Scientific literature has intensively researched the reasons behind farmers' choices when adopting or adapting new technologies and strategies (Pamuk et al., 2013). We argue that the successful uptake of PGS as institutional innovation is linked to one of its main features: knowledge sharing and co-creation. The development of knowledge is realized through transdisciplinary approaches, where different actors generate socially robust knowledge through meaningful interactions, in order to try to solve problems (i.e. unfair prices from traders and middleman, low bargaining power, difficult access to quality markets etc...). This is an essentially collective process, based on interactive learning and encouragement of communication and trust and it provides an innovative tool for capacity building.

## Methodology

This communication explores why and how PGS are tools for implementing institutional innovations in rural areas. We adopted a case study methodology. The empirical case studies that will be presented are two PGS supported by civil society facilitating organizations, the *Timbaktu Collective* in the Anantapur district and the one supported by the *Institute for Integrated Rural Development* (IIRD). Two other examples will be drawn from the framework of governmental organizations, Swadeshi, in the Bulandshahar district and the PGS supported by the APOF – Organic Certification Agency, in Bangalore.

## Development project

### Context of the study

Institutional innovations need public support or at least a favorable legal and policy environment that legitimize their existence. Even though in India organic farming does not officially recognize PGS, a voluntary framework for the domestic market al. ows recognized PGS to claim their organic status. India is among the most advanced countries concerning PGS development. PGS in India started with the intervention of national NGOs, FAO and government representation in 2006. The PGS Organic Council (PGSOC), a coalition of Indian NGOs built and promoted PGS throughout the country in the following years. Also the government took concrete action and since 2015 the National Center of Organic Farming (NCOF), linked to the Ministry of Agriculture, is officially supporting PGS as a low-cost alternative certification method. They launched PGS India, a government-run PGS program with an online database of all PGS initiatives. The relationship between the government and the NGOs is good as the government designed their program to build on the work and achievements of the PGSOC. This duality of government and

NGOs is important and quite unique; it should be encouraged since it allows the civil society to venture into new spaces and create their own frameworks. Altogether, more than 37.000 farmers have been organically certified for their products through PGS in India (NCOF, 2016) and India can be regarded as the leading country in the PGS movement.

PGSOC is a formal society consisting of 15 NGOs/VOs (Voluntary Organizations) working in various states of India, grouping around 25.000 farmers. It is a democratically run organization with council members electing the executive council and the managing committee. Each of these organizations works in various parts of India with small and marginal farmers. A total of 587 small farmer groups across India with 5.925 farming families were directly involved in certification and marketing under PGSOC. A variety of organizational and marketing models exist among PGSOC's members. The facilitation councils, composed by NGOs and VOs, play a key role in supporting at local level the management and the administration of the guarantee system inside each PGS.

### PGS as tool of innovation

PGS not only represents an alternative to third party organic certification, but also contributes to foster access to markets for small-scale farmers, thanks to their set of intrinsic features: shared vision, trust,
horizontality, transparency, participation and learning process. Organic PGS initiatives adhere to strict organic standards, but the compliance mechanisms used are suitable to small-diversified farmers selling on local and domestic markets. In addition to the positive economic effects, PGS is a tool for developing innovations and community actions, based on high-level knowledge exchange between farmers, but also with other stakeholders along the value chain.

## Participation: Redistribution of responsibilities along the value-chain

Due to their local adaptability, PGS initiatives exist in many shapes and contexts; however they share some basic key features. Participation is an essential and dynamic part of PGS. PGS is built from a shared vision, meaning that the key stakeholders collectively support the same guiding principles. Participation means that the stakeholders are engaged from the initial design. They contribute to decision making such as the choice of principles and standards that will be adopted by the group. PGSs are intended to be non-hierarchical and have a shared ownership. This is reflected in the overall democratic structure and through the collective responsibility of the PGS: engagement in the development process, understanding of how the system works and the communication between producers, consumers and other stakeholders.

The peer-review, a farmer-to-farmer approach, is a key element of PGS. Through this fundamental process farmers visit each other and review their practices. The equality between the inspectors and the inspected extends the possibilities of knowledge exchange. Peer review is not just a mere control for compliance against a standard, but becomes an opportunity to share challenges and personal experiences and to disseminate knowledge, which is an essential feature of farmers-to-farmers approaches (Tripp, 2006).

## Knowledge exchange and co-creation

The organic/agroecological movements recognize the relevance of farmer knowledge, which is a combination of different type of knowledge resulting from farmers' activities and interactions with their own systems and the more traditional knowledge that some farmers or societies have developed over time (Doré *et al.*, 2011). Traditional Knowledge Systems (TKS) are a set of values and technical capabilities that exist within and are developed around specific conditions. They include technological skills, ecological relations and the awareness of the social impact of their activities (Twarog & Kapoor, 2004). In recent years there has been a re-evaluation of the importance of traditional knowledge and farmers have gained recognition as key actors in the process of knowledge and innovation development. The most common kind of knowledge, which is shared between farmers participating in the PGS, is organic farming techniques and practices, which include traditional and innovative knowledge. Therefore PGS is both a tool for preserving knowledge and to transfer innovation and it emphasizes the capability of local communities to experiment, evaluate, and scale-up innovations through farmer-to-farmer research and grassroots approaches.

Innovation and knowledge are shared and crated also through workshops, trainings and fieldschools, which are often organized by the PGS. Training might be organized to teach new members about organic practices and the functioning of the PGS. Sometimes technical workshop and training might be organized with the involvement of technical/research experts. The arrival of *Internet al.o* in rural areas has changed consistently the style of communication: farmers have now access to online platforms and websites where data and information can be easily shared even on long distance, making knowledge sharing easier as well as allowing a better control over the integrity of the value chain.

## Consumer-oriented transparency

PGSOC grants a logo to all PGS initiatives that are recognized to follow the organic principles and good organizational procedures. Along with the logo, a unique identification code is provided. PGSOC is opening collaboration with the governmental institution PGS-India to join their online platform. In such way, consumers can verify information about products, producers, and local groups via searching for the personal code of the PGS on the online portal, ensuring traceability and the integrity of the value-chain.
Innovations in transition

Agri-food systems are undergoing tremendous changes globally and farmers need increasingly to compete with agribusiness, urban expansion and corporate land-grabbers. To implement diversified and sustainable farming systems might be the most powerful tool for farmers and their families to empower themselves (Rosset & Martínez-torres, 2012). Empowerment means improving livelihoods, enhancing skills and knowledge and allowing continuous self-growth. Peasant agriculture follows a pattern typically based on short and decentralized circuits of production and consumption, with strong links between food production and local ecosystems and communities. PGS supports and enhances those characteristics and incorporates different socio-technical innovations inside a broader institutional dimension. At economic level, PGS opens new market possibilities, while socio-technical innovations are generated through knowledge exchange and co-creation between the stakeholders involved. New institutional structures are created to manage local agri-food chains with horizontal and participatory approaches, enabling meaningful social networks. We reckon that it is crucial to explore how those innovations influence the markets and how they change the socio-ecological environment towards more sustainable systems, since there is much potential for local changes to be replicated and scaled up throughout the different levels of the food system.
# Multi-actor innovation platforms in Southwest China: participatory plant breeding, community supported agriculture and participatory guarantee systems

Dr Yiching Song<fnref n="1" /> and Xin Song<fnref n="2" />

This presentation is proposed for the session on “Institutional innovations for sustainable food systems: practitioner experiences in ‘transitions in the making’” organized by FAO, INRA, IFOAM, URGENCI, IIED and CCAP. The session focuses on SDG 12 on sustainable production and consumption. This presentation falls under the session theme of “Institutional innovations for and with indigenous and ethnic communities”. The presentation also addresses SDG 2 on ending hunger, specifically target 2.5 on maintaining genetic diversity; and SDG 1 on ending poverty and building resilience.

CCAP will present its 15 year Participatory Plant Breeding (PPB) programme in Guangxi, SW China, which has linked poor ethnic mountain farmers with crop scientists at national and provincial level. Through PPB, new maize and rice varieties have been developed with both higher yields and improved resilience to drought and pests, resulting in greatly improved variety adoption rates, and many resilient local landraces have been improved and conserved. PPB has also enhanced awareness of the value of traditional knowledge and local landraces amongst farmers and agricultural scientists.

Based on these initial achievements, PPB farmers and communities have gained more interest in value adding to their own local quality biocultural products<fnref n="3" /> and seeds. This has led to further institutional and technological innovations for Community Supported Agriculture (CSA), which are built up from traditional farming knowledge to meet consumers’ increasing needs for safe and quality food. By linking PPB communities to a series of ecological/organic restaurants in urban areas, CSA has spurred a revival of agroecological practices such as duck-in-rice pest control; reversed biodiversity loss by reviving several heritage varieties; and significantly enhanced household incomes, tripling incomes in one community. CSA has been successfully facilitated by the NGO Farmers’ Friend since 2005. However, some challenges emerged last year, as the restaurants’ new manager cut their purchases from PPB communities, complained about the product quality etc., and shifted to other producers. The PPB communities experienced a big economic loss and disappointment.

The major reason for this ‘up and down’ case is that the CSA system mainly relies on individual trust, rather than on any formal or organic certification, and lacks institutions to provide guarantees of origin and quality as well as fair and equal benefit for farmers, for both consumers and producers. This is a challenge not only for the PPB communities in Guangxi province but for the whole country. There is a big increase in quality, local biocultural products due to environmental concerns and food safety issues as well as income increase in China, leading to growing consumer demand. Yet, certification and guarantee institutions are insufficient or missing, especially for local and biocultural products. Geographical Indications are popular in China, but are mainly used by local government for income generation through selected enterprises. Farmers and indigenous communities have benefited little.

To confront these challenges at both action and policy levels, the CCAP team is working together with PPB communities, scientific institutes, NGOs and policy makers, and has established a national “Farmer Seed Network” in China- a multi-actor innovation platform. Founded by CCAP, the Liang Shuming Rural Reconstruction Centre and the Third World Network in December 2013, the Farmer Seed Network (FSN) works through multi-stakeholder interaction, collaboration and dialogue, and includes farmers from across China, as well as leading crop scientists, and Ministries for Environment and Agriculture

<footnote n="1">1. Centre for Chinese Agricultural Policy (CCAP)</footnote>

<footnote n="2">2. Chinese Academy of Science</footnote>

<footnote n="3">3. ‘Bio-cultural products’ are products based on biodiversity, landraces and traditional knowledge</footnote>
and private sector. The Network has started exploring guarantee institutions for biocultural products and other community-based products like PPB seed. Some exploration and open direct discussion has been carried out among different stakeholders around different subjects.

For instance, 3 PPB/CSA communities' biocultural products got rewards from Slow Food International and were listed in the 2015 list of Ark of Taste by Slow Food. However, the reward was originally designed for individuals only. Upon discussion, all the communities think such biocultural products are the result of accumulated and collective wisdom and efforts, and that the rights and pride should belong to all the community! So it was decided to change the award into the community's name. Upon invitation from Slow Food, 3 women farmers were nominated from 3 communities respectively to participate in the "Terra Madre" event in Turin, Italy, in September 2016.

At national level, the Farmer Seed Network (FSN) was formally registered early this year and a collective trademark has been designed and will registered through the FSN and owned by all FSN communities, for all biocultural products and even for PPB and quality seed produced by FSN communities. More work is underway to develop an appropriate PGS system with institutions of collective/group certification, collective labeling etc. for biocultural products and processes. This is essential not only to support the PPB and CSA work in Guangxi, but also its scaling up to Yunnan province (initiated by CCAP in 2012), and to contribute to green agricultural transitions in China as a whole. A PGS stakeholder workshop will be held in Guangxi in September, and the presentation will share the results. The presentation will highlight the critical role of multi-actor platforms in enabling green and pro-poor agricultural transitions for meeting the SDGs.
# Community supported agriculture: innovative ways to share risk among producers and consumers

Judith Hitchman<fnref n="1" /> and Fernando Nacpil<fnref n="2" />

## Introduction

Bringing together citizens, small farmers, consumers, activists and concerned political actors at global level through an alternative economic approach called Local Solidarity-based Partnerships between Producers and Consumers.

It is a way of maintaining and developing small-scale organic family farming and of achieving local food sovereignty for each region and community worldwide.

URGENCI vigorously promotes and advocates for policy and the realisation of all forms of partnership between producers and local consumers, all kinds of Community Supported Agriculture initiatives as a solution to the multiple problems associated with global intensive agricultural production and distribution.

Farmers alone have been shouldering the risks of the increasingly ruthless global market that has forced millions of them from the land. Community-Supported agriculture offers one of the most hopeful alternatives to the downward spiral, and is the only model of farming in which consumers deliberately agree to share the risks and benefits with farmers. In the current period of climate change it also helps combat the effects by relocalising the food system, building resilience and recreating local food security and food sovereignty.

It takes many different forms in the various parts of the world based on the social, historical, geopolitical, agricultural and economic specificities of each country or region where it has developed. The members of URGENCI are united in their belief in the following 4 fundamental ideas:

* Partnerships are characterised by a mutual commitment to supply (by the peasants) and up-take (by the consumers) of the food produced during each season.

* Local means promoting local and territorial food systems. LSPCCs are part of an active approach to relocalising the economy.

Solidarity Partnerships are based on solidarity between producers and consumers and involve:

* Sharing both the risks and the benefits of healthy production that is adapted to the rhythm of the seasons and is respectful of the environment, natural and cultural heritage and health.

* Paying a fair price up-front that enables peasants and their families to live in a dignified manner.

The producer/consumer tandem is based on direct person-to-person contact and trust, with no intermediaries or hierarchy and no subordination.

It is the absolute respect and implementation of these four fundamental principles by URGENCI members that forms the basis for more general values.

Community Supported Agriculture, as a way of contributing to greater solidarity between urban and rural communities, is equally empowering for both the community and the farmers and providing solutions to common problems facing producers and consumers worldwide, including in cases of disaster recovery in climate change, such as the Philippines:

1. Fair local food systems are an efficient tool to restore local food sovereignty for all regions and communities worldwide.

<footnote n="1">1. URGENCI, France.</footnote>

<footnote n="2">2. Farmers Development Network, Philippines.</footnote>
One of the main roots of the current food crises, as well as social unrest more generally, is that farmers alone have been shouldering the risks of the increasingly ruthless global market that has forced millions of them to leave the land.

CSA offers one of the most hopeful alternatives to this downward spiral, and is the only model of farming in which consumers consciously agree to share the risks and benefits with the farmers.

2. With other short supply chains, CSA schemes are a very efficient way of defending health through food and fighting many forms of malnutrition.

By establishing direct and trust-based relationships between farmers and consumers, people have access to fresh food from an accountable source: organic farmers producing healthy, safe, nutritious and minimally processed food without pesticides and various additives at an affordable price. This was what first motivated Japanese women in the 1960s to get together with small-scale farmers to create the first Teikeis to distribute food locally, when they were confronted by the dangers of industrial and agro-chemical pollution.

3. CSA represents a relevant locus for triggering civic responsibility in economic relations and for setting up a social network of solidarity between farmers and consumers, building more socially just and sustainable communities trading on fair terms both with neighbours and sometimes with people in more distant regions.

For CSA to be more than just another direct marketing scheme, the growers and the eaters, as they sometimes call themselves need to work together to create local social/economic forms, based on trust that encourage initiative and self-reliance, sharing the risks of agricultural production and information. They are human-scale and efficient and pricing is based on needs/costs (not market).

4. Addressing environmental and climate change issues seems to be an almost natural outgrowth of the CSA concept, as it is based on cooperation and harmony with nature.

CSAs are part of the economic relocation movement: this means fewer food miles, less packaging and ecologically sensitive farming, a radical reduction in energy waste and pollution. Consumers support the blossoming of organic family-run farms that do not depend on fossil or imported energy, and encourage proper land stewardship by farmers towards low or no chemical inputs, greater biodiversity, conservation of landscapes and cultural heritage, in particular for future generations and agroecology in the widest, political sense of the term.

Urgenci's members are strongly convinced that the flexibility of CSA allows for many inventive and meaningful combinations, building sustainable communities and constructive alliances among as many different groups and perspectives as possible.

Translating CSA to other landscapes and mentalities that are vastly different in scale, available resources and culture is a constant challenge.

The model has certain core principles based on sustainable, fair and ecological practises that are similar no matter where or how it is practiced but at the same time, it is largely an evolving and highly adaptive process.

Urgenci is eager to engage in cooperation with sustainable agriculture/small-scale farming movements from the global South, where shared goals are to empower even the poorest and smallest-scale farmers to become active contributors to and beneficiaries of local sustainable development and to offer continuous education to farmers and other stakeholders in the system.

## Illustrated case study

*What prompted the change?*

Agriculture in the Philippines has long been marked by small-holders encouraged to invest in export-oriented cash crops, especially coconut oil and sugar-cane. The obvious risk for both local populations and the producers is a loss of food sovereignty and, in the worst of cases, a loss of food security.
This was precisely the situation that occurred when Hurricane Haiyan hit the Philippines in 2014, with an estimated loss of 700 million$-worth of agricultural production and infrastructure. 74% of fishermen and 77% of farmers lost their property and source of income, including in such sustainable producer-owned projects as seaweed farming. In recent years there has been strong development in the Philippines of a solidarity economy-based urban-rural movement, and there have been increasing linkages developed between urban and rural areas to both feed the cities and ensure producers have access to local markets that provide them with decent income. There is considerable interface with Local Authorities to ensure that local populations have access to healthy nutritious food.

## What is the new model?

The Community Supported Agriculture model was promoted by the national solidarity economy movement, and Dr. Doy Nacpil (with their organization, Stargrass Coalition) is the leading force behind this young network. The aim of the network is to change the agricultural model of cash crops to small-scale fruit and vegetable production that will guarantee local food security/food sovereignty in the post-Haiyan period, thus ensuring that local producers and communities become food secure. Interestingly, this movement has been consumer-driven, rather than producer driven, but nevertheless ensures peasant producers are guaranteed access to specifically defined local markets.

## How does it work?

Producers and local restaurateurs sign an agreement, with upfront payment at an agreed price to raise pigs, rice, goats and various vegetables. Most farms are less than one acre in size but Dr. Nacpil says "Even small farmers can earn well by diversified, integrated farming". This agroecological approach ensures that it is easy to avoid any outside chemical inputs. The system in place uses inter-cropping, and ensures that the production is spread over the season. The local varieties of organically grown rice have proven far more productive and resilient.

## Who does it benefit and what are the outcomes?

As the network has rapidly developed a high reputation for the organic products grown by these producers, many local (medical) doctors are requesting delivery of fruit and vegetables for patients who are suffering from cancer. The network supplies food to hospitals, schools as well as restaurants. It has been developed as a holistic local development network to build locally resilient food systems and ensure that both producers and the local populations would recover from the trauma of the hurricane. The approach used was to work from provincial level to regional level to national, with a national consultation on Community Supported Agriculture, and the subsequent creation of a national network, (Philippine CSA Network (PCSAN).) The national solidarity economy network provided the means to do this. This project has now reached phase 3 in the Luzon and Mindanao regions, with provincial and national networks and a national coordinator. There are approximately 20 different organizations, each consisting of 20-30 farmers, each feeding around 100 families in their local communities. The farmers use the system of Participatory Guarantee Systems (PGS) as a low-cost participatory organic certification method. In the immediate post-typhoon period this also helped the producers to find help for the next growing season. The national legislation introduced in 2016 that supports organic production also has helped provide post-Haiyan relief for the producers.

## Conclusion

This is a clear illustration of how alternative economic solutions to free trade can support the connection of small-holders to local markets, thereby developing resilience to climate change and violent weather events in high-risk regions like the Philippines as well as building national food security and food sovereignty together with an economic paradigm.
# Geographical indications: what institutional innovations for a territorial construction of technical innovations?

Stéphane Fournier<fnref n="1" />, Emilie Vandecandelaere<fnref n="2" />, Catherine Teyssier<fnref n="2" />, Clément Charbonnier<fnref n="3" />, Giovanna Michelotto-Pastro<fnref n="4" />, Dominique Barjolle<fnref n="5" />, Olivier Beucherie<fnref n="6" /> and Philippe Jeanneaux<fnref n="7" />

## Rationale for the research

The TRIPs agreement (1994) recognize as intellectual property rights the Geographical Indications (GI), defined as a name associated to a geographical area that is used on products originating from this area and presenting specific characteristics or reputation linked to origin. Many studies have illustrated the potentials of GI processes as tool for enhancing food systems' sustainability. These processes may lead to interesting place-based development, thanks to producers' collective strategy to promote, defend and preserve their origin-linked quality product and the related natural and human resources. By improving producers' incomes (Dinopoulos et al., 2010; Moschini et al., 2008), GIs may allow some of the producers getting out of poverty and more broadly avoid a damaging agricultural intensification, which could be the only way for producers who receive low prices for their products.

The economic lever appears then fundamental for GI's contribution to sustainable food systems development. To consolidate the previous studies and establish evidences on GIs' economic impact, FAO has carried out in collaboration with four Universities[1] 10 case studies[2] in various regions all over the world and an analysis of the impact pathway (Barjolle et al., 2015).

The analysis of these case studies has confirmed the GI economic impacts, but especially an important assumption: innovation plays an important role in GI processes and in their impact pathway. In all cases, minor and major innovation processes occur in order to adapt the practices to the requirements of the Code of Practices, or to change the product characteristics to sell it on new markets. For example, the T'ete de Moine did start a spectacular growth after that a new tool for cutting slices of this cheese was invented and introduced: the "Girolle".

In two specific cases, changes have been particularly significant, as GIs' codes of practices have not been built based on traditional practice. During the setting-up of these GIs, the stakeholders pursued an upgrading of product's quality, while ensure compliance with international standards (including the sanitary ones).

Based on these two cases, Penja pepper in Cameroon and Vale dos Vinhedos wine in Brazil, the objective of this paper is to show that GI can stand by institutional and technical innovation processes and more generally their role in the construction of multi-actor innovation platforms.

## Theoretical framework and methodology

Innovation has not very often been considered as a GI factor of success in the scientific literature. The main objective of a GI is to protect and add value to traditional products, by preserving the production techniques that make the product quality well known. Being defined in a code of practices, which may

<footnote n="1">1. Montpellier SupAgro, UMR Innovation, F-34060 Montpellier, France.</footnote>

<footnote n="2">2. FAO, I-00153 Rome, Italy.</footnote>

<footnote n="3">3. Université de Montpellier 1, France.</footnote>

<footnote n="4">4. Montpellier SupAgro, F-34060 Montpellier, France.</footnote>

<footnote n="5">5. Swiss Federal Institute of Technology Zurich (ETH), Switzerland.</footnote>

<footnote n="6">6. Olivier Beucherie Conseil, Angers, France; ESA, Angers, France.</footnote>

<footnote n="7">7. VetAgro Sup, UMR METAFORT, F-63370 Lempdes, France.</footnote>
give the impression every condition is given and fixed forever, GIs have been repeatedly criticized for their supposed negative impact on the adaptive capacity of production systems, for the “*significant brake on innovation*” they may induce (van Caenegem, 2003) or the “*museums of production*” they may create (Bowen & De Master, 2011). However, several authors have shown that the innovation processes along the GI implementation and running may also have positive impacts (De Rosa *et al.*, 2015; Fournier, 2015; Barjolle and Paus, 2007). GIs are sometimes used specifically to introduce and develop local innovations (Durand and Fournier, 2015; Mancini, 2013).

In light of the case studies, we analyse GI processes as institutional innovation, as defined by Hargrave and van de Ven (2006) and Raffaelli and Glynn (2015). They encompass new rules and relationships between local actors and their environment. These new relations often lead to technical innovations. GI process may then appear as a “multi-actor innovation platform”, developed to create and share knowledge (FAO, 2016).

The two case studies have been done during master thesis internships, in the frame of the FAO study of the economic impact of GIs. Each case has been studied during 2-4 months, and 30-50 semi-structured interviews have been conducted (Charbonnier, 2015; Michelotto-Pastro, 2015).

## Main results

### Penja Pepper

Penja pepper is cultivated in the Littoral region in Cameroon. The GI process took place under the PAMPIG[3] project, which started in 2008 under the African Intellectual Property Organization (OAPI) leadership, involving Cirad and the French Development Agency. The GI “Penja Pepper” was officially registered as GI at the OAPI level in 2013.

Pepper is not a traditional Cameroonian crop. Important plantations have introduced it in the 1950s. Until 2000s, the production stayed at this plantation level. The increase in pepper prices at the beginning of this decade had led local peasants to introduce pepper vines in their farms, developing a basic technical itinerary. Alongside, some local early entrepreneurs developed pepper plantations and adopted the technical itinerary developed within the historical plantations. With the support of research centers and thanks to sharing of experience between planters, a new technical itinerary has been set up from the mid-2000s, more labor and knowledge intensive and using chemicals inputs. It is now required for GI production in the CoP.

Since the GI process has started, this new technical itinerary has been popularized among GI producers widely and to a lesser extent among non-GI producers. It deeply positively influences both the efficiency and quality of the production.

The GI producers’ organization has catalyzed these technical and institutional innovations, with the creation of an inter-professional body gathering committees for producers, nursery and retailers, inducing new relations between these value chain actors, to discuss and agree on the GI production and marketing strategy (Charbonnier, 2015).

### Wines from the Vale dos Vinhedos

Vale dos Vinhedos is in the Serra Gaucha Region in the south of Brazil. A traditional table wine is produced since the 19th century. In 1995, after a first qualification process of the local production, wine producers and other local actors created the “Association of Producers of Fine Wines of the Vale dos Vinhedos” (APROVALE) with the initial aim for promoting the region and its wines. With a strong support from Embrapa[4], this organization that gathered producers and tourism operators, apply for a GI registration for wine of Vale dos Vinhedos, which became one of the first GIs registered in 2002. The code of practices includes technical innovations compared with local practices, but it has been widely adopted.
During this phase, strong governance has been established among producers. Various grape producers have created their own wineries, increasing quality of wines and producers' income. There was an important territorial development with the wine tourism development, APROVALE facilitating the interactions between the wineries (26 of its members) and the tourism enterprises (43 members). Upgrading of the local infrastructure and a diversification of activities did occur.

After that, a change from GI to a more qualitative (and exclusive) Denomination of Origin created some dissensions, but territorial development continues.

In this case, the institutional innovations started with the creation of APROVALE, which gives the producers a new role in the regional identity promotion, and has been strengthened with the GI process that gives them a new role in defining specific production and marketing rules for their wines (Michelot-to-Pastro, 2015).

## Lessons learned

Both cases illustrate the efficiency of GI process in the diffusion of technical innovation in terms of rapidity (a few years) and level of changes (important differences between before and after in the production practices), thanks to institutional innovation. GI created a form of multi-actor innovative platform, giving new or enlarged roles to the value chain stakeholders and especially the producers, but under the influence of facilitators and public authorities, which provide the necessary knowledge on new technology and organizational device (Durand and Fournier, 2015). GIs appear then as efficient booster of innovation, being able to convince local stakeholders to adopt new practices, whereas other kinds of development projects do not meet such successes.

However, these two cases radically differ in terms of diffusion scale in terms of number of producers concerned, validating some “classical” factors regarding innovations’ successes and failures, as an interesting cost/benefit ratio and a scale effect.

Finally, the objectives of the innovation processes may be diverse, and are not always oriented towards sustainability. GI construction is a negotiation process between local stakeholders, the final consensus being strongly dependant on the existing power relations. Support organizations have then important roles to play: to equilibrate these power relations and to highlight the stakes and the potential consequences of the decision taken in terms of systems’ sustainability.

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Michelotto-Pastro Giovanna, 2015. *Evaluation of the economic impacts of geographical indications. The Brazilian cases of shrimps from the Costa Negra and wine from the Vale dos Vinhedos*. Mémoire présenté pour l'obtention du MS IPAD de Montpellier SupAgro, 54 p. + annexes.

Moschini G., Menapace L. & Pick D., 2008. Geographical indications and the competitive provision of quality in agricultural markets. *American Journal of Agricultural Economics*, 90, 794-812.

Raffaelli R. and Glynn M.A., 2015. Institutional Innovation: Novel, Useful, and Legitimate, In: Shalley C.E., Hitt M. A. and Zhou J. (eds) *The Oxford Handbook of Creativity, Innovation, and Entrepreneurship*, Oxford University Press.

van Caenegem W., 2003. Registered geographical indications. Between intellectual property and rural policy - Part I. *The Journal of World Intellectual Property*, 6(5), 699-719.

ETH Zurich, Sustainable Agroecosystems Group; VetAgroSup, Clermont-Ferrand; Montpellier SupAgro and the School of Agricultural Studies of Angers (ESA) within the specific framework of the Food Identity MSc.

Futog cabbage, Serbia – Taliouine Saffron, Morocco – Manchego cheese, Spain – Ryukyu Awamori liquor, Japan – Darjeeling Tea, India – T'ete de Moine (cheese), Switzerland – Penja pepper, Cameroon – Vale do Vinos wine and Costa Negra shrimps, Brazil – Colombian coffee, Colombia – Kona Coffee, Hawai'i, U.S.A.

Projet d'Appui à la Mise en Place d'Indications Géographiques

Embrapa is the Brazilian Agricultural Research Corporation, under the aegis of the Brazilian Ministry of Agriculture.
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Session 8

*Participatory Guarantee Systems (PGS):*
*a value chain innovation to boost*
*smallholder quality management*
# Collaborative short food supply chain to make market inclusive for smallholder farmers: case of participatory guarantee system (PGS) in Vietnam

Van Anh Thi Truong<fnref n="1" />

With the majority of the world's rural poor engaging in agriculture as 75% of the world's poorest – about 880 million men, women and children-depend on agriculture and related activities for their livelihood, agricultural globalization is arguably the single most important global partnership for poverty reduction.

Whilst free trade systems increase the opportunity for agricultural production this production needs to be competitively produced both in terms of cost of production and in terms of meeting consumer demand. This is even more challenged in Vietnam where increasing agriculture factor productivity of land and labor is offset with the highly fragmented production systems due to the size of smallholder land holdings as well as the multiple plots that many smallholders rely upon. To enable the geographic expansion of value chain participation that meets a specified safe food standard, import standards in sufficient volume requires the coordination of a large number of producers. Therefore, small farmers are facing the high risks of exclusion of the high-value products supply chain due to the costs of coordinating production and the adoption of quality standards and certification system.

The Asian Development Bank's TA 8163: "Implementing Core Agriculture Support Program in Greater Mekong Subregion" promotes innovative agribusiness and farm management system to address these constraints and one of them is to adopt collaborative local supply chain using community based certification such as those that apply IFOAM' participatory guarantee systems (PGS). This report summarizes the findings of the TA' research group on the effectiveness assessment of PGS in Vietnam regarding as a coordination mechanism to establish inclusive collaborative supply chain for smallholders.

In 2008, the Agriculture Development Denmark Asia-Viet Nam Farmers Union (ADDA-VNFU) started working on organic vegetable value chains with a group of ten women farmers in Thanh Xuan Commune, 40 kilometers north of Hanoi. PGS is a community-based certification system that organizes farmers into groups and coordinates regular peer reviews or inspections of their members. The groups then come together and connect to consumers, traders, local officials, agronomists and NGOs working in the area. The groups are responsible for making certification decisions, maintaining the PGS standards and procedures, issuing approval seals, assuring compliance with ministry regulations, and publicly promoting the PGS system. Most of the work is conducted on a voluntary basis, which brings down the cost dramatically.

Several publications present the social and environmental benefits of farmers participating in this alternative system; particularly smallholder farmers who in principle adopt organic farming but cannot afford costly third-party certification system. However, less is known about the PGS as a coordination mechanism to form small farmers in groups to link them with market. Based upon works of other scholars on value chain development and organic certification, the study finds critical factors of PGS that make market work better for smallholder farmers. At the heart of value chain development is the effort to strengthen mutually beneficial linkages among chain actors so that they work together to take advantage of market opportunities. The internal connection in value chain is especially important to assess how able it is to link producers to the market.

In most of the cases, smallholder farmers cannot establish the necessary linkages to participate into the value chain due to the high transaction costs presented by high standards and food quality. One option to reduce transaction cost is to use collective action to take advantage of the existence of the inverse

<footnote n="1">1. Asian Development Bank, Implementing Core Agriculture Support Program in GMS countries, Vietnam.</footnote>
relationship between scale and transaction costs. Collective action including farmer organizations and cooperatives can be oriented toward improving production, marketing, or livelihoods in general. When trust, learning, and benefits are shared among chain actors (vertically and/or horizontally), there is a greater likelihood of generating collective efficiency and scale. For instance, the more that suppliers can be trusted to meet quality, quantity, and time requirements, the less time and money need be invested to monitor performance. However collective action brings with it a whole new set of transaction costs such as bureaucratic costs, mismanagement and free riding behavior. It is showed by many case studies that while there are examples that small farmers successfully participate in the market through collective action and institutional support, still there are many cases that farmers' income is not improved upon participation in a group.

Farmers first produced organic products due to their concerns on their health and environmental effects of chemicals used in conventional farming. Their practice is based on their local understandings of what constituted organic. Certification of organic production was a response to growing consumer interest in organically produced food during the 1960s and 1970s; as consumers and retailers needed to find a way of clearly identifying foods produced by farms that met clear standards. In other words, certification was generally unnecessary in cases of direct marketing in which consumers know and trust producers. As the products of organic agriculture moved into more anonymous markets, certification and inspection developed and became an industry with the involvement of several institutions. Multiple organic standards, private and commercial organic certification organizations emerged since the certification become value added, bring price premium to producers and retailers. However, these layers of standards continually move the templates that shape certification further and further from farmers.

PGS with its characteristics can help to address these challenges to include small farmers into high-value markets. PGS does more than an ordinary farmer group. It is a system where farmers are committed to follow agreed and locally adapted standards, quality control and certification system. PGS allowed a scope for local-level flexibility in setting standards based on basic organic standards set by IFOAM. It is also a system providing mutual trust and mutual control through trainings, peer reviewing, knowledge and skills exchanges and internal group inspection.

The direct linkages between Thanh Xuan PGS farmers with retailers help to establish a Collaborative Short Value Chain (CSVC) and to reduce intermediaries. Pre-adopting PGS without post harvesting activities, the raw products has been gone through farmers, local traders, wholesalers, retailers and final consumers in Hanoi market. With PGS adoption, farmers harvest the vegetables, sorting, handling, packaging and selling to retailers who have their own shops in

Hanoi markets. In this way, farmers create more value added and gain more profits. The data in 2011-2015 shows that each farmer get 38-41% income increased on average. Retailers participate in the system having frequent interaction with farmers, participating in the quality control and inspection and able to share production information with consumers. Therefore SFC also contribute significantly to make a transparent food chain that means the citizen who eats the food know exactly where the food comes from, how it has been produced, what the farming practices has been used.

In 2015 there are 245 PGS farmers producing 372.4 tons of organic vegetables on nearly 20 hectares nationwide. The average growth rate of total PGS vegetable sales from 2011 to 2015 is 35.3%. Currently there are two main PGS sites in Vietnam: PGS Thanh Xuan located in the Red River Delta region and PGS Luong Son located in the Northwest region. The differences in geography, social and natural conditions leads to the different performance of PGS groups between two sites. Compared the average yield of the period 2011-2015, production yield of PGS Thanh Xuan although following organic farming practice is 26.5% higher than production yield of conventional vegetable farming of Red River Delta while production yield of PGS Luong Son is 50.9% lower than production yield of conventional vegetable farming of Northwest region. It reveals that the soil and water quality, distance to the market, education of farmers, group leader's capacity and time spending on farm are critical factors for success in organic farming in general and PGS organic farming in particular. PGS as a form of collective action plus with
quality control, peer reviews and transparency is potentially beneficial to adopters but it is unnecessarily a guarantee for success. In term of land returns, both PGS Thanh Xuan and PGS Luong Son gain significantly higher return per hectare compared to the average land return of country planting areas. In 2014, while one hectare of planting area brought 79.3 million dong on average, one hectare of PGS vegetable brought 371.8 million dong and 114.5 million dong in Thanh Xuan and Luong Son, respectively.

Adopting PGS bring farmers an opportunity to have horizontal linkage with other farmers and at the same time vertical linkage with traders and retailers in the high quality vegetable value chain. In term of market linkage, the data collected from 2013 to 2016 shows that there are two main supply chain channels in place: (i) PGS sub-groups of around 10 farmers per group sell their products to retailers/traders in group basis, then the traders will sell PGS products at Hanoi market or to restaurants through their own stores or their own online marketing channels. The products are sorted and transported in bulk without packages to retailers who then use their own package and labels for the vegetables; (ii) direct sales where PGS sub-groups join as farmer cooperatives and the cooperative make transaction directly with retailers and individual consumers in Hanoi. The products are sorted and packaged with cooperatives labels and information and later transported to retailers.

In 2016, around 70% of the total vegetable sales are going through group-contract with traders while the remaining (28-34%) are sold through farmer cooperatives (direct sales). From 2013 to 2016, there is not much different in annual growth rate of the sales to traders and direct sales. Cooperative with its legal status as private entity is expected to be more beneficial to its members in terms of financial resources and input providing and outputs services compared to farmer groups, yet none of the farmers in sub groups want to move to cooperatives during past 4 years. There are several reasons including (i) people are risk adverse of changes, they rather stay with a system that they know well, (ii) the group of 10 farmers can do a better job of getting agreement among its members on its decision than a much larger group, (iii) traders are better at market facilitator compared to farmer cooperative.

It has been confirmed that farmer cooperative can take advantages of government and development organization programs, get access to financial support, gain economies scale in term of input supply and stronger bargaining power in trading with buyers. However, there is a need to strengthen cooperative leaders' capacity so that it is able to provide better services to its members as well as handle better the large groups of farmers in term of coordination in production, quality control and trading.

PGS is proved to function as inclusive collaborative short supply chain for smallholders; however, there are significant challenges with the system. The movement of the function played by middlemen or intermediaries back to producers. Successful association required management and entrepreneurial skills that many small producers with little education are less likely to have. Group leaders' capacity, strong commitment and responsibilities of PGS members as well as external support from public sector, private sector and development organizations are key determinants for success. In later 2016, the research team expects to get quantitative analysis of transaction costs and economic benefits of PGS adoption from questionnaire survey are being implemented. This analysis using propensity score matching to access PGS impacts will provide overall picture of economic cost of PGS and how it manage and develop market linkages. It aims to provide input to policy development for building safe food value chains in the fresh produce markets – both domestic and regional markets – that integrate smallholders (through horizontal coordination) and then link these to market demands (through market based vertical business relationships).
# The building of agri-chains toward sustainable community development: experiences of applying PGS for organic and diversified agricultural production in Ben Tre Province

Mayu Ino<fnref n="1" />

## Introduction

Traditionally most of the farmers in the world managed small-scale land by using local resources in a sustainable way. However, due to the expansion of the industrialized agriculture and globalization of markets, cheap agricultural products were brought ant sent across the border in many countries. This has created massive impacts on traditional small-scale farmers who used to produce small amounts of many different agricultural products and sold the surplus mainly in domestic markets.

In recent years, small-scale farmers also adopted the cultivation of cash crop, such as maize to survive in the era of changing international and domestic market demand. They started using F1 hybrid and GM seeds, chemical fertilizer and pesticides, therefore, production costs rose dramatically. The effects of climate change also became notably apparent, but traditional wisdom that has been inherited from ancestors, cannot often solve these emerging problems. Under these circumstances, small scale farmers cannot harvest enough to maintain their life in rural area and the number of farmers with a burden of indebtedness is rapidly growing.

In addition, natural resources which played the role of 'safety-net' for the poor households of the region, are degraded and disappearing through the residual effect of chemical pesticides, fertilizers and antibiotics. This problem made it difficult for poor households and small-scale farmers to obtain the resources necessary to live, such as food, medicine and fuel. Many young people and women in rural area go to factories and cities in the search of cash income. It has resulted in weak human relationship among family members, relatives, and neighbors in rural areas.

On the other hand, though the consumers can purchase cheap agricultural products, they have to worry about the impact of pesticide residues and chemical food additives on their own and family members' health. Because the process of production and distribution is not transparent. The consumers have only little information about agri-products that they buy and eat every day. Many children living in the city don't know how the vegetables and chickens are grown. Building mutual trust and cooperation among producers and consumers is urgently needed. Education must also be provided for children to make them aware about the relationship of humans and nature, as well as origin of our food production, processing, storage and transportation system for building the basis of sustainable and equitable development.

The same problems are evident in Vietnam. In Vietnam, nearly 70% of the population live in the rural areas, and around 50% of the population is engaged in agriculture. Vietnam is known as one of the world's leading exporter, of products such as rice and coffee. However, most of farmers are small scale growers and the lives of these farmers has not improved very much. One of the reasons is heavy dependence on the use of chemical fertilizer and pesticides or herbicides and a narrow selection of crops and vegetables. It has led to high cost of production and the degradation of natural resources such as soil and water and narrowing of biodiversity. The low quality of agri-products and lack of processing technology, are also serious problems. As for the consumers, the quality of food is the most important issue. Because many scandals regarding food safety has occurred in Vietnam, the consumers cannot trust the information available to them about agricultural products.

<footnote n="1">1. Seed to Table (STT), Tokyo, Japan.</footnote>
In this paper, I report about the project for environment-friendly sustainable community development by enhancing cooperation among different stakeholders through the application of Participatory Guarantee System (PGS) in Ben Tre Province located in Mekong Delta. In this project, farmers, distributors, local government, schools, chefs and consumers work together to protect the natural environment and biodiversity of the region, and to improve the lives of smallscale farmers, help them deliver good quality agricultural products to the consumer, and ensure a safe environment and food to the children, our next generation. Thus, we aim to continue to build the foundation for sustainable society and environment.

## Applying PGS for sustainable community development in Ben Tre Province

Ben Tre Province is located in the most downstream of the Mekong River. The primary activity is agriculture. Most of farmers manage a small piece of land, the average area of a farm is between 0.1ha to 0.3ha. Main crops are rice and coconut, integrated with vegetable production and animal husbandry. Recently, intensive shrimp farming is being widely practiced, and pollution of natural environment has become a serious problem. Furthermore, due to a serious salt pollution as the effects of climate change, people in Ben Tre province have been struggling to procure drinking water during the dry season.

Seed to Table has been working with Agricultural Extension Center (AEC) of Ben Tre Province to implement Organic Farming Project, aiming at improvement of the livelihood of small-scale farmers and simultaneously protecting local natural resources since 2012. PGS was introduced and applied in Ben Tre Province since 2013. Till date, two Inter-groups and a Coordination group have been established, with five farmers group including 25 small scale farmers.

The members of the Inter-group and Coordination group include representatives of farmers' groups, agricultural professional organizations such as AEC and Plant Protection Office, Local government agencies, Department of Education, traders, and hoteliers. Regular meetings are organized and plans and problems are discussed.

The AEC plays an important role in our activity. They have been providing a series of trainings and advices on organic farming technology, ecosystem and biodiversity, and pest and disease prevention. Especially, The AEC staffs served as the representative of Coordination Group and Inter-groups to manage all activities regarding PGS for improving the quality of organic vegetables as well as securing transparency to keep consumers' trust on PGS organic vegetables. They are also responsible for coordinating different stakeholders such as government agencies and educational institutions.

In addition, the Communist Party and People's Committee of Ben Tre Province have started promoting organic farming since early 2016. For example, in cooperation with the hotel in Ben Tre Province, People's Committee of Ben Tre Province has tried to introduce various dishes made with organic vegetables, produced by the farmer groups that are participating in PGS, at the dinner party held by government agencies. Or Department of Agriculture and Rural Development in Ben Tre Province is preparing to organize regular Farmers' Market to introduce organic vegetables to people living in Ben Tre Province.

In Binh Dai District, where organic farming has been practiced since 2012, some farmers groups have been making effort to grow coconut and banana organically to diversify organic products. Furthermore, Seed to Table collaborates with chefs and experts of food processing in Ho Chi Minh City to develop sweets and another processed food by using organically grown coconut and banana. In this activity, we encourage poor households, especially women participate to obtain cash income for improvement of their livelihoods.

Another activity is providing environmental education for children. We cooperate with Department of Education and the orphanage in Ben Tre Province to establish a school garden in order to carry out a training for children. Some events are also held to exchange ideas and experiences with local people on organic products and environmental protection.
## TEIKEI - building mutual trust between farmers group and consumers group

In Japan, a producer group directly supplying agricultural products to a consumer group is very common. This type of cooperation is called TEIKEI. In Vietnam, TEIKEI has not been common yet. If there are relatives in rural area, consumers in the city asked them to send agricultural products on a regular basis. In PGS, it is widely applied that organic vegetables are distributed by traders. Because it is easy to manage the production and sales. However, in the case of PGS Ben Tre, the relationship between a local distributor and farmers groups was not so well, and farmers group were not able to sell their organic vegetables. We urgently needed to expand the sales channels in addition to cooperation with traders.

Under these circumstances, we had an opportunity to participate in the farmers markets that are regularly held in Ho Chi Minh City. The great thing of this event was promoting direct sales by producers. Three producers' groups from PGS Ben Tre joined and introduces their organic vegetables to consumers. The members of farmers' group learnt about the information on organic vegetables, about which the consumers were concerned. After joining first market, farmers from Ben Tre Province had more self-confidence and were motivated to produce good quality of organic vegetables. Through participation in this market, organic vegetables of PGS Ben Tre was gradually known and accepted by people living in Ho Chi Minh city. Every time, 200 kg or organic vegetables were sold out in one day and a lot of repeat-buyers began to enjoy the organic vegetables produced by the farmers of Ben Tre Province.

In this process, we met many traders and consumers who wanted to buy organic vegetables of PGS Ben Tre and discussed further cooperation. Of these, a Bin Dai District-born woman established 'Saigon Green Family Group (SGFG)' and started buying organic vegetables directly from Loc Thuan farmers group every week. The remarkable thing about this group is close communication with Loc Thuan farmers group, Inter-group and Seed to Table. For instance, every time the organic vegetables arrived, they checked the quality and packing method and if there were problems, told Loc Thuan farmers group, Inter-group and Seed to Table immediately and discussed about the best possible solutions. Sometime the members of SGFG with their children visit Loc Thuan farmers group to exchange ideas and discuss for further cooperation.

Through a partnership with this group, Loc Thuan farmers group try to improve the quality of organic vegetables and carefully pack vegetables and deliver to SGFG. The price for selling to SGFG is 60% higher than the price sold to traders. Currently, Loc Thuan farmers group built a good mutual trust with SGFG and help each other as family members. Other farmer groups also feel attracted to this method and have begun to seek a partnership with consumer groups.

## Future plan

The most interesting part of PGS is building transparent and fair agri-chain by cooperation among different stakeholders. PGS is built based on mutual trust and self consciousness of people who participate. It is possible to issue a certificate of organic agricultural products at a lower cost, while also contributing to sustainable development of the region.

Future challenge for PGS Ben Tre is enhancing cooperation not only among farmers groups and traders, but also between consumers' and farmers' groups. Because the experience in Ben Tre Province showed that if a farmers group can meet a consumers group that sincerely hoped to understand about farmers' situation, environmental issue, and to cooperate with farmers for a long time, farmers would take responsibility with the quality of their product and their capacity would be improved. Also, for consumers, they can see the 'face' of producers and directly communicate with them to understand more deeply about what is the relationship between consumers' health and environmental protection.

In addition, developing food processing is necessary for utilizing all organic agricultural products, increasing income of small-scale farmers as well as creating jobs for poor women in the region. Through Inter-groups and Coordination Group, building and enhancing a relationship among different stakeholders is crucial to develop a strong foundation towards an environment friendly, sustainable community development.
I believe that these activities and efforts will contribute towards the achievement of some goals out of the 17 points declared as the United Nations' Sustainable Development Goals, such as No poverty, Zero hunger, Decent work and economic growth, Responsible consumption and production, and Life on land. At the same time both technical skills and feeling of community cooperation, especially among the participating women develops. Seed to Table will continuously work together with people in Ben Tre Province for building an eco friendly sustainable community.
# Participatory guarantee system (PGS) the sustainability assessment for vegetable in Red River Delta – Vietnam

Dao The Anh<fnref n="1" />

The study focuses on the suitability of PGS structure and organization in Vietnam where smallholder farmers account for over 80 percent of agricultural producers. The manner of PGS organization is suitable for the production conditions in Vietnam because participatory approach enables farmers to run the system by themselves. The farming households have been provided with production knowledge, inspection skills, commercial skills, and negotiation skills. PGS has shown its economic efficiency over the years, with higher income compared with the conventional vegetable production. PGS-certified vegetables bring about US$100-200)/360 square meters/crop higher benefit than vegetables grown in conventional way. Meanwhile, the certification cost is low and affordable to the smallholder farmers about 10-15 ÚDS/household/year. Especially, distributors in the PGS network also join to share the burden of certificate cost about 50 USD/year. PGS has also established connections among organizations of producers, distributors and consumers. Thanks to PGS application in vegetable production, PGS has built up trust and attracted more stakeholders to the network. Currently PGS has been expanded in the existing production regions by local government finance and policies to improve the effectiveness of agricultural production.

<footnote n="1">1. Centre for Agrarian System research and development (CASRAD) – An khanh, Hoai duc, Hanoi, Vietnam</footnote>
# Scaling up sustainable food systems in a local context: an experience of the freshveggies PGS scheme in Wakiso, Uganda

Julie Nakalanda Matovu<fnref n="1" />

In pursuance of sustainable livelihoods through organic agricultural production systems, Freshveggies, Uganda, has undertaken yet another inclusive approach to develop local markets for their organic produce within their PGS (Participatory Guarantee System). Amidst the existing challenges Uganda faces towards sustainable agriculture development, smallholder farmers have limited access to fair markets in this liberalized economy. Without guidelines on pricing agricultural produce, farmers often sell at very low prices. In the PGS approach; producers are able to reach out to consumers directly, respond to the consumer needs and these in turn with continuous interaction are able to appreciate the entire food production system in reciprocal. Such local innovations are in line with the global goals for sustainable development. Following established organic standards, this directly contributes positively to reduction in poverty, hunger and inequalities while also promoting economic growth at grassroots; sustainable cities and communities; responsible consumption and natural resource conservation for life on land and below water.

Since its inception, the initiative promotes healthy feeding and sustainable farming practices among members, but also sustainable household incomes from sales and delivery of fresh organic produce to consumers in the Kampala business district and the respective farming communities. Our vision of **"safe food in the garden and on the plate"** aims to have economically empowered, motivated and healthy farming communities able to produce and supply organic food to sustain a happy and healthy clientele in Uganda.

Our clientele has expanded currently to 50 households (about 200 consumers). To respond to the growing demand and the need for scaling up as reflected in the recently published findings by FAO (2016), the scheme has undertaken a Participatory Market Research (PMR) using a tool adopted from different existing marketing models but customized to suit the PGS mechanism. Hence, Freshveggies has targeted 250 households and aims to start with the first 100 households within the same geographical location of the Wakiso cluster, who commit to buy fresh produce directly from Freshveggies. Wakiso being a peri-urban district soon transforming into a city is a now a home to many new young families and old existing ones having about six(6) people each on average. This will see freshveggies serve about 600 new consumers within the next four months to scale up its consumer base and income among participating members in addition to the existing clientele. Using the findings by FAO (2016), coupled with the inaugural one-year MAIL (Market Access to Improved Livelihoods) development plan implemented by two participants (Julie N Matovu – Freshveggies, Jane Nalunga – NOGAMU, [under the ending IFAD-funded three-year INOFO capacity building project, implemented by IFOAM and local partners, has embarked on planned production with appropriate technologies such as drip irrigation and intensive knowledge sharing through the INOFO trainings/interactions to produce the highly demanded scarce high value fresh organic fruits & vegetables within the communities of Wakiso District. Freshveggies has also attracted a membership of youth to boost production. In addition to the PMR, under Juls Consults, an affiliate of Freshveggies another "product" of establishing organic home vegetable gardens has been developed and well received to reach out to more consumers and avert the logistics limitations. The package has, an assortment of seedlings, a training session on basics is offered to a client to raise home-grown organic vegetables for a whole season of continuous harvest, while receiving free technical advice on management during this period. We are now recruiting interested youth to join the field

<footnote n="1">1. Freshveggies PGS, Kampala, Uganda.
Email:freshveggies2012@gmail.com</footnote>
training team that is technically able respond to growing demand, while improving consumer knowl-
edge, awareness and appreciation of sustainable food systems. The later, coupled with the on-going
Participatory Market Research are yielding promising results which we would like to share our experi-
ence, learn at this conference.
# Smallholder vegetable quality guarantee challenges of VietGAP adoption and alternative Participatory Action Research (PAR)

Pham Tho<fnref n="1" />

Vietnam has been facing a food safety crisis. In response, since 2008 Vietnamese Government has promoted a voluntary standard named VietGAP (Vietnamese Good Agricultural Practices) based on HACCP, ASEANGAP, GlobalGAP, and Freshcare (MARD, 2008). VietGAP has been perceived as unappropriated to smallholders due to technical, financial and marketing constraints. Above of those, VietGAP vegetables, which are certified by a third party; however, the certificate has not obtained a good reputation due to lacking of the transparency of accreditation as well inappropriate practices of the chain stakeholders. Low trust of consumers on VietGAP vegetables is also originated from their low trust on a weak system of quality control. Vegetables, which are mostly produced by smallholders but they are also excluded in the quality control regulations of Vietnam. Smallholders do not have to comply to compulsory technical requirements for vegetables (QCVN 01-132:2013/BNNPTNT, National Technical Regulation on Fresh Vegetable, Fruit and Tea – Conditions for Ensuring Food Safety in Production and Packing, 2013) while most farmers producing vegetables are at a small (occupying around 0.42 ha in Red River Delta of Northern Vietnam (VAAS, 2014)). Addition to that, sanctions for unsafe food producing and trading are not stringent. Obviously, once compulsory safety ensuring is not reached, a voluntary VietGAP vegetable would have to strongly compete with conventional ones in the market. As a result, most VietGAP vegetables with external supports have not been sold in high-end market at higher prices; have not improved smallholder’s income, thus unstable

That context leads to a paradox in which farmers producing safe guaranteed vegetables could not improve incomes, traders would like to buy guaranteed vegetables but reluctant to trade certified products if they could not supervise the production, consumers demanding on safe foods but not willing to buy certified vegetables. In such a context, transparency is a key to the success. Related to that, safety, the most demanded characteristic, and one of credence attributes (defined as *environmental benefits, animal welfare benefits, social welfare extras, and special health benefits*) which are only known by producers and unknown by consumers or consumers could not check (n.a, 2010) should be well illustrated and trusted by consumers. In reality, there have been some effective alternative approaches to VietGAP such as PGS organic vegetables in the framework of programs of NGOs or specialist-shop-retailers coordinating the chain with groups of small farmers in quality guaranteed vegetables producing and marketing.

This study was conducted in the framework of a Ph.D degree (2012-2016) aiming at defining challenges of VietGAP adoption, using Participatory Action Research (PAR) as an alternative to VietGAP approach, which was designed and supported in order to apply in the chain. PAR was used to involve all key stakeholders in the process of choosing, applying and maintaining a suitable “standard” or “protocol” to ensure vegetable safety/quality and agreeing on marketing. By doing so, the study provides an insight to the issue of improving the safety of vegetables in Vietnam through a broader view of “standards” coincide with value chain development, which focuses on all key processes and stakeholder’s perspectives. Therefore, the study contributes to scientific knowledge of PAR application to response to the problem of a particular context of unsafe vegetables in Vietnam and improves policy making procedure in a long term. In a short term, the alternative approach will bring incentives to involved stakeholders; and finally, the whole community will be benefited.

<footnote n="1">1. University of Canberra, Canberra, Australia.</footnote>
# Conceptual framework and methodology

## Research processes

PAR is a process of collaborative research, education and action used to gather information to use for change on social or environmental issues. It involves people who are concerned about or affected by an issue taking a leading role in producing and using knowledge about it (Pain, Whitman, Milledge, & Trust, 2010). Pain et al. (2010) and (Kemmis & McTaggart, 2007) indicated that there is a continuing cycle of engagement moving through four phases: information gathering, planning, acting, and reflecting.

Time, financial and other limitations of the study has led to an application of PAR only in two phases (information gathering and planning). Value chain approach was also employed in those phases. The study design is described as below:

## Stakeholder planning workshop

The aim of the workshop is to gather interested stakeholders of the chain to discuss how to improve quality and income of vegetables for smallholders through 2 main sections:

* Information providing

* Discussion

Information presented in the stakeholder workshop would consist of two main messages: the situation of VietGAP adoption and other types of quality guarantee by standards or mutual trust; and what stakeholders would like to apply in their chain (focusing on types of guarantee and marketing strategy).

# Main results

## Literature insights

Different types of quality guarantee

* Safety and quality, credence characteristics of food quality and the role of food standards and certifies.

* Overview of different types of food standards: public and private, compulsory and voluntary.

* Standards and Schemes

GlobalGAP – a schemes with "numerical standards" consisting of a limited amount of chemical residues and "process standards" having production procedure requirements and all written recording needed. Food schemes include food standards and also certifying and enforcing processes and sometimes the use of those two types are exchangeable.

* Third party certificate

A product certificate usually issued by a third party is a document to promise that the product meets specific standard criteria; therefore, the third party certificate is usually knowns as a mean to persuade buyers that the product quality is assured (Dankers & Liu, 2003, p. 8).

* Internal control system

* Participatory Guarantee System

* Standards and value chain governance:

Some private collective voluntary standards like GlobalGAP require a coordination of different stakeholders at different stages along the chain as well as a coordination of the same type of stakeholders (Hammoudi, Hoffmann, & Yves, 2009).

* Limitation of standards, specifically GlobalGAP to smallholders: Exclude smallholders in the export market.

* Opportunities to linking smallholders to market by upgrading quality
* PAR overview and application worldwide, strength and weakness

* VietGAP in a particular context of Vietnam (market situation, food law, and regulations)

## Reasons for the challenges of VietGAP adoption

* Weak food safety control system: Food law, regulation (compulsory), ability to control especially the compulsory regulations exclude smallholders.

* VietGAP is a top-down approach: Comparison of VietGAP and GlobalGAP. Similar articles of “numeric standards” and “process standards”, different in demands and management: GlobalGAP is from retailer’s demand and VietGAP is from the Government strategy for food safety assurance.

* Governance of the chain: When applying VietGAP, the governance of the chain has not changed, still characterized as “spot market” that could not continue to maintain quality control and marketing of improved quality products when withdrawing supports from the Government.

* Technical, financial and market access difficulties faced by small farmers: costly, complicated, selling to conventional markets...

* Retailers' perspectives are not only buying VietGAP products

* Market situation including consumer's demand: Consumers have more trusts on market locations and retailers. Condition of land and water, pesticides and chemical residues are more prioritized. Therefore, in Vietnam context, complying public compulsory standards is more recommended than VietGAP, which is based on GlobalGAP ensuring safety and other environmental and social requirements.

## Alternative approaches

The key message from the challenges of VietGAP adoption is that food safety is difficult to solve by setting a voluntary standard to the chain to comply. It should be done by compulsory regulations or standards. If so, any types of voluntary standards and quality guarantee could be eligible to choose. In the context of low trust, the crucial goal of a voluntary standard is to create a transparency of the quality assurance process and to share benefits among involved stakeholders from an agreement on marketing plan.

### Cases of building a transparent system within the chain

* Safe vegetables from farmer's groups linked to high-end market: No certificate issued but mutual trust and good coordination of retailers

* PGS organic vegetables and specialist shops

* Non-standard and moral trust: Online, direct selling, retailers hiring land and labors

## Stakeholder's workshop results

### Process of the workshop

* Information providing

* Group's discussion

Group 1: Producers – Group 2: Producers, wholesalers – Group 3: Retailers and consumers

## Questions to the groups

* The kind of quality standard do you think is best and why?"

* For developing quality standard chosen from morning section – What are the different ways this could be achieved? How do you get there?"

## Outcomes

"Safe standard", which is no longer the public voluntary standard, was chosen by small farmers and other traders to apply in the chain. "VietGAP" was chosen by the only one private production company
who has more than 5 ha of producing vegetables and other products. "*PGS organic standard*" is the
most preferred standard as no chemicals and pesticides are used during production.

To achieve the goal of quality guarantee, small farmers and traders agreed on:

* Improve marketing and advertising skills

* Transportation mean needs to improve: cooling vans

* Clear information of vegetable origin and ensure the transparency of the whole process from production and marketing.

* Post-harvest should be improved to reduce lost and quality.

*Implications*

* VietGAP adoption has faced difficulties due to multiple causes. Technical, financial and marketing constraints might be foreseen as the approach of VietGAP is top-down, designed and promoted by the Government.

* The involvement of stakeholders during VietGAP application is passively receiving supports or plans from the program, leading to a failure of many models after subsidies are withdrawal.

* The success of current alternative approaches is from active involvements of stakeholders in linking small-farmer to high-end market, less costly process of quality assurance (mostly non-third-party-certified products).

* PAR application showed that VietGAP is not preferred by smallholders and retailers but only big scale company.

* From the discussions and decisions in PAR process of stakeholder's workshop, it is clearly seen that VietGAP is not the only option to ensure safety. The Government should consider other standards or approaches to the problem rather than focusing on VietGAP.

* Successful voluntary standards or other types of quality assurance in smallholder vegetable chain are based on a closed linkage between traders and farmers; sometimes, built up from mutual trust, long-term relationship, which is more credible than a third party certificate.

* Voluntary national standards would not solve the problem of unsafe food; that should be.

* Done from setting and controlling mandatory ones. That will be considered the long-term goal.

* PAR application showed that although retailers are buying non-certified vegetables (like safe vegetables), they still need to get a more informal assurance of the quality.

**References**

Dankers C., & Liu P. (2003). *Environmental and social standards, certification and labelling for cash crops*. Rome: FAO.

Hammoudi A., Hoffmann R., & Yves S. (2009). Food safety standards and agri-food supply chains: an introductory overview. *European Review of Agricultural Economics, 36* (4), 469-478. doi:10.1093/erae/jbp044

Kemmis S., & McTaggart R. (2007). Chapter 10 Participatory action research *Communicatice action and the public sphere* (pp. 284-330).

MARD (2008). *Decision on the procedure of good agricultural practices for safe vegatbles and fruits Quyt nh ban hành quy trình thc hành sn xut nông nghip tt cho rau, qu ti an toàn*. Hanoi Retrieved from http://www.nafiqad.gov.vn/b-van-ban-phap-luat/quyet-111inh-ve-viec-ban-hanh-quy-trinh-thuc-hanh-san-xuat-nong-nghiep-tot-cho-rau-qua-tuoi-an-toan-vietgap/at_download/attachment_file

n.a. (2010). *Credence attributes: Making honesty the best policy*. Melbourne Victoria: Consumer Affairs Victoria, Department of Justice.
Pain R., Whitman G., Milledge D., & Trust L. R. (2010). *Participatory action research toolkit: An introduction to using PAR as an approach to learning, research and action*. Retrieved from South Road, Durham, DH1 3LE, UK: https://www.dur.ac.uk/resources/beacon/PARtoolkit.pdf

QCVN 01-132:2013/BNNPTNT, *National Technical Regulation on Fresh Vegetable, Fruit and Tea – Conditions for Ensuring Food Safety in Production and Packing*. (2013). Hanoi, Vietnam.

VAAS (2014). Chuyn giao tin b k thut trong nông nghip, nông thôn.
# Participatory Guarantee System, a management tool for value chain development – A lesson learnt from Vietnam

Nhung Tu Thi Tuyet<fnref n="1" /> and Nhung Tu

## Introduction

Since VietGAP has introduced by MARD in 2008, less than 0,5% of all vegetables produced in Vietnam are certified by VietGAP. Its may because of cost for certificate too high while the consumers still not trust enough though program under the big support of government,

The certification is the set of procedures from observation, registration, verification, reports and recognition that developed to obtain the guarantee for a specific product. The certification can be compulsory or voluntary depends on the product, the process involved and pertinent legislation. Getting through the certification process, producers obtain the advantages to aggregate value, access products to new markets and stimulate continuous improving in quality. It also help consumer to distinguish more easily between brands, products with the same appearance and different qualities, and provide security and warrant to guarantee the diversification of quality products.

The PGS is a participatory guarantee system already established in more than 50 countries around the world. Started in Vietnam 2008, PGS poses a highly viable solution for quality assurance in agricultural food products produced by small farmers. In support of the local government's intent to improve the overall safety of food in Vietnam and build consumer confidence through the certification products, there are some development organizations operating in the country such as ADDA<fnref n="2" />, VECO[2], Seed to Table[3],ACCD[4] provide interesting models of how farmer compliance organic standards in groups and provide consumers the products with a quality assurance in community certification system that they can clearly identify with trust. These initiatives have successfully adopted what is known as a PGS (Participatory Guarantee System) approach that make small farmer in the organization to produce quality products with fair stable income

## What is PGS?

PGS is a system guarantees the product quality, which involves relevant stakeholders to the production value chain, including the producer, consumer, trader and the Government.. PGS is suitable for small farming households, adaptable to local situations, locally governed by farmers themselves, socially accountable through the cooperation of an alliance among farmers and other stakeholders

Just like third-party certification systems, PGS aims to provide a credible guarantee for consumers seeking organic produce, but the approach is difference in the direct participation of farmers, consumers and other stakeholders in the verification process. Costs of participation are low and mostly take the form of voluntary time involvement rather than financial expenses

## Structure of PGS Vietnam

The PGS has a simple structure consisting of a number of “units”, each having its own roles and responsibilities as illustrated in the following figure and the text below.

<footnote n="1">1. PGS Vietnam, Hanoi, Vietnam.</footnote>

<footnote n="2">2. Agricultural Development Denmark Asia, Hanoi, Vietnam.</footnote>
## The individual farm family

To join a producer group the farmers contact the producer group leader in their area. The main roles and responsibilities of the farmers and their families include:

* Learn the principles and methods of organic farming

* Learn the PGS standards

* Fill in the Farm Management Plan (FMP) and update it regularly

* Make the pledge (and strictly follow the pledge)

## The Producer Group

A producer group consists of at least 5 individual farmers who live in close proximity. The Producer Groups will:

* Make the production plan for the group and to promote the group's products

* Conduct the regular peer review (inspection visits) of all the groups members

* Motivate the group members to achieve goals and objectives of the group

* Ensure equality and avoid conflict of interest between the members

## The Inter - Group

An Inter-Group covers a number of Producer Groups in a particular area. The members include the heads of all Producer Group as well as some outsiders such as consumers, traders, local officials, farmer-trainers or NGO staff, working in the Inter-Group area.

The roles and responsibilities of the Inter-Group are:

* To coordinate the process for farmers completing the FMP's and pledges and to make sure that the members understand the PGS standards

* Keep a database of members and their organic status and production activities that is updated each year

* To coordinate the peer review process

* Take the decisions on certification

* To take action on fraud and non-compliance

* To coordinate the production plans for all Producer Group within the Inter-Group and to promote the Inter-Group's products

* To report annually to the PGS Coordination Group as required

## The PGS Coordination Group

The PGS Coordination Group is responsible for big issues that are common to the Inter-Groups as a whole. The members of the Coordination Group are volunteers who are selected for their technical competence at the PGS annual member's meeting.

Roles and responsibilities of the Coordination Group include:

* Protect the interests of the Inter-Groups, farmers and the PGS

* Maintain and update the PGS organic standards and approve the farm inputs guidelines for inspections and sanctions

* Issue certificates

* Responsible for the management of the PGS seal (trademark)

* Promotions and contact with mass media

Belgium NGO

Japanese NGO
## Action Center for the City Development

PGS Vietnam formed in the functional teams with participation of stakeholders includes farmers, retailers, consumers, Farmer Union/Women Union or any local interest institution... At the local, there are at least 2 producer groups established to create the Inter-group for a linkage between. A system include action plan, regulations, check list, PGS manual guide, logo/seals etc... are developed. Training of inspection, leadership, accounting, planning, dealing and post harvest... are carried out to build capacity for farmers. Peer review process (monitoring/ auditing) which coordinated by Inter-group to take the decision on certification and send to PGS.CC for issue the certificate. In order to protect the PGS seal the Coordination Group will have the right to check the internal workings of both the Producer and Inter-Groups when required. PGS.CC will also issue the certificates and have the right to withhold certification.

## Steps in the PGS Organic Guarantee Process for producer

Certification is open to farmer groups. There is a separate system under the PGS for managing the organic integrity of the certified products along the whole value chain to include processors, traders and retailers. Each step of process is implemented separately by each functional team and managed by the Coordination Group operators. Obtaining certification also allows the use to the PGS seal.

**Step1: Farmer**

The farmer must attend training on the PGS organic standards and then sign a Farmer's Pledge that s/he is willing to follow these standards and the PGS certification procedures.

**Step 2:** The Inter-Group will verify that the FMP is completed sufficiently and then will inform the Producer Group to carry out the peer review.

**Step 3:** To ensure consistency among the inspections, the PGS group inspection checklist must be used.

**Step 4:** Based on the Inspection Checklist reports and other reports (e.g., the soil and water tests), as well as a check on the Farmer Pledges and FMP's the decision is made by the Inter-Group Certification Committee on the certification status of the farm. The decision is sent to the Coordination Group including the actions required to address non-compliance issues.

**Step 5:** The Coordination Group enters summary information for each farmer into the database and sends a paper certificate to the farmer that is valid for 1 year from the date of the inspection visit to the farm.

**Step 6:** Farms will be re-inspected each year. The Inter Group Certification Manager will manage the re-inspection process. Prior to the inspection the farmers will update their FMP and check their records (inputs used and sales).

**Step 7:** The inspection, decision-making and approval process follows steps 3 -5 shown above.

**Step 8:** Each year, the Inter-Group Certification Manager will randomly select 10% of the inspection reports and Inter-Group members will re-inspect these farms and report their conclusions to the Inter-Group certification committee.

## Develop market

When production is organized, develop the market for produce are very important to motivate production and keep farmer going on organic farming. A direct market shown it is not able to sell all products with premium price. PGS Vietnam focus on develop a value chain by linkage producer groups to retailers/traders for a further market in Hanoi capital. The business between traders and farmer groups are made under the contract. Organic PGS products sell through different channel in Hanoi market such
as: Special shops, home delivery, and online markets. The modern market like super markets was tried but it was unsuccessful. To raise the awareness of consumers/people and exchange knowledge, organizing the event as talk show, workshop, joining fairs, and propaganda via TV, media, organize Eco-tours of consumers, students, school pupils and kid are often organized by the retailers with support of PGS.

In PGS, traders who make direct contract with farmer groups have to register PGS. All PGS member include farmers and traders have duty to pay fee for operating PGS. The traders have committee not only doing business but also with farmers monitoring quality and support them when have difficulties.

## Monitoring quality along value chain

To develop a sustainable system, ensuring the quality of products from farm to table must be taken. The nnetworks from grass-roots are developed for monitoring quality on farm together with a 5 volunteers often visit shops where selling PGS products to check the transparence. PGS with participation of the enterprises, local people and others stakeholders take action to manage quality along organic value chain from farm to the markets. The chain are systematically organized in cooperative /association/groups for cross check of products both in conversion also already certified.

A regulations and format for PGS packaging/labeling are agreed between PGS coordination Committee (PGS.CC), farmers and retailers. Only farms are certified by PGS can sell products as organic. Every PGS certified organic vegetable package thus can be traced back to group who supplied.

## Growing interest

The interest of consumer in organic vegetable is growing that motivate farmer expanding production. Currently, more retailers are seeking organic products, and register as PGS member. Three Cooperatives of organic agriculture are established. Without any fund from outsource since project ended in 2012, farmers and traders all agreed to pay fee for running system and cover inspection and monitoring costs.

## Important implication of PGS

PGS is an effective guarantee with low cost for small holders. PGS significantly raised the awareness and capacity of farmers and stakeholders on food safety issue. It created grass root networks where farmer working together to show up their responsibility for community and securing food safety as well as for people meet to share and learn. Joining in PGS, trader and farmer sharing responsibilities and benefits of monitoring and quality guarantee a long product chain. Not only increase stable income per month (50-100%) but also improve relationship among their community. Currently, more provinces of Vietnam are interest and expect to adopt PGS (Hoi An city, Ben Tre province, Ho Chi Minh city).

### Constrains

* PGS is still very new and not many people know including government.

* Not yet recognized by government even it has showed many advantages for enhancing small-scale production.

* PGS has not yet to receive support from government as a local market guarantee.

* Limited consumer awareness of PGS/organic.

* Difficulty in scaling-up PGS without government support for land policy.

### Lesson learnt

* PGS certification should in group where producer member share benefits and responsibilities.

* To links farmers with the market, forming a realistic chain with traceability is the optimum option that make farmer become more professional with premium prices for their quality products.

* To establish a successful PGS network, at least the existing group or network of farmers who want to produce organic products with the concerning of authority.
* Suitable land area that is tested or very likely to be free from chemical contamination at present and future.

* Local Government support for the PGS concept that make resources available to help PGS initiative start especially the policies for land using.

* Select retailers/trader who want to be PGS members must have strong committee not only to buy PGS produce but also involve in daily quality monitoring and sharing with farmer.
# Short and small vs long and big supply chains:
the case of Bac Tom

Manh Chien Tran<fnref n="1" />

## Rationale

Short and Small Supply Chains of perishable foods for better information are growing quickly in Vietnam, particularly in big cities. Bac Tom is a pioneer which provides foods of high quality, including organic foods. When consumers purchase a product from Bac Tom, they can call back all necessary information such as production area, procedure, and supplier. These pieces of information are very meaningful for them, particularly in the context of no recordings in the farms and markets as majority.

In recent years in Vietnam when income is increasing, consumers like foods of high quality and with information of production. A lot of stores and supermarkets are claiming safe foods but with limited information due to their long supply chains with short term strategies of stakeholders involved. They want to sell a huge volume of a wide range of products in a short time with competitive prices. However when consumers ask about where the produce come from and how to control the quality, they are not answered. Their popular supply chain is as long as this, with no contract: Producers (~ 0.1 hectare/each) -> Collectors -> Primary Wholesalers (night market) -> Wholesalers -> Retailers -> Consumers. Additionally the buyers do not care about their produce before supermarket gates. Prices and appearance are two main elements for their purchasing decision. A couple of legal papers are required and available for consumers. However they do not trust these papers. Therefore the need to improve the trust from the consumers is at the first priority in order to sell foods of high quality

## Objectives of new supply chains

To gain trust from consumers by providing them detail information of produce

## Challenges of gaining trust from consumers for new supply chains

* Quality control and certification systems by government are not trusted by consumers

* 80% consumers do not trust official certificates by government

* No certification system for organic farming yet in Viet Nam. Ministry of Agriculture and Rural Development have been working for several years for this but no results yet.

* The majority of fresh produce in the market cannot be traced due to long supply chains and no recording from farm levels to the market

* Very small scale farming as majority in Vietnam, therefore reallocation is necessary and it takes a lot of time and energy

* Farmers are mainly women and old, who are normally poorly educated and therefore it is hard for them to learn new things and make a change

* Consumers get used to open and convenient market

## Bac Tom as a pioneer in minimarts of foods: Small and Short

The chain stores were founded to supply consumers with products of good information about quality and control systems by direct contracting with small producers or collectors/groups. Bac Tom was founded as one of the pioneer in the market. Its name is sourced from "The cabin of Uncle Tom". The idea is that we are always loyal to our host-customers, the same way that Uncle Tom was doing with his host

<footnote n="1">1. Bac Tom – Vietnam</footnote>
family in the famous Novel of America in the mid of 19th century. The first store was founded in 2010 by a value chain specialist. There are 27 stores at the moment (August 2016) and regularly 1-3 is opened every month

These stores are all new in the market. Their supply chains can be displayed as simple as following: Farmer groups -> Retail Stores -> Consumers. Farmer groups contract with Retail Stores to make sure that they comply with the quality, the range of produce and the seasonality as requested. Therefore the information of farming is available to buyers.

To review our first step in contracting with farmers, it was a big challenge to make farmers happy with the volume and selling prices. It was not that case from the beginning due to the fact that farmers do not trust their buyers. Therefore it was very challenging to convince farmers to comply with PGS organic. Bac Tom had to go ahead with the contract and pay in advance or credit for small farmer groups of 5-10 members with ~ 0.5 hectare/ group. Additionally, training in advance is necessary to provide farmers with advantages of reallocation, new management styles and quality inspection system; market opportunities are also very important for farmers before making a shift. In order to do the above activities, partnership with NGOs and local government agencies is crucial. They help us build capacity for farmers promote them to get organized in groups.

In the meantime, the quality and detail information of farming must be exposed to consumers. In order to do so, the farm management team is responsible for inspecting the produce from the farm, while the quality team is responsible for checking the produce at the general store and retail stores. The information gathered is then displayed in retail stores and the media (website, facebook). Especially facebook is emerging as a powerful tool in marketing. It can be useful for small firms as it does not cost much and most of young people in Vietnam are get used with it. However, in order to disseminate our messages, staffing is crucially important. Our sales staff must be trained to understand very well about produce. Particularly they must go to the field and talk with farmers to gain deep knowledges of production.

Farm tours are developed for pupils and parents to disseminate the message of quality. They become very much interested in discovering the farms and the way producers manage the quality.

Regular meetings are also of an important tool for sharing experiences and reflect feedbacks from consumers. Satisfying consumers is always on our first priority.

In addition, the collaboration with NGOs is very important in making use of development projects. They have a good understanding about farmers. Therefore they help organize farmers in groups and empower them to work with the market. Working with NGOs is also good for retailers as consumers tend to trust NGOs more than traders who conventionally don't have a positive position in Vietnam.

Very recently our PGS network and retailers are working with digital traceability which help call back the producers and production procedure by code and smart phone.

## Diversity of produce

When you gain trust from consumers, it does not mean that you are sustainable. Particularly it is true in vegetable supply chains. Why? Vegetables are cheap in Vietnam, and they are bulky. Therefore retail stores which sell vegetables only are very difficult to gain profits. They must expand to other products such as fruits and meat. Bac Tom was originally a vegetable store and had quickly diversified to a wide range of perishable foods. By that way, consumers can do shopping in one place and save time. This trend has resulted in a new type of minimarts which is specializing in fresh and perishable foods: vegetables, fruits, meat (pork, beef, chicken, duck, fish, sea fish)

Profile of stakeholders and produce

* 90% of our customers and staff are women; 85% of our customers and 95% of our staff are under 35

* 90% of our producers at farms are women; 80% are above 35

* 60% of veggie are organic and 40% are safe (natural)
## Recommendations

* Re-allocation for larger concentrated areas per household

* Organic standards and certification systems should be available

* Standards are recognized in other countries in Mekong region for export opportunities and produce exchange

* Certification bodies should be empowered to be trusted by consumers, therefore they are used in third party certification

* Standards and certification systems for small farmers groups should be available in a way that the cost is acceptable and the recording is appropriate

* More investment in promoting and marketing instead of focusing at farmers and production level

* Farmers are empowered to be as tour guides on their farms and also a marketer for healthy foods. This will help bring in more customers to visit the farm

* Foundation of a group of sustainable agriculture enterprises for sharing experiences and products
Session 9

City driven food chains
and sustainable development
# Transformation of the vegetable supply chain in Mar del Plata (Argentina) in the face of raising health concerns

Ophélie Robineau<fnref n="1" />, Maria-Laura Viteri<fnref n="2" /> and Roberto Cittadini<fnref n="3" />

## Introduction

Urban food issue is taking more and more importance in the political agenda (Pothukuchi and Kaufman, 1999; Krausz et al., 2013; Morgan, 2015). A new food equation (Morgan and Sonnino, 2010) is taking shape both in the global North and the global South (Blay-Palmer, 2010; Koc et al., 1999) and the city scale appears relevant to build a food governance oriented toward sustainable food systems (Sonnino, 2009; Perrin and Soulard, 2014). The underlying idea is the design of more sustainable food systems that answer current urban food issues (Viljoen and Wiskerke, 2012; Mansfield and Mendes, 2013).

Agriculture and food systems have long been polarized in the scientific and the public debate by “conventional versus alternative” models (Beus and Dunlap, 1990). There are dual perceptions about the best suited model to go toward the construction of sustainable food systems. However, authors increasingly warn about the risk of restrictive views defending alternative as fundamentally good and conventional as fundamentally bad (Trauger, 2014). Recent research examine the porosity of both models (Deverre, 2011; Le Velly and Dufeu, 2016): intermediary forms and the coexistence of models in local territories is thought as a possible condition to build resilient and sustainable food systems (Visser et al., 2015).

In Argentina, as in many Latin American countries, the dominant agricultural industrial model also identified as the “conventional” one – and the model oriented towards agroecology – the “alternative” one – coexist and confront (Altieri and Toledo, 2011; Cittadini, 2012). The conventional model is deeply rooted in the national foodscape whereas the alternative one developed in the last decades in a context of economic crisis, when various national and local programs aimed to develop agriculture for self-consumption (based on the principles of agroecology) in urban and rural vulnerable households. Then, from mid-2000s, rising health concerns have been put at the forefront of the political and media scene by environmental associations who are strongly challenging the industrial agricultural model because of its high level of pesticide use. The use of pesticides near urban settlements and their health effects are the main cause of conflicts that arose between producers and their neighbors in suburban areas (Pérez et al., 2013). In many urbanized regions of Argentina, the lobbying of these associations resulted in the adoption of municipal laws prohibiting the use of pesticides in a defined perimeter around urban centers (Conti et al., 2013).

This presentation aims at underlying how this kind of municipal order can be a lever or a break to the sustainable development of the vegetable food chains and more globally, of the urban and periurban territory.

## Materials and methods

Mar del Plata (700,000 inhabitants), located at 400 km South of Buenos Aires, is surrounded by the second horticultural belt of the country. The city's agricultural belt is a patchwork of intensive vegetable production and intensive cereals and oilseed crops. An urban policy prohibiting the use of pesticides in a radius of 1,000 meters around urban settlements was adopted in 2008.

<footnote n="1">1. CIRAD, UMR Innovation, F-34398 Montpellier, France.</footnote>

<footnote n="2">2. INTA, Area of Economy and Agrarian Sociology, Argentina.</footnote>

<footnote n="3">3. INTA, Area of Economy and Agrarian Sociology, Argentina. INTA, LABINTEX, Argentina.</footnote>
In order to understand the undergoing changes i) in the local territory and ii) in the vegetable supply chain we did field visits and we realized 40 open and semi-structured interviews with local actors (vegetable producers, actors of the commercialization, development practitioners and public actors), the study of projects/policy documents, and the review of existing literature.

## Changes in the urban and periurban territory

The expansion of Mar del Plata led progressively to an encroaching of urban areas on agricultural land. As vegetable production got more intensive from the 1970s, urban settlements became each time closer. Until the 1990s, periurban dwellers were mainly poor and workers families. But the construction of semi-private neighborhoods in the outskirts of the city attracted middle and upper class families with new expectations toward their natural environment; the number of complaints regarding the spreading of pesticides near human settlements increased. As a result, environmental associations convinced the municipal council to vote an order that prohibits immediately the pesticides in the urban fringe. In front of the difficulty to implement such an order, the council then decided to step backward and to propose a more progressive order leading to the adoption step by step of more environmentally and health friendly practices through the creation of a Municipal program to accompany farmers toward the agroecological transition. Up to now, little means have been provided to implement such a program and very few technical agents are available to provide education on agroecological practices. However, the discussion that arose from the situation led to the implementation of quality controls on vegetables. Hence, there was a shift from agrochemical drift issue to vegetable quality issue.

In a country where the agricultural landscape is dominated by large scale and intensive production, there is very little systematized knowledge on production free from agrochemicals. Conventional producers commonly consider that producing without pesticides is not feasible. Hence, the ones located close from the city and who have the means to move are selling their land to avoid to be subjected to pesticide regulation. Rather than trying to reconnect with consumers, who increasingly distrust conventional production, farmers prefer to invest in other land farther from the city. Smaller ones do not have that the option to move and have to adapt to the changing regulation. Also, when located near urban settlements, farmers are enduring pressure from estate agencies. It order to convince farmers to sell their land, these agencies argue that soon farming will not be possible anymore due to the new regulations. As a result, land use could evolve quickly in the urban fringe.

## Changes in the vegetable supply chain

The conventional vegetable supply chain plays a central role in the vegetable supply. It is characterized by intensive agricultural practices, the use of agrochemical inputs, and marketing activities organized for large volumes involving numerous intermediaries. Conventional producers represent the very large majority of the producers of the horticultural belt. Their profile goes from family farmers (most of them of Bolivian origin) having less than 5 ha farms, to entrepreneurs (European descendants) developing vegetable production on up to 70 ha farms. The share-cropping system is common in conventional production. Many Bolivian families enter vegetable production through the share-cropping system with the objective to become land renter or even land owner in the future – it is the process of “Bolivian scale” described by Benencia (1997). The existence of quality controls led to new preoccupations of producers regarding the use of agrochemicals. However, they make their practices evolve more for fear of control than for health concerns. Producers working with share-croppers often worry that share-croppers actually apply the right doses because in case the control, the producer will have to pay the fine. Indeed, share-croppers are sometimes trapped in an intensive productive model. Their objective is to save money to be able to rent land. To ensure satisfaying yields they tend to increase the doses indicated by the land owner. These discrepancies between technical advice and actual practice do not only characterize the share-cropping system. Still technical agents notice that some producers keep on applying too much agrochemical in order to secure the production. Moreover, a best price is given for better-looking vege-
tables, which encourages producers to develop a certain type of farming practices in order to reach those standards. Finally, the conventional vegetable supply chain answers expectations in terms of volumes but it engenders strong reactions from associations of the civil society regarding health issues.

Conversely the alternative model is positively perceived by the civil society. It is characterized by small-scale farming, short-circuits, and produces free from agrochemicals. It was boosted by programs fighting against poverty of which purpose was to ally food production with environmental preoccupation. However this alternative model has difficulties to expand in a context dominated by conventional agriculture. Many producers still need institutional support to keep on producing and selling their produces. Indeed, there is little systematized knowledge, little/no adapted input available in agronomy shops, few agronomists are involved, and the knowledge is mostly created through individuals and informal on-farm tests. Moreover, the consciousness of consumers regarding agroecological production is still low and there are no sufficient outlets to welcome more producers in this alternative model. Hence, the problem is twofold: it is hard technically for small-scale conventional farmers to do a transition toward agroecology and agroecological farmers are sometimes little willing to share their knowledge as each new agroecological producer might be perceived as a competitor. Finally, the alternative model is closer from the society's new expectations regarding food quality but it represents small volumes and it is not accessible to the large majority of consumers.

Intermediary forms emerge or get a greater legitimacy in the context of rising health issues. Two examples are interesting to underline. First, many small-scale vegetable producers find difficult to get interesting incomes through the conventional supply chain because there are many intermediaries involved and small volumes are disadvantages when it is about getting a truck to transport produces. As a compromise between conventional and alternative chains, these producers use of agrochemicals and sell part of their production to neighbors and to nearby vegetable shops. These channels do not achieve to improve the demand for products free of agrochemicals; however, direct contact with consumers is an incentive to use less agrochemical inputs. It is thus a win-win situation: small-scale farmers improve their farming practices without being constrained to specifications, and they have a better income; consumers trust producers for the quality of vegetables they buy at lower price. These producers combine short-circuit with conventional circuits of commercialization through wholesale markets. A second example deals with wholesale markets. Mar del Plata hosts three. Two are located outside the city. One, the oldest, stands within the urban space, which makes it hardly accessible for large trucks; large volumes can hardly enter/go out. Hence, most of producers/retailers operating through this wholesale market are in average of smaller-scale than the ones operating through the two other markets. Many small-retailers agree that vegetable quality is higher there: smaller-scale producers (perceived as having less intensive practices and better harvesting practices), face to face transactions as well as the anchoring in local food supply are mentioned as possible explanations for such a different quality in this wholesale market. Its suitability to local community's expectations, notably in the context of rising health preoccupations, makes that this wholesale market plays an important role in the local food system. But there is a political idea to move wholesaling activities to urban peripheries, which questions its future.

## Conclusion

The periurban landscape of Mar del Plata is undergoing changes. Impacts of the municipal order go beyond productive aspects. In this process, small-scale farmers with low financial means find themselves in a delicate situation in between the wish to keep on producing vegetables and the technical dead-end in which they feel they are. The urban policy can be a break to build sustainable local food systems if we consider how estate agencies are taking advantage of the situation. Also, the way the public policy was adopted – without consultation – led to a break between consumers and producers. But this urban policy could also be a lever to build a more sustainable local food system; health concerns could be an opportunity to build a concerted policy for urban and periurban planning. Indeed, there is new consciousness of consumers and producers, although some producers try to improve their practices more for legal than for
health purpose. New intermediary forms emerge or find more legitimacy regarding local stakeholders because they answer local food issues. But public actors and public policies support strong and well identified models – conventional and alternative ones. Intermediary initiatives do not find visibility in that political landscape and receive little/no political support; they develop and maintain through local actors’ practices, apart from institutional programs or political support and bear more local community’s expectations than a political vision. They remain scattered and fragile in the face of urban policies and rapid transformations in the urban fringe but they are signals of positive on-going changes.
# Sustainable development impacts of various ways to modernize urban food distribution: the case of vegetables in Vietnam.

Paule Moustier<fnref n="1" /> and Nguyen Thi Tan Loc<fnref n="2" />

## Concept and rationale

During the past twenty years, the food sector in Vietnam has undergone major changes. Economic and demographic changes have caused an increase in the demand for more diverse and better quality produce, especially in urban areas. The food distribution sector has adapted to these changes and has now taken on a diversity of forms including covered markets, wet markets, street vendors, shops and supermarkets. The government is promoting the expansion of supermarket distribution and plans to eliminate all informal trade on the grounds of modernization, which includes various concerns related to food safety, economic development and attraction of foreign investors. Urban areas are indeed windows of government efforts to promote economic development through modernization, while they increasingly concentrate social problems, especially unemployment of the less qualified dwellers (Moustier et al., 2009; Thi Hong Nguyen et al., 2013; Wertheim-Heck et al., 2015).

## Research objective

The paper investigates the impact of supermarkets in terms of various dimensions of sustainable development, related to social objectives (employment, consumers' access, management of food safety), economic objectives (farmers' incomes), and environmental impact (mostly as regards farmers' practices; and nature of transport used), relative to other distribution formats. Supermarkets are considered as a package of organizational and technical innovations in food chains which can be related to sustainable development objectives.

## Conceptual framework

The paper starts by some review on the literature to get some hypotheses on the link between different formats of food distribution (more or less centralized and capital-intensive) and sustainable development. It is hence a contribution to the analysis of the performance of food chains in terms of sustainable development as the structure of food chains, in particular the technological content, is commonly (sometimes implicitly) considered as an indicator of food chain performance, particularly economic performance, but also food safety management. The development of supermarkets goes hand in hand with various innovations in terms of technologies (e.g., logistics platforms, cashiers, refrigeration) which result in cost reduction (thanks to economies of scale), value-adding activities and often go together with patterns of vertical integration in the chain(Hagen, 2002; Reardon et al., 2009). One challenge is how to ensure that the value added by these new enterprises can effectively be distributed to the poorest people rather than primarily bringing profit to those who are able to invest in this demanding business and excluding the poor who cannot compete with them. Labor-saving and scale-biased innovations have generally a negative impact on employment of the poor and may be less suitable to a country like Vietnam where labor is in excess supply than is the case with capital-saving or neutral innovations. As regards the effect of vertical integration on management of food safety and environmental impact at farmers' level, the literature shows ambiguous results – but it tends to show benefits in terms of economic results and food safety that are driven by retailing firms' involvement in the control of farmers' practices (Biénabe et al., 2011; Jaffee et al., 2011; Minten et al., 2009).

<footnote n="1">1. CIRAD, UMR MOISA, F-34398 Montpellier, France.</footnote>

<footnote n="2">2. Fruit and Vegetable Research Institute (FAVRI), Vietnam.</footnote>
**Method-data collection**

The paper is based on a review of the literature and empirical data collected in Vietnam between 2009 and 2014. In 2009, we conducted an analysis of inputs-outputs, costs, benefits, and governance along four value chains in the horticultural and rice sector, which generated indicators of economic performance, technologies, chain governance, use of energy and chemical inputs. In 2009 and 2014, we estimated the number of employees and volumes traded by different points of sale to estimate their contribution to total vegetable distribution. In 2009, we also conducted surveys of poor consumers (110 in Hanoi and 52 in Ho Chi Minh City) to appraise their access to food. We compared the prices of selected food products in various points. In 2014, we estimated the share of different selling points by a survey of 138 peri-urban farmers. We also conducted some action-research on the inclusion of street vending in selected districts where we took into account livelihood as well as food safety issues (Nguyen and Moustier, 2015).

**Main results**

We estimated that supermarkets generate half the employment of street vending for a given quantity of vegetables, markets and shops standing in-between. In 2009, vegetable street vendors supplied 32% of the total vegetable volume sold to consumers, compared to 58% for retail markets, 9% for shops, and 1% for supermarkets. Until 2009, the number of vegetable street vendors increased at a higher rate than that of the city's population. In 2014, we estimated that 45% of vegetables were sold by street vendors, 49% at retail markets, with a limited volume being sold at stores (3%) and supermarkets (6%). Peri-urban vegetable producers mostly sell through markets (42%), street vendors (42%) or directly to canteens and consumer groups (9%). Freshness, lower prices and easier access are major reasons for consumers preferring market or street retailing to supermarkets, while supermarkets and shops are more trusted in terms of food safety. Immediate payment in cash is the major reason of farmers not selling to supermarkets, albeit producer prices are generally higher. Yet wet market retailers and street vendors are seriously jeopardized by the negative attitude of national as well as urban authorities towards their business. The modernization of wet markets can indeed stimulate unregulated street vending with hygiene and traffic problems (Wertheim-Heck et al., 2015). The bulk of vegetables supplied to urban supermarkets originate from “safe vegetables” cooperatives in peri-urban areas (sold either directly through contracts or through dedicated wholesalers) or semi-public companies. The incomes of farmers participating in supermarket-driven chains are generally higher than in informal markets, but this is allowed by farmers belonging to cooperatives involved in marketing; and farmers’ direct sales in cooperative-managed shops provide them with higher incomes.

Farmers' efforts in reducing chemical inputs, which are favorable to food safety as well as environmental protection, are indeed stimulated by supermarket outlets; but also by alternative ones, including quality food shops. Comparing pesticide residues in various points of sales shows the higher performance of organic shops and supermarkets along this criterion of food safety. But training street vendors as regards sources of supply and waste management is an efficient way to upgrade their business. Consumers' access to supermarkets is mostly by cars or motorbikes, while food distributed by street vendors enables consumers' access to food by foot, which suggests a lower energy cost of street vending, at least at the final stages of distribution. There is indeed a variety of ways to upgrade food distribution, along sustainable development objectives, besides supermarkets, including trained street vendors in terms of food safety; farmers' organisations involved in chemical-limited production, food labelling and distribution; farmers' markets; quality food shops. These innovations combine the advantages of decentralization and labor-intensity in food distribution, with an orientation towards consumers' health and improved environment. The urban context can prove positive in the development of such innovations, due to the availability of technical and marketing information, and the proximity between farmers, retailers and consumers. Yet it requires a more positive attitude of public authorities towards small-scale distribution. The paper concludes with a tentative model of relationships between organization of food distribution and supplying chains, and consequences on economic, social and environmental objectives.
## References

Biénabe, Estelle, Julio A. Berdegué and Lucian Peppelenbos 2011. Reconnecting markets: Innovative global practices in connecting small-scale producers with dynamic food markets. In Reconnecting markets: Innovative global practices in connecting small-scale producers with dynamic food markets. Farnham: Gower Publishing.

Hagen J.M. 2002. Causes and Consequences of Food Retailing Innovation in Developing Countries: Supermarkets in Vietnam. New York: Cornell University, Department of Applied Economics and Management.

Jaffee, Steven, Spencer Henson and Luz Diaz Rios 2011. Making the Grade: Smallholder Farmers, Emerging Standards, and Development Assistance Programs in Africa-A Research Program Synthesis. In Making the Grade: Smallholder Farmers, Emerging Standards, and Development Assistance Programs in Africa-A Research Program Synthesis: World Bank, wdronline.worldbank.com.

Minten B., L. Randrianarison and J.F.M. Swinnen 2009. Global retail chains and poor farmers: evidence from Madagascar. World Development 37: 1728-1741.

Moustier P., M. Figuié, The Anh Dao and Thi Tan Loc Nguyen 2009. Are supermarkets poor-friendly? Debates and evidence from Vietnam. In The crisis of food brands, eds. A. Lindgreen and M. Hingley, 311-327: Gower Publishing.

Nguyen, Thi Tan Loc and Paule Moustier 2015. Toward a Restricted Tolerance of Street Vending of Food in Hanoi Districts: The Role of Stakeholder Dialogue. World Food Policy 2.

Reardon, Thomas, Christopher B. Barrett, Julio A. Berdegué and Johan F. M. Swinnen 2009. Agrifood Industry Transformation and Small Farmers in Developing Countries. World Development 37: 1717-1727. doi: 10.1016/j.worlddev.2008.08.023

Thi Hong Nguyen, Hai, Steve Wood and Neil Wrigley 2013. The emerging food retail structure of Vietnam: Phases of expansion in a post-socialist environment. International Journal of Retail & Distribution Management 41: 596-626.

Wertheim-Heck, Sigrid CO, Sietze Vellema and Gert Spaargaren 2015. Food safety and urban food markets in Vietnam: The need for flexible and customized retail modernization policies. Food Policy 54: 95-106.
# Landscape factors influencing sustainable food agri-chain innovation: The role of place in the Toronto experience of Local Food Plus

Wayne Roberts<fnref n="1" />,<fnref n="2" /> and Lori Stahlbrand<fnref n="2" />,<fnref n="3" />

Agri-food chains have an unrivalled capacity to contribute to, and benefit from, every one of the United Nation's 17 Sustainable Development Goals (SDGs). Supporters of every one of the goals can make substantial progress by treating agriculture and food as a gateway to impactful actions. One or both of agriculture and food are essential to: 1. reducing poverty; 2. reducing hunger; 3. improving health and well-being; 4. providing educational opportunities; 5. increasing gender equity; 6. ensuring clean water for all; 7. ensuring clean energy for all; 8. providing good work and economic development; 9. innovating in industry and infrastructure; 10. reducing inequity; 11. fostering inclusive cities; 12. greening production and consumption; 13. protecting the climate; 14. conserving marine life; 15. conserving forests and fields; 16. promoting peaceful and just institutions; 17. Strengthening society-wide action on behalf of the 16 stated goals.

Passion for this wide-ranging potential of agri-food systems brought both individuals submitting this proposal to write a Canadian bestseller called *Real Food for a Change* in 1999, and to subsequently become professional practitioners in the Canadian food and agriculture sector. One proponent, Wayne Roberts, PhD, was manager of the influential Toronto Food Policy Council from 2000 to 2010, prior to becoming a member of the International Advisory Committee of Wilfrid Laurier University's Centre for Sustainable Food Systems and a participant in the SSHRC-funded FLEdGE (Food: Locally Embedded, Globally Engaged) Project, as well as international consultant and speaker in the field of city food policy. The other proponent, Lori Stahlbrand, founded and led a civil society organization called Local Food Plus (LFP), from 2004 to 2012, and in that capacity became a leading promoter of local and sustainable food infrastructure, prior to taking up doctoral studies at Wilfrid Laurier University and university teaching in the field of Global Food Equity.

Stahlbrand convinced the University of Toronto to include language in its Request for Proposals for foodservice that required increasing amounts of local and sustainable food. Stahlbrand then convinced several foundations to fund her efforts to build the farm connections and overall infrastructure to supply the food. Before her resignation from LFP to undertake doctoral studies in 2012, Stahlbrand and her team at LFP worked with University of Toronto officials and Ontario farmers and processors to ensure provision of up to 25 per cent of campus food from local and sustainable sources. Years later, in 2016, the University of Toronto consummated the local and sustainable experience with the decision to operate its foodservices in-house, rather than contracting with a global foodservice company – a rare accomplishment for a university in North America, where food is usually defined as an out-sourced ancillary service. As a campus with one of the largest student populations in North America, the University of Toronto experience with a sustainable local food supply chain is a generative one – with many lessons to reveal about the challenges of developing agri-chains with a potential to contribute to the full range of Sustainable Development Goals.

This proposal marks the first time that the full context of the U of T/LFP story will be unfolded. Having Stahlbrand as a co-presenter is an opportunity to provide first-hand “behind-the-scenes” evidence of the experience of developing a local-sustainable agri-food chain to serve a high-profile public institution. The combination of intimate practitioner knowledge and extensive academic research and analysis will

<footnote n="1">1. Wilfrid Laurier University, Centre for Sustainable Food Systems, Ontario, Canada.</footnote>

<footnote n="2">2. Food: Locally Embedded, Globally Engaged (FLEdGE), Ontario, Canada.</footnote>

<footnote n="3">3. Wilfrid Laurier University, Ontario, Canada ; University of Toronto, Ontario, Canada.</footnote>
yield many insights into the technical, operational and socio-political aspects of local and sustainable food chains as works in progress.

Having Roberts, retired manager of the Toronto Food Policy Council, as co-presenter permits an under-reported and under-theorized aspect of the Local Food Plus/University of Toronto experience to be told. He will show that the LFP/U of T experience co-evolved with what might be called the “Toronto community of food practice,” within which the Toronto Food Policy Council played a central role. Founded by the Toronto Public Health department in 1991, the TFPC was one of the first food policy councils in the world, and the first to exist in a large and high-profile city. The TFPC quickly became an important force, and imprinted several norms within the developing food community that were unique in the North American context. It established a presence for public health, public policy, sustainability (it wrote the Toronto Declaration on Nutrition in 1992, in which the City formally endorsed sustainability) and government collaborations with the fast-blooming NGO community and community of food practice. Consequently, food work and food supply chain work in the city “instinctively” included public policy and public health goals as objectives, and always included representatives of consumers and city residents in the design of supply chains. On the ground floor level, the TFPC was able to use its role as a network connector to introduce Stahlbrand to several individuals, organizations and foundations that enabled her to organize LFP, arranged for her to meet University of Toronto figures and become a part of the University community, become aware of Greenbelt issues that led to a major foundation grant, and so on.

Few of the studies on food movement-inspired supply chain work recognize the significance of this dimension of the early (1998-2004) Toronto and LFP/U of T experience for the elaboration of food transition theory and analysis. Almost all studies of supply chains, for example, are premised on a “farm to table” or “farm to cafeteria” model, whereby farmers get together and bring new products to the city. In actuality, the opposite is often the case: people in cities search out and arrange suppliers who will address their needs. This “farm to table” premise of most food reports is closely tied to an agricultural premise, which assumes that problems within the crisis-ridden agricultural community provoke action, which ends up coming to the city. To the extent the Toronto experience is indicative (Stahlbrand’s PhD thesis research shows that the English experience with school and university meals confirms the Toronto pattern), there needs to be a fundamental rethink of how innovative supply chains are constructed. Unlike agribusiness chains, which flow one way, they are two-way streets. Moreover, in the absence of two-way approaches to food supply chain construction, it is unlikely that the “value proposition” of the food brought to the city will include many of the SDG goals elaborated by the United Nations.

Examination of the early years of the TFPC-Toronto community of food practice/ Local Food Plus/ University of Toronto developments confirm the importance of 'landscape' factors as elaborated by Geels in the Multi-Level Perspective (MLP) framework. In particular, it emphasizes an analysis of innovation that science writer Steven Johnson calls “adjacent possibility.” This concept stresses the importance of order and sequencing in the narrative of innovation. In effect, it argues, the opposable thumb and nimble fingers on the human hand were not possible without a wrist, and in turn an arm, and in turn shoulders, and in turn an erect human posture. In the same way, the social media could not have developed without the Internet, which in turn was preceded by home desktop computers, which in turn were only possible with microchips, and so on. Applying this sequential logic to the development of agri-food chains, it could be argued that a local and sustainable food supply chain addressing United Nations sustainability goals cannot succeed without already-established urban communities of food practice with a deep sense of public policy and consumer needs. In the absence of such expressions of the “adjacent possible,” it is unlikely that sustainable local supply chains oriented to stable and bulk orders for major institutions will emerge.

This proposal presents the narrative around two other pivotal events in the LFP/U of T experience. One that will be featured is the development of a local and sustainable certification system that would provide guidance to farmers enlisted in the program and provide assurance to the University of Toronto, media
and general public that that added price premium on local and sustainable food indeed gave value and
values for money. The other pivotal event that will be featured is the suspension of LFP outreach activi-
ties in 2015, the result of an inability to raise funds to carry on. Each of these events is rich in learnings
about the challenges of constructing sustainable local agri-chains. Each of these events illustrates the
ongoing significance of LFP's co-evolution within a Toronto community of food practice.

Establishing a certification system for sustainable local food was considered essential to the construc-
tion of a sustainable local agri-chain. The certification system required that farmers follow a production
system of minimum Stage 2 Integrated Pest Management, with additional standards for on-farm labour,
animal welfare, biodiversity preservation and energy use. The standards clarified to farmers exactly what
would be expected of them if they wanted to have access to contracts that awarded them a sustainability
price premium. Importantly, the certification system also appealed to local organic farmers who were
competing directly with California imports, and who looked to sustainable local certification for some
profile with local purchasers.

Perhaps due to “path dependence,” precedents established for organic growers were incorporated, espe-
cially independent third-party certification by organic inspectors specially trained to do inspections
for LFP. In retrospect, this proved to be a serious mistake. It saddled the LFP with a very expensive,
rigorous, and ultimately administratively unwieldy model of certification – a huge opportunity cost for a
chronically cash-strapped organization. As well, the strictness of certification imposed significant paper-
work demands on farmers who were generally over their head in paperwork already. Certification added
little value for consumers, most of whom were happy to accept LFP leaders’ word for the legitimacy of
the label. And retailers, restaurants and institutions were also generally indifferent to the strictness and
expense of LFP certification.

In her presentation, Stahlbrand will reveal some of her subsequent research into alternative means for
providing guidance for sustainable local producers, and for ensuring quality for consumers – especially
measures that have been adopted by the Soil Association in England.

The second pivotal event was the decision to close active operations of LFP in 2014. Although the
University of Toronto and other LFP partners have continued to extend their sustainable local food
purchasing practices, the future of the civil society organization that took responsibility for an expanding
agri-chain for local and sustainable food is uncertain.

A comparison of the English university food purchasing experiences of the Soil Association suggest
there were viable alternatives to some of the decisions made by LFP in Canada, many of which will be
reviewed in the session. But at this point in time, the concepts of the “adjacent possible” and of “disrup-
tive innovation” best explain the inability of the LFP to convince two key groups to provide necessary
funding. Foundations would not adapt their standard approach to funding, and guarantee investment in
such a major and long-term project for more than three years. Departmentalized governments could not
understand that cross-cutting sustainability goals required some form of cross-cutting governmental
support, and left LFP to the mercy of the Ministry of Agriculture, itself poorly funded and beholden to
export-oriented conventional agribusiness interests with no serious commitment to sustainability goals.

These are challenges that any initiative hoping to contribute to a sustainable local agri-chain must
consider.
# Are food losses and waste overestimated in developing countries?

Géraldine Chaboud<fnref n="1" />

## Introduction

In spite of the growing concern on food losses and waste (FLW) issues, empirical research on FLW along food supply chains (FSC) in developing countries, from production to retail, is uncommon (Minten et al., 2016; Parfitt et al., 2010). Details on how FLW have been calculated and where unsold food products actually end up are rarely available (e.g. garbage, home-consumption, food donation, feeding, etc.). However, the common belief stipulates that in developing countries, FLW are expected to be greater at post-harvest stages (harvest, storage, transport, retail) due to poor post-harvest handling and technical constraints (Godfray et al., 2012; Hodges et al., 2011).

This study presents some of the following advantages. First, the levels of FLW along the “traditional” tomato value chain that supplies the city of Cali in Colombia are assessed. Where knowledge gaps exist, data and empirical findings are generated and provided, respectively. Second, this case study is helpful for observing what happens to unsold tomatoes and where they actually end up. It is not unknown that informal waste recycling in those countries is common (Medina, 2008). Municipalities of developing countries often deal with environmental and sanitary problems caused by waste (Thi et al., 2015). It is the case of Cali where the municipality launched in 2014 the program “Cero basura”[1] within “Cali Bioagradable”. Detailed information on the different destinations of unsold products is provided but only food products that ended up in the garbage were considered as FLW. FLW were approached from a waste management perspective. Third, the case study selected is used to verify (or not) the common belief about high post-harvest losses in developing countries, especially in semi-informal channels. Finally, with the perspective of improving the assessment and report of FLW, a methodological framework was designed and used as a guide to set up the survey questionnaire, as well as report empirical findings. It has helped us avoid assessment bias, as far as possible, and to ensure transparency when reporting data.

## Methodology

The aim was to identify a representative sample for the whole “traditional” tomato value chain that supplies Cali and representatives of each type of stakeholder involved. Producers grow and sell their agricultural products; traders provide the link between the rural area and the city, while corners stores sell food products to urban consumers. Different interviews and surveys were carried out to understand the role of each actor and to assess the level of FLW at each stage (i.e. farmers, traders – wholesalers, middleman – and corner stores). Exploratory interviews with experts and stakeholders were conducted. Then surveys were conducted with three types of structured questionnaires adapted to each FSC stakeholder. We surveyed 99 farmers, 18 traders and 200 corners stores. FLW were, therefore, assessed on the basis of the FSC stakeholders’ declarations. We used a downstream survey approach from retailers to farmers in order to better target the farmers who supply tomatoes to the wholesale markets in Cali.

## Results and discussion

During the crop cycle, on average 6.2% of the available tomatoes are left in the field by farmers and on average a producer throws away 9.2% of the tomatoes harvested. Beyond the farm gate, on average, 1.2% of the products purchased by a trader remain unsold and only 0.5% of the purchased products end

<footnote n="1">1. CIRAD, UMR MOISA, F-34398 Montpellier, France.</footnote>
up in the garbage. Retailers purchase products, of which on average 4.3% remain unsold and only 1.7% is actually thrown away.

Data shows five main results:

* Transport losses are not significant along the tomato value chain.

* Farmers are the stakeholders in the FSC who most frequently report FLW.

* There are greater differences in FLW between farmers than at other stages. This suggests that there are discrepancies in the performance of farming operations (management practices and/or agro-climatic environment) and/or in terms of farmers' socio-economic characteristics, which could explain the scale of farmers' FLW.

* Farmers frequently declare FLW. However, only a few farmers report substantial FLW, which suggests that high rates of FLW tend to be concentrated. The pattern is similar for retailers. As Kaminski and Christiaensen (2014) claim that the relatively low incidence of FLW, together with the relatively high rates of FLW (incurred in our case among farmers and retailers), underlines the need for carefully targeted FLW operations.

* Unsold tomatoes or tomatoes considered unmarketable by stakeholders are frequently used for different purposes. Unsold products tend to have a second "life".

The information shared by FSC stakeholders in the surveys and interviews is coherent with the results on amounts of FLW, which confirms the general accurateness of the data collected.

The modes of transport used from rural areas to the city are not refrigerated, but delivery is relatively fast (from 1.5 to 2 hours on average). Farmers and traders mainly transport tomatoes by truck. They use food box package for protecting tomatoes during transport. Moreover, during the transport stage other measures are widespread among stakeholders to prevent FLW (e.g. heavier produce is put at the bottom, tomato box package are not overloaded, fast delivery, they load their own produce, etc.). Speedy delivery and preventive measures for minimising FLW, adopted by farmers and traders, can explain the absence of FLW during transport.

Farmers are the stakeholders in the FSC who most frequently report FLW. This first result is consistent with the stakeholders' perception of the frequency of FLW. A higher percentage of farmers (58%) consider that they have FLW all or most of the time in comparison to traders (22%) and retailers (25%). The farmers' perceptions and responses are coherent with the FLW levels recorded. Diseases and pests were identified by farmers as the major causes of agricultural losses and waste. Pre-harvest management of pests and diseases can partly explain the amounts of tomatoes not harvested and those harvested and not sold. Consistency was finally confirmed by production practices. In the area surveyed, more than half of the farmers grow tomatoes outside. Outdoor cultivation is more exposed to diseases, pests and climatic conditions than semi-greenhouse and greenhouse cultivation. The mode of production adopted by the majority of the farmers is likely to impact the quality and quantity of tomatoes produced.

The average rates of unsold products for traders and retailers are low. The data matches the traders' perception given that approximately three-quarters of traders declare that FLW levels are low or very low. Their responses suggest that tomatoes are easy to sell on the market irrespective of product quality. Traders also claim to have in-depth knowledge of the tomato market, as well as the different outlets depending on the quality of the product. Generally, tomatoes are delivered to wholesalers the afternoon before the market night. Subsequently, they resell the tomatoes the same night. The time of storage is short. Similarly to traders, retailers affirm that tomatoes are easy to sell. They claim that FLW are low because they buy small quantities of produce on a daily basis and the demand for tomatoes in the market is high. Most of the respondents (80%) store tomatoes for no more than 3 days. The traders and retailers' marketing and storage practices seem to explain the low average percentages of unsold products.

The average rate of FLW per trader and retailer are even lower. This is not surprising for several reasons. The informal sector plays an essential role when it comes to alternative uses for food products originally destined for sale. The interviews with wholesalers revealed that at the end of market day, it is not
uncommon to see housewives coming to the market to recover unsold products for cooking. People also recover food products for resale in the street. In Cavasa (the wholesale market), the Cali Food Bank also recovers unsold products at the end of each market. Other products unfit for sale are recycled at the composting plant located in Cavasa. This reduces the volume of food products that are thrown away. Over and above food donation, retailers and farmers use produce for home-consumption to avoid throwing away unmarketable tomatoes. On average, a retailer uses more tomatoes for home-consumption than a farmer. This is coherent for two reasons. Firstly, farmers manage larger volumes of tomatoes than retailers, i.e. home-consumption is expected to cover a smaller part of the total volume. Secondly, during the survey and interviews farmers shared their concerns about eating their own tomatoes because of the intensive use of pesticides and chemical fertilisers. Some of the farmers are reluctant to use their own tomatoes for home-consumption in order to avoid any health risks.

## Conclusions

Insights from the case study selected are important to guide future areas of research and intervention policies.

Firstly, data show that FLW recorded at the harvest and post-harvest stages are likely to be linked to pre-harvest management. Therefore, depending on the target product, pre-harvest stages could constitute an important step for inclusion in future studies. At the empirical level, interventions, such as training, assistance and support for farmers at the pre-harvest management stage appear essential. They could help increase the efficiency of resource use by reducing the quantity of tomatoes likely to be discarded and by improving the quality of tomatoes sold along the entire FSC.

Secondly, the average rate of food products discarded is in itself not sufficient to justify the research interest and guide policy intervention. Data may conceal more important issues. The rates of tomatoes thrown away at the trader and retailer stages are low. Yet, that does not mean that attention and intervention are not required at these stages. The relatively low level of FLW raises questions about the safety and health risks of the tomatoes sold to consumers

(e.g. high level of pesticide residues) because of poor marketing control and a lack of standards. Stakeholders may also suffer losses with low quality produce by increasing their qualitative FLW. Stakeholders are paid little for poor quality tomatoes, which can cause economic losses.

Thirdly, in developing countries, FLW at post-harvest stages cannot always be explained by poor post-harvest handling, lack of infrastructure and technical constraints as suggested in the literature (Godfray et al., 2012; Hodges et al., 2011). Stakeholders adopt strategies to overcome technical constraints and limitations linked to infrastructure in order to minimise FLW at their own stage. In addition, coordination among stakeholders appears essential to minimise FLW at the meso-level of the FSC.

Finally, assessing the determinants that significantly influence FLW along the FSC is essential for future recommendations, the design and implementation of effective intervention policies. Here, the case study focuses on quantitative measurements. However, alternative estimates of FLW based on a qualitative view would complement the analysis and provide an integrative overview of FLW issues.

## Bibliography

Affognon H., Mutungi C., Sanginga P., Borgemeister C., 2015. Unpacking Postharvest Losses in Sub-Saharan Africa: A Meta-Analysis. World Dev. 66, 49–68. doi:10.1016/j.worlddev.2014.08.002

Godfray H.C.J., Beddington J.R., Crute I.R., Haddad L., Lawrence D., Muir J.F., Pretty J., Robinson S., Thomas S.M., Toulmin C., 2012. The Challenge of Food Security. Science (80-. ). 327, 812. doi:10.4337/9780857939388

Hodges R.J., Buzby J.C., Bennett B., 2011. Postharvest losses and waste in developed and less developed countries: opportunities to improve resource use. J. Agric. Sci. 149, 37–45. doi:10.1017/S0021859610000936
Kaminski J., Christiaensen L., 2014. Post-harvest loss in sub-Saharan Africa-what do farmers say? Glob. Food Sec. 3, 149-158. doi:10.1016/j.gfs.2014.10.002

Medina M., 2008. The informal recycling sector in developing countries Organizing waste pickers to enhance their impact. Gridlines Shar. Knowledge, Exp. Innov. public-private Partnersh. Infrastruct. 4, 1-4. doi:10.1080/17535069.2011.579777

Minten B., Reardon T., Das Gupta S., Hu D., K.A.S M., 2016. Wastage in Food Value Chains in Developing Countries: Evidence from the Potato Sector in Asia. Food Secur. a Food Abund. World. doi:10.1108/S1574-871520150000016010

Parfitt J., Barthel M., Macnaughton S., 2010. Food waste within food supply chains: quantification and potential for change to 2050. Philos. Trans. R. Soc. London – Ser. B Biol. Sci. 365, 3065-3081.

Thi N.B.D., Kumar G., Lin C.-Y., 2015. An overview of food waste management in developing countries: Current status and future perspective. J. Environ. Manage. 157, 220-229. doi:10.1016/j.jenvman.2015.04.022

“Zero waste”
# Vulnerability and resilience of the urban food system to extreme weather: a case study of Colombo, Sri Lanka

Christina Semasinghe<fnref n="1" />, Jorien Benders<fnref n="1" />, Visakan Vairavamoorthy<fnref n="1" />, Sudarshana Fernando<fnref n="1" /> and Pay Drechsel<fnref n="1" />

Colombo, the commercial capital of Sri Lanka is the most urbanized area of the country. It is home to half a million people and has an equal number of floating population daily. Most of its land area is utilized for commercial and residential purposes while the amount of agricultural activities in the core city (i.e. Colombo Municipal Council area) is negligible. Hence, Colombo's own food production is minimal and is dependent on food cultivated in other areas of the country, which is passed along a complex supply chain of many actors. Furthermore, the two most popular wholesale markets in Sri Lanka, the Manning market for commodities such as vegetables and fruits and the Peliyagoda market for fish are located in and close to Colombo making the city a food supply hub for different parts of the country. Therefore, when the supply chain to Colombo is being negatively affected also the food system of the country can be disrupted.

This study was carried out in May 2016, while and directly after Sri Lanka was hit by a severe cyclone (https://en.wikipedia.org/wiki/2016_Sri_Lankan_floods) as the country is experiencing all few years, and several parts of Colombo suburbs and external food supply areas were flooded. The study aimed to investigate in real time the vulnerability and resilience of the urban food system to such increasingly periodic events.

Impacts on and recovery of marketing channels and supplies were studied by visiting in defined intervals major markets with a significant influence over Colombo's food system and interviews with lorry drivers, commission agents, buyers, sellers, whole sellers, and importers. In addition, floor managers and distribution centre managers of leading super market chains were interviewed to analyse how far their food supply was affected and their coping strategies. The interviews were carried out a week, a month and two months after the floods which displaced half a million people across the country. In addition to the impact, also the reasons for low supply were analyzed (production failure, transport failure, etc.).

While the paddy rice supply, the most important local staple food, remained constant during this time of crisis due to sufficient storage capacity in Colombo., the heavy rains led to a severe shortage of vegetables. The upcountry vegetable (carrots, leeks, beans and cabbages) supply was greatly affected and prices were at least as four times higher than in the same period of previous years. As the floods had a lesser impact on production areas of low-country crops (Okra,Pumpkin,Cucumber etc.), their supply and prices remained relatively stable. Leafy vegetables (lettuce, Spinach,water spinach etc.) were also greatly affected because the main supply to Colombo comes from peri-urban areas that were flooded. Fish supply was heavily affected, with a 75% drop in supply immediately after the floods, because fishermen were advised to not go out fishing during the extreme weather. The supply and the prices of onions, garlic, dhal, and potatoes remained however unchanged as a major portion of it being imported and the harbor and wholesale market for imports is located in Colombo.

The big supermarket chains (Keells, Cargills, Arpico) also experienced low supply and higher prices of vegetables and fish but had more flexible supply chains, own storage and alternative suppliers. While they recovered most of their supply gaps within two to three weeks, the mainstream supply chain (which serves the middle and low income community) took for most affected commodities up to 2 months to recover. Also some local food processing factories (e.g. alcoholic and non-alcoholic beverages) which were flooded had 2 to 3 months after the events still production shortages.

<footnote n="1">1. IWMI, Battaramulla, Sri Lanka.</footnote>
This study shows that the supply of some popular commodities (e.g. fish, vegetable) proved to be very vulnerable, because no infrastructure or mechanisms are in place to cope with possible supply failure. Pulses, dry fish and other imported commodities can fill this gap to some degree, and within limits of cultural acceptance. Mainstream supply chain actors, small retail shops and poor households are most affected because of low adaptive capacity. Lack of economic incentives, a low lobbying capacity of those most affected, coupled with the fact that floods have been periodic but hard to predict limited so far public investments into the related challenges. However, as climate change related extreme weather events are likely to become more frequent in the future, investments, for example, into short and more diverse food chains (including urban and peri-urban agriculture), as well as storage, is likely to increase the resilience of Colombo's food system to possible future impacts from climate change and, thereby help the city to move towards achieving the second sustainable development goal-of zero hunger.
# Resilience of rural-urban food flows in West Africa

Pay Drechsel<fnref n="1" />, Hanna Karg<fnref n="2" />, Richard Kofi Appoh<fnref n="3" /> and Edmund Akoto-Danso<fnref n="4" />

Within the larger assessment of urban food supply and commodity specific foodsheds, the question was posed how City Region Food Systems (CRFS) respond to natural disasters like droughts or flooding which might severely affect urban food supply and resilience.

The study focused on four cities, Accra, Kumasi, Tamale (all Ghana) and Ouagadougou (Burkina Faso) cutting from South to North across different agro-ecological zones from humid to semi-arid, and consisted of two parts: A detailed and multi-seasonal quantitative analysis of commodity specific rural-urban food flows to determine common urban foodsheds of Ouagadougou and Tamale, and a commodity specific, semi-quantitative study on the experience and coping measures of the private sector to production shortfalls in all four cities.

The food flow study was conducted over two years, covering the seasons of good and short supply and more than 30 food commodities. Food flows were assessed via vehicle surveys on all major urban access roads to the cities, as well as market surveys and visualized via GIS. For the study of coping mechanisms 90 traders on 25 retail and wholesale markets in the four study cities were interviewed about shortfalls between 2007 and 2014 addressing the following key commodities: yam, cassava, plantain, millet, maize, local rice, okra, onions and eggplant.

Results indicated that foodsheds were highly crop and season specific, ranging from one-dimensional to multi-dimensional foodsheds. The most common supply challenges along the transect were extreme climatic events such as large scale flooding as well as lack of rain and drought. In view of the analysed key commodities, traders recorded for every year supply problems for one or another crop, mostly related to particular weather conditions but also fuel price increases. In particular, 2011 posed multiple challenges due to unexpected weather conditions, as mentioned by every third trader who could recall the exact year. Supply losses ranged commonly between 40 and 100% of which in 2 of 3 cases alternative foodsheds allowed to fully recover the loss, while related extra costs (transport distance) were usually transferred to the customer. Supply shortfalls which could in several cases not be buffered, even via imports, concerned e.g. local rice, millet, maize and onions.

There was an increase of city vulnerability from South to North. Compared with Accra and Kumasi, twice as many cases of failed supply recovery were reported in Tamale, and the number of cases doubled again in Ouagadougou.

The data show that the larger geographical diversity of multi-dimensional foodsheds appeared to enhance the resilience of urban food systems. However, while the urban food system appeared generally prepared to cope with extreme climate events (every asked trader had alternative plans for food sourcing) the poor suffered most from related increases in food prices by 5 to 35%. These trade-offs could be addressed by well-planned storage facilities.

<footnote n="1">1. IWMI, Colombo, Sri Lanka.</footnote>

<footnote n="2">2. University of Freiburg, Physical Geography, D-79085 Freiburg-im-Breisgau, Germany.</footnote>

<footnote n="3">3. IWMI, Accra, Ghana.</footnote>

<footnote n="4">4. University of Kassel, Organic Plant Production Agroecosystems Research in the Tropics and Subtropics, D-34109 Kassel, Germany.</footnote>
Session 10

*Innovations in approaches and tools for inclusive and efficient value chain development*
# Commercial and inclusive value chains: doing good and doing well

Malcolm Harper<fnref n="1" />, John Belt<fnref n="2" /> and Rajeev Roy<fnref n="3" />

## Introduction

A value chain approach refers to a set of activities by chain actors, including buyers, processors, small-holders, traders and other service providers to generate higher value and create win-win relationships among several chain actors. Our book (Harper, Belt and Roy, 2015) is about value chains, not all value chains but a particular class of such chains – ‘inclusive’ value chains – which include and substantially benefit large numbers of poor people. These people are often smallholder farmers, but may also be small-scale retailers or poor consumers. The value chains described in the book have been developed because they are good business: the poor people from whom they buy their raw materials, or through or to whom they market their products, are their best partners from a commercial point of view. They can perform whatever functions are necessary, to higher quality standards, or more reliably, or less expensively, than any other suppliers, and it makes good business sense to work with them, and to pay them more than they could earn elsewhere, so that they will do their best to continue.

## Background

Porter (1985) showed how companies, and whole nations, could improve their competitive position by optimising value chains as a whole, rather than seeing them only through the lens of the ‘leader’ of the chain. Kolinsky (2000) went further, and showed how value chain analysis could be applied not only to maximise the profits of one firm within the chain but also to achieve a ‘dynamic shifting of producer rents through the chain’, thus improving the share of poor and disadvantaged producers or others. Prahalad (2005) writes of ‘inclusive capitalism’ where he discusses businesses that try to include the poor and underserved markets and consumers. While Prahalad’s focus was primarily on the poor as a market, several others have specifically looked at possibilities of including the poor in productive processes (Fairbourne et al., 2007, Harper, M. 2008). These writers and others discuss how poor producers and other intermediary micro-enterprises such as village-based processors, itinerant vendors, and others can be linked into ‘modern’ value chains. Several donor agencies have promoted this type of activity by supporting value chains by subsidizing inputs, finance, institutional development, business development services or infrastructure. A number of multinational corporations have also promoted such value chains, supported in part from their ‘corporate social responsibility’ budgets. We do not suggest that donors, governments and others should never subsidise value chains in order to include and benefit smallholder farmers or other disadvantaged groups, but our case studies show that it is not always necessary to provide subsidy of any kind to enable the small producers in a value chain to gain from their inclusion. We aim to demonstrate that including and benefitting the poor can do good and be good business, at the same time.

## Methodology

We used a multi-stage process to identify and choose the cases. First we publicised the opportunity through our own and other contacts. We received a large number of submissions; many were rejected because they had been subsidised, or they involved very small numbers, or the aspirant contributors were clearly anxious to promote rather than to describe the value chains. We short-listed apparently suitable cases, and were able, thanks to CTA in Wageningen and the KIT in Amsterdam, to offer a modest fee to the authors.

<footnote n="1">1. Cranfield University, England, United Kingdom.</footnote>

<footnote n="2">2. Royal Tropical Institute, the Netherlands.</footnote>

<footnote n="3">3. Indian Institute of Management, India.</footnote>
Showing that value chains have 'significantly benefited' the poorer people who are involved requires information about their condition before they joined the chain, and at the time when our contributors carried out their studies. Incomes may seem to be the best measure of economic well-being, but it is notoriously difficult to measure anyone's income. Fortunately, however, we were able to use the Grameen Foundation's Progress out of Poverty Index (PPI, see wwwprogressoutofpoverty.org) which provides a remarkably simple and reasonably accurate measure of economic well-being, with tailor-made versions for the countries we covered. It was not always possible to ensure that the samples were representative, or of sufficient numbers to ensure statistical validity, but we hope that each case contains at least some reasonably convincing evidence that the value chain it describes is not only inclusive but also that it substantially benefits some if not all of those whom it includes.

## The cases

Twelve of the fifteen cases included in the book involve farm products. They include 'traditional' crops such as rice and millet, but we also included milk, fresh vegetables, poultry, cashew nuts and khat.

The Khat case shows how a multi-link chain makes it possible to satisfy demand, across international borders, at a reasonable price, even in a region which has been subject to long-lasting warfare and violence. It is instructive, if sobering, to compare the effectiveness of this value chain with the experience of so many attempts to bring more desirable products to disadvantaged people living in remote areas.

The case for banana beer in Tanzania describes a low cost local product, made with locally available materials, can successfully compete with well-established brands, and how bottle collectors, small-holders, traders and local entrepreneurs can benefit from the value chain.

Small-scale 'tribal' farmers in South Rajasthan in India have taken over the very labour intensive production of genetically modified cotton seed from better off farmers in neighbouring Gujarat. As a result, a complex value chain of organisers and agents links large numbers of tribal farmers to seed companies and farmers' incomes are substantially increased.

Millet is a traditional smallholder crop, grown mainly for subsistence, and its demand has tended to decrease with 'development'. One company, however, has seen the opportunity in Tanzania for an upgraded product, properly processed, and has developed a multi-stage value chain with backward linkages to the farmers and forward linkages to consumers.

Malawi has ample land which is suitable for rice, but it must nevertheless import large quantities of rice every year. A local company is helping smallholders to produce rice for them, rather than cultivating it on a large scale.

Cambodia is a large producer of rice but its production per acre is low. A local entrepreneur realised that this constituted an opportunity and he decided to work with existing community organisations, having some 50,000 farmers under contract to supply the company.

India is the world's largest producer of milk, thanks in large part to the success of the Amul cooperatives. But Moksha Yug, based in the Southern state of Karnataka, shows that a private company, without any farmer groups or associations, can profitably compete by reaching out to even smaller-scale producers than state sponsored cooperatives.

Chicken meat is by far the most popular meat in India. One company, which is one of the top ten poultry producers worldwide, has chosen to work with some 20,000 independent out-growers, substantially increasing their income.

Green bean exports from Senegal to Europe have increased dramatically in recent years. Its production is subject to increasingly stringent regulations and controls. Many farmers have found employment with the large producers. The workers on the large farms are relatively well paid, and most of them are women.
Village householders from Odisha in India cultivating cashew nuts benefit from increasing international demand, as do some of the processing factory workers, most of them are women. Many campaigners have publicised their low wages and difficult conditions, but there are few alternative employment opportunities in rural Odisha; the workers themselves are generally pleased to have a job of any kind, rather than having to migrate.

The palm oil case from Peru shows that a smaller locally based value chain can sometimes succeed where larger-scale producers have failed. A local entrepreneur realised that local poultry and pig producers needed a lower cost replacement for the imported feed supplement. He succeeded in organising the local people, through their municipal associations, and they are substantially improving their incomes by harvesting oil palm fruits for his company.

Turmeric is a rhizome similar to ginger and is an important constituent of curry powder, and is also used as a dye and a medicine. A local company in Odisha state of India, has developed an effective and mutually profitable value chain for organic turmeric, which includes and benefits tribal farmers who are the traditional inhabitants of the forested hill areas of the state.

## Discussion

We chose deliberately to seek out and study less well known chains whose leaders were small businesses. Such companies are not interested to portray themselves as 'socially responsible'; their aim is to build their businesses and to make money. Many of these local entrepreneurial businesses had to seek out and develop new suppliers and other business partners. More established and better-off producers, retailers and so on are generally already linked to existing value chains. The companies in our cases had to look for new suppliers, disrupt existing procurement processes and reach deep into the supply chain and by-pass existing powerful intermediaries. All this can be achieved by involving smallholders or other small-scale producers, intermediaries or customers who lack access to larger markets or suppliers. Small-scale entrepreneurs, smallholders, poor clients and other disadvantaged groups have limited resources and they lack substantial market presence. They tend to be ignored or exploited by very large suppliers or others, and are at a serious disadvantage in negotiations with them. Smaller firms such as the ones described in the cases, can often achieve a better match with the very smallest and weakest producers or others. They can enter into balanced business relationships with them and they are less likely to be held hostage to supplier power.

The businesses covered in this book have set up the value chains primarily driven by market forces and business logic. There was a natural fit between the businesses and the small producers, intermediaries or clients who make up the value chain. Small-scale local actors contributed their own understanding of local conditions which helps the businesses.

Smallholders, and the people who make a living as vendors or market traders are often among the poorest in any society, and they are often the 'target beneficiaries' of development projects. These projects focus on the weaknesses of the people they are trying to assist, the businesses of the value chains in these cases, however, did the opposite; they identified the strengths of the small units with which they are collaborating and effectively exploited these strengths, in the positive sense of the word, in order to achieve their objectives and maximise their profits.

There are many features which explain the success of the various value chains, and there is certainly no common model to which they all conform; one of the strengths is that they are built on the basis of local circumstances. Generally they involve familiar activities, or small modifications of such activities, that do not require training in new practices, making it easier for poorer actors to participate. They have access to alternative markets of comparable value; this minimises the risk of monopoly and exploitation, and the assets which they have to use for their participation in the value chain are generally not specific to that particular business. They can redirect their efforts if they wish or have to leave the value chain. They can also if necessary access alternative sources of raw material and supplies; this constrains any tendency towards monopolistic behaviour.
References

Fairbourne J.S, Gibson S.W. and Dyer W.G. (2007) *MicroFranchising: Creating Wealth at the Bottom of the Pyramid*, Cheltenham, Edward Elgar Publishing.

Harper M. (2008) *Inclusive Value Chains in India*, Singapore: World Scientific.

Harper M., Belt J. and Roy R. (eds) (2015) *Commercial and Inclusive Value Chains: Doing good and doing well*, Rugby, UK: Practical Action Publishing.

Kaplinsky R. (2000) *Spreading the Gains from Globalisation, What Can be Learned from Value Chain Analysis?*, IDS working paper 110, Brighton.

Porter M.E. (1985) *Competitive Advantage: Creating and Sustaining Superior Performance*, New York: Simon and Schuster.

Prahalad C.K. (2005) *The Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits*, Philadelphia: Wharton School Publishing.
# Factors influencing successful inclusion of small farmers in modern value chains in ACP countries

Andrew Shepherd<fnref n="1" />

## Rationale

As a component of CTA's ongoing project on "Research, capacity building and institutional development in support of inclusive value chains in African, Caribbean and Pacific (ACP) regions", six case studies were commissioned in response to a Call for Proposals to either (1) carry out original research into the factors affecting the development of inclusive value chains or (2) prepare case studies of successful and innovative inclusive value chains. All of the proposals received concerned cases from countries in Africa.

## Theoretical Framework

Small-scale farmers face numerous difficulties in producing for sophisticated markets that are based on supplying products that comply with specific consumer demand. Such difficulties can include poor access to inputs and services, inadequate farmer organisation, difficulties in meeting quality requirements; and lack of access to credit for equipment and production activities. In general, efforts to promote inclusion attempt to address some or all of such constraints. The CTA Call for Proposals considered 'inclusive value chains' to be those that "obtain supply from smaller farmers, although value chains that actively involve small and medium-sized enterprises, such as small traders and processors, could also be considered".

From a review of the literature it can be noted that the definition of 'inclusive' usually refers to poverty rather than to size. However, while inclusive projects aim to work with the 'poor' the definition of 'poor' is often imprecise. An SNV study defines an inclusive business as a socially responsible entrepreneurial initiative, which integrates low-income communities in its value chain for the mutual benefit of both the company and the community (SNV and WBCSD, 2010). This, therefore, involves the expectation that large buyers will relate with farmers in an equitable manner. Perhaps the easiest approach is that taken by the GIZ, which defines inclusive business as any business that interacts with smallholders (GIZ, 2012). But the question then arises as to what is new about the concept of inclusiveness, given that farmers have been interacting with buyers for generations.

Haggblade et al. (2012) address this question. They see actions to promote inclusiveness as a response to changes to production and marketing systems that have opened up opportunities for some rural suppliers to access new markets but have exposed others to new threats as a result of quantity and quality requirements of the markets. They argue that agribusiness investments are not inherently pro-poor and that the move towards stressing 'inclusiveness' responds to this, by promoting interventions that benefit the poor. Desired outcomes of such an approach include higher income for the poor as well as greater participation of women and youth in value chains. This approach does, however, raise the question of how to make value chains more inclusive for poor farmers without hampering competitiveness. Harper, Belt and Roy (2015) aim to show that it is possible and profitable for businesses to build and maintain such value chains, without subsidies or other non-commercial assistance. In other words, working with the poor can "do good and be good business". They consider 'inclusive' value chains to be those that include and substantially benefit large numbers of poor people.

According to the deliberations of an FAO workshop, features likely to be found in an inclusive value chain include: their suitability for households with few assets; reliable and profitable trading practices; diversified market opportunities; a strong element of capacity building; and full and transparent consultation (FAO 2014).

<footnote n="1">1. Technical Centre for Agricultural and Rural Cooperation (CTA), NL-6700 AJ Wageningen, The Netherlands.</footnote>
Also influencing the adoption of an inclusive business model is the fact that products targeted at export markets, in particular, are increasingly becoming subject to certification. Exporters have to be sure that the farmers they work with are capable of meeting the standards required by the certifiers. Although the use of certification continues to expand, Kuit and Waarts (2014) conclude, from a review of many certification programmes, that there is little evidence that farmers are benefitting from them.

## Main Results

The oral presentation will describe six case studies commissioned by CTA. These covered: (1) jatropha chains in Burkina Faso and Mali, carried out by IRAM and JatroREF; (2) oilseeds in Uganda, carried out by SNV and IIED; (3) litchi in Madagascar, carried out by AVSF; (4) cashew in Benin, by Self Help Africa; (5) milk products in Senegal, carried out by GRET, IFPRI and Jokkolabs; and (6) bananas, pigs and aquaculture in Uganda, carried out by Shoreline Services, in association with ILRI. The studies adopted a range of definitions of inclusive value chains but such chains were generally considered to be those that seek to obtain supply from poorer farmers, thereby maximising their access to market opportunities. These case studies inevitably provide a slightly biased approach to the topic because the organisations applying for funding were likely to be the NGOs involved in supporting their development. Indeed, five of the case studies were prepared by NGOs or donors and concerned activities in which they were, or in some cases still are, actively engaged. It is improbable that any of the chains described in this report, other than the banana, pig and fish chains in Uganda analysed by the Shoreline study, would have emerged in the form described without NGO or other intervention.

Efforts to establish inclusive value chains may fail if the buyers make little effort to understand both the agricultural practices and skills of the farmers and their socio-cultural environment. For example, yield projections should be based on the local farm situation and not on yields achieved on commercial farms or on research stations. The capacity and willingness of farmers to follow recommended practices should be fully assessed. The implications of new farming practices on household and employed labour, and on gender relations, must be fully reviewed. Such issues have particularly plagued jatropha and other biofuel developments, as illustrated by the case study from Burkina Faso and Mali.

A major factor in the success of inclusive chain development is the extent to which the buyers provide “embedded” services, such as input supply and technical advice, for which the farmers only pay indirectly through lower final prices for their products. Not only does this practice overcome the financial constraints of farmers but it also gives them access to inputs and support that might otherwise be unavailable. Even where such support is not fully embedded and farmers are required to meet some costs directly, the provision of improved seeds and other inputs specifically tailored to the needs of a particular product buyer can be very beneficial. However, trust between farmers and buyers is essential if this is to work. Developing such trust can be complex and time-consuming and the role of outsiders, such as NGOs, in supporting this can be beneficial, although such support does raise issues of sustainability. A major cause of discord is slow payment, which was a factor in jeopardising the oilseeds chain in Uganda.

Farmer organisations and cooperatives can play an important role, either as agents of a company or as the prime movers of an inclusive value chain. The use of full-time professional business management appears to be essential for farmer organisations seeking to become involved directly in value chains as there are many risks associated with poor management. This was well recognised by the Madagascar cooperative marketing litchi and other fruits.

NGOs working to support inclusive value chain development have tried various approaches to organise farmers. One model is to work only with established organisations and not try to set up new ones. Bodies set up solely to bring about inclusion often have a short life span. On the other hand, where no suitable organisations exist an inclusive value chain may require some consolidation of farmers into groups in order to promote communication, provide training and facilitate logistics to deliver inputs and collect the products.
Although “inclusion” tends to emphasise the position of farmers within a chain, the strength of the value chain approach is that it moves development efforts away from being farmer-centred to considering the entire chain from producer to consumer. Some of the case studies well illustrate the value of this approach, such as litchi in Madagascar where efforts to develop sales in export markets had a positive benefit for all in the chain. The importance of inclusion for purposes of certification was supported by a study cited by the Madagascar case study. However, it found that litchi farmers certified as GlobalGAP did not receive statistically higher prices than noncertified farmers (Subervie and Vagneron, 2011). Unlike the litchi cooperative’s investment in fairtrade certification, which was the main focus of the case study, GlobalGAP was driven by exporters, not producers. Certified farmers were, however, able to sell greater quantities as a result of GlobalGAP certification, providing support for another emerging conclusion about certification, that it is becoming more of a precondition for selling products than a way of obtaining higher returns.

The case studies show that inclusion of small-scale farmers often requires a “trial and error” approach in order to arrive at the most suitable model for a particular environment. The research also suggested that the tendency in development work to ignore the traditional trading sector may be misguided. While not suitable for the handling of products requiring export certification and traceability, traditional marketing intermediaries (the so-called “middlemen”) do have a capacity to provide transport from remote areas, to buy small quantities per farmer and, often, to pay in cash. Farmers may be inclined to sell to them despite agreements with other buyers. However, it is presently rare to find projects and programmes that provide either technical assistance or direct support to traders.

The case studies provide several examples of successful NGO activities to promote inclusion. While donor and NGO support can have a very positive impact on value chain development, the question arises as to what happens when that support comes to an end. Collaboration with development agencies makes sense for the private sector when it has few costs to bear, but taking on those costs itself may not represent a sustainable business model. Care must therefore be taken to avoid giving a false picture of the viability of an inclusive business model if companies lack the resources and skills to continue implementation after donor support has ended. An additional concern is how to replicate apparently successful large-scale interventions and how to scale-up activities that have been successful on a small scale or as a pilot. This suggests that new project activities need to be planned in close collaboration with companies and with a strong emphasis on developing affordable interventions that, if successful, will provide a business case for the private-sector partner to continue implementing them. In turn, demonstrated profitability should provide the model for future replication or scaling up.

## References

* FAO. 2014. *Inclusive Business Models: Expert Workshop Report, 1-3 October 2013*. UN Food and Agriculture Organization (FAO), Rome. http://www.fao.org/fileadmin/user upload/ivc/PDF/IBMworkshop Oct2013 Proceedings.pdf

* GIZ 2012. *Growing Business with Smallholders: A Guide to Inclusive Agribusiness*. Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), Eschborn, Germany. http://www.agribusiness-with-smallholders.net/fileadmin/user upload/publications/Guide-Growing Business

* Haggblade S., Theriault V., Staatz J., Dembele N., and Diallo B. 2012. *A Conceptual Framework for Promoting Inclusive Agricultural Value Chains*. Michigan State University, Michigan, USA. http://fsg.afre.msu.edu/IFAD-WA/conceptual framework.pdf

* Harper M., Belt J. and Roy R. 2015. *Commercial and Inclusive Value Chains: Doing Good and Doing Well*. Practical Action Publishing, Rugby, UK.

* Kuit M. and Waarts Y. 2014. *Small-scale Farmers, Certification Schemes and Private Standards: Is There a Business Case?* Technical Centre for Agricultural and Rural Cooperation (CTA), Wageningen, The Netherlands. http://publications.cta.int/media/publications/downloads/1823 PDF.pdf
SNV and WBCSD, 2010. Inclusive Business: Creating Value in Latin America. SNV and World Busi-
ness Council for Sustainable Development (WBCSD) Alliance for Inclusive Business, The Hague, The
Netherlands. www.snvworld.org/fr/publications/inclusive-business-creating-value-inlatin-America

Subervie J. and Vagneron I. 2011. *Can Fresh Produce Farmers Benefit from Global Gap Certification? The Case of Litchi Producers in Madagascar*. NTM-IMPACT Working Paper 11/05, Montpelier, France. http://ageconsearch.umn.edu/bitstream/126704/2/SUBERVIE.pdf
# Cross-border trade and women in value chain development

Florence Tartanac<fnref n="1" />

## Rationale

Although trade is regarded as a key driver for growth in almost all African countries, the development and implementation of coherent and appropriate policies and strategies to realize the full benefits of agri-cultural trade, particularly its employment creation potential, is still limited. Moreover, with evolving international markets dynamics and expanding global value chains, the continued competitiveness of food products from developing countries depends increasingly on the country's ability to assure appropriate levels of quality and safety standards for their food products. Following the new trends, the trade development agenda is moving away from the traditional agenda on tariff liberalization to a two-fold strategy, on the one hand addressing issues such as international standards, intellectual property rights, removal of non-tariff barriers and technical barriers to trade, all of which requires specialized and technical expertise; and on the other hand focusing on meeting the increasing demand for agricultural food products at national and regional level.

In the promotion of regional trade, including domestic and cross-border trade, value chain development is key to increase trade in import-competing food staple sectors, which is where the majority of the rural poor operate. For many of these disadvantaged African pr1"oducers, the domestic and regional markets are likely to provide a more promising outlook in the short to medium term than international markets. Increased trade will also generate improved employment opportunities, particularly for Africa's youth – contributing to create job opportunities for at least 30% of the youth in agricultural value chains.

Small-scale (both formal and informal) cross-border trade, which involves mainly food products, is an important coping mechanism for women to create self-employment, promote income and reduce poverty. Employment creation is particularly relevant for women and especially in the informal trade: 70 percent of informal traders in Africa are women; with trade providing the main source of income for 90 percent of them and being the most important source of employment, with 60 percent of the non-agricultural self-employment in Sub-Saharan Africa.

The potential represented by small-scale trade in poverty reduction is hindered by a number of challenges:

* Inefficient value chains with high transaction costs and limited economies of scale;

* Administrative obstacles, including poor enforcement of policies (e.g. difference in standards applied);

* Transparency in tax collection and ad-hoc enforcement of national simplified export requirements for small traders and adoption of the regional small trade regime (STR) for small traders, both formal and informal (33 percent of regional formal export are below USD 2 000 and could potentially benefit from the STR);

* High cost and time of crossing borders, due to poor transport infrastructures

* Lack of infrastructure at the border (e.g. bulking and storage facilities for traders; lab and test equipment for custom agents);

* Poor market information system;

* High insecurity and vulnerability to violence and harassment;

* Low presence of formal associations and cooperatives of small traders (especially for women), resulting in poor service delivery to small traders;

<footnote n="1">1. FAO, I-00153 Rome, Italy.</footnote>