A guide to analyze a territory’s food system
Ademe, the French Agency for Ecological Transition, has just published a guide produced by BASIC explaining how to carry out an analysis of a food system, its sustainability and resilience.
The guide (which can be downloaded from the Ademe website) is based on the methodology we developed while carrying out several regional studies at Ademe’s request: in 2021 in the Hauts-de-France region, then between 2022 and 2023 in the regions of Normandy, Occitanie and Auvergne-Rhône-Alpes. This method has also proved its worth when applied on a smaller scale, from the département down to the intercommunal level.
This integrated approach is based on several stages which, when combined, enable us to define a transition strategy that is both anchored in local realities and focused on structural change in the territorial food system.
1. The first step is to carry out a diagnosis of the local food system. This is based on:
– an analysis of the flows of raw materials and processed products that enter, leave, are manufactured and consumed in the territory. This is an essential step in assessing the territory’s level of dependence to others, as well as the degree of connection between the different stages of the local value chain (from agriculture to consumption).
– a study of the players involved in the various stages of the local food value chain, the depth of their roots in the territory and their socio-economic characteristics. These elements make it possible to analyze the footprint of the various players in the area, through the way they use or generate local resources. The aim is also to study how the characteristics of these players relate to the flows quantified above.
– an analysis of the social, health and environmental sustainability issues associated with these stages of the local food system.
2. The second step is the co-construction of forward-looking visions (to 2050, for example) integrating all the diagnostic components described above: flows, food system players, sustainability issues, as well as the potential for reconnecting the various links in the local food system (agricultural production, agri-food processing and final consumption). The aim is both to become aware of the trend trajectory of the territory’s food system and to develop a more sustainable and resilient projection of its evolution, by acting on some of the structural elements of the food system to improve its effects on individuals, society and the environment.
3. The final step is to identify the “strategic lock-ins” that prevent the territory’s food system from moving from its current situation to this desirable vision. These lock-ins are the starting point for defining the strategic changes that need to be made in the territory to unblock the situation and open up the field of possibilities. The various players in the area can then co-construct action plans to bring about concrete change.
Total meat consumption in France has risen steadily since the 1970s, but the share of beef is declining. The beef industry is faced with an aging workforce, a vocational crisis, a significant decline in livestock numbers, and strong, multi-faceted competition. What are the driving forces and potential pitfalls?
Following on from a study on the dairy cattle industry published in November 2023, BASIC and French NGO Fondation pour la Nature et l’Homme have now turned their attention to the mechanisms for creating and distributing value within the French beef industry.
France stands out in Europe for its strategy of promoting and supporting beef cattle breeding. This has been encouraged and financed by the public authorities for over 50 years, through genetic research, aids earmarked for livestock bred in the mountains, and support for slaughterhouses (2.8 billion euros in 2020 just for supporting breeders). Yet the financial results of beef cattle farms – before subsidies – have been negative for over 15 years. Only twice between 2010 and 2020 have specialized beef farmers been able to achieve an income equivalent to the minimum wage. Their net hourly income was equivalent to 0.94 SMIC (France’s minimum wage) in 2021.
The industry is characterized by the growing importance of minced beef patty in beef purchases. It accounts for over 66% of all beef consumed in France over the course of a year. Minced beef patty, a standardized and mass-produced product, is one of the main products used by supermarket chains in their price wars. They put it forward to attract customers to their stores via its discounted price.
To compensate for this quest for low prices, players in the middle of the chain (slaughtering-cutting and distribution) are seeking to reduce the cost of raw materials. The number of slaughterhouses has halved in 40 years, as the sector concentrates to gain bargaining power. As a result, the pressure is back on breeders, who face two types of competition:
First, competition from the French dairy industry, whose cull cows (deemed unfit for milk production, for example, because of their age) supply carcasses that are sold 30% cheaper to slaughterhouses and are totally substitutable for suckler cow meat in the manufacture of standardized products such as hamburgers and ready-made meals.
Second, competition from low-cost beef imports from the rest of the European Union. Most of these come from dairy herds and are fuelled by a shortage of French female cow’s meat, which is highly sought-after by consumers.
Even a production model that values the work of breeders through the Label Rouge and organic farming quality labels does not benefit all links in the chain (breeding, slaughtering-cutting, distribution).
Intermediate players in the slaughter-cutting sector, who are struggling to cover their production costs, are even seeing their financial equilibrium undermined by the additional costs linked to the traceability required by these labels, and the difficulty of passing these additional costs on in their selling prices to retailers or caterers.
For further information, you can read the following documents (in French):
Photo: Stijn te Strake / Unsplash.
8 million French people find themselves in a situation of food insecurity. At least 2 million people are forced to rely on food aid to feed themselves. The number of diabetics has increased by 160% in 20 years. 18% of farmers live below the poverty line, in a profession with the highest suicide rate in France. In 15 years, 30% of farmland birds have disappeared, and 437 drinking water catchments have been abandoned due to nitrates and pesticides between 2010 and 2021…
All these facts show that our current food system is causing gaping social injustices and dramatic ecological impacts. What is the scale of the negative effects of this system? In other words: how much is our food system costing us?
In 2021, public authorities spent 19 billion euros to repair and compensate for these negative impacts, highlights a study published on September 17 by Secours catholique-Caritas France, the Civam network, Solidarité paysans and the Fédération française des diabétiques, based on research by BASIC. While most of this sum – 12 billion euros – comes in response to illnesses caused by our food system (diabetes and cardiovascular diseases in particular), it only partially covers all the costs generated by our food system.
Public spending designed to repair ecological damage amounted to 3.4 billion euros in 2021, a low figure given the scale of environmental damage (climate, biodiversity, waste, and so on).
At the same time, 48 billion euros were spent on public support for players in the food system, through subsidies, direct purchases and tax and social security exemptions. More than 80% of this support benefits players caught up in a race for volumes, which goes hand in hand with the standardization of agricultural raw materials and pressure on prices paid to farmers, fostering the deleterious effects mentioned above.
According to the study’s conclusions, this public support can be rethought to steer the food system in a different direction, and make it fairer and more sustainable.
Find out more about the study “L’Injuste Prix de notre alimentation” (in French), carried out by Secours catholique-Caritas France, the Civam network, Solidarité paysans and the Fédération française des diabétiques.
A summary is available here (in French too).
BASIC will publish the research report on which this study is based in the coming weeks.
Our latest study on value, costs and profits’ distribution in the coffee value chain, commissioned by Global Coffee Platform, IDH and Solidaridad Network, revealed on June 18, 2024, show a disconnection between farmer prices and consumer prices.
The net coffee farm income barely increases between ground coffee and expensive capsules sold at a price 4.5 times higher.
Besides, “family labour is undervalued. Labour is the largest share of farm costs for smallholders, but it is often unpaid and unaccounted for – meaning farmers’ ‘margins’ can seem higher than they are which hides the problem”, Solidaridad Network explains.
“Current value distribution makes coffee production economically unviable for most farming families and the planet”
— Annette Pensel, executive director of the Global Coffee Platform
To conduct this research, BASIC used publicly available data from the German coffee market, along with insights from Brazil, Colombia, Ethiopia and Vietnam, to build objective quantitative estimates of the distribution of value, costs, taxes, and net profit margins along coffee value chains.
This was verified through extensive rounds of interviews and consultation with the industry. Though the report begins with the German market, the results are indicative of how value is distributed in other markets.
Photo: Mateo Arteaga / Pexels
On 20 September 2022, BASIC published a study on the cocoa and chocolate value chains in Germany. The analysis was commissioned by the European Commission’s Directorate-General for International Partnerships (DG INTPA), the FAO Investment Centre and the secretariat of the German Initiative on Sustainable Cocoa (GISCO).
There is little work available to estimate and understand the creation and distribution of value, costs, taxes, and therefore net margins along the cocoa and chocolate value chains. Yet this information is of growing interest to industry players in the context of international discussions on the income needed for farmers to survive, as well as the fight against deforestation and child labour.
These issues are of particular concern to the European Union, a region that accounts for 55% of global chocolate consumption and around 40% of cocoa grinding. In 2019, DG INTPA, the FAO Investment Centre and ECA initiated a first step by asking BASIC to develop a model for the creation and distribution of value, costs and net margins for chocolate products marketed in France. The results were published in July 2020.
Following this publication, the secretariat of the German Initiative on Sustainable Cocoa (GISCO) contacted BASIC to develop a similar model and study for the German market.
The study revealed a disconnection between the final price of products and the income of cocoa farmers. The price paid by consumers depends more on marketing than on the cost of the raw material. For example, for a bar of chocolate (100g) from a national ‘entry-level’ brand, sold on average at 0.57 euro (or 5.70 euros per kilo), just as for a top-of-the-range bar, sold on average for three times this price, the farm’s net margin is very low, if not non-existent.
The difference lies essentially in the net margin generated by the companies manufacturing the final product (multiplied by seven between the two products) and by the distribution sector, which goes from a negative net margin to a positive net margin of almost 26 cents per tablet sold.
The German market differs from the French market in that Germans prefer sweeter milk chocolates, while hard discounters are driving down the price of entry-level chocolates.
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