Value chains are one way being suggested to gain producers a greater share of the food dollar.
The concept behind value chains is relatively simple— it calls for a more formal commercial relationship between farmers and retailers. It allows producers to obtain premiums for their product when it has attributes that are valued by the consumer such as quality, convenience, health benefits and animal welfare issues. Quite simply, it is a recognition that not all agricultural products that end up on store shelves are created equally and consumers value certain practices in food production and are willing to pay extra to get them.
With financial help from the PEI ADAPT Council (which administers the Canadian Adaptation and Rural Development Fund in the province for Agriculture and Agri-Food Canada), the Farm Income Improvement Committee held a value-chains workshop recent at the Stanley Bridge Resort. The committee, chaired by former Prince Edward Island Federation of Agriculture president Robert MacDonald, was formed as a follow-up to a symposium of sustainable agriculture held just over a year ago. It includes representatives from all of the major farm organizations and commodity groups.
"There was plenty of good input and ideas at the workshop," said MacDonald. "However, this is not something that can be done overnight— there is no magic solution and it is going to take some time."
MacDonald concedes the value chains idea will probably gain its first early successes with new products. He said the current system works quite well for suppliers and retailers and it will be a major task to convince them to change. "We have to start with new products and hopefully we will achieve some success in that area and we can move further," he said.
However, the facilitator of the workshop said there is some incentive for stores like Sobey's and Loblaws to look at the idea. Paul McInnes, an agricultural economist who specializes in value-chain development, said there is a storm cloud on the horizon for those companies— big box stores like Wal-Mart who are moving into the grocery business.
McInnes said top quality locally produced products can give the traditional grocery stores an edge as they take on the world's largest retail organization.
MacDonald said the workshop was the first major project undertaken by the committee. He said the group will continue to meet regularly and now hopes to develop suggestions in such areas as marketing and distribution. The committee operates out of the Federation of Agriculture office. Ronda Bellefontaine has been seconded to the committee from the Department of Agriculture as a resource/staff person.
(This is one of a series of articles prepared by the P.E.I. Agricultural Awareness Committee and funded by the PEI ADAPT Council and other partners to highlight new and innovative developments in the province's farming community.)