Incentives for change

The identification of feasible instruments for ensuring that agri-food systems are sustainable and inclusive requires better insights into the responsiveness of producers and consumers to market incentives (prices, taxation) and non-market instruments (regulation, information). Robust approaches for impact analysis have become available to assess welfare and sustainability effects under different market and policy conditions.

For the transition to an inclusive and sustainable economy, we need insights into system interactions and the likely responses of agents (producers, consumers) to market and policy incentives. Economic outcomes are not always optimal in a biophysical sense. For instance, the market might respond to waste reduction in supply chains with lower farm gate prices. In such cases, there is a need for price incentives to align multiagency interests. In certain agri-food sectors, the mainstreaming of sustainability standards or fairness criteria along the supply chain is promoted. Moreover, nutrition and health considerations are increasingly held up as arguments for the taxation or public regulation of the sugar, salt or fat content of food items.