Radical transformation in global supply chains: can new business models be based on biodiversity in the agrifood industry?

Abstract

The food industry has been struggling for years with its impact on the environment. The impacts of input-intensive agricultural production on nature and the environment have been made obvious since the 1960s. Silent Spring by Rachel Carson from 1962 is still an extremely vivid account of the impacts of pesticides on nature, resonating with today’s scientific reports on the effects on pollinators. The algae blooms in Brittany’s coastal waters have been linked for a long time to a structural excess of intensive farming of pigs and chickens that has brought jobs and prosperity to a region previously suffering from underdevelopment, and emigration to other French regions. This has been well known for decades, but the trends of environment degradation have still not been reversed. One obvious explanation of the inability to change is that the downward trends in prices that farmers are being paid for their products make it nearly impossible to ask them to change their practices, because their economic viability is so close to a survival threshold. This is now all well known, and the food industry knows it must do something. What is also well known in the public debate is that power and value are not fairly allocated along the supply chain: farmers have much less power and a small share of the value compared to upstream players (the input industry) or downstream players (processing and retailing) because their negotiation power is scattered and thus weak. That gives enormous responsibility to the large companies of the food industry: they are in power; they have the tools at hand to foster change in the whole supply chain. The different phases of the sustainability strategy in a company like Danone are extremely interesting in this regard. In the late 2000s, this large company in the dairy industry developed a specific innovation and exploration fund, called the Livelihoods Funds, where impact investment1 projects were explored to finance sustainable agricultural practices, landscapes and food supply chains, particularly aiming at finding solutions for carbon storage and biodiversity pro-