) 2013. The Commission released 'A better functioning food supply chain in Europe' communication (28.10.2009, COM(2009) 591). The global food price crisis is said to have raised concerns about the functioning of the supply chain. Study results displayed show that the supply chain has been faster to react to food commodity price increase than decrease, intensifying the pressure on both consumers and producers. Consumers’ income is clearly mentioned as a target of the policy proposals introduced in the document.

The proposals are addressing more 'sustainable and marked-based relations in the food chain' through monitoring unfair competition and through the new EU Competition Network. A call to an increase transparency along the chain includes drafting Directive for Markets in Financial Instruments and a European Food Prices Monitoring tool. The third objective of integration and competition of the food chain actually corresponds to an attempt of harmonisation of the 27 Member States standards and labelling rules and could suggest rural or regional restructuration or cohesion supports.

These two examples show how the food value chain is now topical in rural economics and advocacy. The recent difficulties around the creation of a consumer information tool for food retail prices in Australia, and the slow evolution of the 'paddock to the plate' policy are certainly the first challenges to tackle before including a similar issue in the Australian agenda of agricultural policy.

Labelling or not labelling, is that the question?

Footprinting (carbon, water) labelling, organic, gluten free, preservatives free, 'this' friendly...you know, you've seem it on the shelves in your local Woolies; on food products you're trying to choose. Can the information; supposedly embodied into the label not distort (pervert, disguise) the bio-agroeconomic reality it is supposed to represent? What kind of signal is it really sending to the food/fibre production sector? Those two questions are not really simple, are they?

Behind the label
 Lots of people are ready for 'responsible consuming' but we all know it depends on the information we want to have (i mean we are not all defining 'responsibility' the same way), we can have and we can understand (knowledge, time). Even economists have accepted to change the 'consuming' model and include more social factors in their analysis. Retailers have found a never before dreamed of opportunity to renew their image, their market share and their market bargaining power. But we also all know then, when its written 'carbon neutral, 45CO2eq. or water efficient, or '5 swimming pools of water were needed in the process of making this beef', or 'chemicals or preservatives free'...we know it's not exactly what the actual cow, or the two pigs used in this sausages, or those 12 different cherry tomatoes, that actually went through that (this consumption of water, this carbon emission...). I'm sure we all understand it's an average, that this exact number or these scales (that qualifies or not the products to be in one category of the other) are calculation. Do we all know that they are not only calculations, but also estimates.  An estimation rest on 'assumptions' and 'statistics' instead of measurement. It's a bit like the difference between a survey and a census. So for example, in the case of the carbon footprint of your tomatoes, an equation has already fixed parameters (g of Co2 emitted during the life cycle of this variety of tomato in this area (soil, type of culture), given level of emission of the different inputs (fert, pest...), emissions corresponding to the energy used for this tomatoe (average of total use on a reference number, yield of the tomato). Relatively, variables of the equation are not that many (the season, the volume) and the variable are actually the only measured elements. The equations are no less important in the 'substance free' product and most of the time; it doesn't mean that all the product and its components are free of the substance. It's presence under a certain level and equation are needed to fix an acceptable level, according to the production method and the possible consequences (healths, concerns).
So how does it work? One company of the labelling system has built a data base and the corresponding software, another is settings the standards and third company is organising the controls. I wont go further on this in this post, but i wanted to spell out simply (?) some elements behind the labels. Now let's have a look at the consequences or the relation with the producing system.


The label and the farm?
I have already outlined that the claims made on the labels of products, don't  correspond to the product actually contained within, and that these claims are not specific to the farm having produced it. The farmer may have similar concerns about sustainablity as the consumers, but certainly the main driving influence is it's economic  (depending on the socio-economic context ie government subsidised, or commercial value) viabilty.  Other farms could be interested in doing the corresponding changes (checking the corresponding with the standards, measuring some references points to benchmark the farm among the other supplier) if it appears economically interesting. Some farm may have less alternatives if the usual and bigger buyer realised that in this location these farm have good 'estimates' and it would supply an important volume of product which could be labeled.
What's tricky is that agronomy, as much (if less) as economic, is not a totally exact science and farmers (small or corporate). Good observations and good measurement are key to manage with the soil, the weather, the local biodiversity, the local energy and water supply. So it would be thoughtful to make sure these equations are discussed, revised, adapted, also shared by the farmers, reset depending on measurement. Everybody can understand that a minimum of certainty, stability is needed for the marketing (from the labeling creation to the placement of the product). Everybody can't ignore that if these labels are setting standards not corresponding to a 'clever' way of production, it may again have some un-wanted impact. For example, focusing only on the greenhouse gas emissions is now leading the science to find way to adapt the digestive systems of ruminants. Organic producing needs more time and sometimes more skills or more space to produce the same volumes. In some cases, mono-criteria labeling (focusing of one little details of the agronomic production system) can have contradictory effects on another criteria. For example, hormones free products could mean more emissions as well as it could mean, in some regions. A low water footprint may be compensated with more total energy consumption (fertilizers, pesticides). This demonstration tends to lead to the conclusion than a comprehensive label like 'organic and environment neutral' is needed. Right. We're not there yet and i don't think there is a 'one fits all' solution. There is a new trend in the 'ag network' to relate very quickly 'food crisis - hunger' to a need a global increased production. There are plenty of reasonable concerns regarding the availability of land, water, the need to maintain and increase production and productivity. It also seems so simple to forget that overproduction in some countries has never been simply related to hunger in another. But it's also too simple to propose 'unique size' or ones that have strong impacts on farms practices and global productivity. On one side, shared, checked and valued information should play a much more important part and the way to guarantee this can't be forgotten. On the other side productivity definitions must may be thought in another way to reflect current production complexity and complex consumers demands.

To conclude, the technical and -at least apparently-scientific claims done on mushrooming food/fiber labels tends to make us forget that they are a medium with both marketing and informative purposes. The history and reflection on the media and journalism industry may brought an interesting light in this debate. I'll work on this question.

First post: agriculture, food and policies..or something around that!

This post covers the topic of the relation between agriculture, food, health, may be food sustainability. I reacted to the mention of a 'farmers apocalypse' by Alana Mann as i can agree with the importance of the question she sets. However i present the thoughts of Gay Bilson on how important to think about how food consumers are ready to change theirs habits, may be reduce as long as they are inform and, i reckon, involved in the process. I conclude on the importance to involve farming policies and this 'sector' in order to provide a comprehensive answer.

Hi blog readers,

This morning I started with reading 'Farmers' apocalypse: the globalisation of food supply'. For some reasons it made me feel a bit uncomfortable. I've tried to think about it a bit and felt like writing, as its a great way to express thoughts and to share them.
First she wrote:
'Per Pinstrup-Anderson, Cornell's professor of food nutrition and public policy, believes the world is not headed for a "global food apocalypse". There is an overabundance of food in the world - look at our growing waistlines. But the reality is millions of people die from hunger and malnutrition every year and unsustainable farming practices are destroying arable land.' (Alana Mann, ABC The drum, 11/10/2010) and however choose to keep the word Apocalypse in the title.

Overabundance=some fat people & some dying of hunger and malnutrition people =/or ? and? unsustainable farming practices are destroying arable land.

The rest is an interesting outline of possible logical links between these elements. I reckon it's a very interesting and important question. I feel less at ease with the idea of concluding or communicating on an 'apocalypse'. I'm sure its important to attract readers and to apparently challenges main ideas and topical policies. But, if it's to resolve the above puzzle, then we may need what is proposed by Gay Bilson:

'I reckon we need a team  of sociologists, public health researchers and, most importantly, a board of advisory tasters' (Gay Bilson, The Monthly, September2010).

In his article Bread and butter, she discusses the question of consuming less food and drinks instead of increasing the level of technologies allowing an industrial offer directly targeting health. She supports his case with the example of  development of wheat with a high lutein level, the waxy durum that allows to reduce the level of fat to use in cakes, biscuits, and strangely enough bread (as its for industrial white loaf i supposed). She fortunately also recalls that the development of this product was stimulated by the asian noodles markets where any food processing company able to supply a low fat product could make a temporary interesting niche market and improve its social policy disclosure on health. I quite agree that it's a topical question as any that is trying to look at innovation not only on the technological way but also on the societal, political framework.

What's riveting with this reading is that its close to a reflection i have about the role of food processing, upstream industry, downstream retailers and consu-citizen (not city-consumers even if here the question could have a tendency to be set that way). I mean that product qualities not related with the products (but with the farm practice, environment) and related with the product are mainly internalized by the downstream part of the agricultural and food chain, i.e food processing and retailing. Farming practices are also much shaped by seed, fertilisers and aninal health industry. Not to say its a bad thing. Just to recall that we can't forget how main farms are working now. Changing involves an awful lot of stakeholders with different interests. It's been now more than one century since seed/breed industry has shifted from agricultural business to industry and technology corporates. Small scale farming, small scale food processing remain in plenty of different socio-economics conditions. Food science is a bit like biotechnologies for sees manufactures and animal health products manufacturers. They also influence a lot the way of producing raw food products which more or less influence the characteristics of the food products. And food products have also to be understood as how they are part of a food-lifestyle, relating how people connects with nature, values. Consumers, citizens, voters already answers to that and are ready for more information.
When it comes to farms practices, the question of their impacts on the environment has been set in most of the nations. The one of its impact on health, lifestyle and how it may de-reponsibilise some of its stakeholders is less in the agenda.
So I think i agree with Gay Bilson on the need of a 'team' and i would also propose to involve representatives of different way of farmings, consuming and supplying to this industry. I reckon that this kind of team may bring another 'chapeau' than Apocalypse to the problem recalled by Alana Mann.