Supply chain, power relationships and local food systems

1. Supply chain, power relationships and local food systems Preliminary results from an ongoing research : “Institutional architectures for sustainable food systems” (Keywords: globalization, sustainability, local food systems, participatory democracy ) Valeria Sodano Department of Agricultural Economics, University of Naples “Federico II” V.Sodano, University of Naples federico II

2. The mainissue Sustainability is defined with respsect to cociety, economy, environment Globalization is jeopardizing sustainability of the food system . During the last twenty years public intervention have been undermined in every field of economic and social organizationbecause of TNCs and international bodies such as the WTO imposing their neoliberal trade agenda Food local systems are a kind of organizational form able to promote sustainability when state intervention is no longer able to accomplish the task of correcting the different forms of market failures that contrast sustainability V.Sodano, University of Naples federico II

3. Localfoodsystems: definitions A food system comprises the interdependent and linked activities that result in the production and exchange of food. A food system is local when it allows farmers, food producers and their customers to somehow interact face-to-face at point of purchase. Consumers are linked to producers by bonds of community as well as economy. Community Food Systems (Gillespie, A. and Gillespie, G. 2000. Community Food Systems: Toward a Common Language for Building Productive Partnerships. Cornell Cooperative Extension) A community food system is a food system in which food production, processing, distribution and consumption are integrated to enhance the environmental, economic, social and nutritional health of a particular place. V.Sodano, University of Naples federico II

4. Sustainability of food systems is a wide concept when assuming the principle of “food for community” instead of “food as commodity” (IIED, 2006). V.Sodano, University of Naples federico II

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6. A sustainable food system is one able to correct market failures due to public goods, negative externalities, and “future generation issue”. When market fails , the process of resource allocation needs to be performed by alternative institutions, as for example power and gift-relations (Sodano, 2006). Unfortunately experimental behavioral economics has largely demonstrated that gift relations based on altruistic attitude are very rare in practice. V.Sodano, University of Naples federico II

7. - In the process of resource allocation, in the economic field, goods are continually transferred from an actor to another actor. - For perfect private goods these “transfers” are regulated by free voluntary market exchanges. - In the case of public goods different form of regulation are needed, these are basically rules relying on power and on gift-relations (Consumer social responsibility and corporate social responsibility can be considered as special cases of gift-relationships) V.Sodano, University of Naples federico II

8. As a consequence: Sustainability of food systems is more likely to be fostered by power (and thus by politics) than by altruism (and thus by ethics) Power needs to be legitimated by the society, hopefully in a democratic way. In the period between the second world war and the eighties, in Western Europe nation democratic states have widely carried out policies aimed at correcting market failures, and providing those basic goods and services needed to assure life and human rights to their citizens. During the last twenty years the process of globalization has dramatically undermined public intervention in every field of economic and social organization V.Sodano, University of Naples federico II

9. Localization is about the process of restoring public policies on the basis of a participatory democracy, a democracy that involves popular control and equality and ensures real participation (not simply through elections) in managing food, environment, health and all those public goods that the private sector is not able-willing to supply. Concluding: Local food systems can be considered as a form of economic organization that solves the public goods problem, stemming from the view of food for community and not food as a commodity, through participatory democracy. All the following nine options for localizing foods rely on some of participation led by trust and solidarity. V.Sodano, University of Naples federico II

10. Nine options for localizing food (Prety J. ,2001): 1. Community Supported Agriculture (CSA) The basic model is simple: consumers pay growers for a share of the total farm produce, and growers provide a weekly share of food of a guaranteed quality and quantity.  2. Box Schemes In the UK, there are 20 large schemes and another 280 small ones are supplying some 60,000 households weekly A central rationale for both CSAs and box schemes is that they emphasise that payment is not just for the food, but for support of the farm as a whole.  3. Farmers’ Groups Farmers can create new value in agricultural systems working together in groups.  4. Consumer Groups and Cooperatives Direct links between consumers and farmers have had spectacular success in Japan, with the rapid growth of the consumer co-operatives, sanchoku groups (direct from the place of production) and teikei schemes (tie-up or mutual compromise between consumers and producers). V.Sodano, University of Naples federico II

11. Nine options for localizing food (Prety J. ,2001): 5. Farmers’ Markets Sell your produce directly to a consumer, and you get 80-90% of the food pound instead of the paltry 8-10% through normal marketing mechanisms. In the UK, there were 200 established Farmers’ Markets trading on some 3000 market days per year in early 2001.  6. Community Gardens In developing countries, 100-200 million urban dwellers are now urban farmers, providing food some for at some 700 million people.  7. Clear Labelling Eco-labels They allow growers and processors to be rewarded for using environmentally-friendly production processes. They also permit consumers to express their values whilst making purchases.  8. Food Webs and Local Shops Small retailers, producers and consumers creates a dense social network that provides employment, good quality food and wider social benefits.  9. Slow Food Systems Slow and distinctive food, resonant of place and people. V.Sodano, University of Naples federico II

12. The benefits of local food systems -Food swaps and food miles. Average meal travel in a local food system= 45 miles; average meal travels in the conventional food system: 1500 miles. In the US each item of food travels 2000 km from field to plate. - More jobs and “safer” labor. - Improving food sovreinty. - Improving food security . - Strengthening culture and societal activities. - Bioregionalism implying the integration of human activities within ecological limits. V.Sodano, University of Naples federico II

13. Threats to local food system Consolidate corporate power Economic subsidies and incentives that favor big business Preemption (laws preventing local governments from passing policies and initiatives that regulate the food sector and the environment). Free trade ( Legally binding international trade agreements can remove a country’s ability to restrict food imports for health, safety, or environmental reasons). Health, safety and environmental standards (when these are used by big business to shape policy in its favor and burden smaller business). Disinformation (marketing campaigns portraying the global scale food system as the key to economic prosperity). V.Sodano, University of Naples federico II

14. A case study: the market for fresh produce in Italy, traditional retailers and regional markets vs large retailers’ In Italy the fresh produce market exhibits a polarized structure, with the 70% of the market dominated by few large chains of supermarkets and the remaining part of the market covered by the “so-called” traditional retailers, i.e. small specialized retailers located in residential areas and in the traditional food trade centers of towns. Strategies carried out towards customer and suppliers by supermarkets do not promote sustainability, being characterized by high distance suppliers, standardized productions, power relationships and technology-intensive innovation policies V.Sodano, University of Naples federico II

15. On the contrary traditional retailers are integrated in more sustainable local production-consumption systems, characterized by local small suppliers, high product variety, trust-based relationships and innovation policies aimed to restore traditional sustainable production processes and food styles more than to experiment new bio and nanotechnologies. Notwithstanding its high performance in term of sustainability and consumer satisfaction, the traditional sector is very likely to be forced to exit the market in the next years, due to the aggressive competitive behaviors of supermarkets and to the lack of state intervention in the field of environment protection V.Sodano, University of Naples federico II

16. One way for these regional markets to survive is to turn themselves in real local food system, where a deliberative process of communication and participation among the different stakeholders of the system might strengthen producer-consumer relationships on the basis of a shared preference for “food for community” instead of “food as commodity”. Only one in five of the analyzed regional markets seems to experiment such a “metamorphosis”. More research effort on theoretical and empirical ground is requested in order to assess the real attitude of Italian food market towards sustainable local food systems V.Sodano, University of Naples federico II