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The Role Of “Integrated Production” Scheme In The New Fruit And Vegetable Cmo: A Tool For Competitiveness, Sustainability Or Oligopsony By Large Retail Chains?

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  • Canali, Gabriele
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    Abstract

    The new Common Market Organization (CMO) for the fruit and vegetable sector approved in 2007, continues to include sustainability and competitiveness of the sector among its most important goals. The key role of the new (as well as the old) CMO is still played by Producers Organizations (POs): among other things, they should help farmers to organize and to concentrate supply in order to satisfy the old and new requests by large retailers in Europe as well as in other foreign markets. On the other side POs should also help farmers to apply the best available growing, preserving and packaging technologies, in order to become more competitive but also sustainable from an environmental point of view. In order to satisfy these requests POs have been traditional supporters of new production systems like “Integrated Pest Management” (IPM) and later “Integrated Production” (IP); they have generally offered to their farmers technical assistance for its application in the fruit and vegetable sectors. The main stated objective of IP schemes is to reduce the use of pesticides, and therefore to increase the environmental sustainability of these productions. However differently from the case of organic products, in the case of IP no EU regulation or standard exists. The absence of this common standard has allowed regional authorities to introduce different definitions of IP. Moreover large retail chains, the most important buyers for these products, apply chain-specific requirements, again based on the “idea” of IP and perhaps also on regional IP scheme, to some extent, but always with differences quite important. The actual result is that farmers producing vegetables and fruits must often apply, for the same product grown on the same farm, different technologies in order to obtain different certifications (i.e. regional IP scheme and possibly few different retailers’ scheme) all of them theoretically based on the “common idea” of IP but with quite different interpretations. These different certifications schemes imply, at the farm level, a relevant increase in costs of production and commercialization, without generating any positive economic effect, on one side, and with a large degree of uncertainty in terms of effect on environmental sustainability of these production technologies. The paper starting from the case of fruit production in Emilia-Romagna region, discusses these negative implications together with the possibility for large retail chains to exercise some oligopsony power with respect to POs also using IP schemes. Few implications are drawn with respect to the potential benefits of a common IP scheme defined by EU regulation, and few considerations are made about the main characteristics that this certification should have in order to be (at least theoretically) efficient.

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    Bibliographic Info

    Paper provided by European Association of Agricultural Economists in its series 109th Seminar, November 20-21, 2008, Viterbo, Italy with number 44893.

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    Date of creation: 17 Nov 2008
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    Handle: RePEc:ags:eaa109:44893

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    Keywords: Agricultural and Food Policy; Industrial Organization;

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