Impact of special-denomination label constraints on fresh produce supply chains

Abstract

Special Denomination labels for fresh food products, such as “local”, “fair-trade”, “organic” and similar market-narrowing movements have gained a lot of attention over the last few decades. While these movements have some clear benefits and beneficiaries, they also may increase the complexity of the management of the underlying supply chains resulting in unintended consequences such as increased food waste, higher prices, and reduced food availability for certain geographical areas and population segments. The implementation of local food movements may result in the exclusion of farmers of certain areas, enticing these farmers to move their operations to be close to large urban centers, increasing the competition for scarce resources such as land, water and labor. In this paper, we explore the use of optimization-based tools to assess the impact of different levels of implementation of these special denomination labels to fresh food, with particular emphasis on the “local food” label and the distance used to determine compliance with this label. The tools presented seek to contribute to the emergence and maturation of the design of efficient supply chains for the direct procurement of special denomination crops, particularly fresh vegetables by making the most efficient connections between a market demand and the suppliers of products with the required characteristics. A case study is used to analyze the impact of the definition of this label on the potential suppliers of a specific market. The results show that the implementation of distinct definitions of local food have different impacts on the potential supplying sources being considered, depending on their distance to the market and the other potential supply sites. The results also show that the relaxation of strict local-food label and the use of other proxy measures of local food may be a better approach to reduce CO2 emissions associated with the supply chain of fresh produce.