Stream 1
Agri-food cooperatives and the transition to climate smart and sustainable agri-food systems
Stream leads: Michael Cook (University of Missouri), Cynthia Giagnocavo (University of Almeria), Hagen Henrÿ (member, ICA Cooperative Law Committee)
Description:
Agri-food cooperatives have traditionally been formed to increase bargaining power, achieve economies of scale, provide higher profits or returns for farmers, lower costs on inputs, obtain or improve quality of products and services, reduce risk, and contribute to rural development and the building of social capital.
These objectives are still valid, but increasingly globalised markets, digitalisation, the concentration of power in supply chains, and climate change, amongst other structural, technical, and market developments, have presented complex challenges for agri-food cooperatives, including for their managers, boards, and members. Agri-food cooperatives are also influenced by the position in the food supply chain; internal governance; and their institutional environment.
The following trends can be seen worldwide:
a) Accelerated internationalization has led to small-scale farmers increasingly forming associative and/or collaborative strategies that are continually being restructured due to changes in other areas of the system;
b) Large investor-owned firms (IOF) have modified relationships in the supply chain, thus affecting integration and collaboration;
c) Cooperatives are very present in worldwide food distribution, but as a supplier to large distribution and as a buyer from large suppliers (inputs), they are often seen to represent a weak link in the overall supply chains or systems;
d) Competition among powerful retailers is transferred to squeezing the margins of the farmer suppliers; and
e) Cooperatives either concentrate or cooperate horizontally but they must also engage in vertical collaboration (raising questions on the heterogeneity of member interests/values/incentives).
Where historically agri food cooperatives organised agri-food chains vertically and/or horizontally, from the producer to the consumer, the various functions of production, processing, commercialisation and retail have become subject to specialisation and have integrated separately and more intensively into global value chains, aided in part by digitalisation and data flows. The integration into value chains, instead of integrating into higher-level cooperative structures, risks weakening the structure of primary cooperatives.
At the same time, agriculture has been noted to be a major contributor to GHG emissions and negative climate impacts. The agricultural sector is under pressure to find solutions for the social, economic and environmental impacts of climate change, including mitigation and adaptation.
Digitalisation processes are intertwined with almost all processes of supply chains and horizontal and vertical collaboration. Agricultural supply chains have undergone profound re-organisation, and continue to do so. Decentralised chains become centralised; new food chains emerge; and digital technologies change the nature of chains to networks through retail platforms, such as Amazon, and data platforms, such as Google Cloud and Microsoft Azure.
The utilisation of Big Data and ICT technologies on a large scale in agriculture is seen to be a solution for dealing with climate change, environmental degradation, land and water constraints, the necessity to optimise resources, reduce costs, and increase traceability and food safety, amongst other compelling arguments.
However, it has also resulted in imbalances in power, investment barriers, reduced access to knowledge and the decreasing ability of farmers and SMEs to control and benefit from their agricultural-related activities. While agricultural data and their use for better decision-making and innovation are at the core of the sustainable digital transformation of agriculture, there are serious and legitimate concerns for small farmers, SMEs and agricultural cooperatives: fragmented and unclear data governance arrangements leading to power imbalances and use of farmers’ data without any reciprocal benefit, and indeed, possible harm (e.g., anti-competitive behaviour, lock-ins, misuse of sensitive economic or compliance information).
These significant changes in competition, distribution of market power and governance structures of agri-food chains, in addition to the risks and volatility of climate change and the demands for increased sustainability, coupled with digitalisation leads to complex decisions as to which relationships to build on and how.
Between vertical market structures, cooperative principles, and hierarchical governance structures, agricultural cooperatives have been continually adjusting alternative governance structures, new financial instruments, and different organisational arrangements. This has led to a concern over the loss of cooperative “DNA”, most importantly member engagement, participation and control, and has led to discussions on the barriers in enabling environments for cooperatives and whether cooperatives risk becoming a “firm”, independent from members.
Submissions welcome which address the trends and issues mentioned above, as well as those that relate to:
Challenges for of globalizing strategies for agri-food cooperatives in different parts of the world.
How can small farmers and SMEs help themselves (maintain their autonomy and/or strengthen their bargaining/negotiating power) through cooperatives in the midst of globalised and/or digitalised agri-food chains?
What cooperative governance and management strategies are needed to ensure resilience in the face of globalisation of agri-food markets?
Does digitalisation enable or hinder sustainable and climate smart agriculture?
How can agri-food cooperatives contribute to climate smart and sustainable agriculture?
What different organisational arrangements might be proposed for agri-food cooperatives?