Innovation and market challenges: thinking beyond technology
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http://www.fao.org/about/meetings/agroecology-symposium-china/en/ Presentation of Allison Loconto, from INRA and FAO, on Innovation and market challenges for sustainable agriculture. The presentation was prepared and delivered in occasion of the International Symposium on Agroecology in China, held in Kunming, China on 29-31 August 2016. © FAO https://www.fao.org/
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Innovation and market challenges: thinking beyond technology
- 1. INNOVATION AND MARKET CHALLENGES: THINKING BEYOND TECHNOLOGY DR. ALLISON MARIE LOCONTO RESEARCHER, INSTITUT NATIONAL DE LA RERCHERCHE AGRONOMIQUE VISITING SCIENTIST, FOOD AND AGRICULTURE ORGANIZATION PRESIDENT, RESEARCH COMMITTEE ON THE SOCIOLOGY OF AGRICULTURE AND FOOD, INTERNATIONAL SOCIOLOGICAL ASSOCIATION (ISA) THE INTERNATIONAL SYMPOSIUM ON AGROECOLOGY FOR SUSTAINABLE AGRICULTURE AND FOOD SYSTEMS KUNMING, YUNNAN, CHINA 29TH - 31ST AUGUST, 2016 © Y. Chiffoleau
- 2. LOCONTO / INNOVATIONS AND MARKET CHALLENGES What is an innovation? Assumed linear path (invention, design, commercialization): Scientists and companies invent, with state investment through R&D funding (patent registration) The private sector commercializes and develops products The public sector distributes the benefits to all people (prevent poverty), extension diffuses the new technologies The State manages environmental and social impacts of technology and innovation Civil Society is a watchdog People are consumers, producers, employees and voters (but not innovators). But … significant evidence of multi-actor networked paths: user innovation (von Hippel); co-invention (Malerba); open innovation (Chesbrough); open source (Raymond) participatory design (Schuler, Namioka), community innovation (Oost) upstream engagement (Fischer) mid-stream modulation (Fischer), Constructive Technology Assessment (Rip et al.) cooperative research (EC RTD); democratising innovation (Felt et al) Responsible innovation (Guston), responsible research and innovation (Von Schomberg, McNaughten, Owen, Stilgoe) social innovation (Stirling), grassroots innovation (Smith)
- 3. LOCONTO / INNOVATIONS AND MARKET CHALLENGES What is innovation? Innovative uses of old technologies?
- 4. LOCONTO / INNOVATIONS AND MARKET CHALLENGES Innovation is a collective process – not only a new technology! An innovation is a journey (Van de Ven et al. 1999) “An innovation occurs when new ideas, new technical devices or new forms of organisation meet their users” (Joly 2011). “Innovation is not simply a technology (or a technical object), it must be the reorganization of institutions, organizations, value chains, businesses to enable actors to innovate on their own terms” (Felt et al., 2007)
- 5. LOCONTO / INNOVATIONS AND MARKET CHALLENGES The linkages between innovations and markets – not only commercialisation of new products Markets are : “the collective devices that allow compromises to be reached, not only on the nature of goods to produce and distribute but also on the value to be given to them” (Callon and Muniesa, 2005). Re-organization of rules and re- allocation of responsibilities between actors provides space for innovation through markets. Institutional Innovations are new situations, not necessarily new knowledge (or technologies).
- 6. LOCONTO / INNOVATIONS AND MARKET CHALLENGES The agroecological transition challenge ROOM FOR INNOVATION!!
- 7. LOCONTO / INNOVATIONS AND MARKET CHALLENGES Core challenges that can provide opportunities for innovation Gaining access to sustainable inputs Satisfying consumer demand in terms of quantity and availability all year long Providing quality guarantees to consumers Finding the right balance between costs and prices Strengthening the capacity of farmers both in terms of sustainable farming practices and in terms of market knowledge because improving the ability to negotiate value is fundamental How to make these systems sustainable and attractive to the next generation?
- 8. LOCONTO / INNOVATIONS AND MARKET CHALLENGES Connecting to markets and relocalizing… Markets for inputs Inputs Procurement channel Benefits Seeds Agro-dealer High seed quality (germination) Own production Reduction of production costs Farmer exchange Availability Fertilizer (compost, manure, Effective Microorganisms) Own production Closed production cycles Farmer exchange “High quality, low price, within short distance” Community network Trust in the product quality Animal Feed/Fodder Own production Less costly and accessible Local farmer Availability Community network Know it is organic Post-harvest materials Agro-dealer Good transport Local farmer/supplier Availability Importer Availability and better price
- 9. LOCONTO / INNOVATIONS AND MARKET CHALLENGES Integrated production systems and the creation of local input supply systems Youth training centre Integrated production model (crop, livestock, aquaculture and biogas production) 5 regional hubs (training, production, processing, services) that sell inputs (EM, seeds, biorepellents) and buy products from ex-trainees 54% of the value of finished products was internal to the network and 46% constituted product sales with a value of US$ 7,040,540, of which the off-farm sales of finished products accounted for US$ 2,579,830 in 2014
- 10. LOCONTO / INNOVATIONS AND MARKET CHALLENGES Turning waste into inputs 1989, California law required 50% of waste to be diverted from landfills In 2008, San Francisco reached a landfill diversion rate of 77 percent, the highest of any city in the United States. Jepson Prairie Organics, a subsidiary of Recology makes four compost blends for more than 200 vineyards in Northern California who buy the blends and use them to feed the soil. Recology, Inc. - Owned 100 percent by its employees.
- 11. LOCONTO / INNOVATIONS AND MARKET CHALLENGES Small-scale agricultural service companies Creation of small-scale local service companies by youth who are competent in ITC and Drone technology Example of Agri Load 2 800 eggs of natural predators are deposited throughout the fields. They live for 3 days and will eat the larvae of the corn borer. Cost of the operation: 55€/ha o“Same price as a powdered agrochemical product, but without the waste of time.” http://www.ouest-france.fr/bretagne/morbihan/un- drone-pour-proteger-ses-parcelles-agricoles- 4357375
- 12. LOCONTO / INNOVATIONS AND MARKET CHALLENGES 24% 8% 18% 15% 4% 4% 28% 4% 28% 31% 21% 26% 31% 36% 24% 55% 28% 45% 83% 30% 41% 51% 92% 44% 47% 46% 36% 38% 57% 27% 14% 40% 21% 20% 8% 6% 15% 26% 4% 11% 1% 7% 7% 0% 20% 40% 60% 80% 100% Uganda FreshVeggies Ltd. Namibia NOA PGS Mozambique Earth Market Kazakhstan Akmola Traditional France Ici.C.Local Ecuador Canasta Utopia Colombia Familia de la Tierra China Shared Harvest Chile Kom Keylluhin Brazil Sateré-Mawé Bolivia Tarija PGS Benin Songhai Centre Self provisioning Agroecological channels Conventional Channels Non-monetary Exchange Connecting to markets and relocalizing… Markets for outputs (products) Diversity of exchanges Diversity of Agroecological Channels 0% 20% 40% 60% 80% 100% Public procurement Home/office deliveries Events (festivals,..) Export Processors Internet sales Barter /Exchange Box-Scheme Wholesaler Cooperatives Small shop Consumer clubs Traders Specialty shops Supermarket Open air market Restaurants/hotels On-farm sales Direct sales Farmers’ market/ eco-fairs Self provisioning
- 13. LOCONTO / INNOVATIONS AND MARKET CHALLENGES 1.0 2.0 3.0 4.0 5.0 Benin (BJ) Bolivia (BO) Brazil (BR) Chile (CL) China (CN) Colombia (CO) Ecuador (EC) Kazakhstan (KZ) Mozambique (MZ) Namibia (NA) Uganda (UG) 1 = Very Unfair - 5 = Very Fair Country-Averageacrossallmarketchannels Fair Pricing System? (n=35) Fair Price? (n=146) BJ BO CL CN CO EC KZ NA UG BJ BO CL CN CO EC KZ NA UG 1 1.5 2 2.5 3 1=Lower;2=Same;3=Higher Country Paying Higher Prices? (n=46) Willing to Pay More? (n=45) Valuing products: Are prices fair?
- 14. LOCONTO / INNOVATIONS AND MARKET CHALLENGES Source: Y. Chiffoleau (INRA) in FAO forthcoming 2017 New labeling schemes in Farmers’ markets National random survey in 2013, 42% purchased a product in a ‘circuit court’ during the preceeding month, with a food basket worth 25€/week http://www.gret.org/2014/06/circuits-courts-quen- pensent-les-francais/ Research-Municipality-Producer-Consumer led initiative Labels for distance Reduced competition between producers
- 15. LOCONTO / INNOVATIONS AND MARKET CHALLENGES KEY FACTS Created in 2011. Corporation (with "social enterprise" status). 800+ Ruches in Europe, mostly France (729). 126 Ruches in PMR. Ruche-Mama platform: 50+ employees (mainly IT and development). Franchise system: decentralized network of auto-entrepreneurs each manage one or several Ruches. Each Ruche must follow platform specifications (e.g. Ruche opening conditioned on appropriate product diversity. Maximum distance < 250 km. Source: R. Stephens and M. Barbier (INRA) « La Ruche qui dit Oui! »: - using the internet to link-up locally "Let's unite to buy the best products from the farmers and artisans of our regions." Map centered around Paris shows 127 "ruches" (food assemblies). Ruche intermediary revenue breakdown.
- 16. LOCONTO / INNOVATIONS AND MARKET CHALLENGES Linking gourmet cuisine and tradition Familia de la Tierra in Bogotá, Colombia Direct sourcing between local agroecological farmers and a network of 17 gourmet restaurants Integration of ‘traditional foods’ into the culinary school curriculum Collaboration between the National University, Psychiatric Hospital, producers, the Culinary School and Restaurants to rehabilitate ‘lost’ native varieties (beans, yacón) Source: Nieto and Aguirre in FAO 2016
- 17. LOCONTO / INNOVATIONS AND MARKET CHALLENGES Community supported agriculture – multi-functional innovation Brasso Seco Tourism Action Committee Began with Bird Watching – now a vibrant agri-torusim community Continuous investment, new ideas, new products, new events in order to value old traditions Bringing the market into the commuinity
- 18. LOCONTO / INNOVATIONS AND MARKET CHALLENGES Public procurement for local agroecological food National regulation for Ecologic Agriculture 2006 - Export = 3PC, Domestic = PGS Registration with Food Safety Authority School Breakfast Camelidos/Quinoa production system Local, traditional products PGS as the registration mechanism Direct procurement from local farm families
- 19. LOCONTO / INNOVATIONS AND MARKET CHALLENGES Closing the circle – innovating through markets in networks Agroecological innovation is about picturing where you are in your agroecosystem and figuring out how to make changes in your environment (socio-technical, economic and natural) in order to ensure its sustainability. We need to be able to imagine this in order to close the circle - we need to enable actors to make changes in their systems from different vantage points A circular economy is not only the idea of a local, closed or protected system – but it is the facilitation of interactions that enable the knowledge, goods and services to circulate within networks of actors and markets so that all resources are used to the most sustainable extent possible
- 20. LOCONTO / INNOVATIONS AND MARKET CHALLENGES How to innovate in food systems transitions?
- 21. LOCONTO / INNOVATIONS AND MARKET CHALLENGES The 6 (Re)s of policy support that can (re)Value agroecology Recognize existing agroecological markets by facilitating the registration of agroecological farmers with trade and food safety authorities according to appropriate standards Revise input subsidy schemes to include agroecological and biological inputs (or remove subsidies altogether) and provide financial incentives for creating small-scale agro-enterprises Reform research and extension programs in order to include agroecology and enable more flexible collaboration and experimentation with producers, private and civic actors Reinvest in agriculture through public procurement from agroecological producers by adapting the procurement protocols to the local realities of agroecological production (e.g., informal trading relations) Recreate public spaces for agroecology by providing public facilities that can be used to host farmers’ markets, fairs and festivals for agroecology Research, via participatory methods, the innovative markets for agroecology and sustainable agriculture in order to better understand how they contribute to Sustainable Agriculture and Food Systems
- 22. LOCONTO / INNOVATIONS AND MARKET CHALLENGES « In travelling to ‘unpredictable’ places, an object that isn’t too rigorously bounded, that doesn’t impose itself but tries to serve, that is adaptable, flexible and responsive – in short, a fluid object – may well prove to be stronger than one which is firm » (de Laet, M., & Mol, A. 2000, 226) Contact: amloconto@versailles.inra.fr, allison.loconto@fao.org
Editor's Notes
- Reinforced by moves towards networked understandings (Powell) user innovation (von Hippel); co-invention (Malerba); open innovation (Chesbrough); open source (Raymond) participatory design (Schuler, Namioka), community innovation (Oost) upstream engagement (Teknologiradet), two-way dialogue (EC RTD); cooperative research (EC RTD); democratising innovation (Felt et al) Even official understandings are growing broader (eg: BIS, NESTA): beyond science, technology and commercial entrepreneurship in universities, research labs and high-tech companies or just improved production and use of goods and services to many other developing forms of knowledge and action including: practices, relations, organisations; small business; service industries; public sector; grassroots movements; social mobilisation; communities; households; workplaces; lifestyles; civil society, creative arts, wider culture …. NESTA: ‘Innovation Gap’ So… All Innovation is Social Encompasses all ways to enhance diversities of ‘human wellbeing’ analytically and normatively, what matters are details structures, relations, power gradients, orientations opens door to understanding innovation as collective action (BIS) Collective Action: “the process by which interest groups produce a public good” (Macy) Marx, Weber… achieved thro’ struggle by social movements Olson: dynamics of individual utilitarian rationalities Benford & Snow: crucial roles of “collective action frame” processes Innovation as collective action is explicit in growing attention to - social technology, especially in Brazil (Helmer, Tornatzky, Miranda, Fonseca); - grassroots innovation more generally (Abrol, Smith, Fressoli)
- (because farmers have little capacity to source off-farm inputs due to the cost of the latter, farmers do not have the scale necessary to produce enough on-farm and very little purchasing power) (because yields decrease in the transition to organic and products are not available all year round as many farmers rely on seasonal rains) (determining what qualities consumers want is not easy and being able to provide the information that consumers need to choose the quality that they are seeking is a challenge) (how to account for the real costs of sustainable production and how to negotiate prices with different types of buyers and consumers) (how to ensure dissemination of the basic principles and confer consistency of practices?) Knowledge is the very first step for improving farmers' power in market relations (We are all faced with the phenomenon of youth exit from agriculture, how might innovative systems be able to attract youth to agriculture?)
- For example, since its founding in 1985, the Songhai Centre in Benin Republic has been investing in a rural transformation strategy, which they call ‘green rural cities’ (Agossou, et al., 2016). The Songhai Centre is a well-established regional training, production, processing, research and development centre for sustainable agriculture that takes a holistic approach to linking producers and consumers in local and national level markets for ‘organic’ labelled products. The Songhai integrated production model (crop, livestock, aquaculture and biogas production) provides a practical rural transformation strategy by incorporating three key sectors of the economy into a network of 5 regional training, production, processing and service centres across the country (Kétou, Kinwédji, Savalou, Parakou and Zagnanado). Each regional centre acts as a hub for a network of ex-trainees who are selling their production to Songhai’s processing centres. No link functions without a relationship to one or more of the other links and the satellites are governed through a centralised, hierarchical, chain of command that permits horizontal linkages between network members. There is a central procurement and marketing service that organizes the procurement of raw materials for processing and the sales of processed products from the Porto Novo hub. However, each satellite is also responsible for local sales of their fresh produce and artisanal processed goods. 54% of the value of finished products was internal to the network and 46% constituted product sales with a value of US$ 7,040,540, of which the off-farm sales of finished products accounted for US$ 2,579,830 in 2014. The Songhai centre trades only in organic products and enforces its own internal standards for organic via its training program and through its internal quality control system for the traceability of its products. Over its lifetime, the Songhai Centre has benefited about 152.000 people across Benin and has created a network of over 200 partners around the world, through which it maintains strong international and multidimensional relationships that contribute to the investment in this model.
- Overall, the prices were considered to be fair by all actors in the system. [mouse click] The actors in Kazakhstan and Bolivia felt that their prices were the least fair, but in both cases they felt that the system for setting prices was fair. [mouse click] When we looked at whether or not the consumers are paying more for agroecological products and whether or not they are willing to pay more, we see that [mouse click] Bolivia is not paying a higher price for their products, but they are willing to pay more, which means that the consumers do not think that they are paying as much as they should for agroecological products (which is in line with their feeling about the fairness of the price, which we can interpret to mean that it is not fair because it is not high enough). On the other hand, Kazakhstan is not paying a higher price, but they the consumers feel that they should be paying less. This also reflects the unfairness of their prices from the last table, but in this case the unfairness comes from prices that are too high. [mouse click] Overall, the consumers that were interviewed in these case studies seem to be insensitive to price (except for Kazakhstan and Uganda) – or at least they placed a lower priority on the price of the product when determining quality. This finding is in line with the literature which suggests that ethical consumers are less price-sensitive than others (Arnot et al., 2006). Often, this is tied to their relatively higher socio-economic status. However, our interviewees declared themselves to be mostly of middle income compared to the average incomes where they live; which offers an interesting avenue for future research.
- D'après une enquête nationale, en 2013, 42% des Français déclaraient avoir acheté un produit en circuit court le mois précédant l'enquête, avec un panier moyen en circuit court de 25 euros / semaine http://www.gret.org/2014/06/circuits-courts-quen-pensent-les-francais/
- THE MODEL The supplier produces and transports food to a locality temporarily "lent" (café, cultural or community center…) for the 2-hour long "assembly". Supplier travels only if a minimum chosen amount is ordered. The Ruche-Manager finds diverse suppliers, communicates to potential local customers, manages assemblies (weekly), organizes events and manages the Ruche mini-website. The Ruche-Mama manages payments and overall website design, assists and selects Ruche implementation, offers tech-support and communicates socially and institutionally, The customer orders online and collects produce on the day of assembly.