Sustainability and the global food supply chain

To understand the challenges farmers face, it’s important to understand the entire food supply chain and the demands of the consumer.

Understanding the food supply chain

Before it gets to the supermarket shelves, our food passes through an extensive network of retailers, processors and producers who are responsible for transforming agricultural raw materials into safe and nutritious food that we want to eat [1].

This network is called the food supply chain (Figure 1).

Figure 1: A conventional food supply chain

The three main stages of the supply chain are:

1. Primary production (farming)
2. Processing and manufacturing of the final product
3. Distribution

Even those products that are minimally processed, such as fresh fruit and vegetables, are nonetheless graded and packaged to meet the consumers’ need for acceptable, visually-appealing food with a reasonable shelf life.

Optimising the stages of the supply chain

Researchers and policymakers are now focussing their attention on how to optimise each of these stages, as food waste (which you will look at in more detail later in the course) has become such a significant issue [2].

As food travels through every stage of the supply chain it uses up natural resources (eg labour, water, energy, fuel), so each transaction requires those involved to set a price that ensures the final product is affordable for the consumer [3].

Technology and policy are reshaping the food system

Technology continues to have an impact on reshaping contemporary food supply chain systems to improve productivity, affordability, accessibility and diversity of choice and to reduce losses and waste [2]. More than 80% of the population in Europe buys food from large retailers because they are convenient and reliable [4].

The dominance of the large retailers, who can afford to invest in technological innovation, has led to raised quality and welfare standards across the food industry. One example of technological innovation that has revolutionised the food industry is the invention of the Tetra Pak continuous filling method (video hosted on Youtube).

This and other production line processes, air freight, moulded plastic packaging and numerous other initiatives have had major impacts on food safety and shelf life [5].

The Common Agricultural Policy

In the European Union, the Common Agricultural Policy was introduced in the 1950s to guarantee a minimum level of production and fair payment to farmers when food supply chains were becoming long and complex but end product prices had to remain low.

The Policy has changed as our needs have developed and now improves the competitiveness of European farmers by offering alternative models of short food supply chains. Shorter supply chains deliver more of the profit margin to the farmer and include direct sales to the consumer through farm shops, community-supported agriculture, and sales to local restaurants [6].

They represent a constructive alternative to conventional longer food chains where small farmers or cooperatives have little bargaining power and consumers can’t trace their food to a known producer or local area. There are economic, environmental and social benefits to shorter food chains and the increased connection to where their food comes from, is likely to lead to less waste and increased trust among consumers.

Embracing change for a sustainable food supply chain

Mechanisation and industrialisation of agriculture enabled fewer farmers to produce more food, and government policies subsidised the investment this needed to ensure consumers could still afford to buy it.

However, longer supply chains resulted in a declining understanding of agricultural processes, the challenges faced by farmers and the impact of our choices on the environment. Short food supply chains are one example of the potential for food to act as a driver of change [8].

Supply chains of the future

Supply chains of the future need to produce healthy and nutritious food that has been grown in an environmentally friendly and ethical way, while also dealing with the significant challenges of a growing population, climate change and declining natural resources.

Consumers in turn have become more health- and environment-conscious and increasingly demand more locally produced, less processed food of known origin.

This is leading to a ‘circular economy’ where the feedback between supplier and consumer is continuous, resource consumption and waste are minimised, and the supply chain is no longer one-directional [10].

Changes in supply chains systems

Changes in supply chain systems are bringing more transparency to the food production process, ensuring functional regulatory systems, eliminating heavy administrative burdens and costly compliance procedures, improving farmers’ income and minimizing environmental impacts (Figure 2) [11].

Food supply chains need to become smart, sustainable and inclusive and they need to support sustainable local agricultural and food production through direct interaction between producers, businesses and consumers, creating more resilient communities.

Figure 2: The changing landscape of the circular economy ©Cambridge University Judge Business School Source