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Market power and food loss at the producer-retailer interface of fruit and vegetable supply chains in Germany.

ABSTRACT: Food loss and waste are associated with an unnecessary consumption of natural resources and avoidable greenhouse gas emissions. The United Nations have thus set the reduction of food loss and waste on the political agenda by means of the Sustainable Development Goal Target 12.3. The German Federal Government committed itself to this goal by implementing the National Strategy for Food Waste Reduction in 2019. However, this policy approach relies heavily on voluntary action by involved actors and neglects the possible role of power imbalances along the food supply chain. While current research on food loss and waste in industrialised countries predominantly focuses on the consumer level, this study puts emphasis on the under-researched early stages of the food supply chain from the field to retailers' warehouses. Based on 22 expert interviews with producers, producer organisations and retailers, this article identifies major inter-stage drivers of food loss in the supply chains for fresh fruit and vegetables in Germany. Its main novelty is to demonstrate how market power imbalances and risk shifting between powerful and subordinate actors can reinforce the tendency of food loss on the part of producers further up the supply chain. Results indicate that prevalent institutional settings, such as contractual terms and conditions, trading practices, ordering processes, product specifications, and communication privilege retailers and encourage food loss. The mechanisms in which these imbalances manifest, go beyond the European Commission's current legislation on Unfair Trading Practices. This study suggests a research agenda that might help to formulate adjusted policy instruments for re-structuring the German fruit and vegetable markets so that less food is wasted.

Supplementary information

The online version contains supplementary material available at 10.1007/s11625-021-01083-x.

SUBMITTER: Herzberg R

PROVIDER: S-EPMC8760580 | biostudies-literature |

REPOSITORIES: biostudies-literature

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Project description:The need for food systems to generate sustainable and equitable benefits for all is a global imperative. However, whilst ample evidence exists linking smallholder farmer coordination and aggregation (i.e. the collective transport and marketing of produce on behalf of multiple farmers) to improved market participation and farmer incomes, the extent to which interventions that aim to improve farmer market engagement may co-develop equitable consumer benefits remains uncertain. This challenge is pertinent to the horticultural systems of South Asia, where the increasing purchasing power of urban consumers, lengthening urban catchments, underdeveloped rural infrastructures and inadequate local demands combine to undermine the delivery of fresh fruits and vegetables to smaller, often rural or semi-rural markets serving nutritionally insecure populations. To this end, we investigate the potential for aggregation to be developed to increase fruit and vegetable delivery to these neglected smaller markets, whilst simultaneously improving farmer returns. Using an innovative system dynamics modelling approach based on an aggregation scheme in Bihar, India, we identify potential trade-offs between outcomes relating to farmers and consumers in smaller local markets. We find that changes to aggregation alone (i.e. scaling-up participation; subsidising small market transportation; mandating quotas for smaller markets) are unable to achieve significant improvements in smaller market delivery without risking reduced farmer participation in aggregation. Contrastingly, combining aggregation with the introduction of market-based cold storage and measures that boost demand improves fruit and vegetable availability significantly in smaller markets, whilst avoiding farmer-facing trade-offs. Critically, our study emphasises the benefits that may be attained from combining multiple nutrition-sensitive market interventions, and stresses the need for policies that narrow the fruit and vegetable cold storage deficits that exist away from more lucrative markets in developing countries. The future pathways and policy options discovered work towards making win-win futures for farmers and disadvantaged consumers a reality.

Dataset Information

Market power and food loss at the producer-retailer interface of fruit and vegetable supply chains in Germany.

Supplementary information

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