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    This database contains bibliographic descriptions of all Wageningen University PhD theses from 1920 onwards. It is updated on a daily basis by WUR Library.

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Record number 983840
Title Circuits in de landbouwvoedselketen : verscheidenheid en samenhang in de productie en vermarkting van rundvlees in Midden-Italië
show extra info.
Hielke S. van der Meulen
English title Circuits in the Agro-food Chain; diversity and coherence in the production and marketing of beef in Central Italy
Author(s) Meulen, H.S. van der
Publisher Wageningen : Wageningen Universiteit, Circle for European Studies
Publication year 2000
Description 321 p
Description 1 online resource (321 p)
Series title Studies van landbouw en platteland (no. 29)
Notes Proefschrift Wageningen
ISBN 9058083047; 9067546178
Tutors Ploeg, Dr. Ir. J.D. van der
Graduation date 2000-11-01
Dissertation no. 2879
Author abstract show abstract

This PhD-thesis describes the diversity and coherence in the beef chain of the Central-Italian region of Umbria as co-existing circuits of interlinked cattle farmers, butchers and consumers. A circuit represents a specific and stereotypical way in which the production annex marketing of a agri-food product is organised. The main hypothesis is that within a geographically delimitated chain of an agri-food product usually a limited number of clearly different vertical segments - circuits - can be distinguished. A second assumption is that successive actors in the chain have a shared conception of the right quality of the product, and that this shared conception is essential to their commercial connectedness.

The circuits approach developed in this book elaborates on the styles of farming research of the Rural Sociology Group of Wageningen University. Thereby, the application of its basic notions of style and diversity shifts from the level of primary production to that of the entire chain. In the same line, the circuit approach tries to integrate basic notions from the Frech-Italian filière research tradition, in which emphasis is placed on meso-economic systemic coherences and the regional development context, into the micro-economic and casuistic Anglo-Saxon approach which presently dominates the debate.

The research method is essentially descriptive in nature: the focus is on the existing diversity of stereotypical modes of vertical organisation within the commodity system of a specific agro-food product. Diversity is seen as a positive phenomenon and not as a number of deviations form an alledged technical-economic optimum. The function of describing diversity is first of all that of an eye-opener. In the circuit approach, implicitely, particular attention is paid to the 'hidden' circuits, either traditional or recent ones, because they may bear or inspire solutions for actual problems.This implies a critical attitude towards the main stream of the product in question, which in fact may be composed of different circuits itself.

Practical results

On the basis of extensive interviews and surveys in the Umbrian beef chain the following circuits have been identified.

  1. In the direct circuit small-scale farmers, and the so-called arrangioni in particular, sell large packages of beef directly to consumers: neighbours, friends, and other interested families. The consumers attach much importance to the fact that they know exactly where their beef comes from (traceability), and that they can eventually check personally how it is produced (inspectability). The small scale of production (about 10 bulls per year), the use of traditional fodder like alfalfa, barley, and corn, and the fact that farm family itself consumes the same beef are important quality parameters to the consumers.
  2. The artisanal circuit is organised around the so-called traditional butchers who buy beef cattle from small-scale breeders of the indigenous Chianina cattle. The desired genuinità (purity, authenticity) of this carne nostrale (beef from own area) is determined by the relatively small scale of production (about 30 bulls per year), the use of traditional forragi aziendali (farm made fodder), and the highly appreciated Chianina breed. At the level of the butcher's shop a good frollatura (hanging and ripening) is considered essential to obtain the full taste from the primary matter and to render it more tender. The consumers of the artisanal circuit are mainly countrymen and elderly people. Butchers describe them as intenditori (connoisseurs). They know, for instance, the positive relationship between fat and taste. They also "still know how to make a good stew".
  3. In the scientized circuit so called modern butchers play a central role. They order their slaughter cattle from regional ingrassatori : holders of large-scale feedlots. The 'scientific' character of the circuit is high-lighted by the meticulous calculation of the feed rations in the feedlots and the analysis of the beef samples on toxic residuals after slaughtering. Butchers say their clients - mainly young and high-income people - "eat with the lips", i.e. they prefer very tender and juicy beef. These characteristics are obtained, amongst others, through intramuscular fat infiltration during the last weeks of the fattening period. Further, modern butchers make a good profit on their piatti pronti (ready-made dishes), which allow them to add value to the tougher cuts that would else remain in the counter. The consumers in the scientized circuit attach importance to quality hallmarks like " Carni Umbri di Qualità ", to which most modern butchers adhere.
  4. The anonymous circuit pivots around the so-called import butchers. They order their beef, sometimes already sectioned and vacuumed, from wholesale dealers. The wholesalers obtain the beef from large-scale feedlots or through slaughterhouses in Northern Italy and abroad. Butchers in the anonymous circuit are ignorant of the exact origin. They say consumers tend to "eat with the eyes", since they prefer light coloured beef with no visible fat (which they assume to be tender). The low price of the meat and its convenience (in sectioning and cooking) are important criteria to both the consumers and the butchers.
  5. The integrated circuit is organised by the meat divisions of some supermarket chains, in this research represented by Coop Italia. Coop Italia's central meat division enters contracts with a number of large-scale feedlots and slaughterhouses in Italy and abroad. Within this 'integration' all stages of production, processing and distribution are precisely prescribed and controlled by the retailer. It establishes the prices in the counters of its stores and promotes the beef hallmark " carne con amore ". The clients of the Coop Italia supermarkets are one-stop shoppers who care for quickness and convenience. Compared to other categories of consumers, they are not very worried about the genuineness of the beef.

The direct circuit covers an estimated 4% of the fresh beef market of Umbria, and it is growing. The artisanal circuit has a market share of about 20%, the scientized circuit 15%, and the anonymous circuit 10%. De butchers who could not be classified in one of the three "butcher styles" (traditional, modern or import) account for 35% of the market. The supermarkets hold 15% of the fresh beef market, of which the integrated circuit has an estimated 3%. This was the situation in 1992. Up till now the share of supermarkets will have increased to about 25%.

The practical value of the circuits approach for matters of common or public interest has been demonstrated by means of a scenario-study. The effects of a substantial extension of the artisanal circuit have been compared to those of an equal extension of the scientized circuit, substituting the actual 4.2 million kg of beef imports. These two major circuits in the Umbrian beef chain are both characterised by region-based primary production. In the first case, called the Chianina scenario, 1,200 additional jobs and 2.0 million Euro of Net Value Added would be generated, against 100 jobs and a negative income of 0.63 million Euro in the feedlot scenario. In the Chianina scenario another 3.4 million Euro of EU-premiums for suckling cows and fatting bulls can be added to the region's economic balance (1992 prices). With higher beef prices and premiums (1994 situation) the Chianina scenario yields 4.4 million Euro of Net Value Added, plus 4.3 million of premiums, against 0.59 million in the feedlot scenario.

Economic and social side effects of the scenarios have not been quantified, but there is little doubt about the superior performance of the Chianina scenario with respect to environmental pressure, preservation of the landscape and the image of Umbria as a quality food producer. These external economies can hardly be overestimated, since tourism is becoming the major employer in the region.

Two important conditions to the safeguarding and extension of the artisanal circuit are, first, granting the farmers their traditional access to mountain pastures that now risk to become enclosed in nature reserves and thus subject to degradation, and second, the maintenance of a sufficient number of local slaughterhouses. It was on the basis of the results of this research, amongst other pressures, that in 1994 the regional administration decided to postpone the planned 'rationalisation' of small-scale slaughter plants.

Theoretic results

Each of the above circuits represents a number of similarly organized commercial networks, called chain networks , in the Umbrian beef commodity system. A chain network is supposed to be organised around one central actor, the centre of command or principle agent , usually the retailer, and includes all primary actors (defined as those who hold title at some moment in the chain) involved. The coherence of a chain network is determined by the mutual agreement among the vertically linked actors about the definition of quality, operationalised here as the relative importance attached to criteria like taste, tenderness, colour, genuineness, production method, breed, convenience, and price. Chain networks of the same type, i.e. belonging of the same circuit, share the same quality definition and organisational logic.

It is argued that the involvement of primary actors with an agri-food product, such as beef, will tendentially decrease going downstream, from producer to consumer. For a breeders his cattle may be the only source of income, but for a butcher it is one of at least five different types of meat he offers, whereas for a household beef will constitutes one of the hundred food items that it buys during a week. This phenomenon is coined here as the law of diminishing involvement in the chain. The unequal involvement and unequal dependence between the actors of different stages in the chain corresponds an assymetric knowledge of the production process and assymetric influence on the actual 'construction' of quality. The actors with the biggest interests will try to promote their own product, transferring part of their knowledge, whereas the less interested actors (consumers) tend to 'follow' the supply (linking themselves to specific selling points rather than specific versions of the beef). Opposite to the law of diminishing involvement stands the downstream imperative , which says that every buyer holds a dominant position vis-à-vis his supplier(s). I argue that in a stable chain network both effects are more or less balanced. The balance is found when all participants have a keen interest in continuing the existing relationships. Suppliers look for guarantees because of their sunk cost investments, and buyers want guarantees about the quality, especially for a product like beef, which they find difficult to evaluate. Continuity is reinforced through the creation of habits and through the creation of personal, emotional bonds.

The continuity of the bond between primary actors in a chain network presupposes mutual trust. The way in which this trust is created differs from one circuit to another. Central in the artisanal circuit are long lasting, personal relations between breeders and their butcher and between butcher and clients. In the scientized circuit the label "Carni Umbri di Qualità" , which guarantees standardisation and laboratory checks, plays an important trust-inspiring role. In the anonymous circuit trust and coherence seem to be developed weakly. This is why the butchers of this circuit suffer more than their colleagues from competition of nearby supermarkets. In the integrated circuit trust is installed by means of the contracts between the supermarket and farmers and slaughterhouses in which the mutual interests are laid down. To consumers the reputation of the supermarket and the quality label on the 'integrated' beef are the trust enhancers.

The differences in the creation of trust are reflected in the structure of transaction costs, i.e. the costs that a supplier or buyer must sustain on top of the nominal price in order to get transactions done. In some circuits a lot of time is invested in the development and maintenance of personal bonds, whereas in other circuits time and money is lost in the negotiation about contracts and the enforcement of compliance. Relevant for the circuits approach, and may be in general, is not so much the hight of these governance costs - they may be equal in different circuits - but the specific form they have. The specificity of the 'code of conduct' in a circuit determines the relative autonomy and competitive advantage of its chain networks vis-à-vis the networks of other circuits, just like the specificity of the physical resources of a circuit adds to this relative autonomy. Both imply additional costs in case an actor (or an entire chain network) switches to the network of a different circuit, the so-called transformation costs (which come on top of the mere switching costs that he has to sustain anyway, also when he enters a new network within the same circuit.)

A certain degree of internal coherence and co-ordination, here called systemness, is essential to the functioning of a chain network. It reflects a good tuning of the mutual economic interests and of considerations about quality. The degree of systemness is considered to be a function of two dimensions: the intensity of commercial interactions (frequency, duration, and load) and the degree of regulation of those contacts (planning of supply and demand, hierarchy, formal rules). This decomposition allows for a graphic projection of the different circuits of an agri-food product, which illustrates the relative competitive advantage of each of them. Thus, the artisanal circuit of the Umbrian beef chain, for instance, has a high score on the intensity dimension, reflecting strong personal bonds between the primary actors, whilst the integrated circuit has a high score on the regulation dimension, reflecting the use of formal contracts and long distance relationships, but is low on intensity.

The intensity and regulation dimensions are not completely independent of each other; tendentially, there is a trade-off. When, for instance, the scale (distance, number of actors) of a chain network increases, intensity will normally diminish, and therefore regulation has to increase, if actors strive to maintain the same degree of systemness.

In the analysis of systemness, besides the social-transactional aspect, the physical-economic aspect must be considered. In the direct circuit of the Umbrian beef chain, for instance, the investment by consumers in large home freezers, makes it possible and at the same time profitable for them to buy larger quantities of beef in one visit, being the packages that direct selling farmers offer. Such unique material elements of a circuit together constitute its specific infrastructure. Together with the specific social institutions (habits and conventions, which structure the commercial relationships of a circuit in a more invisible way) they constitute the circuit-specific resources .

The analysis of systemness applies in the first place to the level of the chain network, but occasionally it may be relevant at the level of the circuit too, namely when there is a coherence within an geographically bound collection of similar chain networks. This clearly is the case in the scientized circuit of the Umbrian beef chain, because of the co-ordinating role of the Butchers Association of Perugia (capital of Umbria). It has a strong impact on the definition of quality through the professional courses it organizes, the hallmark it controls, and the wholesale service it provides to its members. All the other circuits are merely categorical denominators.

From a systemness analysis no conclusions can be drawn about the fitness of a particular circuit. Although a certain degree of systemness is primordial, high systemness is not equal to good performance. Fitness or medium term survival depends on the dynamics in the market environment (an environment that, in turn, is partly shaped by the actors of the circuit). In a quickly changing environment (legislation, technology, consumption pattern) loosely organised chain networks are expected to have better perspectives, whereas in a stable situation tight relations do. In the first case flexibility and low transformation costs are crucial, in the second case efficiency in production and logistics and low governance costs of transactions determine the competitive advantage. In general, a very high degree of systemness of vertical relations leads to rigidity and a loss of self-renewing capacity, whilst a very low degree of systemness leads to uncertainty and a bad tuning of the successive actions throuhout the chain.

Definition framework

The early definitions of circuit in the French and Italian filière literature are quite superficial. The same holds true for many other "chain terms". Four variables have been developed in order to describe the analytical scope of a chain term rather exhaustively:

  1. level of aggregation, or horizontal extension (geographically; numbers),
  2. level of integration, or vertical extension,
  3. degree of inclusion, or systemic extension,
  4. focus, or thematic extension.

The term circuit can thus be defined as a vertical segment of the macro-economic chain (or commodity system) of a single agri-food product. It comprises all similarly organised chain networks within a delimitated area. It comprises the actions in all stages, from producers to consumers. The degree of inclusion is limited to the primary actors, i.e. those who take part in the buying and selling of the product. At the level of the circuit overall actors who exclusively operate for this circuit are considered as if they were primary actors. The focus of the circuits approach is on production as well as marketing processes. Characteristic of the approach is, further, the focus on diversity and differentiation. Therefore, a circuit always is analysed in comparison to other, competing circuits for the same product in the same area.

On the basis of the first two variables, integration and aggregation, the so-called chain frame has been designed, which allows for a rough visualisation of any chain term (see Figure 2.2).

Figure 2.2
Fig. 2.2

The circuits approach requires a clear and motivated geographic delimitation of the research area. Circuits are always defined in a specific geographical and socio-economic context; they never are universal. In the case of the Central Italian beef sector, the administrative borders of the Region of Umbria have been chosen. A consequence of the geografical boundedness of the circuits approach is that chain networks that extend beyond the borders of the area are only partially analized. Only the consumers and their direct suppliers are considered. The question remains whether this really distorts the picture of a circuit or not. The anonymous circuit in the Umbrian beef chain is anonymous in the very perception of its butchers and consumers.

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Keyword(s) beef / meat production / marketing / italy / economic production / authenticity
Categories Animal Nutrition and Feeding (General) / Food Policy
Publication type PhD thesis
Language Dutch; Flemish
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