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Report

Teaser, summary, work performed and final results

Periodic Reporting for period 1 - VALUMICS (Understanding food value chains and network dynamics)

Teaser

Summary

The overall objective of the VALUMICS project is to provide decision makers throughout food value chains with a comprehensive suite of approaches and tools that will enable them to evaluate the impact of strategic and operational policies, and enhance the resilience, integrity and sustainability of food value chains for European countries. The consortium driving this proposal has a core of 19 European partners from 14 countries, and two Asian partners.
Given the complexity and diversity of food value chains, and the contexts within which they operate, the VALUMICS project offers a comprehensive and multi-dimensional scope that will go beyond the current state of art to provide new approaches and tools for stakeholders on several fronts. This includes new modelling approaches, consumer research, foresight analysis and synthesis into policy options, adding new perspectives for policy makers, both in government and within the food industry sector. The dynamics within the food systems will be explored using a causal loop analysis framework, covering the interconnected value, supply, and decision chains. The causality framework for the VALUMICS project methodological approach is implemented as a key driver of the project work through workshops with all participants in the project and with involvement of stakeholders in order to construct a shared vision of the overall system
VALUMICS will challenge and go beyond previous research limitations and boundaries through a highly cross-functional project design that will provide a bridging analysis across the economic, environmental and social dimensions previously kept separate. This whole chain analysis perspective will deliver comparative assessments at the European level and beyond. The selected case studies cover short supply chains, with local and national analysis (dairy cows to milk), as well as reaching global food chains relevant for sustainable food and nutrition security in Europe (cattle to steaks, wheat to bread, tomato to canned tomato and salmon to fillets).

Work performed

In the first reporting period the conceptual framework for the project modelling work was driven by system thinking approach in dedicated workshops, where the expertise of the consortium partners was pooled. The work delivered flow diagrams for all the case studies and a generic causality loop diagram and mapping for supply-, value- and decision chains with a focus on market dynamics and system dynamics approach. The causality framework development is still evolving and will be continued. The identification of problematic system behavior influencing fairness, resilience, sustainability and integrity in food supply chains will be further extended with a focus on agents behaviour and their interaction for each case study and the concepts operationalised. An evidence base and characterisation framework on policies, regulations and governance impacting upon food value chains was completed according to schedule. The results of this work are further used to analyse governance of food chains which provides a structured approach for the case study work to identify the system drivers and agent behaviours to underpin the high level requirements for the integrated quantitative model. Furthermore, work has been completed to identify availability and need for secondary data for the projectÂ´s analysis and model validation and an EPC (event driven process chain) framework for data collection has been established to map decisions and information for the case studies.

Final results

The project consortium has decided to prioritise work on â€œfairnessâ€, where the modelling objective is to identify unfair trading practices in particular from the farmersâ€™ perspective, but also considering all actors in the chain including the consumers. The ultimate goal of the modelling work is to find ways to positively affect unfairness in the chain. The conceptual model consisting of causal loop diagrams and flow charts of the physical flows of raw material from primary production to final products provides basis for the further conceptualisation of the VALUMICS integrated model and tools. The modelling specifications will be further enriched, complemented, assessed and then justified by the analysis performed in the case studies. This includes assessment of environmental and social dimension of food chains by life cycle assessment, exploring the influence of transportation and logistics of the selected food chains and considering risk and resilience by assessing vulnerabilities and capabilities of food chains to mitigate risks. The characterisation framework of policy and governance interventions provides a basis for evaluating power structure in food chains linked to economic studies on food chain organisations, price formation and price transmission, persistence of supply chain relations, assessment of economies of scale and technical innovations, and finally statistical analysis of agribusiness profitability. Moreover, the insights on consumer behaviour provides understanding of the dynamics of the functioning of food supply chains and systems.
The next step is a collaborative work to define and map agents\' behaviours and develop the requirements and specifications for a quantitative simulation model of the selected food systems using agent based modelling (ABM). System dynamics (SD), which is a practical application of system thinking, has been used extensively to model supply chains. Indeed, both SD and ABM, have properties that make them a good fit when simulating complex systems such as food supply networks. These methods differ in several ways, but the main distinction lies in their level of aggregation and the modelling point of departure. SD modelling, which is a top-down approach, takes place on a highly aggregated level making it a good fit when viewing the big picture (e.g. policy considerations). When heterogeneity within the system is important, such a high level of aggregation can become a problem. ABM, a bottom-up approach, can range from high to low abstraction levels. Several properties of ABM make it well-suited for capturing some of the complex features of supply chains such as the behaviours and interactions of agents in the chain. The main advantage of ABM is its ability to model social interactions and could therefore contribute to the study of subjects such as governance, cooperation, competition and collaboration within supply chains. Therefore, ABM is well suited for further developing the quantitative integrated model in VALUMICS.
A two level approach will be applied in the case studies (salmon to fillets, beef to steak, dairy cows to milk/butter, wheat to bread and tomatoes to canned tomatoes).
â€¢ Model will primarily focus on fairness along the food chain
â€¢ The second layer will answer the broader goals and research questions for the project regarding sustainability, integrity and resilience.