Value-chain analysis: definition of a fair price

By project SMEOrigin

Published on 09 November 2023

France

Aquitaine

About this good practice

INTERBIO Nouvelle-Aquitaine propose a balanced scheme of the value chain and respond to the demand of the National Food Conference (EGALIM) in France, in relation to price indicators. One of the objectives is to add transparency on the marketed price, with a tool that can be reused and adaptable to each operator. INTERBIO NA developed two working methods, according to the specificities of each sector:
-A Survey Methodology;
-A working group Methodology.
The main stakeholders are also the main beneficiaries of the practice: they are the actor of the designated value chain. All the elements exchanged remain confidential outside the working groups / Interbio:
-Data transmitted to Interbio project managers by the operators are not used by name, they will be aggregated and therefore anonymous; the principle of confidentiality is respected.
-No publication is made without the validation of all contributors
To this date (Septembre 2023), 10 successful case studies have been conducted. The analysis and its results are then used in price negotiations, as a basis for desired and fair price, coming from a consensual approach. After a few years, the stakeholders can reunite again and update the price information to have a relevant model linked to the market conjuncture.

Resources needed

INTERBIO Nouvelle-Aquitaine partly finance this good practice thanks to an annual call for project monitored by the Regional Council of Nouvelle-Aquitaine, the Ministry of Agriculture, and Adour-Garonne Water Agency. This call is dedicated to the animation of the organic sector in the region.

Evidence of success

The analysis of the value chain is a good practice because:
-Since 2017, at least one value chain per year is analyzed: there is now a total of 10 value chains;
-Beneficiaries of the result report to INTERBIO NA that they can use the economic data as an element of negotiation.
-For each working group, there are 4 to 5 contributors, so at least 40 companies have been involved;
-INTERBIO NA provides consulting to others regional organic interbranch on this methodology

Potential for learning or transfer

This practice is potentially interesting for other regions to learn because:
-It is a way to engage some of the stakeholders in group work;
-It is a consensual approach that brings operators to agree on a fair price at each step of a value chain;
-It enables operators to have more concrete elements to negotiate on the price, for instance a grain cooperative can justify the cost of production of its producers to their buyers (to a feed manufacturer for instance);
-Within the scope of GI (geographical indication), transparency on the price is important at each step whether it is for producers or for processors. Indeed, when a food sector decides to apply to a GI, it potentially means premium price hence added value to share in a fair way;

List of analyzed organic value chains: Wheat to baguette ; Soybean to egg; Lentils; Organic wine market; Corn to egg; Soybean to cheese; Ground steak; Fruits and Vegetables market; Barley to beer