On 30 July 2010, the European Commission decided to ‘extend the mandate of the High Level Group on the Competitiveness of the Agro-Food Industry’, to create a ‘High Level Forum to improve the functioning of the food supply chain’, which will focus on ‘contractual relations, logistics and competitiveness’. The EC press release noted that ‘the agro-food industry represents 2% of Europe’s GDP and 13.5% of total employment in the EU’s manufacturing sector, [and] consists of approximately 310,000 enterprises, including some global leaders. It continues to play a fundamental role in satisfying the needs of consumers and contributes an annual production of more than €600 billion to the EU economy.’ However it went on to observe that ‘the entire European food supply chain has entered a period of adjustment’, with ‘consumer preferences … changing as a result of income and lifestyle developments’.
The newly established forum will bring together representatives of all food chain operators, starting its work in the autumn of 2010 and continuing until December 2012. According to press reports, ‘the Forum will issue an annual report on the follow-up of the recommendations of the High Level Group and on the implementation of the initiatives proposed by the Commission.’
According to EC Vice-President Antonio Tajani, the commissioner responsible for Industry and Entrepreneurship, ‘the High Level Group will help achieve future growth and competitiveness in the European agro-food industry, to address the impact of globalisation and take advantage of its opportunities.’
Changing consumer preferences in the EU provide the context within which ACP food and agricultural exporters will need to design and implement production and trade adjustment initiatives in order to reposition themselves so they are able to profitably export to the EU in an era of trade liberalisation and the progressive erosion of traditional trade preferences. This process is already under way in a number of ACP countries and sectors. In the Caribbean rum sector, approximately €150 million has been invested in production and trade adjustments to reposition the industry to serve premium brand markets for quality-differentiated bottled rum (rather than the bulk rum market), with notable successes emerging ( see interview with Vaughn Renwick). In the Namibian beef sector, considerable investment has been made to improve marketing and better meet the needs of the final consumer, for example by supplying ready-for-the shelf, prepared, packaged and bar coded ‘quality’ differentiated beef cuts, thus shifting the Namibian industry up the value chain. Even in a bulk commodity such as sugar, initiatives are under way in countries as diverse as Mauritius ( see interview with Jocelyn Kwok) and Barbados to reposition sugar exports in evolving markets, by moving up the value chain and establishing markets for quality-differentiated final consumer products.
What all these examples have in common is that they seek to follow, and even anticipate, market trends, particularly the rapid expansion of the ‘luxury purchase’, quality-differentiated markets resulting from income growth in developed and advanced developing country economies. However, as illustrated by the recent EU initiative to establish a high-level forum to improve the functioning of the food supply chain, new public sector policies are often needed to support this process of adjustment. This is a policy challenge which ACP governments urgently need to get to grips with.