Changes in rural economy
The agro-food industry in peri-urban and rural areas is changing rapidly. Corporate agricultural businesses thrive while small and middle sized agricultural companies vanish. These changes do not only concern farmers. In their decline all food chain related SMEs will be affected severely as food chains industrialise and globalise. Smaller businesses in the food chain look for new roads in the tension between the demands of global food chains and the local requirements concerning nature and the environment.
From global to local
In the NSR, SMEs in the food sector have strong potential to be successful on globalising markets. However, the EU Joint Research Centre concludes that there is evidence that shortening supply chains leads to increased local sales, employment and multiplier effects as well as being an important component of regional tourism product. Also Horizon 2020 in its work programme 2017 argues that modernisation of rural economies depends on the capacity of rural businesses to cooperate successfully within the region. Main challenge is to form efficient value chains which will deliver competitive products and services, high-quality and diversified jobs as well as resilience to global economic and climate changes. Increased interest in regional economy, resource-efficient and low carbon value chains generates opportunities to rethink and improve value chain organisation for economic, environmental and social benefits. The diversification of economic activity and improvement of the quality of life in rural areas is a mission shared by the European Union’s rural development policy and its Cohesion Policy.
Short supply chains
In the last couple of years, among consumers interest in the concept of local food systems has begun to grow. There has been an explosion of interest in small-scale food systems throughout the global north. The concept of local is expected to contribute to building liveable communities, strengthen the local economy, improve access to food, and improve consumer health. Such local food systems are referred to as Short Supply Chains (SSCs). They are one example of regional value
chains, and mushrooming across Europe (f.i. farm shops, farmers’ markets, farm based hospitality, roadside sales, pick-your-own schemes). Traditionally, SSCs connect local food supply and demand, have no intermediary agents and supplies can be traced to every link in the chain. Most SSCs use ‘local’ as an attractive branding element for customers to identify themselves with in support of regional products and qualities.