An in-depth look at the European food chain
Population growth implies more mouths to feed and the need for more efficient production methods. The EU-funded project 'EU food industry dynamics and methodological advances' (Foodima) aimed to examine the food industry, assess the EU food chain and recommend policies to improve the sector. To achieve its aims the project looked at developing methodological tools that support the economic assessment of the food chain. It looked at competitiveness in the industry, technology adoption, industry mergers, welfare considerations, regulatory environment, food quality, standardisation, labelling and socioeconomic effects of the supply chain. Numerous valuable findings and recommendations emerged from the project. With respect to mergers, the project outlined trends in manufacturing, retailing, cultural differences, mergers and food prices. It also assessed welfare, technology adoption and research and development (R&D) incentives related to the EU food supply chain, and how an increase in competition affects these factors. In addition, it examined the positive impact of product differentiation and looked at how to develop EU policies aimed at adopting and spreading new technologies related to production. Another important factor examined covered market and welfare effect of purity standards in food labelling laws. The project addressed assumptions in this respect and offered important findings regarding adventitious presence (AP) thresholds. After examining the economic performance of the food chain, Foodima found that technical progress favours larger farms, endangering the existence of small farms. It recommended that policymakers stimulate research for technical innovations relevant for small farms. Lastly, it analysed the socioeconomic effects of the food supply chain in remote rural areas and impact on employment. Overall, the project results gave way to the development of quantitative and qualitative tools, models and methods to help analyse the food chain and food industry in the EU. These will assist in shaping policy concerning the food sector and help ensure that one of the most basic needs of society is met.
