The SUPPLIERS theoretical framework

Returning to Figure 2.1, the political economy framework provides a basis for explaining the evolution of agri-food systems and for assessing the forces shaping the food supply environment in the study regions. Political economy perspectives also provide an under-standing of the differential regional impacts of economic modernisation and thereby help to explain some of the reasons why certain regions are described as ‘lagging’. Central to these explanations are power relationships in the commercial world that, in turn, can be refl ected in regulatory systems.

The LRRs covered by the SUPPLIERS project exhibit regional specifi cities in terms of resources, systems of food production, local market potential, marketing practices, food chain organisation, rural development programmes, and cultural and social organisa-tion. A central proposition is that economic activity is embedded in specifi able social and cultural circumstances. Cultural and socio-cultural concepts help to elucidate the theoretical underpinnings of the models of regional development being pursued, as well as to explain the economic behaviour of individual actors (producers, intermediaries and customers) in food supply chains. Actor network theory treats food chains as the social constructions of ‘real actors’ in which actor relationships, from production to consump-tion, form part of a complex of transactions. More usefully, ‘vertical’ and ‘horizontal’

network theory draws attention to the webs of interdependence in the rural economy and helps to identify horizontal linkages between food supply chain organisation and other dimensions in the rural economy.

Marketing theory is fundamental to analysing the overall market performance and competitiveness of food supply chains. The key approaches here are supply, conduct and performance (SCP) analysis, theories of transaction costs, marketing processes, and economics-based evaluations of supply chain management and performance. However, there is a need to bridge the gap between socio-cultural approaches, and marketing and eco-nomic analysis. It is proposed that this will be provided by conventions theory. Ecoeco-nomic analysis is culturally/territorially ‘blind’, but conventions theory is culturally sensitive.

It relates networks and embedded economic behaviour to particular cultural forms. Thus the ideas drawn from network theories, economic analytical approaches, and conventions theory, provide the main theoretical foundations for the SUPPLIERS project.

2.7.1 Selecting food supply chains

There are clearly increasing variations in the structural complexity and spatial extension of food supply chains. Given that the SUPPLIERS study is focused on food SMEs, and the fact that a high proportion of these are likely to be involved with products empha-sising local distinctiveness and serving segmented markets, it is proposed that a main focus of the project will be on short food supply chains. In recent years, there has also

been an important shift from an overriding concern for the quantity of food produced to a new concern for the quality of food products. This resurgence of interest in more

‘natural’ or ‘fresh’ types of food comes at an important time for agri-food regions in the SUPPLIERS project which have traditionally ‘lagged behind’ regions of commercial agriculture (Nygard and Storstad 1998). It supports the reason for selecting food supply chains dedicated to local and/or quality-based food production.

2.7.2 Putting theory into practice

Figure 2.2 shows how different work packages (WPs) are linked to the theoretical frame-work. Importantly, the WPs were embedded within a regional context. Within this context, an entire food supply chain is framed by a set of sector-specifi c conventions. However, Figure 2.2 also attempts to express how each of the actors within a supply chain/network can also have their own set of actor-specifi c conventions. These conventions may well be the same as for any other actor but, in some circumstances, they can also be quite different.

For instance, organic cheese producers may be framed by an environmental convention, as the production process is the key concern for that particular set of actors. However, at the commercial level, one may fi nd that public conventions concerning issues such as labelling and marketing may also be of equal, if not more, importance. The institutional actors were positioned to refl ect the infl uential role that they play throughout the entire food supply chain. Figure 2.2 also includes the consumer perspective, to refl ect the fi nal stage of the chain (although the SUPPLIERS study did not concern itself directly with this set of actors).

Clearly, Figure 2.2 is a simplifi cation of the ‘real world’ processes that occur within food supply chains in an LRR. However, the diagram is useful as a way of showing how the different work packages are linked and how the terminology is operationalised. Figure 2.2 also demonstrates how a product can be both territorially embedded (e.g. it is produced in a certain place) and territorially disembedded (e.g. if it moves out of the local area to be sold and the local association is signifi cantly diminished). Crucially, this process of disembeddedness is not necessarily seen in a negative sense; in fact, it may be necessary if a food SME is to be successful in terms of product sales. Certain actors within the food supply chain may therefore market a product’s local embeddedness in order to differenti-ate the product from a similar one (e.g. to credifferenti-ate a particular niche market for a type of cheese) and so establish an economic gain. In this case, actors may be demonstrating high levels of instrumentalism and market awareness.

As shown in Figure 2.2, other factors such as learning and innovation as well as horizontal and vertical networks can also be applied to understand the development and performance of food supply chains. Like the commodity chains approach, power relations are also still important; however, they do not move in a unidirectional manner. Thus the network theory approach is favoured because it refuses to privilege one site over others but rather conceives of power as the ability to ‘act at a distance’. For instance, some food SMEs

may have been awarded a Protected Designation of Origin or Protected Geographical Indicator by the EU. This label then acts on the basis of a copyright principle (i.e. an institutional mechanism) preventing other food SMEs from imitating the product. The EU is therefore enabled to ‘act at a distance’.

Combining network theory with conventions theory, therefore, enabled the SUPPLIERS project to better understand the negotiations that take place in the food chain. By doing this, it may be possible not only to trace the network but also to explain how the networks are framed by conventions, thereby providing a new understanding of food supply chains within the broader context of rural development. Thus by analysing producers, interme-diate members, commercial customers and institutions as part of a network – framed by

Figure 2.2 Conceptualising relationships within a food supply chain.

DISEMBEDDEDNESS

particular conventions – one can understand individual roles in the food supply chain, and also build up a picture of how these actors are linked together by complex webs of interdependence. Economic analysis will demonstrate how their performance as food supply chains rated in terms of market access and competitiveness.