This article is part of our special report Farmers under pressure.
Local markets, where farmers and producers sell directly to the consumer, have prospered across the EU in both rural and urban areas in recent years.
The development of short food supply chains where intermediaries between farmers and consumers are removed should result in fairer remunerations for farmers and higher quality local food products, supporters say.
In 2015, 15% of farmers sold half of their products through these short food supply chains, according to a study carried out by the European Parliamentary Research Service (EPRS).
The Common Agricultural Policy for the first time focused on short food supply chains during the current funding period (2014-2020). Producers can now benefit from support by the European Agricultural Fund for Rural Development to set up such schemes.
Smallholders often find themselves in a weak negotiating position against food processors, traders, wholesalers, and large retailer chains. In some cases, the “big players” are the only access to the market for small-scale farmers, which results in unfair trade practices.
This was recognised in a European Parliament resolution and EU lawmakers urged the European Commission to take action.
Additionally, small farmers have consumers on their side: a recent Eurobarometer survey (2016) found that four out of five European citizens believed ‘strengthening the farmer’s role in the food chain’ is either fairly or very important.
Benefits and weaknesses
The survey stressed that the utilisation of short food supply chains leads to fairer prices for farmers, given fewer middlemen ensure farmers get a larger slice of the profits.
This can result in greater trust between producer and consumer. Local economies benefit from these exchanges by increasing the possibility of job creation. This is especially vital in rural, disadvantaged areas.
Local markets also give consumers better access to fresh, seasonal produce and have less of an impact on the environment due to reduced production and transport associated with local foods.
However, the amount and range of products on offer in short food supply chains tends to be limited. There is often too little of it to satisfy demand, especially from the public sector.
Producers who operate within short supply chains also have limited ability to expand. This is because they often have fewer resources for production, processing, and transport than larger producers, as well as less marketing and advertising power.
A matter of quality
Paolo de Castro, an Italian MEP from the Partito Democratico (Socialists and Democrats group), told EURACTIV that short chains are more profitable for farmers, and seldom alter the end price for consumers.
But beyond price, he says short chains have the huge advantage of placing the emphasis on quality, defined as the most intimate interaction between the farmer and the consumer.
“Quality here is also intended as consumer’s health and, above all, food education: through this particular form of purchase it is possible to better understand the features and seasonality of the products,” the socialist MEP said.
According to De Castro, the short chain model tends to play to the advantage of smallholders but doesn’t hurt large industrial farms.
“They are not opposed,” he told EURACTIV. “Today, even a small farm, if properly organised, can be as productive as the big ones,” he explained.
De Castro also stressed that there were online platforms in every EU country directly connecting farmers and consumers.
“Smart short chains, supported by digital technologies, can be a resource for farmers. For instance, an Italian farmer opened a restaurant in Brussels where you can enjoy products from his farm. This is not zero-miles however it is a short supply chain,” he said.
An old story
Geneviève Savigny, policy advisor at Via Campesina, says short food chains are nothing new, even though they are now quite fashionable.
In the past, it was used as a way of selling farm surpluses but it took new forms over the last decade, such as “community supported agriculture” with farmers’ shops or short chains between farmers and public canteens.
Savigny comes from Provence, where 30% of farms sell part of their products in short supply chains. “We have everything; honey, goat cheese, bread, fruits, jam, preserves of all kinds. I, personally, sell 3,000 poultry annually on the local market,” she told EURACTIV.
The French farmer explained that it is a win-win game, as consumers find good and fresh products with good value for money, and producers get a much better price than in wholesale.
“Being directly in contact with consumers in a genuine market economy, producers are geared towards quality, meaning organic farming, freshness, and taste,” she explained.
Not a global answer
For Pekka Pesonen, secretary-general of Copa-Cogeca, the association of European farmers and agri-cooperatives, short food chains are a valuable concept.
“In some cases, it could result in a better living and can offer partial certainty for farmers,” he said, adding that it could also help have local products adjusted to the local consumer needs.
However, it is not a “global answer,” he warned.
“The EU food system is complex and, therefore, other means should also be enhanced against unfair practices such as shortening the payment time,” she added.
*Hannah Black contributed reporting for this article.
Socialist MEP Paolo de Castro (S&D group) said, “The concept of supply chain incorporated three dimensions of proximity: geographical, social and economic. But we should not be bound to the vision that short-chain is JUST a matter of distance. There are so many smart ways to promote and exploit short chains, even not at zero miles. It is necessary to get out of the short chain’s vision based solely on the spatial dimension, since ‘short chain’ is everything that contributes to bringing consumers and farmers closer to each other, despite their physical distance”.
“The short chain of those farmers, who live thanks to subsistence farming, with no other ways of selling their products, cannot be considered as an economic model if ever, it is an ideological one. The short chain chosen and built as a distribution asset along with others has a lot to say and it could become more and more a natural part of the business model of the future farms,” he added.
Eric Gall, IFOAM EU Deputy Director and Policy Manager, told EURACTIV.com, “Organic producers have been the pioneers of the short supply chain from the development of producers markets and shops to community supported agriculture. Short supply chains help in reconnecting producers and consumers and therefore achieving a fair price for those employed in the agricultural sector. The growth of organic farming often goes together with the increasing interest from consumers, municipalities, and regions in purchasing seasonal produce”.
“The organic sector has also contributed significantly to the Green public procurement in recent years. We have some examples where sourcing of organic products combined with long-term partnerships has strengthened regional production for developing short supply chains. The city of Malmö in Sweden wants to serve in its institutions and venues 100% food sourced organically by 2020, the city of Copenhagen reached 90% of organic in 2015 by emphasising more balanced diets based on organic principles and financing conversion and education of public kitchens, and a main public kitchen near Bordeaux source 30% of their ingredients from organic,” he emphasised.
Genevieve Savigny, policy advisor at the European coordination committee of Via Campesina, commented, “This type of farming doesn’t seem to be able to really counterbalance the growing concentration of the agri-food industry. There seems to be two opposite paths for agriculture: industrialisation, investments and growth, or alternatively producing for the local market with added value for smaller farms. It leaves a lot of medium and some quite large family farms with heavy difficulties as we see in the dairy or beef meat sector. This is why a fair CAP is needed to ensure decent prices and income to farmers”.
“For producers in direct sales, CAP is needed to enable investments in equipment for processing on the farm or collectively. Direct payment geared towards ‘active persons’ and not only hectare would be a legitimate support,” she concluded.