Environmental services coupled to food products and brands: food companies interests and on-farm accounting

Much research has been carried out on governmental support of agri environmental measures (AEM). However, little is known about demands on and incentives from the commercial market for environmental contributions of the farmers. The factors farm structures, level of remuneration and legal framework have been thoroughly investigated. However, demands of the food industry for environmentally friendly goods(1) and their effects on farmers’ decisions have not yet been analyzed. Leading companies in the food industry have observed an increasing consumer awareness and, due to higher competition, see an additional need to communicate environmental benefits which result from either organic production methods or agri-environmental measures. To address this research deficit, two case studies were carried out. The first case study is a survey aimed at the industrial food producers’ demands with regards to the environmental performance of supplying farms. Concurrently, within a second survey farmers were questioned to find out what conditions are required to implement agri-environmental measures beyond cross compliance and document their environmental performance. This article presents the outcomes of the first case study. The results show that food companies have an interest in the documentation of environmental benefits of supplying farms for their marketing strategies. Provision of support by finance or contract-design is also seen as appropriate tool to promote an environmentally friendly production. In turn the food producers’ demand and support for documented environmental services can have a positive influence on farmers’ decisions for implementation and documentation of these services. Thus, the surveys provide essential findings for further development of documentation strategies for environmental benefits within the supply chain.