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The Agro-food value chain contributes significantly to the economy.
In addition, the sector plays an important cultural and societal role and contributes the vitality of rural communities.
It is critical for food security and food traditions.
Value added means the value of goods and services produced minus the cost of the raw materials and other inputs used to produce them.
In 2007 a study initiated by the EU Commission found that the competitiveness
of the European food industry is weaker than that of the US and the Canadian food industry and approximately equivalent to that of Australia. The level of competitiveness in this study was measured via a series of indicators that
capture various aspects of the growth in value added, export shares, and
productivity in the sector.
These indicators are the growth and real value-added of the manufacturing sector in the food industry.
The growth of the export share on the world market.
The growth of real labor productivity.
This affects the unit labor costs and, in this way, the relative process.
And the growth of real value-added which reflects industrial dynamism.
In order to identify why the agro-food sector is underperforming, it is important to
understand the trends and challenges of the sector in the last few decades.
The agro-food sector has changed significantly over the last few decades.
This is manifested through important trends, which include: globalization, structural changes (especially with regard to farms and the retail sector), changes in consumer preferences and environmental awareness, advances in biotechnology and in information and communication technologies, and finally demographic changes.
They explain and discuss these trends and the challenges they bring in more detail.
The Agro-food sector is becoming increasingly global.
This is driven by decreasing transportation and transaction costs and
by trade liberalization thanks to the efforts of the World Trade Organization.
With increasing globalization, many EU agro-food businesses face increasing
pressure from new competitors, specifically, from emerging economies such as Brazil and China.
While the EU is lagging behind, these emerging economies are gaining shares on the food export market.
At the same time one can observe a gradual transformation of farms into small companies managing large operations.
In the retail sector concentration is also increasing but at a much higher level.
This is happening because large firms are growing even larger, and large firms are
acquiring smaller ones.
This increasing concentration places retailers in a strong position in their business relationship with suppliers.
Consumers are the main drivers of the development of the Agro-food value chain.
As the basic calorie needs for a large share of the population are satisfied
consumer demand is becoming more sophisticated.
The price continues to be an important element in consumer decision making when it comes to buying food.
However, consumers are increasingly interested in high quality, The possibilities of bio technologies and information and communication technologies, short ICT, are growing.
These developments have the potential to reduce the environmental impact of the Agro-food value chain, improve consumers health, and enhance productivity.
However, taking advantage of these developments often requires an upfront investment in infrastructure, which not all firms can afford.
Also, not all kinds of bio technologies are accepted by the general public, as in the case of GMO.
The aging population implies that there are more people moving out of the
workforce then moving into it, which creates a shortage of labor supply.
This is particularly difficult for the Agro-food value chain as young people
are more attracted by new industries.
"I cannot buy health, but I can buy health orange's "
Quality IN Agro-food chain:
There isn't a commonly agreed definition for food quality, and most
people would say that food quality shows itself by its "fitness for use" and/or its "fitness for consumption."
In a broader sense food quality represents the requirements necessary to satisfy the needs and expectations of the consumer.
An open list of the set of consumer requirements for food quality:
The safety of food - refers to the absence of risk factors that could represent a risk for consumer health. Nobody wants to eat food that could potentially be hazardous to your health. The safety of food for consumption is usually punishable by law if violated and heavily regulated.
Commodity requirement refers to a product's conformity to its definition. Gaining importance as the production of artificial food is improving and distinguishing between a natural product and its lab produce equivalent is getting more difficult. Both of these requirements relate to the authenticity and the genuineness of the food's quality.
The nutritional value of the food, the main purpose of food consumption. We eat food to satisfy our nutritional needs, so that a customer expects a certain amount of nutritional value from the food product.
Customers are concerned about the origin or the tradition of the product and have recently become more concerned about organic agriculture. Customers want to know where something was grown or produced, how animals were treated, and what affect the production process had on the environment.
Customers are concerned about the impact on the environment, but biodiversity, the well-being of animals and the possible consequences of mass production. The difficulty in this and the previous requirement is that it is difficult to verify or determine this quality requirement by analyzing or consuming the food. Hence, it is highly susceptible to fraud and deceit, which is why labels and regulations are important.
The guarantee of the product goes hand-in-hand with the previous requirements. Since it is difficult to verify in material requirements, consumers rely on guaranty requirements. The credibility of a producer is based on consumers| perception of their professional competence and moral reliability. Producers can improve their credibility for person-to-person interaction; however, this is time-consuming, costly, and often logistically impossible. Another possibility is to use certification and traceability procedures.
Product and packaging system. Proper and recognizable packaging is used to facilitate product recognition, marketing and the use of the product. The recent trend of environmental consciousness has led consumers to be more aware of packaging efforts. Some companies are therefore moving towards packaging that is reusable. Packaging can also be important to avoid the perishing of food as is the case with canned food.
The expectation can vary depending on the customer and the product.
However, there is a recent trend towards "health-giving" properties of food. This also includes prices as the price-to-quality ratio represents consumers' perception determining preferences and choice.
Consumers demand both, quality and safety, just as they demand:
Sensory quality and nutritional quality; material quality and immaterial quality.
traditions and ethical values; quality of the product and quality of the
production and commercial context.
BY KHAS
