Circular Economy in the agri-food sector: a policy overview

From Firenze University Press: Italian Review of Agricultural Economics (REA)

Giulia Chiaraluce, Department of Agricultural, Food and Environmental Sciences, University of Marche

The Covid-19 pandemic is causing a worldwide crisis, with cascading effects on the entire economic system. The growing spread of the virus has prompted governments around the world to introduce exceptional measures for its containment, such as the temporary closure of companies and businesses, which have inevitable consequences on economic and financial mar-kets. Apparently the agri-food sector is not among the most affected, at least directly, by these measures, even if numerous factors intervene to modify the market equilibrium (De Maria et al., 2020).

Indeed, when compared to other Italian economic sectors, it has not suffered serious negative effects from the emergency linked to the pandemic. Its nature of strategic and essential compartment meant that most of the activities were not destined for direct closure, limiting the damages. However, it is highlighted that the virus has bequeathed some changes which, in all likelihood will last, like the attention to the Made in Italy, the territory, convenience, health and environmental protection and sustainability (ICESP, 2020; Nomisma, 2020). Facing these new needs will be a challenge for companies, and they will have to confront the difficulties and problems of the supply chain, to strengthen their position on the market, becoming more resilient.

Among the problems, one of the most impacting is the production of wastes. In fact, the agri-food sector is responsible for the generation of a large quantity of highly polluting waste materials, rich in valuable organic matter and moisture (Donner and de Vries, 2021). Reducing food waste has enormous poten-tial for reducing the resources we use to produce the food we eat. Fighting food waste is a triple win: it saves food for human consumption, helps farmers, companies and consumers to save money, and lowers the environmental impact of food production and consumption, affecting the three aspects of sustainability, social — economic — environmental (Stenmarck et al., 2016; Finco et al., 2018).

According to the Fusion report of 2016, approximately 88 million tons of food waste are generated each year in the European Union, with associated costs estimated at 143 billion euros, of which around 31 million tonnes derive from the primary production, process-ing, wholesale and retail. In Italy, according to the latest ISPRA report on special waste (2021), more than 3 million tonnes of wastes were generated in 2019 from the food and beverage industry, corresponding to 11% of the total amount of waste produced by the manufacturing sector, and more than 300,000 tonnes of waste came from agricultural activities (agriculture, forestry and fishing). Losses and wastes occur along the whole sup-ply chain (Gustavsson et al., 2011), and all stakeholders have a role to play in the prevention and reduction of food waste, from those who produce and process food to those who make it available for consumption and, finally, the policy makers and authorities.

Consumers too can influence the industry’s behaviour, by demanding more sustainable processes (Cembalo et al., 2020). Besides, consumers are directly involved by their personal attitude towards food waste (Marangon et al., 2014). Rethinking the current production and consumption models and the transformation of waste into added value products need to be based on new technologies, processes, services and entrepreneurial systems that will shape the future of the global economy and society. From this perspective, the circular economy (CE) represents a game changer for the agri-food sector (Chiaraluce et al., 2021). Agriculture is already involved in the circular process, as in the case of the production of biogas and digestate. On the other hand, the food industry requires much more attention and research. Agricultural and food wastes possess a huge potential to be exploited, in terms of recovery of nutrients, compounds and mate-rials for different purposes (nutraceutical, functional foods, energy production, packaging materials) (Mira-bella et al., 2014). However, proper circular business models need to be established, as the agri-food sector is somehow obliged to innovate itself towards new con-figurations, in order to close material loops and switch to a circular model (Donner et al., 2020). Moreover, supply chains are complex systems that need to be fully involved in circular models, developing circular supply networks (Braz, Marotti de Mello, 2022).In this context, the policy makers, national laws and Union regulations have an important role to guide the transition, developing resilient supply chains and sustainable businesses from the perspectives of management, technological aspects and policy perspectives (Luthra et al., 2021). To our knowledge, there is a lack of papers dealing with the current political situation in Europe about the circular economy (Zarbà et al., 2021). In our opinion, a summary of what Europe has done in this field could be useful for future improvement and to concretely support who wishes to face the challenges of changing the agricultural production economic mod-el from a linear to a circular system. For this purpose, this paper aims to analyse the current policy framework regarding CE in the European Union, with a specific focus on the Italian situation. The general situation will be considered, as there are no specific norms regarding the agri-food sector.


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The University of Florence is an important and influential centre for research and higher training in Italy