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The EU's food value chains are diverse and dynamic, designed to meet consumer expectations while enabling producers to add value.
The Common Agricultural Policy (CAP), through the Farm to Fork (F2F) strategy, specifically addresses power imbalances and promotes the inclusion of vulnerable participants in the EU food system by emphasizing the role of farmers in value chains (Specific Objective 3). This is achieved by promoting cooperation, supporting market-oriented production models, encouraging research and innovation, improving market transparency, and tackling unfair trading practices (UTPs).
On this regard, the Directive (EU) 2019/633 of the European Parliament and of the Council established fair trading practices in the agricultural and food supply chain, by highlighting some key points (box 1).
Box 1: Directive (EU) 2019/633 of the European Parliament and of the Council
- Scope: It applies to a wide range of operators in the agricultural and food supply chain, including producers, processors, and retailers, ensuring a level playing field.
- Unfair Trading Practices (UTPs): The directive focuses on preventing unfair trading practices that disproportionately affect small and medium-sized enterprises (SMEs), particularly farmers. This includes practices such as late payments, unilateral contract changes, and other exploitative behaviors.
- Protection of Farmers: By addressing UTPs, the directive seeks to strengthen the position of farmers in the supply chain, enabling them to negotiate fairer terms and receive more equitable compensation for their products.
- Encouraging Cooperation: The directive promotes cooperation among farmers and other supply chain actors, aiming to enhance their bargaining power and overall market position.
- Sustainability and Equity: By fostering fairer trading conditions, the directive contributes to the broader goals of sustainability and equity within the EU food system.
- Implementation: EU Member States are required to transpose the directive into national law, establishing legal frameworks that protect against unfair practices in their respective agricultural sectors.
Reporting Mechanisms: The directive requires Member States to establish national authorities responsible for monitoring compliance with the rules and handling complaints related to UTPs.
CAP reforms have strengthened the market orientation of agricultural production and improved the competitiveness of European producers. This has led to innovations along the supply chain, including product, process, and organizational changes driven by emerging technologies and evolving consumer demand. However, despite the EU agri-food sector's competitive edge in global markets and its leadership in variety and quality, farmers are less experiencing growth in their share of added value within the supply chain.
In fact, significant power imbalances persist, particularly disadvantaging producers who struggle to negotiate fair prices set by processors and distributors.
This issue is prevalent throughout the agri-food sector but varies in intensity and impact on the primary sector and across different supply chains and their stages, due to several factors: the type of product, its connections to the local territory, and the geographical scope of the value chains—whether local or more extensive (supra-regional or supranational). Additionally, dynamics with other territories and supply chains, including non-agricultural sectors like tourism, also play a role. Furthermore, relationships within value chains are increasingly shaped by access to natural resources and the effects of climate change.
In this context, the multitude of initiatives rethinking production chains from the perspective of food systems and the attachment of identity to territories has increased awareness of the crucial roles and functions of farmers in ensuring healthy and nutritious food. This has led to greater sensitivity regarding the compensation and income that farmers deserve for their resilience and enhanced competitiveness within the food production value chain. In this regard, it may be beneficial to draw on the results and tools from various R&I projects focused on food policies (e.g., the Food 2030 Project Family).
As it was highlighted by the EC the challenges and weaknesses of agrifood systems in Europe include:
Besides, positive developments in power balancing along supply chains are emerging from the connections between short value chains and zero-kilometer markets. Key benefits include:
All these aspects highlight the fact that agricultural value chains in Europe are characterized by increasing complexity, which needs to be addressed more effectively by rebalancing the power of farmers at different stages. Pursuing this specific CAP objective must include a system-oriented approach that considers the multitude of interconnected socioeconomic and environmental dynamics. This encompasses internal relationships within supply chains at various stages, as well as external relationships with territories and other supply chains, along with their respective internal power dynamics and modes of cooperation (e.g., with non-agricultural sectors). Additionally, connections to natural resources and climate change impact farmers' access to biological resources, while demographic changes drive shifts in the local labor market and consumer demands.
The AKIS approach can more effectively navigate the growing complexity and dynamism of agricultural value chains by introducing a holistic vision for their balanced, resilient, and sustainable development. This should bring creating an enabling environment that empowers farmers at all stages of the value chain, through increasing major sensitivity and collective awareness along with developing more appropriate capacities towards more equitable income generation.
In general, it may be very appropriate to mainstream AKIS interventions within the initiatives of territorial partnerships and governance entities that focus on the development and transformation of local systems. Examples include local action groups (LAGs), food districts, bio-districts, integrated supply chain initiatives, and former producer organizations.
Moreover, requiring a more integrated and comprehensive project design that combines productive and non-productive investments with AKIS-related interventions is likely to lead to more market-oriented approaches and equitable development of supply chains.
More specific ways to collectively empower farmers, enhancing their productivity, market access, and overall position in the agricultural value chain include:
Training
Cooperation for innovation:
Advisory and innovation support services:
Information access and sharing:
The practices presented in this "Compendium" showcase some interesting and replicable approaches that effectively leverage the potential of AKIS interventions to contribute enhancing farmers' positions within the value chains in different ways.
The first approach includes integrated strategies, such as those seen in the integrated supply chain projects in Italy, which promote a well-organized combination of various CAP productive and non-productive interventions alongside
AKIS-related efforts. These strategies foster vertical integration and concentration along the supply chain, based on a collaborative mindset across value chains and human capacities development, where the value and contributions of farmers are better recognized and enhanced to strengthen the overall innovativeness, effectiveness, and efficiency of the supply chain.
Another approach, also Italian, involves strengthening the position of farmers within the supply chain as part of a collaborative process, pursued more directly through EIP-Agri (Operational Groups) and with a focus on streamlining an effective interactive innovation model for the modernization of the specific supply chain.
Finally, the Dutch case presents a more focused approach aimed at addressing a fundamental issue of power imbalance for farmers within the value chains, specifically asymmetric price transmission along the chains. This is achieved through the establishment of a public service for information, reporting, and consultation about good and on unfair practices relating to farmers' bargaining power.
Food for thinking
In this perspective, we could raise a few questions (not exhaustive) to help us reflect on how to better direct AKIS interventions towards the achievement of objective 3 of the CAP:
