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Supply chains linking food SMEs in Europe's lagging rural regions

Small food enterprises in lagging rural regions (LRRs) of the European Union must develop efficient and effective supply-chains to contribute fully to the local economy and community. SUPPLIERS will research their business environment, including communications and information technology (C and IT), and members of their supply-chains through to the retailers. It will assess the structure, operation, performance and competitiveness of the chains and their contribution to rural development. It will identify the possibilities for improved policies, institutional structures and rural development strategies for food supply-chain integration in LRRs of the EU (Finland, France, Greece, Ireland, Poland and the United Kingdom), and ascertain cost-effective dissemination of good practice in SME food supply-chains.

The overall objective is to assist the sustainable development of small-scale food enterprises in lagging rural regions of the EU and Poland through the development of new tools and models for the supply and distribution chain integration, leading to improved market accessibility and competitiveness.
1) The Supply-Chain Environment Objective: to identify factors influencing the operation and development of food supply-chains from LRRs, and to determine the likely evolution of such factors along with their implications for supply-chain access and management, the development of existing and new supply-chains, and for rural development in the LRRs.
2) The Producer Objective: to evaluate the food supply-chain from the SME producers' perspective, with particular emphasis on chain characteristics and performance, C and IT usage, linkages to the local and regional economy, and relationships with institutions.
3) Intermediate Supply-Chain Member Objective: to evaluate the food supply-chain from the intermediate chain members' perspective, including structural and operational characteristics, business performance, C and IT use, chain integration and development, and relationships with other chain members.
4) The Commercial Customer Objective: to examine the food supply-chain from the commercial customers' perspective, with an emphasis on chain organisation and relationships, chain dynamics, consumer requirements, and chain performance.
5) The Institutional Objective: to assess the strategies, measures and structures of national, regional and local institutions in assisting food product SMEs and supply-chain management, integration and development in LRRs.
6) The Evaluation and Policy Objective: to provide an overall evaluation of food SME supply-chains from LRRs, to identify the possibilities for effecting improvements in supply-chain integration and performance, and to develop tools and models for the cost-effective dissemination of good practice.

Progress to Date
The project is progressing well and reports have been submitted. Work is still being done on Work Packages 1B, 7 and 8.

The theoretical framework within which SUPPLIERS was being researched, embraced orthodox market and marketing theory and the related concepts of supply-chain management, along with issues of supply-chain structure, conduct and performance. However, there was a need to bridge the gap between marketing and economic analysis and socio-cultural approaches to network operation and development. In this area, the conventions theory was particularly important, as it related networks and embedded economic behaviour to particular cultural forms.
As far as the supply-chain environment was concerned, consumers and retailers were seen as the two most important supply-chain influences on food SMEs in LRRs. Primary producers were perceived as being in a weak position to influence supply-chain developments. The development of food SME supply-chain arrangements was being dominated by product quality and safety development and by customers', usually retailers', demands for Communication and Information Technology adoption. A number of other developments were also identified, including product sourcing, consumer access and supply-chain integration. The development of modern industrialised food supply-chains was seen as having both positive and negative impacts on rural areas.
The supply-chain arrangements of food producing SMEs in the LRRs studied within SUPPLIERS were seen as generally having the following characteristics. 'Upstream' from the food producers, there was a preference for local raw material suppliers with trading relationships frequently being informal, trust based and long lasting. 'Downstream', the food producers were often producing a differentiated product for a particular market or type of customer or consumer. Again, trading relationships were often informal and trust-based, although larger customers, and generally those outside the LRR, had greater requirements for contracts and set terms of trading. Such contractual requirements may have fed right back to raw material suppliers, thus increasing chain integration. The development of food supply-chain arrangements, which were sympathetic to the distinguishing nature of the food products produced by SMEs in LRRs, was seen as important to their continued market performance and competitiveness.


Scientist responsible for the project

Ferguson Building, Craibstone Estate, Bucksburn
AB21 9YA Aberdeen
United Kingdom (The) - GB Region NUTS UKM11

Phone: +44 1224 711048
Fax: +44 1224 711270


Project ID QLRT-1999-30841
Organisation Scottish Agricultural College
Area 5.5
Start date 01 February 2001
Duration (months) 36
Total cost 2 120550 €
Total EC contribution   1 689 533 €
Status Completed
Web address of the project

The partners

  • Ecole Nationale d'Ingenieurs des Travaux Agricoles de Clermont-Ferrand (ENITA), France - FR
  • University of Wales: Institute of Rural Studies, United Kingdom (The) - GB

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