Promoting Agricultural Value Chains
In the OIC Member Countries
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In developed countries, rising incomes translate into trends that are less clear-cut and more
paradoxical. On the one hand, urban lifestyles and increasing time scarcity have led to a rising
demand for processed, pre-cooked and prepared foods which are generally associated with
increased levels of fat, salt and sugar consumption (OECD-FAO, 2014). From a value chain
perspective, the rise of these types of convenience foods requires highly sophisticated systems
of production, distribution and retailing (Asian Development Bank, 2012). At the same time,
the demand for convenience foods translates into considerable opportunities for value-adding
activities between farm and fork (African Development Bank, 2013).
On the other hand, recurring ‘food scares’ such as the ‘mad cow disease’ (bovine spongiform
encephalopathy, BSE) crisis or the more recent horsemeat scandal in Europe have triggered
growing concerns by consumers over food safety, nutritional content and health properties of
food. In response, mandatory food safety standards by public authorities have increased
significantly, including requirements for traceability, nutrition labelling, country of origin,
hygiene, microbiological criteria, MRLs, and contaminants.
Many retail companies have developed similar and partially even more stringent standards not
only to show that food is safe to consume but that it is also ‘sustainable’. This is linked to
mounting concerns by consumers on the environmental and social impacts of food,
particularly at the level of production. Organic and Fairtrade standards were among the first to
provide sustainability assurances to consumers on environmental and social issues,
respectively. The former also addresses rising health awareness by consumers by offering food
produced without the use of chemical inputs.
While sustainable consumption was confined to niche markets for a long time, an increasing
drive towards mainstreaming can be observed for a variety of products, including fresh fruit
and vegetables, meat, fish and dairy. Similarly, traditional export commodities, such as coffee,
tea and cocoa, and specific bulk commodities which undergo considerable processing and
manufacturing before reaching the final consumer, such as palm oil, soy and cotton have
witnessed increasing growth in sustainable products. For instance, the market share for
sustainable coffee in Europe – the worldwide largest market for coffee – had grown to 15
percent in 2013 (Coffee Barometer, 2014). Other leading sectors in terms of sustainable
consumption are cocoa, palm oil, and tea (Potts et al., 2014).
To meet the consumer demand for more sustainable products, a variety of voluntary standards
and certification schemes has emerged over recent years. The ITC identifies over 170
standards and codes of conduct worldwide for sustainability in global value chains, of which
100 apply to agricultural products (ITC, 2015). While this trend is largely consumer-driven,
public policies, such as the EU 2020 strategy, also aim to promote sustainable consumption to
reduce the social and environmental costs of unsustainable agricultural production and
consumption.
2.1.5 Corporate social responsibility and sustainability
Corporate social responsibility (CSR) occupies an increasingly prominent place in global
agricultural value chains. Its growth over the last two decades is intrinsically linked to the
mounting pressure on multinational companies by non-governmental organisations (NGOs)
and international media to reassess their responsibility for the conditions at the production
level. Public allegations of severe environmental degradation and human rights abuses, which
began to be voiced from the mid-1990s onwards, posed a clear threat to corporate reputation