The State of Food and Agriculture 2024

Chapter 3 Incentivizing change from within food supply chains

Conclusions

Transforming food supply chains for greater inclusivity, sustainability and resilience requires not only an understanding of the actors and their activities at the individual stages, but also of the knock-on effects that generate hidden benefits and costs along the chain. A fundamental challenge is garnering interest from private agrifood actors, who weigh the costs of action today against the benefits of tomorrow, including the perception that most of the benefits may be reaped by someone else. Targeted TCA assessments can provide evidence that transformative actions need not be a zero-sum game for agrifood systems actors.

The inclusive engagement of agrifood systems actors in assessing the environmental, social and health hidden costs of activities can highlight risks and opportunities, thereby strengthening the viability of the chain. Food supply chains have a significant amount of leverage to drive change: when one business partner signals to another how value can be enhanced, there is a vested interest in seeing that change comes to fruition. Agribusinesses and financial institutions with more leverage have roles to play beyond exerting their influence over other actors, by investing in better practices, be it through finance, contract arrangements, technical assistance or overall skills and awareness building, so that all are best fit to contribute to the required transformation. Meanwhile, forums such as the World Banana Forum, foster collaboration across the different levels of food supply chains and can be a key means of ensuring a just transition.

Governments have a role to play in ensuring social inclusion during the transition. In addition to incentivizing the private sector to modify its business practices, they can signal future business risks through regulations and effective enforcement to motivate early adopters. And because of the global reach of food supply chains, which distribute the benefits and costs of transformation across national boundaries, international collaboration is essential to equip supply chain actors with the awareness, motivation and capability to address the hidden costs of their activities. Political economy challenges to ensuring that the burden of paying for change does not fall disproportionately on any one actor or population group locally and globally – both today and in the future – may be significant, yet food supply chain actors seem to be making progress in the right direction.

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