Economic Impact of Short Food Supply Chains: A Case Study in Parma (Italy)

Abstract

Short food supply chains (SFSCs) are advocated as strategies to improve the sustainability of the agro-food system. The recent literature claims that SFSCs are examples of social experimentation and innovation. By scaling up the positive elements of niche alternative food networks, SFSCs can serve as a basis for changing the overall agri-food system. However, their economic impact remains a matter of debate. Local multiplier methods have been used to measure the economic impact of economic sectors at a regional scale. In the case of SFSCs, multiplier methods need to be developed at a local scale and are highly data demanding. This analysis measures the local financial flow created by the MercaTiAmo project by applying the Local Multiplier 3 (LM3) method. MercaTiAmo is organized by a group of citizens and farmers and arranges farmers’ markets three days per week in the city of Parma (northern Italy). To measure the financial flow created by the initiative, data were collected from 10 farmers representing 70% of the farmers participating in the project. The method takes into account the total annual turnover (Round 1), the local expenses of the farmers (Round 2), and the local expenses of the farmers’ suppliers (Round 3). The results suggest that farmers with a higher turnover (Round 1) and percentage of direct expenses in the local area (Round 2) also show higher values of LM3, thus suggesting a higher economic impact, while Round 3 does not affect LM3. The novelty of the study relies on the fact that here the local multiplier method is applied for the first time at the farm level, providing precise information and data on farmers’ upstream supply chain, which can be used to inform policymakers and initiators of SFSCs. Moreover, the study provides a detailed description of the main categories of costs for farmers and which categories of costs are more suited to be locally based. For this reason, the study contributes to the debate on the economic impact of SFSCs in the local area. The method can also be used to provide information to consumers on the economic impact of alternative food networks and local food production.