Resilience and Transitionwhat do these concepts mean in

the Dutch pork industry?

Community of Practice ResilienceJune 7, Wageningen

Krijn Poppe

How resilient is our pork industry ?

Content of the presentation

1. Definitions of resilience at different levels of the pork chain: farm, sector, chain

2. A short history and the problems of the Dutch pork industry

3. Transition theory4. Questions to focus on:

● Is transition capacity a characteristic of resilience?● How to define and measure resilience in a period

of transition ?

Resilience

Systems

Traits of the stressor

Stressors

Traits of the system

Resilience: a definition

Resilience is the capacity of a complex systemto deal with change and continue to develop (Stockholm Resilience Centre(SRC)/Hollings)

Farm level: the system is the farm

Traits: primary production that is, given the risk/reward ratio organised in family farms

Stressors: prices, (contagious) diseases, policy measures and the 3D’s (Death, Disability, Divorce)

3 levels of resilience (see Ika Darnhofer, 2014):●Buffer capacity: e.g. solvability, borrowing capacity●Adaptive capacity: innovation, entrepreneurship?●Transformative capacity: ?

●Entrepreneurship?●Weak ties (Granovetter) ?●??

(Compare DSM, Philips, AKZO, Nokia)

Sector level (all pig farms in a region)

Traits: cluster is a pool of production, competitive advantage via specialised services, deep labour markets, efficient size for the up- and downstream chain

For a resilient sector, in a setting with increasing income outside farming and technical progress (more piglets / sow, better feed conversion), farms have to grow (labour productivity) and (if the market or land / quota are a limited resource) a number of farms has to disappear

Stressors: fast urban income development, too restrictive agricultural policy (e.g. Japan, S. Korea)

Resilience: capacity of cluster to stay competitive●Capacity to attract resources (human capital, e.g.

young farmers, land from other sectors)●Innovation capacity

Chain level (the system is a pork chain)

Traits: efficient configuration of collaborating firms to provide consumers with meat manufactured from the seeds of feed and (industrial) waste.

Stressors: changes in consumer demand, substitution by other other (new) products, innovation in technology (by competitors) or market channels (e.g. Spotify vs. record company and CD record store).

Resilience: capacity to stay in business●Capacity to change chain relationships (ICT, from

auction / weekly price quotes to contracts) Or should the system be defined as the Protein chain ?

●Transformative capacity to move from pigs to algae

Conclusion: issue is transformative capacity

I assume that Resilience can be defined and measured, and even managed in (about) the way I presented

At least that is the case in a rather stable situation, where the situation asks for buffer capacity and adaptive capacity

How about a situation where a transition is in the making and we want to measure transformative capacity?

●Define and measure before transition●Define and measure during transition (reflexive ?)●Design future state, after transition

Our pork industry - bottlenecks

Dutch pork industry (network of chains): a short history 1950s: small, poor mixed (subsistence) farms on poor

sandy soils: “small farmers problem”●Development of pigs and poultry sector with

government support 1960s: encouraged by CAP (high pork prices and cheap

imports of citrus pulp, corn gluten, tapioca, crushed soy) 1970s: encouraged by fiscal investment premiums (WIR),

environmental problems grab attention 1980: introduction of quota, manure policy Around 2000: classical swine fever, animal welfare

issues, ammonia. Q-Fever in goats. “Megastallen”.

The problem is un-sustainability

Environment (emissions, oversupply of manure, deforestation for feed production);

Health (animal health, resistance of antibiotics, fine particles); Animal welfare; Landscape (odour, scale of stables, horizon pollution)

These are external effects ● No problem owner ● Societal costs that are not included in the price of food.

Has become a wicked problem

The system blocks...

a) Cost price driven• Optimalisation and efficiency oriented• Supply driven, many anonimous products• Until a few decennia ago it was a succes-story

b) Negative external effects: political governments act only after a time-delay, the policy targets are then often reailised.

c) Citizens protest, but that does not translate in a changed buying behaviour in the shop

Blocks....

d) Higher production costs are difficult:• Part of the slaughtered animal is for export to

markets were willingness to pay for animal welfare is low.

• Only 30% of the production is fresh meat for the Dutch retail.

e) Firms (and ngo) work on different geografic scales (national vs. NW Europe). Strong internationalisation of the feed industry

Meat marketing ... A way to go

time

Leaving Production

Branding Market Orientation

Branding; Innovativeness

Process optimization;

scale and scope effects

Major strategic management focus

Poultry

Beer/Beverages

Dairy

Fragmented industry; mainly national markets

High market concentration;

multinational companies

Increased market concentration;

more internationalized companies

Pork

Snacks & Sweets

Bron: Wijnands, Van der Meulen & Poppe, 2007

Transition Theory

Feed back cyclesimprovement

strategic planning

transition

standards

objectives

values, norms

Design

Reconstruct reality

Plan

Interactive self- organisation

Transition is more than just change:

Figure 1 Multi-level perspective on transitions (Geels en Schot, 2007)

The S-curve from Geels &

Schot

Does it exist?

Can it be managed?

Transition management ?

Although transitions cannot be managed in terms of command and control, they can be managed in terms of influencing and adjusting: a more subtle, evolutionary way of steering.

In other words the direction and pace of transitions can be influenced, even if not controlled directly. Transition management therefore aims to better organise and coordinate transition processes at a societal level, ant tries to steer them into a sustainable direction (Loorbach & Rotmans, 2006)

Transition theories in social science / economics Organisational change management

●Planned change / organisational development Multi-actor collaboration

●Cooperation / negotiation in wicked problems Network governance: from government to governance Policy agenda setting Social learning: participatory systems Adaptive management: ecological approach Economics:

● Induced innovation theory (Hayami & Ruttan)● Economic organisation theory / institutional economics ● Kondratieff business cycles (Schumpeter, Perez)

Transformative capacity and transition

How about a situation where a transition is in the making and we want to measure transformative capacity?

●Define and measure before transition●Define and measure during transition (reflexive ?)●Design future state, after transition

Can we be inspired for measuring Resilience (transformative capacity) by definitions and indicators from transition theories ?

Does it help to imagine a greenfields situation?

How would we organise the pork sector / protein sector when we could start from scratch ?

Is resilience the transformative capacity to move from the current situation towards that greenfields situation?

Verwaart and Van den Broek modelled alternative states of the chain organisation (inspired by chain organisations in other, more sustainable sectors) with Agent Based Modelling.

●Can we measure resilience in those alternative states?

●Does this help to define and measure resilience in the current situation ??

Scenarios (for Agent Based Modelling)

No coordination; only regular and organic meat products

Brands offer different sustainability levels

Brands must offer annually increasing minimal percentage of sustainable

Information platform provides supply forecasts to producers

Long term contracts between brand and producer with fixed premium

Baseline Differen-tiation

Green Track

Market platform Producers’

organisation

Source: Tim Verwaart, Eva van den Broek, LEI

Demand

Unsatisfied demand

Certified producers

Producers’ capital

Producers’ defaults

Conclusions: more research is needed

1. Definitions of resilience at different levels of the pork chain (farm, sector, chain):

● relatively easy for buffer- and adaptive capacity. ● more difficult for transformative capacity,

especially in sectors and chains (different levels)2. Transitions: Inspiring cases for research, but also

difficult to work with a moving target ? 3. Questions to focus on:

● Is transition capacity a characteristic of resilience?● How to define and measure resilience in a period

of transition ?● How to focus on the relationships between levels

in the chain ?

Thanks for your attention