In this article, the LWA’s Horticulture Campaigns Coordinator Rebecca Laughton explains why we have to produce and trade a greater percentage of food locally.
The LWA has been interviewing growers about how they can improve their environmental performance. Two dominant themes to emerge from these interviews are that:
- Many of the main environmental problems caused by horticulture are driven by industrial scale supply chains, which demand large volumes of uniform, perfect produce supplied reliably throughout the year, but are not prepared to pay a high enough price to enable growers to deliver this in an environmentally (and socially) sustainable way.
- Small-scale growers, selling via farmer-focussed supply chains, are better able to deliver public goods due better calibrated supply and demand and to customer understanding of issues such as seasonality, waste and packaging avoidance and trade-offs between crop damage and agrochemical use. Public engagement via farm open days, volunteering, box scheme newsletters and other means, facilitates this understanding.
It’s clear from these interviews that without addressing the problems driven by the expectations of the industrial supply chain (retail and catering), encouraging public goods through the Environmental Land Management Scheme (ELMS) will be like pedalling a bicycle with the brakes on. Industrial supply systems work against the delivery of diverse, resource efficient and climate friendly practices that farmer-focussed, local and regional supply systems are able to encourage. A transition to decentralised, farmer-focussed supply systems will require up-front investment. However, in the long term, these will pay dividends, because the market, rather than ELMS payments, will start to drive more sustainable practices and the delivery of public goods.
We set out below twelve reasons why industrial supply systems, including supermarkets, processors and mass catering, are driving environmentally harmful practices.
- Mismatch of scale and capacity – Supermarkets, the catering trade and public procurement require large quantities of uniform produce at a low price, ideally dealing with as few suppliers as possible to minimise admin. Small scale, diverse and organic producers cannot meet these criteria, even though collectively they are producing large quantities of high quality food that much of public want. Industrialised supply chains are not designed to cope with the number of producers, the diversity of produce and seasonality that are a natural function of environmentally sound systems.
- Demand for uniformity and constant year round production – Supermarkets demand uniformity of produce and constant year-round production, rather than following seasonal availability. This drives growers to reduce diversity and supermarkets to rely on imports for some of the year, rather than using traditional varieties that enable season extension, due to their keeping qualities. For example, a Kentish apple producer on ELMS trial finds that supermarkets want the same five varieties of apples all year round, rather than being willing to allow seasonal variation, despite finding there is a demand in his farm shop for the wider variety of apples he grows in smaller quantities.
- Cosmetic perfection – High quality control standards and size requirements drive farmers to use agrochemicals to mitigate risk of problems such as scab and codling moth. Although monitoring and other Integrated Pest Management (IPM) techniques are used to reduce pesticide use, spraying every 7-10 days according to threshold populations and weather conditions is still common.
- Reliability requirement – Industrial contracts require reliability of delivery to a specified quality and size, driving excess production to mitigate risk of not delivering. This means more land and other resources must be used to ensure contract is fulfilled, resulting in in-built waste. Although the surplus might find a market, it is often ploughed back in. While this contributes to soil fertility, it represents a waste of water, agrochemicals and energy used in production. For example, a salad grower in the Growing the Goods Horticulture ELMS trial, grows crops at several sites in separate areas to reduce risk of hail or flea beetle damage, requiring travel between sites and frequent waste of surplus crop. This is ploughed in, but is still a waste of production resources.
- Power imbalance – The power balance between supermarkets and packer intermediaries and individual producers is stacked against the growers, who are forced to be price takers rather than price makers, and accept low margins. A participant in the ELMS trial suggested that co-operation between growers to run their own packing businesses would empower growers and enable them to keep more of the sale price to invest in environmental measures.
- Low margins – Aggressive supermarket buying power and competition from foreign imports means profit margins for growers are small, driving them to cut costs and use practices that harm soil, biodiversity, water resources and cause pollution to maximise production from available land area (for which high rents are being paid). For example, rather than cropping a piece of land once per year and then establishing a cover crop to build fertility and prevent soil erosion from soil left bare over winter, a grower must grow two or three crops per year to maximise income. Such narrow margins reduce willingness to take risks and innovate with environmentally beneficial production methods, such as relying on beneficial predators to control pests rather than agrochemicals.
- Transport – Centralised distribution systems mean it is more cost efficient to transport produce to depots where large quantities can be packed together and then distributed to stores, rather than delivering direct to point of sale. This leads to situations, such as this one from a “Growing the Goods” interview, where produce is being transported from Lincolnshire to Scotland for example, to be packed, and then back to super markets around Lincolnshire to be sold.
- Refrigeration and cold stores – To keep fresh produce fresh, large quantities of energy are required to power refrigeration and cold stores (both static and in lorries), generating greenhouse gas emissions.
- Freshness and nutrition – Long-distance transport results in decay of produce (even when stored in controlled environments (chillers and CO2 manipulated), meaning it is less fresh when it arrives with the consumer and has less nutritional value, compared to produce that is delivered within a day or two of harvest (as happens with direct and local sales).
- Waste – There is a strong financial case for supermarkets minimising from their own operations, resulting in only 3% of total UK food waste (excluding primary production) arising directly in retail. However, investigative research in food supply chains has consistently shown that supermarkets’ trading stipulations are a leading cause of farm level surplus. These include order cancellations, last minute changes to forecasts, retrospective changes to supply agreements and the use of cosmetic specifications (requirements for food shape, size and colour) leading to a third of produce being wasted on farm, as a result of supermarket contracts.
- Packaging – More plastics are needed to package produce that is stored for longer periods, to prevent dessication and wilting. National, rather than local systems, make the reuse of cardboard boxes and plastic crates difficult, so new packaging has to be used. Local suppliers tend to reuse boxes multiple times, using the equivalent of the Danish Trolley System with blue mushroom crates, so that the purchase of packaging is minimised. Box schemes and CSAs provide each customer with two bags or boxes, which are filled and then returned on alternate weeks.
- Distribution of sale price along the supply chain – A farmers’ share of the total pot of money spent on food is around 8% for supermarkets and 26% for food manufacturers. The remaining 92% spent on food in supermarkets covers the costs of a range of middle men, the overheads of the supermarket and dividends for shareholders. By contrast, farmer focussed supply chains ensure that a much larger percentage of the sale price goes to the producer. For example, at Growing Communities, a fruit and veg bag scheme in Hackney, 50p in every pound spent goes to the grower. In a similar vein, Open Food Network food hubs and shops set their own mark-ups which are displayed against all products on every online shopfront. On average 76% of the final selling price of products on Open Food Network shopfronts is paid to the primary producer.
In this final point lies an opportunity to address the concern that local food and farmer-focussed supply chains will not be able to deliver the affordable, healthy food that the NFS requires. Farmer prices are squeezed by the complexity of the supply chain, and that squeeze is driving market failure. Transition away from industrial supply systems towards farmer-focussed ones has the potential to remove the need for ELMS payments in the long term, while making healthy, local food accessible to all. It is undeniable that supermarkets offer convenience, and the way the current food system is configured, their prices are often highly competitive, making food affordable to those on lower incomes. It is essential that food system reform meets the needs of all in society, and addresses issues of access to healthy food. However, we can’t trade off environment against access to food. It is essential that we achieve both.
Regional, farmer-focussed distribution systems such as those developed by Growing Communities, Regather Sheffield and Tamar Grow Local, in conjunction with a diverse range of direct marketing methods and online platforms have the potential to support environmental land management, by passing on a larger percentage of the purchase price to the producer.
The Covid crisis saw the advent of the “solidarity box scheme”, whereby people who can afford it are able to pay a higher “solidarity” price in order to subsidise boxes that are affordable to lower income customers. It will take time and investment to move away from a distribution system that is so dominated by a handful of large retailers to one that is more focussed on the needs of the farmer, the environment and the health of the customer, but this is a challenge we must rise to. Without action to boost the alternatives to the industrial food system, ELMS payments will struggle to achieve the desired changes in agricultural production methods. ELMS payments to horticulture are likely to be a fraction of the total £2.8billion set aside annually for all farm payments until 2024.
With the total value of UK fruit and vegetable production £2.35billion and the majority being sold via supermarkets and other industrial scale supply chains, ELMS payments will be hard pressed to combat the pressure from the market which is driving poor environmental land management. We need the Government to take a bold approach to food system change and set a target for farmer-focussed, decentralised food distribution to account for 25% of UK food spending by 2030.
The views expressed in our blog are those of the author and not necessarily lowimpact.org's