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.
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