After Covid-19, how to “re-territorialize” the agri-food industry?

August 2020
Par MyCfia

Since the turn of the years 1990-2000, the economy perceives the territories in the light of their competitiveness, that is to say of their ability to integrate into international trade to create value, employment and contribute to the trade balance of the country concerned. The result is ever-greater integration into global value chains, within which each territory tries to capture a significant part of the value created.

This was the case with agricultural territories from the 1950s: in order to ensure intensive mass production, the agro-food industry (IAA) was structured into global value chains dominated by industrial groups and large retailers, within which the territories have specialized. Raw agricultural products are collected, packaged and exported for processing on the territory or abroad, often without distinction.

This model is regularly criticized for its induced costs, or “negative externalities”: environmental degradation linked to intensive production, monoculture and international transport, health risks generated by the use of dangerous or polluting inputs, or even less. social saying aroused by competitive pressure and the search for maximum profitability.

The Covid-19 crisis, for its part, highlighted its great fragility: just-in-time management had as a corollary the low level of available stocks, while the containment measures disrupted the production and distribution chains and the States imposed restrictions on international trade for health or policy reasons.

How then would it be possible to “re-territorialize” certain production and industry basins, including the IAA, so as to reconnect production and consumption territories to guarantee their autonomy and food security, the contribution to change? climate and restoration of biodiversity?

Localist way

A first path could be qualified as "localist", favoring the organization of economic activity on the scale of regional spaces. This model, which is also the subject of the attention of the public authorities within the framework of “territorial food projects” (PAT), has experienced a revival with the Covid-19 crisis, the confinement period having been conducive to reflections in health and environment.

Since the endangerment of ecosystems seemed to have largely contributed to the development of the pandemic, consumers sought to obtain quality products, if possible local. During this period, we observed a clear increase in sales in short circuits.

But its generalization comes up against a major obstacle: its cost for the end consumer. When transport weighs little in the cost of the finished product (such as bananas, where the share of maritime transport in the cost is almost negligible), international trade allows each territory to specialize where its productivity is the most important, while importing products which he cannot produce himself, or at higher cost, thus following David Ricardo's theory of comparative advantages.

The production in large quantities that allows access to international markets helps to make infrastructure profitable and therefore reduce average production costs. Conversely, under current conditions, agriculture confined to a restricted territory could produce only a limited quantity and variety of products, at higher costs, with implications for consumers with the lowest incomes.

While short supply chains can aim to recreate a bond of trust between farmers and consumers, they are therefore struggling to supply large metropolises. They cannot completely replace the existing schemes without taking into account the market value of the costs induced by the current model and the transition to a truly circular economy.

Necessary adaptation of IAA companies

Beyond a purely local model, we can consider a reorganization of the IAA at the national level. France has a large population, a large cultivable area and diversified agricultural areas (soils, climates), making it possible to produce a wide variety of food products at the scale of the territory while achieving economies of scale. .

By The Conversation

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