3. Content of the presentation
1. Definitions of resilience at different levels of the pork
chain: farm, sector, chain
2. A short history and the problems of the Dutch pork
industry
3. Transition theory
4. Questions to focus on:
● Is transition capacity a characteristic of resilience?
● How to define and measure resilience in a period
of transition ?
5. Farm level: the system is the farm
Traits: primary production that is, given the risk/reward
ratio organised in family farms
Stressors: prices, (contagious) diseases, policy measures
and the 3D’s (Death, Disability, Divorce)
3 levels of resilience (see Ika Darnhofer, 2014):
● Buffer capacity: e.g. solvability, borrowing capacity
● Adaptive capacity: innovation, entrepreneurship?
● Transformative capacity: ?
● Entrepreneurship?
● Weak ties (Granovetter) ?
● ??
(Compare DSM, Philips, AKZO, Nokia)
6. Sector level (all pig farms in a region)
Traits: cluster is a pool of production, competitive
advantage via specialised services, deep labour markets,
efficient size for the up- and downstream chain
For a resilient sector, in a setting with increasing income
outside farming and technical progress (more piglets /
sow, better feed conversion), farms have to grow (labour
productivity) and (if the market or land / quota are a
limited resource) a number of farms has to disappear
Stressors: fast urban income development, too
restrictive agricultural policy (e.g. Japan, S. Korea)
Resilience: capacity of cluster to stay competitive
● Capacity to attract resources (human capital, e.g.
young farmers, land from other sectors)
● Innovation capacity
7. Chain level (the system is a pork chain)
Traits: efficient configuration of collaborating firms to
provide consumers with meat manufactured from the
seeds of feed and (industrial) waste.
Stressors: changes in consumer demand, substitution by
other other (new) products, innovation in technology (by
competitors) or market channels (e.g. Spotify vs. record
company and CD record store).
Resilience: capacity to stay in business
● Capacity to change chain relationships (ICT, from
auction / weekly price quotes to contracts)
Or should the system be defined as the Protein chain ?
● Transformative capacity to move from pigs to algae
8. Conclusion: issue is transformative capacity
I assume that Resilience can be defined and measured,
and even managed in (about) the way I presented
At least that is the case in a rather stable situation,
where the situation asks for buffer capacity and adaptive
capacity
How about a situation where a transition is in the making
and we want to measure transformative capacity?
● Define and measure before transition
● Define and measure during transition (reflexive ?)
● Design future state, after transition
10. Dutch pork industry (network of chains): a
short history
1950s: small, poor mixed (subsistence) farms on poor
sandy soils: “small farmers problem”
● Development of pigs and poultry sector with
government support
1960s: encouraged by CAP (high pork prices and cheap
imports of citrus pulp, corn gluten, tapioca, crushed soy)
1970s: encouraged by fiscal investment premiums
(WIR), environmental problems grab attention
1980: introduction of quota, manure policy
Around 2000: classical swine fever, animal welfare
issues, ammonia. Q-Fever in goats. “Megastallen”.
11. The problem is un-sustainability
Environment (emissions, oversupply of manure, deforestation
for feed production);
Health (animal health, resistance of antibiotics, fine particles);
Animal welfare;
Landscape (odour, scale of stables, horizon pollution)
These are external effects
● No problem owner
● Societal costs that are not included in the price of food.
Has become a wicked problem
12. The system blocks...
a) Cost price driven
• Optimalisation and efficiency oriented
• Supply driven, many anonimous products
• Until a few decennia ago it was a succes-story
b) Negative external effects: political governments act
only after a time-delay, the policy targets are then
often reailised.
c) Citizens protest, but that does not translate in a
changed buying behaviour in the shop
13. Blocks....
d) Higher production costs are difficult:
• Part of the slaughtered animal is for export to
markets were willingness to pay for animal welfare
is low.
• Only 30% of the production is fresh meat for the
Dutch retail.
e) Firms (and ngo) work on different geografic scales
(national vs. NW Europe). Strong internationalisation
of the feed industry
14. Meat marketing ... A way to go
time
Leaving Production
Branding
Market Orientation
Branding;
Innovativeness
Process
optimization;
scale and scope
effects
Major strategic
management focus
Poultry
Beer/
Beverages
Dairy
Fragmented industry;
mainly national markets
High market concentration;
multinational companies
Increased market
concentration;
more internationalized
companies
Pork
Snacks &
Sweets
Bron: Wijnands, Van der Meulen & Poppe, 2007
17. Figure 1 Multi-level perspective on transitions (Geels en Schot, 2007)
The S-curve
from Geels &
Schot
Does it exist?
Can it be
managed?
18. Transition management ?
Although transitions cannot be managed in terms of
command and control, they can be managed in terms of
influencing and adjusting: a more subtle, evolutionary
way of steering.
In other words the direction and pace of transitions can be
influenced, even if not controlled directly. Transition
management therefore aims to better organise and
coordinate transition processes at a societal level, ant
tries to steer them into a sustainable direction (Loorbach
& Rotmans, 2006)
19. Transition theories in social science / economics
Organisational change management
● Planned change / organisational development
Multi-actor collaboration
● Cooperation / negotiation in wicked problems
Network governance: from government to governance
Policy agenda setting
Social learning: participatory systems
Adaptive management: ecological approach
Economics:
● Induced innovation theory (Hayami & Ruttan)
● Economic organisation theory / institutional economics
● Kondratieff business cycles (Schumpeter, Perez)
20. Transformative capacity and transition
How about a situation where a transition is in the making
and we want to measure transformative capacity?
● Define and measure before transition
● Define and measure during transition (reflexive ?)
● Design future state, after transition
Can we be inspired for measuring Resilience
(transformative capacity) by definitions and
indicators from transition theories ?
21. Does it help to imagine a greenfields
situation?
How would we organise the pork sector / protein sector
when we could start from scratch ?
Is resilience the transformative capacity to move from
the current situation towards that greenfields situation?
Verwaart and Van den Broek modelled alternative states
of the chain organisation (inspired by chain organisations
in other, more sustainable sectors) with Agent Based
Modelling.
● Can we measure resilience in those alternative
states?
● Does this help to define and measure resilience in
the current situation ??
22. Scenarios (for Agent Based Modelling)
No
coordination;
only regular
and organic
meat products
Brands offer
different
sustainability
levels
Brands must
offer annually
increasing
minimal
percentage of
sustainable
Information
platform
provides
supply
forecasts to
producers
Long term
contracts
between
brand and
producer with
fixed premium
Baseline Differen-
tiation
Green
Track
Market
platform
Producers’
organisation
Source: Tim Verwaart, Eva van den Broek, LEI
24. Conclusions: more research is needed
1. Definitions of resilience at different levels of the pork
chain (farm, sector, chain):
● relatively easy for buffer- and adaptive capacity.
● more difficult for transformative capacity,
especially in sectors and chains (different levels)
2. Transitions: Inspiring cases for research, but also
difficult to work with a moving target ?
3. Questions to focus on:
● Is transition capacity a characteristic of resilience?
● How to define and measure resilience in a period
of transition ?
● How to focus on the relationships between levels
in the chain ?
Soy market; % raises as the wtp increases. Green track: book and claim. Optimal carcass valorisation
Market platform
Long term contract: lifts risks of producers. Chain integration
Demand can remain unsatisfied ; time lag in production
Share of brands unsatisfied demand
Active producers of certified meat increased cost level; surplus
Total capital- some lose investment.
Baseline: demand develops, too many producers jump into organic; pork cycle; surplus sold; defaults; repeat.
Diff: brand increases; demand quicker increase. All segments affordable. Pork cycle: some dump. Then, demand increases, investments do not result in defaults.
GT: limited elite sustainable revenue lower.producer: less attractive.
MP: buff pork cycle effects. Supply ofrecasting -> gradual development; less defautls. Average retuns are lower shared. Bullwhip!
PO exlusive contract eliminates risk prod. Slight shortage -> slow increase.