Understanding food value chains and network dynamics

Project Information

VALUMICS

Grant agreement ID: 727243

DOI

10.3030/727243

Project closed

EC signature date 10 May 2017

Start date 1 June 2017

End date 30 September 2021

Funded under

• SOCIETAL CHALLENGES - Food security, sustainable agriculture and forestry, marine, maritime and inland water research, and the bioeconomy

Total cost

€ 6 327 922,49

EU contribution

€ 5 999 999,99

Coordinated by

HASKOLI ISLANDS
Iceland

Periodic Reporting for period 3 - VALUMICS (Understanding food value chains and network dynamics)

Reporting period: 2020-06-01 to 2021-09-30

Summary of the context and overall objectives of the project

It is generally acknowledged that food systems are neither sustainable nor resilient and a major transformation of food value chains (FVC) and the global food system is needed. The overall objective of the VALUMICS project is to provide decision makers with a comprehensive suite of approaches and tools that will enable them to evaluate the impact of strategic and operational policies, aimed at enhancing the resilience, integrity, and sustainability of FVCs for European countries. Given the complexity and diversity of FVCs, and the contexts within which they operate, the VALUMICS project offers multi-dimensional approaches including insights to policies, governance, environmental hot spots, economics, consumer behaviour, and simulation modelling to assess future scenarios and transition pathways. The outcome provides synthesis into policy options, adding new perspectives for policy makers, both in government and within the food industry sector.
VALUMICS goes beyond previous research limitations through a cross-functional project design that provides a bridging analysis across the economic, environmental, and social dimensions. The FVC analysis through case studies delivers comparative assessments at the European level and beyond. The case studies served as enablers of the research and development work, and the outcome provides an evidence base on the functioning of FVCs. The following sectoral case studies (and countries) were selected: Wheat to bread (CZ, DE, F, UK), Beef cattle to steak, (UK, DE), Dairy cows to milk (IE, UK, FR, DE and VN), Salmon to fillets (NO to EU) and Tomatoes to processed tomatoes (IT).

Work performed from the beginning of the project to the end of the period covered by the report and main results achieved so far

In the first reporting period the conceptual framework for the modelling work was driven by a system thinking approach in dedicated workshops to understand the dynamics of FVCs. The key actors and flow charts of the selected FVCs were identified and a generic system dynamics (SD) conceptual model of supply-, value- and decision chains for profit driven systems was suggested. Furthermore, an evidence base and characterisation framework on policies, regulations and governance impacting upon FVCs was established and availability of secondary data for the project´s analysis and model validation was explored.
In the second period the interconnected analysis through case studies applied the characterisation framework of policy and governance interventions as a basis to understand how the power structure in FVCs has been evolving due to consolidation at all levels. Analysis of governance of FVC case studies and linking the results to the outcome of economic analysis provided a structured approach for the case study work to identify the system drivers and potential occurrences of unfair trading practices. Included were empirical studies on food chain organisation, price formation and price transmission, persistence of supply chain relations, assessment of economies of scale and technical innovations, and statistical analysis of agribusiness profitability. Furthermore, environmental hot spots in FVCs were identified, modelling of transportation and production, and insights to consumer behaviour and food consumption were gained. Overall, the research contributed to a more holistic understanding of the FVCs' dynamics including problematic behaviour related to power asymmetries, bargaining power and fair value distribution, and thus provided evidence to underpin high-level requirements for the simulation model. The project consortium decided to prioritise work on “fairness”, where the modelling objective was to identify unfair trading practices from the farmers’ perspective, but also considering all actors in the chain including consumers.
In the third and final period of the VALUMICs project the research on consumer behaviour and modelling linked to future scenarios and transition pathways, focused on the urgent need for transforming food systems and ensuring more sustainable production and consumption. The work was further substantiated through stakeholder engagement to develop transition pathways and sustainable consumption scenarios and recommendations. The VALUMICS integrated model was further conceptualised as a generic hybrid of SD and agent-based model (ABM) and was formulated, tested, and implemented as a scenario simulator for the wheat to bread chain, to be further adapted for the tomato and salmon value chains.

Progress beyond the state of the art and expected potential impact (including the socio-economic impact and the wider societal implications of the project so far)

The results of the VALUMICS research involving FVC stakeholders and experts, emphasize that transformation must be supported by food system actions involving all food value chain actors, from farmers to processors, retailers, and consumers with an emphasis on a wider perspective of food system analysis and policy integration. Food system transformation highly depends on the collaboration and cooperation of FVC actors which is where the issue of fairness plays an important role since actors are less likely to collaborate and coordinate activities when they perceive themselves to be impacted by unfair trading practices.
The simulation model is designed to assess the impact of intervention strategies e.g. for food value chain actors in future scenarios and how this may influence the gross profit margin and level of employment. An example is the implementation of regulations or policies such as the Farm to Fork strategy which is set to influence transitions and enhance the sustainability of European food systems. The outcome of the consumer behaviour studies provides policy makers and food industry actors with a range of evidence-based approaches and recommendations to drive more sustainable food purchasing and consumption behaviours. Behaviourally informed policies or action plans should be conceived as a complementary approach to policies and strategies with the potential to foster enjoyment, innovation, and public acceptance in the transition to more sustainable eating behaviour.
Anticipatory future food value chain scenarios is a way to explore of the influence of different strategies and policies. Given the numerous studies today on FVC transformations towards more sustainable and resilient futures, the novelty of the VALUMICS scenario exercise is twofold: (i) it is the first exercise that explores how food chains could be reorganized to meet the environmental objectives set by sustainable food system scenarios. The focus in earlier studies has so far been on consumption and primary production largely overlooking the numerous actors in FVCs between farmers and consumers, as well as, impactful socio-economic dimensions such as fairness, resilience, and job provision; ii) the VALUMICS scenario exercise goes beyond the characterization of an “end point” by 2050 by addressing the question of “how to get there?” This includes characterization of transition pathways up to 2030 which account for social and political processes at play in the transition. The outcome demonstrates that the economic viability of a “just transition" of the food system will depend on major policy changes.

The consortium driving this proposal has a core of 18 European partners from 13 countries, and two Asian partners. The results have been published and disseminated through scientific publications, international conferences, workshops, and webinars. The outreach and dissemination have raised public awareness of the project via social media campaigns and the project website.

WP7 Modelling workshop team work in Wuppertal, July 2019

VALUMICS project structure and operational phases

The VALUMICS consortium team attending a workshop in Iceland, February 2018

WP6 Consumer workshop, Wuppertal July 2019