Blog - Get Smart: The Next Frontier of Short Food Supply Chains

September 7, 2021

Short food supply chains present manifold benefits for smart citites, local economies, and consumers. To leverage on their benefits various legal, commercial and infrastructure challenges should be addressed.

Originally posted on Linkedin by Mirta Alessandrini, 18 August 2021.

Short Food Supply Chains: Benefits and Obstacles

‘Short Food Supply Chain’ (SFSC) is a comprehensive term that entails a different way to conceive food production and consumption. SFSCs enhance food heritage and maintain regional cultural identities. Thus, they promise to restore local economies through the re-circulation of community income, the creation of new jobs, and the sharing of knowledge and skills.

However, shortening the food chain is not that simple. Succesful SFSCs must respond to a set of issues generated by the globalised agri-food system and its numerous dimensions: from the spatial to the technological, from the hygienic to the nutritional, from the logistics to the number and the typology of the actors involved.

SFSCs can create strong interpersonal relationships between producers and consumers, reduce the carbon footprint of food production and generate positive social impact on local communities. Small farmers are the heart of SFSCs: they play a major role in creating healthy, diverse, and resilient (future) food communities. Thanks to this system, small businesses can build community both on and around the farm due to more effective transmission of information to the final consumer and the possibility of placing small quantities of products.  

Unfortunately, the development of SFSCs is hindered by indirect and direct systemic barriers. First and foremost, the primary producers involved have often little bargaining power and upscaling the market remains a significant challenge.

Moreover, the possibility for local businesses to concretely activate short supply chain initiatives clashes with the actual lack of available resources that do not allow them to perform some functions – both commercial and preliminary to the sale – with adequate efficiency.

Small farmers and other primary producers have to confront indirect exclusion from EU subsidies due to social, economic, and cultural obstacles. The nature of the foodstuffs – its seasonality and the flexibility of quality and quantities in particular – generates a fragmented offer. The lack of available human and financial resources preempt them from performing specific functions and creates logistical difficulties. Limited access to material resources (especially infrastructure and technology) and the absence of professional assistance on how to comply with demanding rules further aggravates this already challenging situation.

Primary producers involved in SFSCs are often engaged in multiple simultaneous tasks: they are often required to take on the additional roles of distributor, salesman, advertiser and public relations expert. Unsurprisingly, they lack managerial skills, well-trained co-workers and legal knowledge necessary to access the market.

At the same time, direct barriers, such as the introduction of minimum eligibility thresholds (in hectares or economic size) for different Common Agricultural Policy (CAP) measures, lead to the exclusion of several SFSCs from financial aids.

The SmartChain, a project funded by the EU Horizon2020 Programme, meets the challenge to enhance all-around innovation in SFSCs, foster rural development with a multi-actor approach, and provide pioneering technical and non-technical solutions aimed to improve collaboration in SFSCs.

One of the aims of the project is to provide legal and policy recommendations to overcome regulatory barriers and positively influence sustainable food production. For example, an interesting challenge is represented by the legal definition laid down for “short food supply chains”  in the CAP Regulation on support for rural development. ‘Short supply chain’ “means a supply chain involving a limited number of economic operators, committed to co-operation, local economic development, and close geographical and social relations between producers, processors and consumers”. This definition is vague, non-exhaustive, and too limited in scope. In particular, the EU legislator has failed to specify how the concept of the restricted number of intermediaries has to be understood, or how to measure the closeness of geographical and social relations.

Consider the example of direct selling e-commerce platforms. Which role plays the “middleman” and who should be considered as such in this case? Is the number of economic operators relevant to classify this alternative system of food distribution as a short food supply chain? If the local economy benefits from the economic return even though the product has been sold and shipped far away, is the geographical distance still a value? And what about the online social relations between producers and consumers? Are those less valuable and close?  It is hard to say.

Hence, how short is “short”? This is still an issue. The concept of distance should give way to transportation efficiency and safety of the food. The presence of the “middlemen” should not be evaluated in terms of numbers but rather efficacy, while equating “direct selling” with “positive environmental impact” should be avoided.

Under a different perspective, the project delivers solutions that not only are able to create bridges between rural producers and urban consumers but also to make small farmers closer to digital technology. The  SmartChain Innovation Platform serves this purpose. By the means of a step-by-step method, stakeholders – small farmers above all –  are guided towards the implementation of the best solution for improving their competitiveness in the market.

The project opens up the possibility to address other relevant challenges, as the integration of urban small farmers within the “short circuit” system and the creation of new outlets for both rural and urban primary producers.

Smart cities – defined by the EU Commission as urban areas that are made more efficient with the use of digital solutions – become key players in this scenario. While urban farming can only provide a limited amount of food required for consumers, cities can get a large share of it from their surrounding areas.

A solid connection between rural and urban areas is therefore needed and should be built on strong technical, political and legal foundations. This should involve working with local businesses on sustainable procurement policies and with city governments on urban food policies, as well as the relocation of short supply chains in strategical and more accessible public venues in the city.

Tradition and innovation should meet halfway. Improving the logistics of these alternative systems of production and supply through technology and designing a legal framework tailor-made for small farmers and primary producers would support the creation of smarter SFSCs, contributing to the transition towards more sustainable urban food systems.