Competitiveness of

commodity chains: commodity chains:

inter-professional associations p
in France
Jo Cadilhon
6 7 December 2011 CEPAL Santiago
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6-7 December 2011, CEPAL, Santiago
Outline of presentation Outline of presentation
Definition of competitiveness Definition of competitiveness
French inter-professional associations
How they work How they work
What they do to enhance chain
competitiveness p
Can they help in managing markets?
How best to integrate smallholders? How best to integrate smallholders?
Latest developments in France and
Europe
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Europe
Lessons learned
Definition of competitiveness
Competitiveness at the industry level
arises from superior productivity, either p p y,
in terms of lower costs than rivals or the
ability to offer products with superior y p p
value that justify a premium price.
Porter, M.E. and van der Linde, C. 1995.
https://notendur.hi.is/bdavids/UAU101/Readings/porter_and_delinde.pdf
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French legal framework
Inter-professional associations recognized by
French law 10 July 1975
N fit i ti t t Non-profit associative status
74 inter-professional associations in France
M b i ti ti Members are associations representing some
or all of:
Producers Producers
Processors
Distributors
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They enable chain stakeholders to tackle
issues common to the whole chain
Missions of inter-professional Missions of inter professional
associations
Advocacy of industry interests in policy
making circles
Collective promotion of products
Concerted setup of quality standards p q y
Research and development
Extension of innovation to members Extension of innovation to members
Limited role in market regulation
Contract harmonization
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Contract harmonization
Market information dissemination
Missions - Seeds association Missions Seeds association
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http://www.gnis.fr/
Missions - Livestock and meat
association
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http://www.interbev.fr/
Model of generic French
inter-professional association
FO 1
FO 4
FO 3
Producers college
FO 2
PO 1
DO 1
DO 2
IO 1
IO 2
Processors college
PO 2
Distributors
college
Inputs providers college
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Observers or Secretariat
Government services Public research institutes Consumers associations
Members of cereals
inter-profession
Producers college g
AGPB: Wheat producers association
AGPM: Maize producers association
Distributors college
Coop de France: grains cooperative - marketing branch
FNA: Agricultural trading federation
SYMEX: French union of exporting millers
SYNACOMEX: National union of cereals foreign trade
Processors college
ANMF: National French millers association
CFSI F h itt f i d t i l li d ti CFSI: French committee of industrial semolina production
Coop de France: grains cooperative animal feed branch
SNIA: National union of animal feed industry
French malt producers
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http://www.intercereales.com/
French malt producers
USIPA: Federation of starch product industries unions
USM: Maize milling union
An association of associations
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http://www.cliaa.com/
Some features of French
inter-professional associations
They should draw their membership only from They should draw their membership only from
organizations that are fully representative of the
stage(s) in the chain to be recognized by government
There must be representational parity between the There must be representational parity between the
professions for recognition by government
Government can extend inter-professional
agreements to the whole industry agreements to the whole industry
There must be unanimity to extend decisions. Inter-
professional associations must speak for and act on
behalf of all members behalf of all members
Subsidiarity is important. An inter-professional
association does not exist to take over the functions
of its individual member associations
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of its individual member associations
Voluntary and compulsory funding by contributions
from all industry members
Success story:
Th A P I d t The Agen Prune Industry
Interprofession set up in 1963 to
t th hi l i di ti promote the geographical indication
Achievements in four main
activities:
Market regulation
Characterizing the product
Estimating yearly market
Disseminating market information
Agreeing on contractual agreements
Lobbying for enabling regulations at
ti l d EU l l national and EU levels
Successful promotion of the product on domestic and export markets
Leader in technological innovations for plum production and prune
processing
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processing
Increased competitiveness: yearly prune sales increased
five-fold since 1963
http://www.pruneau.fr/gb/index.html
Is the system stuck from
within?
Recent difficulties of milk inter-profession to p
agree on minimum farmgate price
Failure of milk interprofession to mediate on
b d d d i contracts between producers and dairy
processors
Heterogeneity of producers is not well Heterogeneity of producers is not well
represented in the college of producers
because of election process
Can numerous producers be on a par with
concentrated processors and retailers?
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Or is the environment no
longer enabling? longer enabling?
Inter-professions recognized by EU law but concept
still foreign in Northern member states where still foreign in Northern member states where
cooperative monopoly model dominates
Changing CAP and market regulation environment:
if d k t lib li ti agrifood markets liberalization
French politicians and some farmers would like to
transfer market regulation activities to inter- g
professions: managing market information and
business relationships for greater market stability,
better food quality and equitable chain relationships q y q p
Increased scrutiny from national and European
competition watchdogs
European Commission recently took steps to
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European Commission recently took steps to
recognize specificity of agricultural marketing
organizations vs. free market regulations
Integrating small stakeholders Integrating small stakeholders
Statutory decision taking in South African
dit il commodity councils
Members of commodity councils represent all
stakeholders of the industry, including labourers y, g
and consumers
No parity is needed in decision making
Decisions taken by 2/3 majority vote representing Decisions taken by 2/3 majority vote representing
both members and total industry production
Only decisions with double 2/3 majority are
submitted to government to become statutory
Government will consult all chain stakeholders
again before establishing statutory tax or levy on
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g g y y
all the industry
Lessons learned from a wider
geographical analysis
+ F h d l ll b d t ti f h i + French model allows broad representation of chain
actors in the association
+ Successful in lobbying, promotion, quality
improvement and R&D
Inter-professions cannot solve all the problems of the
commodity chain commodity chain
Representation of smallholder farmers and SMEs is
problematic
R l ti hi b t h i t till t Relationships between chain actors are still tense
Funding remains problematic
Underdevelopment of farmers associations is a
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p
problem in developing countries
Source: FAO, 2009. Commodity associations: a tool for supply chain development.
ftp://ftp.fao.org/docrep/fao/012/i0945e/i0945e00.pdf
Thank you for your attention
Expecting your feedback Expecting your feedback
Read our analysis no 31: Read our analysis no.31:
Commodity associations: a widespread tool for marketing chain management
EN: http://agriculture.gouv.fr/Analysis-no31-june-2011-Commodity
FR: http://agriculture.gouv.fr/Analyse-no31-juin-2011-Les
C t t j dilh @ i lt f
ES: http://agriculture.gouv.fr/Analisis-No31-Junio-2011
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Contact: jo.cadilhon@agriculture.gouv.fr