The corona crisis exposes vulnerabilities in our globalized food supply chain

What do short supply chains have to offer?

When the coronavirus crisis hit, many consumers rushed to the nearest grocery store to stock their pantries. The threat of a new, potentially lethal virus and fear of a full lockdown raised a question most of us had never asked before: will there still be enough food available in stores down the line?

One thing that many people are unaware of is just how hard farmers have been hit by the crisis too. Potato farmers, for example, produce mainly for the export market and for restaurants and other food service establishments (e.g. potato varieties used for French fries). They are now at risk of getting stuck with their harvests due to restaurants shuttering and countries imposing international trade restrictions.

The current crisis reveals – in more ways than one – the highly complex organization of our food supply chain. While Dutch farmers export 75 percent of their output, 50 percent of what Dutch consumers eat comes from outside the Netherlands. Just to give you an idea: the ingredients in an average meal have traveled 30,000 kilometers before ending up on our plates. Even much of the food grown on Dutch soil often completes a long and roundabout journey, traveling abroad to be processed into ready-to-eat products that eventually find their way back to Dutch supermarkets.

So the question is: is there a simpler way of doing things? We asked Economics professor Barbara Baarsma, who is also Chair of the Local Board of Directors at Rabobank Amsterdam.

Should we use this crisis as an opportunity to take a critical look at our food supply chain?

Barbara Baarsma: While the pandemic is a terrible event, it does provide us with a rich opportunity to accelerate the development of short food supply chains, that is, consuming locally produced food. This crisis is the first time that consumers experienced what it’s like to face empty shelves at grocery stores – certain items were simply unavailable.

It would be great if this led to the realization that, in order to ensure security of our food supply, you need an ecosystem in which local suppliers play a role alongside supermarket food sales. While I’m not opposed to food imports and exports on principle, I think this crisis has revealed that we need to think about the vulnerabilities of the highly globalized food supply chains that we have right now. We import a lot of food because we like to eat products that don’t grow here or that are not in season. But if we work on building shorter supply chains alongside international supply chains, that will ultimately allow us to improve the security of our food supply.

It’s not just in times of crisis that all this shipping food halfway across the world hurts our farmers. A large number of companies are involved in trading, transporting, refrigerating and processing food, and they all want a piece of the pie. Farmers often receive little more than the cost price of their products.

Why do farmers put up with this?

For many of them, it’s easier to plug into the existing supply chain than sell directly to local stores, restaurants or consumers. Since we’re talking about enormous amounts of food being transported internationally, these logistics supply chains are organized very efficiently. Individual farmers are not really in a position to compete with that, since each farm only produces comparatively small quantities of food. This makes it relatively expensive for farmers to sell their harvest locally.

Yet some farmers do manage to market their output at a local level. For example, the Remeker brand of cheese is so popular that the family-run farm actually had to temporarily turn customers away earlier this year; they could no longer keep up with demand and are currently expanding their operations. Then there are the Easter gourmet food boxes produced by the Lindenhoff farm in Baambrugge, which tend to sell out well before the actual holiday.

Why can’t other farmers simply replicate these successful models?

These are examples of single lines from a producer to either consumers or the food-service channel. While it’s very encouraging to see that these farmers have been so successful, you have to bear in mind that they are niche producers. From a logistics standpoint, these single lines are a lot less efficient than the large volumes currently destined for export.

So what is required to enable large numbers of farmers to sell their products locally?

If different types of food producers, such as tomato growers, potato farmers, onion farmers, cattle farmers and others, were to get together and establish their own consolidated supply chains catering to the regional market, you would get volumes that are big enough to be efficient. Farmers would then be able to choose whether to join the international or the regional supply chain.

Rabobank Amsterdam has been promoting the importance of short food supply chains for some time. As part of these efforts, the bank is developing an online platform where regional producers can sell their full range of products. This makes it significantly easier for consumers and food service outlets to find out where to find high-quality potatoes, vegetables, meat and dairy products in their area. The bank also helps to find answers to the question of how farmers can get food to local consumers in a sustainable way. While supermarkets will continue to play a role, we’re also seeing the development of systems that allow food to be delivered directly to consumers’ homes or to restaurants using electric delivery vans, boats and bikes.

Are shorter food supply chains advantageous to farmers?

Yes, in the sense that their revenue model will improve if there are fewer links in the supply chain that all want a cut. A shorter supply chain means a bigger profit margin for farmers, giving them more financial scope to market their investments into practices like increasing biodiversity or combatting soil subsidence. And farmers who are able to communicate their values and mission to consumers in the city closest to them will hopefully receive higher prices for their products.

Once the coronavirus crisis is behind us and memories of empty supermarket aisles gradually begin to fade, how will short food supply chains continue to benefit consumers?

By purchasing food from short supply chains, you can reduce the number of food miles, which means reduced congestion and lower carbon and particulate-matter emissions during transportation – provided that the logistics of the short supply chain are managed sustainably, through smart cooperation, and at the scale required. An added advantage is that you get to contribute to the transition to circular agriculture. It happens to be easier to align several cycles if the various operations take place within a short distance of each other.

Hopefully, purchasing from short food supply chains will make you think about the food you put in your mouth. In other words, you will develop greater food awareness, which could also end up improving your health.

Finally: what can consumers do to promote the creation of short food supply chains?

For starters, you can ask your local grocery store to expand their range of local products. When I go to my local supermarket and see they’re selling apples from Argentina, I’ll ask them why they don’t just get their apples from local orchards.

It also helps to consume as many products as possible that can be grown right here in the Netherlands. In other words, it’s better to eat pears and strawberries than, say, oranges or pineapples. And stick to seasonal produce as much as you can – enjoy what the season has to offer. If we all adopt these habits, we can dramatically reduce imports of fresh foods.

You can also go to www.supportyourlocalsnl.nl to discover all the wonderful products available in your area. I’m very proud of this national campaign, and of Rabobank’s role in sponsoring it. As of April 9, all short-supply-chain organizations operate under a single label (supportyourlocals) and are represented on a single platform. We even managed to negotiate free public-service announcements for the campaign. These supply chains are a lot stronger together and can pool their resources to develop smart logistics systems. Together, they can offer farmers many more local sales opportunities while at the same time bringing fresh, healthy meals to your table. Now that’s what I call win-win!

Barbara Baarsma

Chair of the board Rabobank Amsterdam