Local and Global Cured Ham Chains

WP3 – Italian case study: local and global cured ham chains

2014

sk 3.5)

Authors – Partner

Italian case study: local and global cured ham chains (Task 3.5)

Kees de Roest – CRPA Stefano Pignedoli – CRPA Giovanni Belletti – University of Florence Davide Menozzi – University of Parma

Filippo Arfini – University of Parma

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Contents

1. Introduction ...... 8 2. Description of the three chains ...... 8 2.1. Local Cinta Senese ham ...... 8 2.2. Parma Ham ...... 10 2.3. Generic cured ham ...... 12 2.4. Characterisation, system boundaries and mapping ...... 13 2.4.1. Characterisation of the supply chains ...... 13 2.4.2. System boundaries and mapping ...... 17 2.4.3. Local supply chain Ham of Cinta Senese meat PDO ...... 18 2.4.4. Regional supply chain Parma Ham ...... 19 2.5. Critical issues and relevant attributes/indicators ...... 20 3. Research design ...... 22 3.1. Research Questions ...... 22 3.2. Attributes and indicators selection process ...... 22 4. Methods ...... 33 4.1. Added Value ...... 33 4.2. Resilience ...... 36 4.2.1. Description of the attribute “resilience” and research questions...... 36 4.2.2. Contextualization in the Cured ham supply chain ...... 39 4.2.3. Methodology ...... 41 4.2.4. Prices volatility indicators ...... 45 4.2.5. Pig farm indicators ...... 45 Analytical indicators ...... 45 Synthetic indicators ...... 47 4.2.6. Slaughtering indicators ...... 47 Analytical indicators ...... 47 Synthetic indicators ...... 48 4.2.7. Ham processing indicators...... 48 www.glamur.eu 3

Analytical indicators ...... 48 Synthetic indicators ...... 49 Cross-cutting indicators ...... 49 4.3. Chain governance ...... 50 4.3.1. Description of the attribute ...... 50 4.4. Territoriality ...... 54 4.4.1. Description of the attribute ...... 54 4.4.2. Indicators ...... 56 4.5. Resource use and pollution ...... 57 4.5.1. Description of the attribute ...... 57 4.5.2. Indicators ...... 58 4.6. Affordability ...... 59 4.6.1. Description of the attribute ...... 59 4.6.2. Indicators ...... 60 4.7. Data quality check ...... 61 5. Results (performances) ...... 67 5.1. Value added ...... 67 5.2. Resilience ...... 72 5.2.1. Prices volatility results ...... 72 5.2.2. Pig farming results ...... 73 Analytical indicators ...... 73 Synthetic indicators ...... 73 5.2.3. Slaughtering results ...... 75 Analytical indicators ...... 75 Synthetic indicator ...... 75 5.2.4. Ham processing results ...... 77 Analytical indicators ...... 77 Synthetic indicators ...... 77 Cross-cutting indicators ...... 78 5.2.5. Performance comparison ...... 81 www.glamur.eu 4

5.3. Chain governance ...... 84 5.3.1. Indicator "Trust based internal relationships" ...... 84 5.3.2. Indicator "Trust based external relationships" ...... 85 5.3.3. Indicator "Self governance capacity" ...... 86 5.3.4. Indicator "Chain-based value governance" ...... 88 5.4. Territoriality ...... 91 5.4.1. Indicator “Social cohesion and conviviality” ...... 95 5.4.2. Concluding remarks ...... 98 5.5. Resources use and pollution ...... 99 5.5.1. Results ...... 99 5.5.2. Conclusion ...... 108 5.6. Affordability ...... 109 6. Discussion on the research questions ...... 115 6.1. Global-Local performance comparison (research question 1) ...... 115 6.2. Global-local interactions (research question 3) ...... 119 6.3. Methodological reflections (research question 2) ...... 119 7. Annexes ...... 121 7.1. Annex 1– Volatility indicators and Analytical indicators results ...... 121 7.1.1. Prices volatility results ...... 121 7.1.2. Pig farming analytical indicators results ...... 124 7.1.3. Slaughtering results ...... 129 7.1.4. Ham processing results ...... 130 7.2. Annex 2 – Methodological approach used for LCA ...... 134 7.2.1. Parma pigs ...... 134 7.2.2. Cinta Senese pigs ...... 137 7.2.3. Emissions ...... 139 7.2.4. Slaughtering for Parmapig and generic light pig ...... 139 7.2.5. Slaughterhouse for Cinta Senese pig ...... 140 7.2.6. Ham factory for Parma and generic crude ham ...... 141 7.2.7. Generic crude ham seasoning ...... 141 www.glamur.eu 5

7.2.8. Ham seasoning company for Cinta Senese ...... 141 7.2.9. Transport and retail ...... 142 7.3. Annex 3 – Dataset for Attribute Territoriality ...... 143 8. References ...... 146 8.1.1. List of the main sources ...... 150

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The research leading to these results has received funding from the European Union’s Seventh Framework Programme for research, technological development and demonstration under grant agreement n° 311778

To be quoted as:

de Roest K., Pignedoli S., Belletti G., Menozzi D., Arfini F. (2014). Glamur project Italian case study: local and global cured ham chains. CRPA.

www.glamur.eu 7 GLAMUR Report – Italian Case Study- Pork Chains –March 2015

1. Introduction

Cured hams play a relevant role in Italian’s food habits. Italy is renowned worldwide for its traditional hams protected by geographical indications (e.g., Parma, San Daniele, Toscano, which are protected by a Protected denomination of origin – PDO), which play a very important role on the consumer market. These traditional hams are linked to restricted territories and to local traditions, but they are produced on a large scale and largely manufactured according to intensive/industrial production processes. Next to these traditional hams on the market two main other types of hams are present. On the one hand, hams cured in Italy but produced with fresh hams of foreign origin, very competitive on price, and on the other hand, cured ham produced with traditional methods from local pig breeds reared according to traditional criteria. This report will examine the following three types of cured ham: 1. Traditional cured ham obtained from the meat of the Cinta Senese pig, a native breed of Tuscany; 2. Parma Ham protected by a designation of origin (PDO); 3. Generic non-PDO cured ham produced with fresh hams imported from abroad.

2. Description of the three chains

2.1. Local Cinta Senese ham

The Cinta Senese is an Italian native breed widespread in the region of Tuscany. This breed after a long period of crisis that had brought almost to its extinction, is now recovered and out of danger. Thanks to agro-environmental measures, technical assistance and a re-valorization of its products on the market, farmers have reintroduced this native breed again spreading it throughout Tuscany (and also in nearby regions) and preserving traditional ways of farming. In 2010, according to ANAS, statistics report the presence in Tuscany of 120 farms with about 980 sows registered in the official Herd Book. The farming system is based on the pasturing of the pigs on meadows and/or in the forest. However, there are farms that use buildings housing the sows during farrowing and weaning. The Cinta Senese is characterized by the high quality of its fresh meat, which is both consumed fresh and processed into high quality “salamis” and cured ham.

GLAMUR Report – Italian Case Study- Pork Chains –March 2015

A PDO for the fresh meat of Cinta Senese was registered by the Reg. UE 217 (17.03.2012 published in the EUOJ L 75, 15.03.2012), long time after the first submission of the application (06.09.2005). According to the product specifications, the PDO designate the meat of pigs of Cinta senese breed reared in Tuscany region that are the offspring of pigs which are both registered in the population register and/or the herdbook of the genetic type “Cinta Senese”. Pig farmers of Cinta Senese from other regions where the breed is bred (in particular Umbria) have opposed this geographical demarcation. As far as the method of production is concerned, the PDO product specification states that the animals intended for slaughter must be reared in the wild/semi-wild once they are four months old. The maximum limit per hectare is 1,500 kg live weight. The pigs must be allowed to forage daily in areas of land that are either fenced off or not, and that may include shelters for the night and/or for inclement weather. Breeding sows and boars may be housed in appropriate structures (pens) in the mating period and pre- and post-partum to facilitate health controls and farrowing. It should be noted that some farmers breed Cinta Senese pigs bred outside the requirements of the Product specifications. This fact, in principle, should prevent the opportunity to name the product “Cinta senese”. In fact, according to a decree of the Italian Ministry of Agriculture, all the breeders of Cinta Senese pigs in purity may indicate on the label "product obtained from pigs of Cinta Senese", regardless of the place of rearing and of breeding technique used. In this way the effectiveness of the designation of origin is greatly reduced. Pasture in the forest is carried in more than half of the farms. The sows are kept outdoors (65% of cases), but 75% farrow in boxes. The typical farm business (38% of farms) has a number of sows that varies between 6 and 15 animals. 29% of the farms have a herd size of 1 to 5 sows. The most significant class (16-50 sows) represents 21% of the farms. This is an economically sustainable herd size, as the smaller farms rely primarily on income from other agricultural activities (wine, olive oil). On farms with more than 50 sows (12%) the livestock activity is considered an opportunity for capital investment. On these farms the processing of the fresh meat is quite common. The forest, if present, is used for pasturing during the whole year on 70% of the farms. The natural and artificial pastures are less used: 50% of farms do not use them. The pigs are normally slaughtered after 18-24 months, with a weight of about 150 kg. Past studies have shown that, in some cases, the forest was considered to be a simple container of pigs and not used as a supply of feed. During the fattening phase 80% of the energy need is covered by concentrate feed and only the remaining 20% is covered in a natural way with the acorns of forest. According to Franci et al. (2011), four categories of farms can be distinguished: 1. The traditional farmer tied to the land and the environment that leads to sustainable production with moderate number of animals. 2. The hobby farmer who wants to exploit the forest without having the necessary knowledge to manage the profitable production.

GLAMUR Report – Italian Case Study- Pork Chains –March 2015

3. The very experienced farmer, who looks for innovative solutions for example in the field of genetic selection and knows how to exploit the commercial channels and care of the image of the product. 4. The farmer-entrepreneur, paying less attention to environmental constraints, is involved in the entire supply chain and looks for new potential markets. According to these different models, some problems of negative environmental impacts in the forests, due to an excessive load of animals, are reported. The Cinta Senese meat is used for both fresh consumption and for the production of various types of traditional Tuscan salami, Among these, the cured ham has a particular positive reputation in Tuscany and outside. About 70% of the farmers join the Consortium of Cinta Senese and 60% of the farmers is also processing the fresh meat. The Consortium of the Cinta Senese meat PDO has registered a collective private quality hallmark granted to the Consortium members to ensure sausage products and hams made using only meat Cinta Senese PDO. The cured of the Cinta Senese ham includes always the paw (like San Daniele ham). According to these different models, some problems of negative environmental impacts in the forests, due to an excessive load of animals, are reported.

2.2. Parma Ham The production chain of Prosciutto di Parma PDO involves 4286 breeding farms, 129 slaughterhouses and 150 processors (Prosciutto di Parma PDO Consortium, 2013). The “Prosciutto di Parma” (Parma Ham) PDO is produced in Parma, in Emilia-Romagna region; all Parma Ham PDO authorized producers must be located within the geographical boundaries of the Parma production area (i.e., 5 km south of the via Emilia, limited to the east by the river Enza and on the west by the river Stirone, and up to an altitude of 900m). The pigs used in the production of Parma Ham PDO must be bred in one of ten northern and central Italian regions. However, more than 85% of the pigs are bred in only three Northern Italian regions (i.e., Lombardy, Emilia-Romagna and Piedmont). Only three breeds of pigs can be used for Parma Ham: Large White, Landrace and Duroc. The Parma Ham pigs are fed with cereal grains and, in some local cases, whey from the production of Parmigiano-Reggiano PDO and Grana Padano PDO cheeses. The 150 processing companies have produced 9, 087,000 branded hams in 2013. The value of the ‘‘Prosciutto di Parma’’ is 740 million euro at wholesale prices and 1.56 billion euro at retail prices (Prosciutto di Parma PDO Consortium, 2013). Overall, approx. 28% of the production is exported. Britain is the largest international market for Parma Ham with more than 300,000 hams and over 18 million per- sliced packs sold annually (Prosciutto di Parma PDO Consortium, 2013).

Processing

During the last decades the ‘‘Prosciutto di Parma’’ production system has experienced a deep technical innovation. Traditionally, the unique conditions of the Parma geographical area have made it possible to produce the highest quality hams. The processing methods, first artisanal and

GLAMUR Report – Italian Case Study- Pork Chains –March 2015 linked to rural traditions (e.g., curing ham during the winter season, salt from the wells of Salsomaggiore, pigs fed with whey from the production of Parmigiano-Reggiano PDO cheese, etc.), changed dramatically during the ‘70s with the introduction of the refrigerated holds (the cold storage room) and new skilled, specialized and highly experienced workers (e.g., salters, de-boners, etc.). The technical development involved also mechanical firms inside the Parma territory that designed new machineries for the curing industry. The breeding phases are defined as follows: suckling during first four weeks with the sow; weaning, from the 5th to the 12th week; piglet fattening, from 30 to 80 kilograms of weight; and fattening: from 80 to 160 kilograms of weight and above. The minimum slaughtering age is nine months. Producers of Parma Ham PDO receive fresh legs from authorized slaughterhouses (from the same ten Italian regions) on a weekly basis; the average weight is around 15 kg. The legs are first salted by a highly trained skilled worker; the pigskin is covered with humid sea salt, while the muscular parts are covered with dry salt. Salt is the only preservative used in the processing method, no chemical elements are allowed. This is another big difference from other generic hams, normally containing nitrites and nitrates. Next the hams hang for 70 days in refrigerated, humidity-controlled rooms. The meat gradually becoming darker and harder. Around seven months after the salting process the ham is smeared with a mixture of rice flour, salt, and pork fat called ‘sugna’ to stop it drying too quickly for the remainder of its maturation. After air drying the ham it is moved to the cellar to start the maturation process. The designation of origin ‘Parma Ham’ is reserved for hams cured for at least 12 months from salting. It is checked with a long horse bone needle to assess its quality and maturity. Once approved, it is branded with the authentic five-point Ducal Crown firebrand. Some hams can be cured for up to three years. The sliced and packaged in tray Parma Hams PDO represent the more recent innovation. This process, that must be performed in authorized plants within the geographical boundaries of the Parma production and under the supervision of independent certification body, now accounts more than 10% of the total quantity produced.

The Parma Ham PDO Consortium and guarantee system The Parma Ham Consortium was set up in 1963 by 23 ham producers (originally called “Consorzio Volontario fra i Produttori del Prosciutto Tipico di Parma”, i.e., “Voluntary Consortium of Typical Parma Ham Producers”). Its role is to ensure and certify product quality, authenticity and production methods. The Consortium tasks involve the management and safeguard of the Parma Ham PDO specification, management of the economic policy (strategies, trends and macro- economic policies), definition and monitoring of quality control schedules (to check that hams meet the quality requirements), protection and promotion of the denomination “Parma Ham” and brand (Ducal Crown) world-wide, and assistance to associated companies through advisory services and other support. A rigorous traceability system has been set up to guarantee the authenticity of the Parma Ham PDO (Mancini, 2003). Every stage of the quality control plan can be tested by brands and seals, and proven by documents. The breeder puts a special tattoo on both legs of the young pig within 30 days of birth, showing the breeder’s identification code and a code indicating the month

GLAMUR Report – Italian Case Study- Pork Chains –March 2015 of the animal’s birth. In slaughterhouse every fresh trimmed leg is checked and branded with a mark permanently identifying it, including the initials “PP” and the slaughterhouse identification. In processing plants, the metal seal made up of a circular crown showing the C.P.P. (“Consorzio Prosciutto di Parma”) initials and the date curing began. Finally, the five-point Ducal Crown brand is stamped under the strict control of the independent organization inspectors (i.e., I.P.Q. Istituto Parma Qualità) and is the final guarantee of the quality of the ham. The Ducal Crown also shows the identification code of the producer. The I.P.Q. is an independent organization which objectively controls and verifies the origin and traceability requirements, monitoring the compliance of raw material quality and manufacturing process (Mancini, 2012).

The producers of Parma Ham PDO The companies producing Parma Ham PDO are involved in competitive and cooperative relations based on mutual trust (Arfini and Mora, 1997). During the last decades, new companies entered the Parma Ham PDO Consortium and many organization members started to produce non- PDO hams within the same area (see Case 1: Global supply chain generic non-PDO cured ham). Many companies complain about the lack of vertical quality differentiation within the PDO specification. Although the possibility to define a higher regulated level of label differentiation between the current PDO and a ‘‘higher quality’’ version of the PDO has been suggested by many authors (see e.g., Mancini, 2003; Dentoni et al., 2012), this strategy still lacks of the Consortium general consensus to be introduced in practice (Giacomini et al., 2013a). Thus, many companies have developed their individual brand, often displayed next to the PDO label and the Consortium brand, to differentiate their products from competitors. The individual brands often distinguish specific attributes of the company’s ham, like the curing period length, since the PDO specification set the minimum requirements that “Prosciutto di Parma” hams must meet. In other cases, however, the individual brand does not provide any special guarantee to consumers, except those linked to the company’s reputation. For these reasons, the PDO label (“Parma Ham”) and the Consortium collective brand (the ‘‘five point Ducal Crown’’) generally overwhelm the marketing power of companies’ individual brands (Mancini, 2003; O’Reilly et al., 2003). Two types of companies coexist within the Consortium of the Prosciutto di Parma with different business strategies (Dentoni et al., 2012): the small firms and the large groups and corporations. The first concentrate their activity almost exclusively on the production of the Prosciutto di Parma PDO, aiming to differentiate the quality of their product from the competitors, whilst the latter consider the PDO ham as a part of their own product mix. The decisions that are made within the Consortium are the result of the coexistence of these two kind of companies, which may have very different positions (Giacomini et al., 2013a). This heterogeneity and its implications have been discussed by Dentoni et al. (2012).

2.3. Generic cured ham This supply chain refers to hams produced in the same geographical area as the Parma Ham PDO, often by the same companies producing the PDO ham, but without meeting the requirements set by the Parma Ham Consortium. During the last decades, new companies entered the Parma Ham

GLAMUR Report – Italian Case Study- Pork Chains –March 2015

Consortium and many members of this Consortium started to produce non-PDO hams within the same area, using the same knowledge, skills and facilities of the Parma Ham production. The decisions that are made within the Parma Ham PDO Consortium are influenced by these companies too (Giacomini et al., 2013a). Although there are no official figures about the non-PDO hams production and the number and characteristics of the companies involved, it has been argued that the non-certified (by GI designation) hams production has exceeded in quantity the PDO one (Giacomini et al., 2013a). It has been estimated that approximately 15 million non-PDO hams were produced in 2009 within the same territory of the Parma Ham (Parma Province). The firms producing some quantity of non- PDO Parma Hams within the traditional PDO area of production are approximately 190. Many of these companies are producing both Parma Ham PDO and non-PDO hams. However, the concentration ratio of the non-PDO production system is much higher than the PDO one. It was estimated that 10% of the major companies involved in the production of non-PDO hams accounted for, approximately, 60% of the total non-PDO production (compared to 33% of the PDO hams). These non-PDO hams are produced mostly using foreign meat (i.e., the so-called “foreign ham”) and in minimal part using residual meat of the PDO chain (i.e., the so-called “national ham”). Many Parma Ham producers suffer the competition of the generic non-PDO hams, complaining that this huge production negatively affects the market price of the Parma Ham PDO (Giacomini et al., 2013a). This production aims to exploit the Parma Ham reputation while being marketed at lower prices. In fact, the non-PDO production costs are around 20-25% lower than the PDO ones. The slaughtering age of the pigs is lower than for the PDO chains: six-seven months, instead of at least nine months. This shorter breeding period leads to lower breeding costs (e.g., labor, feeding costs, etc.). The absence of certification and monitoring processes throughout the supply chain, typical of the PDO specification, as well as the possibility to use chemical elements such as nitrites and nitrates as preservative in the processing phase and the shorter curing period, reduce significantly the overall production costs (both operating costs and financial exposure) of the non-PDO hams. The distribution channels are similar to those of the Parma Ham PDO; moreover, in-store the non- PDO ham benefit from the consumers’ difficulty to distinguish between the two products (Giacomini et al., 2013a). The non-PDO generic hams, being smaller than the PDO ones, can be more easily sliced and packaged in a tray than the Parma Ham PDO.

2.4. Characterisation, system boundaries and mapping

2.4.1. Characterisation of the supply chains

The full description of the three chains Cinta Senese (local), Parma Ham PDO (regional) and generic non-PDO cured ham (global) is presented in the table below.

GLAMUR Report – Italian Case Study- Pork Chains –March 2015

Table 2.1: Description of the tree chains of ham production in Italy

Local Regional Global Product Category of Cured Ham product (should be the same for the 3 case studies as they are forming a pair) Precise name of Prosciutto di Cinta Prosciutto di Parma Prosciutto crudo (generic the product Senese (Cinta Senese (Parma Ham PDO) non-PDO cured ham) Ham) Arguments for The ham is produced in The ham is a PDO The ham is produced Scope of the choosing this small companies with product produced in a with imported thighs, case study case study the thighs of the Cinta small area, with fresh cured in the same region Senese pig in Tuscany. meat from North and than the Parma Ham Animals are kept Central Italy, and PDO and marketed outdoors and fed mainly marketed globally. globally with local foods. Controversy - Producers’ have strong - Lack of collaboration - addressed by the influence on the between producers, - The huge production of producers, the governance of the chain, slaughterhouses and more competitive consumers, also by means of the processors generic hams could drive and/or the public PDO (heterogeneity of down the price of the opinion - Recovery of the race Consortium members) PDO Hams Cinta Senese, but with - Tendency of large - Often the same some environmental processors to produce companies are producing problems due to Parma Ham PDO at the both the Parma Ham inappropriate breeding lower edge of the PDO and the generic techniques product specification, as non-PDO hams - Great variability of the well as other generic (members of the Parma raw material and non-PDO hams Ham PDO Consortium difficulty of ensuring - Small firms specialized too) consistent production in Parma Ham PDO - Consumers’ difficulty standards production, aiming to to distinguish between differentiate the quality the Parma Ham PDO and the generic non-PDO hams, especially on export markets Dimension(s) for Environmental (intensive Environmental (intensive which the case is Creation and distribution pig farms), Economic pig farms) Economic most relevant of added value (distribution of value (distribution of value Biodiversity (Cinta added), Ethic (animal added), Ethic (animal Senese breed welfare), Governance welfare), Consumer preservation) (Consortium behavior (WTP for PDO, Resource use (woods) heterogeneity, and high quality PDO Animal wefare, traceability), Consumer hams, and generic Health (fat with high behavior (WTP for PDO, hams), Technological omega-3 content) high quality PDO, and innovation (pre-sliced generic hams), hams) Technological innovation (pre-sliced hams)

Exact definition Prosciutto di Cinta Prosciutto di Parma Prosciutto crudo (generic of the Product Senese (Cinta Senese (Parma Ham PDO) non-PDO cured ham) Ham) Very short See maps characterisation

GLAMUR Report – Italian Case Study- Pork Chains –March 2015

Supply- of the supply- chain chain (flow- description chart) Number and In 2010, according to 4,286 pig farms (these not available characteristics of ANAS, statistics report farms provide pigs not farmers involved the presence in Tuscany only to the Parma Ham (if known) of 120 farms with about PDO, but also to other 980 sows of Cinta. Italian PDOs – e.g., San Out of them, around 80 Daniele) farmers are registered in the PDO system. Number and Around 30 129 slaughterhouses N. slaughterhouses not characteristics of slaughterhouses and 150 processors available producers down- cutting plants (all in 190 processing firms stream in the Tuscany) registered in (very concentrated supply chain the PDO system production: 10% of the companies accounted for 60% of the total non- PDO production) Marketing Sold directly to Supermarkets, small Supermarkets, ho.re.ca. channels consumers, supermarket, retailers, ho.re.ca. small retailers Geographical Feed arrives at least for Feed primarily imported, Imports of thighs from scope of the 60% from Tuscany. farms in 10 regions of N-Europe, processing in supply chain Sales 100% locally or by Italy and processors in delimited area, short channels delimited area south of marketing globally Parma, marketing globally Governance of no formal governance the supply chain (power relations, collective organization, ‘ etc.) Consorzio Prosicutto di

The farmers’ and Parma, is the association of ham producers which Supply- processors of Cinta Senese are represented in comply with the PDO chain product specification analysis the “Consorzio di tutela della Cinta Senese” Other production phases (Consortium for the can also be represented protection of the Cinta with the Consortium Senese) (i.e., breeding farms, slaughterhouses) Main A third body INEQ - An independent no formal organization organizational controls compliance with organization (IPQ) patterns the PDO product controls compliance with specification for fresh the product specification meat. The Consortium for fresh meat controls the use of PDO - Strict traceability Cinta meat for sausages system, along the supply and hams by the chain: associated firms, tattoo on piglets: guaranteeing the traceability of the fresh meat. The Consorzio provides for a quality hallmark for the branded fresh meat:

GLAMUR Report – Italian Case Study- Pork Chains –March 2015

processed products:

metal seal at the beginning of the curing . period:

the five-point Ducal Crown brand after 12 months:

Resources Relevant role of local Industrial organisation of Fully industrial supply (human/capital/ specific resources: the the production process chain other) employed local breed Cinta Senese with certain specific in the production and breeding skills, production phases process (generic woods. carried out by artisans, vs. territorial) highly experienced and specialized workers (e.g., salters, de-boners, etc.) Knowledge Extensive knowledge of Several processing phase Same knowledge employed in the pasture management of are performed manually employed in the Parma production pigs in forests. by artisans, highly Ham PDO production process (generic Long lasting experience experienced and (knowledge spillovers) vs. territorial) in processing meat of specialized workers this particular pig breed (e.g., sugnatura, salters, etc.) Technologies Extensive livestock Industrial processing (no Industrial processing employed in the grazing, traditional chemical additives in the (chemical elements used production processing techniques processing phase), sliced in the processing phase, process (generic and packaged in a tray e.g. nitrites and nitrates), vs. territorial) PDO hams sliced and packaged in a tray non-PDO hams Role of the Very relevant. The bred The production of Parma The cured ham produced territory (in all Cinta Senese is typical of Ham is traditionally in the same territory than dimension: the central hills of associated with the the Parma Ham PDO is geographical, Tuscany; the Tuscan territory of Parma promoted by the cultural and identity of the product is company as a valid economic) in recognized and protected lower priced substitute defining the by means of the PDO. of Parma Ham identity of the product Role of public Subsidies and technical Subsidies for Subsidies for policies and assistance for the investments, hygiene and investments, hygiene and institutions preservation of the veterinary controls, veterinary controls breed. subsidies from Rural Subsidies for Development Plan (e.g., investments, hygiene and gourmet food route) but veterinary controls not for farmers

GLAMUR Report – Italian Case Study- Pork Chains –March 2015

Main dynamics / Increase in the number Exports continue to Domestic market is trends of livestock reared. grow, but the domestic declining, but exports Actually the demand for market is declining are increasing Cinta Senese meat Reduction in the Reduction in the exceeds supply. number of processors number of processors (increased concentration (increased concentration ratio) ratio)

In the following table the three chains are characterized on the basis of the four dimensions that, according to the GLAMUR approach, characterizes local and global chains:

Table 2.2. Characterisation of the supply chains

Local Regional Global Cinta Senese Ham Parma Ham PDO Generic cured ham PDO Physical/geographical Fresh meat from Fresh meat from North Imported fresh meat distance Tuscany, in some cases and Central Italy, local from Northern Europe processed on farm, the processing, (e.g. NL), any origin most part of feed local consumption in Italy livestock feed, sales in or from Tuscany and abroad Italy and abroad Governance/organizati Controlled by local Governance role of the Supply chain on (control by local farmers and processors, Consortium (members’ controlled by larger actors) in some cases all the heterogeneity, local global firms at production and and global processing downstream level processing is made firms involved) (processing and retail inside the same firm phase) Technology and Traditional breeding Mixing of traditional Modern technology, knowledge and processing. way of production industrialization in all Relevant role of local (processing phase, e.g., phases of the chain. No specific resources: the no additives, highly role for local specific local breed Cinta skilled work) and resources. Senese and breeding modern ones (breeding, skills, wood curing) Identity of the product Ham of Cinta Senese Parma Ham PDO General non-PDO meat PDO cured ham (often sold with companies’ brand or private label)

2.4.2. System boundaries and mapping

The main phases in production process which delimit the system boundaries of the three supply chain are presented below:

GLAMUR Report – Italian Case Study- Pork Chains –March 2015

2.4.3. Local supply chain Ham of Cinta Senese meat PDO

Figure 2.1. Material and production flows in the local supply chain of Cinta Senese

Primary Secondary Spatial Scale Production inputs Agricultural Production processing processing Distribution Retailing Consumption Local land farms:

water Farm / manure/slurry INTEGRATED MODEL: On-farm processing (slaughtering committed to external firms) Direct sales feed local Feed pigs Local stores workers Transport Restaurants

Regional pig Slaughterhouse: Ham factory: Transport Transport feed evisceration trimming Restaurants workers cutting salting Gourmet stores chilling ageing Regional supermarkets Direct Internet sales National energy Gourmet stores feed Restaurants machinery Direct Internet sales equipment Continental feed Gourmet stores equipment Restaurants machinery Direct Internet sales energy Global equipment machinery feed

GLAMUR Report – Italian Case Study- Pork Chains –March 2015

2.4.4. Regional supply chain Parma Ham

Figure 2.2. Material and production flows in the regional supply chain of Parma Ham

The Parma Ham PDO area of production.

# # # # # # # # ## # # # # # # # # # # # ## ## # # # # # # # # # # # # ### ## # # # # # # # # # # # # # # # # # # # # # # # # # # # # # ## # # # # # # # # # # # # # # # # # # # ## # # # # ## # # # # # # # # # # # # # # # # # #

# #

# # #

Slaughterhouses # 1 Dot = 1 firm Number of Pigs < 100.000 100.000 - 200.000 200.000 - 1.000.000 1.000.000 - 2.000.000 > 2.000.000

GLAMUR Report – Italian Case Study- Pork Chains –March 2015

Figure 2.3. Material and production flows in the global supply chain of generic cured ham

2.5. Critical issues and relevant attributes/indicators

Several critical issues emerge from the analysis and will be analysed in the comparison of the three supply chains. The most relevant ones are:

 Provenance of the meat for ham production. The three supply chains have a very different geographical scope and organizational models, with different associated impacts linked to transportation costs and other environmental impacts.  Breeds of pigs used in the production process (agro-biodiversity). In the global chain the meats are obtained by pigs of different international breeds. In the Parma Ham PDO chain only three breeds of pigs can be used: Large White, Landrace and Duroc. In the case of Cinta Senese there is a relevant contribution to biodiversity preservation.  Environmental impacts. Different kinds of impacts are associated to the three supply chains. In the case of Cinta Senese, the breeding systems in the forestis in principle a low-impact process, but some concerns emerge due to environmental damage in the forest in case of excessive number of animals per hectare. In other two cases some problems emerge due to the high concentration of animals per hectare.  Governance. In the global chain there is no formal definition of quality; meats are imported from Northern Europe and processed locally, using industrial processing methods (e.g., adding chemical preservatives). In the Parma Ham PDO chain the product quality is set by the PDO specification (e.g., no chemical preservatives used). The guarantee system is also defined by law; the Consortium has a significant role in governing the quality system. However, the heterogeneity of Parma Ham Consortium members characteristics, have

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important effect on the Consortium strategies. For example, several ham producers complain about the lack of vertical quality differentiation within the PDO specification. In the Cinta Senese supply chain there is a problem of quality variability of the meat produced by the farmers, as they use different techniques and this affects the quality. It is a typical feature of local artisanal products which also be considered an advantage compared to standard products if the market is segmented properly.  Animal welfare. In the global chain the medium slaughtering age is six-seven months. They are generally bred in highly mechanised livestock farms (intensive pig farming). In the Parma Ham PDO chain, the breeding technique is also performed intensively in highly mechanised livestock farms: piglets suckling during first four weeks with the sow; weaning, from the 5th to the 12th week; piglet fattening, from 30 to 80 kilograms of weight; and fattening: from 80 to 160 kilograms of weight and above. The minimum slaughtering age is nine months. Health problems of the farming of the Cinta Senese seem to be lower than the intensive rearing of improved breeds, while the well-being seems to be much higher.Some limited problems emerge due to the contact with wild animals (wild boars and wolves).  Participation of farmers to the added value distribution. In the global chain the production of non-PDO hams is highly concentrated in few large companies. While the product being more competitive than the Parma Ham PDO, the value added is not evenly distributed. Downstream stages (large scale processors and retailers) generally benefit from large share of value added. In the Parma Ham PDO chain, the value added is not evenly distributed, where downstream stages generally benefit from large share of value added. Large scale slaughterhouses, processors and retailers are the players with higher bargaining power throughout the supply chain. The PDO system in the case of Cinta Senese in principle allow for a good farmers’ participation to the value added distribution. This is true in particular for farmers which integrate all the phases of the chain in its own firm, up to the cured ham production and its direct selling to consumers. For other farmers some problems emerge for market prices, due also to some oversupply (high prices over the last few years pushed many farmers to breed Cinta Senese, but without real marketing perspectives).  The role of public policies. In the global chain, processors in the Parma province benefit from spillovers of the PDO production system, including public support for investments, etc. In the Parma Ham PDO chain, the public support included subsidies for investments, hygiene and veterinary controls. Indirectly, ham producers benefit from Rural Development Plan (e.g., gourmet food route). For Cinta Senese public polices play a relevant role, first of all for the recovery of the breed: both technical support and incentives paid in the framework of agri-environmental measures in the Regional rural development plan (now stopped).  Consumer preferences. In the global chain, the non-PDO hams have generally lower prices; consumers in some cases (e.g., ho.re.ca) are not able to distinguish between the Parma Ham PDO and the generic non-PDO hams. In the Parma Ham PDO chain, the consumer behavior and preferences are relevant in shaping the WTP for PDO-labeled hams, high-quality PDO hams, and generic hams.

GLAMUR Report – Italian Case Study- Pork Chains –March 2015

3. Research design

3.1. Research Questions

Three general RQ common to all case studies

1. What are the key food chain performance issues with regards to a global-local comparison? 2. What is the methodological strength and weakness of overall applied pairwise comparative analysis? 3. What are the specific interactions of the food chains under study and the policy settings?

Next to the three overarching research questions which are common to all case studies a set of research questions have been formulated together with the NL team:

1. How to characterize and distinguish the 6 selected pork chains in terms of local versus global in line with the criteria as agreed upon in GLAMUR? 2. How to characterize and distinguish the 6 selected pork chains in terms of local-global dynamics? 3. What are most significant and meaningful dimensions, attributes and indicators to assess, measure and compare the performances of the 6 selected pork chains? 4. How do the 6 pork chains perform on these indicators? 5. To what extent and in which ways do pork chain stakeholders agree or disagree about relevant performance dimensions, -attributes and -indicators? 6. How are selected pork chains performances influenced by prevailing policy- and wider regulatory frameworks? 7. What is the methodological strength and weakness of overall applied double pairwise comparative analysis with its specific combination of quantitative and qualitative approaches?

3.2. Attributes and indicators selection process

In line with point 3.3 “Indicators selection” of WP3 Guidelines for case studies, the relevant attributes and indicators for Italian case studies were selected by means of experts and stakeholders advice. Following the experts meeting held in Reggio Emilia on July 8th, a first list of attributes and performance indicators for Italian case studies (Cinta Senese PDO, Parma Ham PDO and generic ham) was defined, including 7 attributes and 21 indicators. This first provvisional list is provided in the table below.

GLAMUR Report – Italian Case Study- Pork Chains –March 2015

First provisional list of attributes Attribute Indicators Retail price Affordability Dynamics in pork consumption Dynamics of pig meat consumption Added value at farm level/AWU Added value VA slaughterhouse/AWU VA ham factory/AWU Volattility of concentrate price Volatility of live pig price Volatility of fresh ham Resilience Volatility of cured ham Degree of diversification Degree of downstream integration Labour service coops Labour relations Non-EU workers Labour scandals Chain governance Degree of self governance Animal welfare Animal welfare level Degree of artisanility Territoriality Effectiveness of PDO Events organised in the territory related to the product Links with local touristic activities

The list has been discussed on August 1st with relevant stakeholders. In particular, Davide Menozzi ( UNIPRt) had a meeting with two representative of the Parma Ham Consortium. The aim of the meeting was twofold: first, to discuss and agree with stakeholders the list of relevant attributes and indicators to characterize the global vs. local chains. Secondly, to gather additional information about the case studies (in particular, Parma Ham and generic ham cases) and, as much as possible, to collect data useful to populate the database. The following points summarize the main issues resulted:  in general, the stakeholders found the proposed list of attributes and performance indicators pertinent with the case studies aims;  among those attributes not selected, the only one that would be relevant for the purpose of the case studies would be “Traceability”. This attribute would help to distinguish the certificated food chains (Cinta Senese and Parma Ham PDOs) from the generic ham. Possible performance indicators able to define this attribute could be the number of inspections by the certifying body, or the number of nonconformities. These data should be appropriately weighted, for example, by the quantity of certified product in order to account for the differences between the Parma Ham (large-scale) and Cinta Senese cases (small- scale). The possibility to include this new attribute has been discussed by the experts involved;  they also agree that the only official prices throughout the supply chain are those defined by the Commodity Exchange, although not always in line with the actual prices defined by the real transactions;

GLAMUR Report – Italian Case Study- Pork Chains –March 2015

 the Parma Ham Consortium will provide data and information about prices, trends of the certified production, composition Consortium Board of Directors, events linked to the territory and related participation;  the Parma Ham Consortium will not provide data on individual companies, for privacy reasons. For such information, the experts should rely on companies balance sheets and individual interviews;  they do not have specific information about the extent to which the ham producers have contract with labour cooperatives. However, stakeholders agree that such cooperative contracts are important especially in certain phases (e.g., ham treatment with pig fat), both for small and large companies. Leporati claims that about 80% of the work in these phases is done by cooperatives. They do agree that unions should have more information about this issue;  according to the stakeholders the Parma Ham and generic ham differ mainly for the use of nitrates in the hams curing (which is banned by the PDO specification), and for the curing period, which is lower for the generic ham, ranging from a minimum of 6 months to a maximum of 9 months. The latter factor also affects the permanence of the ham in the different seasoning cells: the cells and the temperatures are the same as the PDO ham, but the time in cells changes in relation to the lower seasoning period.

The following people of Parma Gam supply chains were interviewed and collaborated in order to collect data useful for the evaluation of selected indicators:

 n. 2 representatives of the Parma Ham Consortium, who provided information about the prices and the quantity consumed of Parma Ham PDO and generic ham (attribute “Affordability”), the number of events and visitors (Indicator “Social cohesion and conviviality”, attribute “Territoriality”), as well as the “Governance” of Parma Ham PDO, and “Resilience” of Parma Ham PDO and generic ham.  the director of the Gourmet Food and Wine Route “Strada del Prosciutto e dei Vini dei Colli di Parma” (“Road of Ham and Wines of Parma Hills”) who gave information about the “Links with local touristic activities” (attribute “Territoriality”);  n. 8 in-person in-depth interviews with Parma Ham producers and n. 2 in-person in-depth interviews with meat processors – slaughterhouses (secondary data, published in Giacomini et al. 2010; Giacomini et al. 2013a; Dentoni et al., 2012); who gave information about the Parma Ham PDO and global chains on attributes “Governance”, “Territoriality”, and “Resilience”;  n. 1 focus group with 9 consumers, n. 20 in-depth direct interviews, and a survey with 250 consumers (secondary data, published in Capelli et al., 2014), who provided information about the “consumers’ perception” of global and Parma Ham PDO chain (attribute “Affordability”).

GLAMUR Report – Italian Case Study- Pork Chains –March 2015

As far as Cinta Senese supply chain is concerned, three main sources of information were used for identifying relevant attributes following the list provided by WP2 GLAMUR report: 1. Scientific literature analysis and other written sources: local newspapers (12 articles were identified as relevant), grey literature and research reports, websites: a systematic analysis of scientific literature and of local newspapers was developed in January-March 2014. See the bibliography at the end of the Report. 2. Key informants interviews and exploratory interviews: a meeting with professors and researchers of the Department of zootechnical sciences at University of Firenze prof. Oreste Franci, dr.ssa Carolina Pugliese, and collegaues (Firenze, 06.02.2014), two meetings with Cristina Santini president of the Consorzio di tutela della Cinta senese PDO (Firenze, 06.02.2014 and 23.04.2014), interviews to pig breeders and processors (Raymond Lamoth, Castellina in Chianti; Fattoria di Pietrabuona, Pistoia; and Azienda Agricola Corboli, Prato).

The following people were interviewed and collaborated in order to collect data useful for the evaluation of selected indicators:

 the Director of the Cinta Senese PDO Consortium, who provided information about the situation of the supply chain, the organization of the chain, market trends, and other main issues relevant for the evaluation;  n. 3 in-person in-depth interviews with Cinta senese farmers and n. 3 with cured ham processors, following a structured questionnaire: n. 3 They collaborate also to data collection on costs and revenues of pig farming and processing;  n. 1 focus group (jointly managed with RETHNIK EU project) with representatives of firms (farmers and ham processors: 7 people), PDO consortium (Director Chiara Santini), PDO control body (president and Tuscan manager), public institutions (Toscana Region and Province of Siena, 3 people), animal feed producers (1 people), researchers from Firenze University (5 people).

A relevant contribution for the identification of critical attributes came from a Master thesis: Lapenna M. (2014), “Valorizzazione dei prodotti tipici locali e effetti sulla sostenibilità ambientale: il caso della DOP cinta senese, Laurea magistrale in Scienze dell’Economia, Università di Firenze”. During the thesis work an analysis the local newspapers and 3 exploratory interviews to farmers were developed, following the Glamur approach. Thanks to these analysis, we have built the following matrix where relevant attributes are pointed out according to different stakeholders categories who cited them.

Multi-criteria matrix of food supply chain performance Attributes Stakeholders Economic Social Environmental Health Ethical Pig farmers  Profitability  Product quality  Landscape  Food safety  Animal welfare (level and preservation  Animal welfare stability)  Wood preservation

GLAMUR Report – Italian Case Study- Pork Chains –March 2015

Ham  Profitability  Product quality  Food safety processors

Scientists  Landscape  Food safety  Animal welfare preservation  Animal welfare  Wood preservation

Policy makers  Profitability  Local/rural  Biodiversity  Food safety (level and developemnt  Landscape and  Animal welfare stability) wood  Economic preservation development (both direct and indirect: support to development of tourism) Fonte: Lapenna, 2014

The final selection of attributes has thus been based on an analysis of all attributes of the matrix through literature review and participatory methods (interviews with stakeholders). The following eight attributes have been analyzed. Some core attributes are common to both Country cases and will be used for the comparison of the Italian and Dutch pork chains. Other attributes relate to just one of the two cases.

Attribute Italy Netherlands

Added value X X

Territoriality X X

Resilience X X

Resource use and X X pollution

Affordability X X

Chain governance X X

The indicators were selected considering the following issues: their scientific soundness; the appropriateness to the chains characteristics, and the availability of data. In table 3.1 indicators indicators are presented, by giving a short definition and the indication of the data source.

GLAMUR Report – Italian Case Study- Pork Chains –March 2015

The relevance of the selected attributes for the three chains is argumented in the following Section, where also indicators are presented in a detailed way.

Table 3.1. Indicators

Main attribut e Name Definition Source Value added per Value Value added at farm kg of slaughter CRPA elaboration of Interpig data and added level weight on pig data collected by UNIFI farms Value Value added at Value added per CRPA elaboration on representative added processing industry kg of cured ham samples of firm balance sheets Coefficient of variation of monthly feed prices over 3 years (concentrates Resilien V.1 - Feed prices CRPA, Interpig, Chamber of commerce of prices for heayy ce volatility index Siena data) and light pigs, representative agricultural products for feed for Cinta senese) Coefficient of variation of monthly live pigs prices over 3 years Resilien V.2 - Live pigs prices (Heavy live Italian ISMEA and Chamber of Commerce of ce volatility index pigs for B; Cinta Siena data) senese live pigs for A; Light live pigs imported from NL not relevant) Coefficient of variation of monthly fresh ham Resilien V.3 - Fresh ham price prices over 30 CUN data ce volatility index months (Fresh ham 14 kg for generic ham ; Fresh ham 11-13 kg for

GLAMUR Report – Italian Case Study- Pork Chains –March 2015

Parma PDO ; not relevant for Cinta senese) Coefficient of Resilien V.4 - Cured ham price variation of Parma market data ce volatility index monthly cured ham prices % of pig farmers Resilien A.1 - Farmers upstream which self-produce UNIFI-UNIPR-CRPA ce integration by ownership the majority of feed Part of pig farmers involved in A.2 - Farmers upstream mid-long term Resilien integration by upstream UNIFI-UNIPR-CRPA ce contractual contractual arrangements arrangements with animal feed producers Relevance of Resilien A.3 - Farmers farmers UNIFI-UNIPR-CRPA ce downstream integration downstream integration % of (light/ heavy/Cinta) pigs Resilien A.4 - Farmers product for ham UNIFI-UNIPR-CRPA ce diversification production on the total turnover of farm Resilien A.5 - Farm-level Price volatility of GLAMUR ce resistance against price- the input and volatility output markets of relevance for pork production, defined as the max delta added value per kg live weight per year over the periode 2009- 2013 Resilien Use of antibiotics A.6 - Use of antibiotics Expert consultation ce in pig farms Resilien A.7 - Part of UNIFI-UNIPR-CRPA ce Slaughterhouses/process slaughterhouses/p

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ors upstream integration rocessors involved in pig farming and/or in long term contractual arrangements Relevance of Resilien A.8 - Slaughterhouses slaughterhouses UNIFI-UNIPR-CRPA ce downstream integration downstream integration Part of activity not linked to production of Resilien A.9 - Slaughterhouses generic / Parma Expert consultation ce product diversification PDO / Cinta senese ham on the total turnover of slaughtering firms Share of processing firms with a share of (generic / Parma PDO / Cinta Resilien A.10 - Processors senese) ham UNIFI-UNIPR-CRPA ce product diversification higher than 70% on the total turnover of processing firms, on the total number of firms Degree of market A.11 - Processors diversification of Resilien marketing channels ham processors, in UNIFI-UNIPR-CRPA ce diversification for cured terms od ham marketing channels Degree of market A.12 - Processors diversification of Resilien geographical market ham processors, in UNIFI-UNIPR-CRPA ce diversification for cured terms od ham geographical markets Degree of product A.13 - Product Resilien differentiation for differentiation for cured UNIFI-UNIPR-CRPA ce cured ham by ham means of collective

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labelling systems Resilien S.1 - Farm-level risk- Risk-spreading by Synthesis of indicators B1,B2 and D1 ce spreading farm-level diversification and producing feed Resilien S.2 - Adaptation capacity Strength of ce of farmers through interlinkages with downstream actors downstream actors cooperation, integration diversification UNIFI-UNIPR-CRPA and diversification strategies in terms strategies of productfolio - and marketing Resilien S.3 - Adaptation capacity Synthetic indicator ce of slaughtering firms based on through integration and upstream, diversification strategies downstream and UNIFI-UNIPR-CRPA diversification analytical indicators Resilien S.4 - Adaptation capacity Synthetic indicator ce of ham processing firms based on through integration and upstream, diversification strategies downstream, UNIFI-UNIPR-CRPA diversification and differentiation analytical indicators Resilien C.1 - Supply chain Synthetic indicator ce attitude to diversification based on and differentiation diversification and differentiation UNIFI-UNIPR-CRPA analytical indicators related to all stages of the supply chain Resilien C.2 - Intradiversity of Diversity internal ce chain relations / to the supply chain configurations can improve the resilience of the system, thanks to UNIFI-UNIPR-CRPA a diversification of risks. Indeed specific crisis factors may

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embarrass some models of chain organization, but not others Resilien C.3 - Chain-based Chain actors' ce adaptation capacity collaborative UNIFI-UNIPR-CRPA through learning and efforts to learn innovation and innovate Resilien C.4 - Ability to mobilize Presence of ce public and societal political and social support support activities UNIFI-UNIPR-CRPA of various types, at national, regional and local level Chain Trust based internal Level of trust- UNIPR Governa relationships based relations nce between chain actors, based on (1) absence of conflicts, (2) trust among chain partners, (3) continuity of chain relations Chain Trust based external Level of trust- UNIPR Governa relationships based external nce relationships based on chain partners' capacity to mobilise support from (1) social movements), (2) citizens and (3) policy actors Chain Self governance capacity Self-governance UNIPR Governa capacity in terms nce of creation of distinctiveness Chain Chain-based value Overall value UNIPR Governa governance governance nce characteristics conform the typology of Gereffi et al. (2005)

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Pollutio kg PO4-eq/kg live CRPA for regional and local /CLM* for LCA.1 - Eutrophication n weight global Pollutio kg PO4-eq/kg CRPA for regional and local /CLM* for n carcass weight global Pollutio kg PO4-eq/kg CRPA n cured ham Pollutio kg PO4-eq/kg CRPA n sliced cured ham Pollutio LCA.2 - Carbon foot kg CO2-eq/kg CRPA for regional and local /CLM* for n print live weight global Pollutio kg CO2-eq/kg CRPA for regional and local /CLM* for n carcass weight global Pollutio kg CO2-eq/kg CRPA n curedham Pollutio kg CO2-eq/kg CRPA n slice cured ham Resourc LCA.3 - Non renewabel, CRPA for regional and local /CLM* for MJ/kg live weight e use fossil global Resourc MJ/kg carcass CRPA for regional and local /CLM* for e use weight global Resourc MJ/kg curedham CRPA e use Resourc MJ/kg slice cured CRPA e use ham Resourc H2O m3/kg live CRPA for regional and local /CLM* for LCA.4 - Water footprint e use weight global Resourc H2O m3/kg CRPA for regional and local /CLM* for e use carcass weight global Resourc H2O m3/kg cured CRPA e use ham Resourc H2O m3/kg slice CRPA e use cured ham Resourc m2/year/kg live CRPA for regional and local /CLM* for LCA.5 - Land use e use weight global Resourc m2/year/kg CRPA for regional and local /CLM* for e use carcass weight global Resourc m2/year/kg cured CRPA e use ham Resourc m2/year/kg slice CRPA e use cured ham Pig farms on total Territori farms with IPQ/INEQ, ISTAT ality Association of product livestock in the with territory territory (%)

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Pig meat processing Territori industries on total ality Association of product food industry in with territory the territory (%) IPQ/INEQ, ISTAT, UNIPR Is there a link between the origin Territori of raw material ality (e.g. fresh meat, Association of product feed) and the with territory territory? UNIPR, UNIFI Number of cultural Territori Social cohesion and events in the ality conviviality territory Parma Ham Consortium, UNIFI Number of visitors Territori Social cohesion and in cultural events ality conviviality in the territory Parma Ham Consortium, UNIPR Is there a Gourmet Territori Links with local touristic Food and Wine ality activities Route involved? UNIPR, UNIFI % of farms involved in on- Territori farm touristic ality activities (agri- Links with local touristic tourism, food activities tasting, etc.) UNIPR, UNIFI Afforda Retail price in bility supermarket € / kg Parma Ham Consortium, UNIFI Afforda Parma Ham Consortium, Cinta Senese bility Cured ham consumption Tons Consortium

4. Methods

4.1. Added Value

The capacity of producers and processors to add value to raw materials in order to adequately remunerate their labour and capital is crucial for the economic sustainability of the enterprise and of the production system. When producers and processors together compose the food

GLAMUR Report – Italian Case Study- Pork Chains –March 2015 value chain, of importance is that a fair distribution of the total value added is achieved among the economic actors of the chain. Added value is calculated taking the difference between farm gate, wholesale and retail prices and non-factor costs at each stage of the pork chain taking into account the valuation of the pig carcass from producer to consumer. When comparing local and global food chains one of the questions which emerge is to which extent local food producers are able to capture more value added in the value chain in their effort to directly reach the consumers. This argument may be used by the producers and processors in the Cinta Senese chain. A second hypothesis is that food products carrying a PDO label are able to generate more added value than generic food products as PDO products can market also the “terroir” as food attribute. Of interest is then to compare PDO Parma Ham with generic cured ham. In global chains primary producers often complain to receive a minimal part of the value added created in the chain because of asymmetric power relationships predominating in the chain. The difference in value added per kg meat between Dutch light pig producers, which are at the basis of the global pork chain, and Italian heavy pig producers, which dedicate their pigs to the PDO Parma Ham circuit, is here of high interest. Direct sales of processed Cinta Senese pork to consumers may affect value added as the sales prices can be established without the influence of middlemen. Within the Parma Ham chain different firm strategies coexist: those who point at large scale production just complying with the minimum standards of the PDO product specification and sell primarily to large retailers, a second group of companies who are specialized in a niche segment of the Parma Ham chain producing high quality hams for small ‘boutique like” retailers and a third group of companies who are operating on different market segments of Parma Ham. These features have their influence on the creation of value added. In the generic cured ham chain Dutch pig producers deliver their pigs to Dutch slaughterhouses. The heaviest fresh hams are exported to Italy and the Dutch pig producers may receive a price premium when a relevant part of their fresh hams are exported for the production of Italian generic cured ham. Added value is calculated taking the difference between farm gate, wholesale and retail prices and non-factor costs at each stage of the pork chain taking into account the valuation of the pig carcass from producer to consumer. For each of the three chains added value has been calculated at two phases of the value chain: at farm level and at the level of the processing company of ham. The following farm types have been used for the calculation of value added: 1. Dutch pig farms specialized in the production of light pigs (117 kg liveweight). Fresh hams of these pigs are exported to Italy and are there processed up to generic cured ham. The calculation refers to the period 2009-2013 and the source used is Interpig (BPEX, 2013). Data refer to a representative sample of Dutch pig farms. 2. Italian pig farms specialized in the production of heavy pigs (166 kg liveweight). The fresh hams of these pigs are destined to the production of Parma Ham. The calculation

GLAMUR Report – Italian Case Study- Pork Chains –March 2015

refers to the the period 2009 – 2013 and the sources used are the yearly bulletins of CRPA dedicated to the production costs of heavy pigs in Italy (CRPA, 2013). Data are derived from a representative sample of Italian pig farms, which are certified for the production of heavy pigs for the PDO Parma Ham value chain. 3. Three Cinta Senese farms which are either producing live pigs for further processing or are integrared companies producing processed pork products among which Cinta Senese ham. The calculation of value added is based on an ‘ad hoc data’ collection in these farms, which produce PDO certified Cinta Senese pigs. As the ham companies are concerned two samples of ham companies were composed for Parma Ham and generic cured ham. The principal feature of these companies is the high degree of specialization defined as either “prevalent mono production of dry-cured PDO Parma Ham" or “dry cured generic hams”. Only companies of medium size have been chosen, since large companies in the sector are unlikely to be "single product". Difficulties would then have been encountered in processing the balance sheets of companies that produce a wide range of products. Once the two samples have been constituted the data contained in the balance sheets have been elaborated for the five year period 2009-2013. The non-factors costs, such as raw materials, services and other direct processing costs, have been separated from the labour and capital costs and taxes. As the prices of the fresh hams for Parma Ham are concerned, the price lists of the Chamber of Commerce have been used in order to extract their value from the total non-factor costs. The prices of fresh hams for the production of generic cured hams are derived from the export prices of Dutch fresh hams plus transport costs to Italy. These price lists have been chosen because of the difficulty to identify the purchase prices from the balance sheets. The added value calculated in this way refers to the initial weight at the beginning until the end of the seasoning period of the fresh ham with the bone. In other terms, the value added is expressed per kg of cured ham with the bone. The two samples were made up of eight companies in the case of Parma Ham, and nine companies in the case of generic cured ham. From the comparison of the main characteristics of the two samples interesting differences emerge: the Parma Ham companies process a lower number of fresh hams than the companies specialised in generic cured ham. The Parma Ham companies on average season 80-90 thousand hams a year against an average of more than 300,000 hams per year of the generic cured ham companies.

Table 4.1.Characteristics of the two samples of ham companies

PDO Parma Ham (n=8) Generic cured ham (n=9) n. hams Sales value € % turnover n. hams Sales value € % turnover 2009 69,000 7,825,000 67 326,000 12,420,000 90 2010 80,000 9,538,000 71 351,000 14,775,000 96 2011 105,000 10,017,000 72 350,000 14,458,000 93 2012 87,000 9,506,000 71 290,000 11,681,000 84 2013 70,000 7,098,000 55 311,000 13,826,000 86

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A second remark regards the percentage share of ham seasoning on the total turnover of the company. For the examined Parma Ham companies this percentage share is on average 70% against 90% of the generic cured ham companies. This difference can be attributed to the fact that the seasoning period of Parma Ham is much longer than that of generic cured ham. The longer seasoning period implies a longer immobilization of capital which induces the Parma Ham companies to carry out seasoning services for other Parma Ham companies in order to dispose of more current liabilities. The calculation of value added generated in Cinta Senese processing companies is based on the selection of some enterprises according to a criterium of representativeness. Each firm is analyzed by means of an in-depth interview and on an accounting analysis. Enterprises were selected with reference to the two main organizational models: 1. The integrated model: integrated pig farmers which combine the production of live pigs with the on-farm processing of their meats where slaugherings takes place in small slaughterhouses which offer these services 2. The long chain model: processing companies which buy live Cinta pigs from the farms, slaughter them in third companies and process the meats to the final high quality products of the Cinta Senese These companies are not specialized in Cinta processed products, which often at the contrary represent a marginal share of their turnover. A total of four interviews were conducted: 2 downstream integrated pig farmers; one of the bigger Tuscan ham processor involved in Cinta Senese processing which represent 15% of the total turnover; one traditional pig farmer.

4.2. Resilience

4.2.1. Description of the attribute “resilience” and research questions The concept of resilience was developed originally with reference to ecosystems. Resilience is defined in different ways by different authors, coherently to the different problems their deal with but also to their different theoretical backgrounds and systems of thinking. In the context of socio-ecological thinking, resilience has been defined as “the capacity of a system to absorb disturbance and reorganize while undergoing change so as to still retain essentially the same function, structure, identity and feedbacks” (Walker et al. 2004, p. 4). The concept of resilience can be referred to the capacity of a food system to withstand and/or recover quickly from sudden or acute shocks (such as price fluctuations, disease outbreaks and other risks factors) in order to be sustainable over the longer term. However, resilience does not refer only to the capability of a system to absorb external disturbances or to recover from adversity, but also more in general to the ability to cope with change and to evolve towards new equilibria but without change its identity. Three main aspects of resilience can be pointed out: persistence, which refers to the ability to buffer shocks and still maintain function; adaptability, which refers to the ability to deal with challenges by means of re-organization, change, ability to adjust to a changing context; and transformability, which implies the capacity to transform the existing system in a fundamentally new one (Walker et al., 2004; Folke et al., 2010).

GLAMUR Report – Italian Case Study- Pork Chains –March 2015

Learning and capability to innovate, both at individual and at collective/system level, is a key issue in making systems resilient. According to Briano et al.(2009), in the business sector resilience refers to the ability of a company to resist a serious damaging event. Christopher and Peck (2004) define resilience as the ability of a system to return to its original state or move to a new, more desirable state after being disturbed, while Fiksel (2003, p. 5333) proposed that resilient systems satisfy four major characteristics, namely: diversity; efficiency; adaptability; and cohesion. As pointed out by Leat and Revoredo-Ghia (2013), the notions of flexibility and adaptability are core ones. According to these authors, “a company or supply chain that has developed its resilience is better able to support the unpredictability of domestic or international trade, thereby achieving a competitive advantage through being able to recover more quickly than competitors when an adverse event arises” (Leat and Revoredo-Ghia, 2013, p. 221). The analysis of resilience as an attribute of a food chain is complex. Resilience is the result of many characteristics of a supply chain and of firms operating in it, and depends also on collective action initiatives firms are able to develop. Resilience is linked to attributes belonging to the economic sphere, such as profitability and competitiveness, but also to attributes linked to the resource use and the possible limited availability of key resources in the future. Hence resilience includes concepts like efficiency, resource use, technological innovation, biodiversity management, and governance. According to some authors (Soldevila et al, 2009) the organizational system and governance instruments of the value chain are key premises for building resilient value chains in pork industry. Other factors impact deeply on resilience, such as public policies – e.g. market regulations – and consumers behaviours. In this report a special focus is given to “economic resilience”, according to GLAMUR National reports, also in order to avoid major overlapping with other attributes. Resilience in fact can be considered as a key component of the sustainability of a business. From a methodological point of view, the choice of the unit of analysis is a critical issue. In fact the interrelationships between the resilience of a food supply chain, and the National food system from one side, and single firms resilience from the other one, should be carefully analysed. See in this regard the diagrammatic representation of the risks facing individual businesses and a supply chain elaborated by Leat and Revoredo-Ghia (2013). As pointed out by the authors, “these risks are clearly related. For example, the production risks of farmer producers will be part of the supply risk faced by others further down the chain. Similarly, the market risk faced by the retailer will ultimately represent the demand risk for the chain as a whole” (Leat and Revoredo-Ghia, 2013, p. 222). Supply chain risks may ultimately represent systemic risks for the whole food system.

Figure 4.1 Mapping risks facing individual enterprises and the whole supply chain

GLAMUR Report – Italian Case Study- Pork Chains –March 2015

The general aim is to understand how the supply chain participants, and in particular the pig producers (considered as the more weak and less empowered actors, also due to their exposure to biological risks), attempt to reduce their own individual and the collective supply chain risks, thereby making the chain more resilient. From a methodological point of view, it is clear that in order to analyse resilience it is needed to start first from an overview of the difficulties affecting the pig sector, and second to highlight the major risks. Resilience being a dynamic concept, an in-depth analysis asks for a long- time observation of the behaviour of the system after a specific crisis. The analysis of this attribute aims to give a general evaluation of the degree of resilience of the three supply chains, the methodology followed in this work included both quantitative and qualitative tools. The steps of our analysis are the followings: - to identify some specific factors affecting the resilience at a local system / supply chain level (e.g. the degree of market diversification of firms) on the basis of the economic literature - to find out appropriate indicators that can be calculated for the three food chains and to find relevant data, according to different available sources - to identify strategies pursued individually by firms and collectively for improving resilience in the three supply chains, by means of a case study approach - to discuss the main results. The main research questions are:

GLAMUR Report – Italian Case Study- Pork Chains –March 2015

- which are the relevant aspects that should be analysed in order to compare local and global food chains against resilience? - are local food chains more resilient than global ones? - which are the factors explaining different performances of local and global food chains? - what is the methodological strength and weakness of comparative resilience analysis? - are there specific interactions of the food chains under study and the policy settings?

4.2.2. Contextualization in the Cured ham supply chain Relevance of the attribute “resilience” in the cured ham supply chain As highlighted by EFFP (2009), the pig industry has been in a structural decline, due to a vicious circle of poor profitability, lack of confidence, underinvestment, falling productivity and increased production costs. The increase in the volatility of agricultural commodity markets has exacerbated the cyclicality of the sector, and the economic downturn put pressure on prices of pork- based final products at a final consumption stage. The upstream and downstream parts of the supply chain are exposed to different risk and pressures: the upstream part of the supply chain (i.e. farmers and processors) are more exposed to price movements in feed, whilst downstream actors (i.e. manufacturers and retailers) are more exposed to changes in consumer demand and to concentration process at the stage of final distribution. The pig population in Italy has fallen significantly (between 2010 and 2013 the pig population in Italy declined by 8.1%) and the processing supply chain has slightly increased imports of pig meat to meet processors and consumers demand. In recent times many Italian farmers have protested against low-cost imports of live pigs and fresh hams from Northern and Eastern Europe countries, asking for new legal rules about the indication of the provenance of the meat on the label. In this framework, economic resilience became a key issue for the whole Italian pork and cured ham supply chains. According to GLAMUR WP2 National reports, some relevant characteristics are identified in order to build resilient food supply chains, like the following: - limited dependence of farmers (and of firms belonging to other stages of the supply chain) on a single firm, or on a single geographical market, for their production factors purchases - diversity of marketing channels and geographical markets for selling their products, both for farmers and for farmers and firms belonging to other stages of the supply chain - limited dependency of farmers income and other firm revenues on a single product or activity - limited dependency of the supply chain on public sector support - capability to differentiate their products on the consumer market - strengthening economic and social connections between actors across the food chain - a strong level of vertical coordination among firms. Specific local/global features of the chain affecting the attribute “resilience” Many sources of information evidence that ham production systems (pigs producers, slaughterhouses and processors) were facing a complex of significant and related business risks, and

GLAMUR Report – Italian Case Study- Pork Chains –March 2015 in particular (Leat and Revoredo-Ghia, 2013; Protocollo di intesa della filiera suinicola italiana, 2007): - Production risks: danger of disease outbreaks and a tarnished image arising from disease concern. - Market risks: reduction trend in final consumption; strong market competition from imports, exacerbated by exchange rate movements; escalating feed costs (the major component of production costs); increasing market power of big supermarket chains; slow and even possible non-payments. - Institutional risks: like animal welfare legislation impacting adversely on competitiveness and potential restrictions on waste disposal. These risks are linked to the perceptions social actors have about the legitimacy of pig farmers (and other supply chain firms) in doing their economic activities. In particular the Generic cured ham supply chain is characterized by a globalized production model, with an high market (and geographical) concentration in the hands of few big firms which tend to specialize on specific stages of the chain. The opportunities for product differentiation are poor and price competition is very strong. In addition, environmental negative impacts are higher than in more traditional pig breeding systems. The dominant logic in the Generic ham chain is based on high volumes, low labour intensity and high capital intensity, low added value per head and per cured ham. In this context searching for scale economies inside the firm and along the chain is the guiding criterion. The Parma Ham PDO supply chain can be viewed as a response to the problems of the generic ham chain. In fact the Product designation of origin allows for an origin-based differentiation model, and the territorial boundaries fixed in the PDO Product specifications facilitate a stronger coordination among supply chain actors and support collective actions initiatives. The dominant logic in the Parma Ham chain is based on the search of high added value per ham, in order to be able to recover higher costs due to production methods able to valorise the links between the product and the territory. On the other side, this model can be threatened by the economic crisis which reduces the purchasing power of consumers. In the Cinta Senese ham supply chain the integrated model of production is the most relevant, where a single firm provide both for breeding Cinta pigs and for processing and curing ham, usually on a small scale and by means of artisanal processing methods. According to QBIC research project (Regione Toscana, 2011), this integrated model cover roughly 25% of the PDO Cinta Senese farmers and a lower percentage of the total PDO ham production. From the marketing side, Cinta Senese supply chain is based on a differentiation model based on two main elements: the link with the local breed Cinta Senese and the link with a specific territory (including both physical and human factors, as rearing methods) from which fresh meat and cured hams derive its specific characteristics. This differentiation model is supported by the legal recognition of a PDO for the Cinta fresh meat, and its extension to the cured ham by means of a collective trademark managed by the Cinta Senese Consortium. Both firm integration and origin differentiation are supposed to give to farmers and processors the opportunity to escape pricing squeeze which characterize ham food chains. Even if in recent years prices of animals are variable, processed products enjoy good prices and lots of opportunities for differentiation on the market and channel diversification, thus

GLAMUR Report – Italian Case Study- Pork Chains –March 2015 supporting resilience. In the Cinta Senese ham chain the value creation logic is based on small volumes, high intensity in labour, high added value per head and per cured ham. Also the links with local culture is strong (Cinta sense is an identitary product for many Tuscan rural people) and this support social acceptance of breeding. Searching for scope economies inside the same firm (between rearing, processing, and other service activities as agritourism) is a guiding criterion for many firms. In the light of these differences between the three supply chains, the hypothesis about resilience is that firms, and in particular farmers, embedded in global chains tends to be more and more subject to : - the effects of price volatility, both for inputs and intermediate outputs (pigs carcasses, fresh hams and other parts), on national and international markets; - the squeezing by two powerful categories of actors, input suppliers on one side, and final processors and the retail sector on the other one. Moreover, firms tends to be strongly specialized in a single product and capital intensive, thus increasing the exposure to risks. Local chains seems to be less vulnerable to volatile prices and to risks in general, thanks to higher levels of diversification and a greater ability to differentiate the product on the basis of “irreproducible” factors linked to a specific territory. As pointed out by Leat and Revortedo-Ghia (2013), improved resilience (in terms of reduced supply chain vulnerability to risks) arose also through horizontal collaboration amongst producers, and vertical collaboration with the processor and retailer. Their findings, related to a Scottish case-study, highlight that - thanks to a strong collective action and governance - producers improved market and price stability and pig breeding performances; for the processor and retailer the collaboration generated greater security of supply of an assured quality, improved communication with suppliers, and reduced demand risk as they could assure consumers on quality, animal welfare and product provenance – thanks to a better ability to communicate with social stakeholders (public bodies, consumers, citizens, environmental associations …). In principle territorial and cultural contiguity allows for better opportunities of coordination, lowering transaction costs and easing common vision about different supply chain actors.

4.2.3. Methodology General approach and overview of indicators From a methodological point of view the analysis of resilience of a supply chain asks firstly to made an overview of the difficulties affecting the supply chain, and secondly to highlight the major risks it faces. Resilience being a dynamic concept, an in-depth analysis asks for a long-time observation of the behaviour of the system after a specific crisis. The scope of this work is to give a comparative evaluation of the degree of resilience of three supply chains in the cured ham sector. On the basis of a set of specific factors affecting the resilience at a local system and supply chain level identified in the previous Section thanks to

GLAMUR Report – Italian Case Study- Pork Chains –March 2015 literature analysis, in this Section we identify some indicators able to represent these specific factors and for which relevant data are available at the needed level of detail. Given the complexity of the attribute resilience, its analysis was decomposed in various dimensions for each of which have been developed one or more indicators, divided in 4 categories. - Volatility indicators provide an overview of the level of price volatility for the different inputs and outputs of the supply chains - Analytical indicators measure specific aspects of the chains and are calculated and presented according to the different stages of the supply chain: pig farming, slaughtering, and ham processing. The focus on the stages of the chain is justified by the fact that each sector develops their own strategies for resilience; often these strategies are in conflict with the other sectors. - To facilitate the comparison among the three supply chains and the interpretation of data, some synthetic indicators – built on analytical indicators – have been developed for each of the three stages of the supply chain. - Finally, a general evaluation of the degree of resilience of the supply chains as a whole is given by means of some cross-cutting indicators.

Indicators are both quantitative and qualitative. Qualitative indicators are evaluated by researchers on the basis of their direct knowledge, of the results of the direct surveys (data and interviews) and of experts’ advices, using ordinal scales, for example: level 1 (very high, that is supporting of resilience), level 2 Intermediate, and level 3 (low, that is reducing resilience). The ordinal scale will be adapted to each indicator. The following table link indicators to research questions and data collection methods. Table 4.2. Resilience attribute: indicators, research questions and data collection methods

ATTRIBUTE: RESILIENCE (Economic/Social) Brief attribute Used indicators Research questions Data collection description (cf. methods Comparative Report) Capacity of a food system Three categories of  which are the relevant For all the indicators, to withstand and/or indicators: aspects that should be a mix of the following recover quickly from - ANAYTICAL analysed in order to techniques: sudden or acute shocks INDICATORS compare local and  Direct interviews to (such as price - SYNTHETIC global food chains supply chain actors fluctuations, disease INDICATORS against resilience?  Official data on outbreaks and other risks - CROSS-CUTTING  are local food chains prices and other: factors) in order to be INDICATORS more resilient than ISTAT (national sustainable over the See the following table global ones? statistics bureau), longer term. In this work for an analytical  which are the factors Chambers of the focus is on economic presentation. explaining different commerce, etc resilience. performances of local  Previous inquiries and global food chains?  Experts’ advices

GLAMUR Report – Italian Case Study- Pork Chains –March 2015

The following table classify the analytical indicators according to both sectors of the supply chains and the issues considered, and link them to the synthetic indicators. Many indicators are linked also to other attributes, and in particular to Added value creation and distribution, Governance, and Territoriality. These links will be discussed in a specific section of the general Report.

GLAMUR Report – Italian Case Study- Pork Chains –March 2015

RESILIENCE VOLATILITY A N A L Y T I C A L I N D I C A T O R S SYNTHETIC INDICATORS INDICATORS Upstream Downstream Diversification Differentiation Other INDICATORS PER integration integration PHASE

Pig farming Farm-level

resistance Farm-level risk-spreading Farmers upstream against price- (S.1) Feed prices index integration by (V.1) volatility (A.5) ownership (A.1) Farmers Adaptation capacity of Farmers product Use of farmers through Live pigs price Farmers upstream downstream diversification (A.4) antibiotics downstream actors index (V.2) integration by integration (A.3) (A.6) cooperation, integration contractual and diversification arrangements (A.2) strategies (S.2)

Slaughtering

Live pigs price Slaughterhouses / Adaptation capacity of index (V.2) processors upstream Slaughterhouses Slaughterhouses slaughtering firms integration (A.7) downstream product through integration and Fresh ham price integration (A.8) diversification (A.9) diversification strategies index (V.3) (S.3)

Ham processing Processors product diversification (A.10) Processors market Fresh ham price Adaptation capacity of diversification for index(V.3) Slaughterhouses / Product ham processing firms processors upstream … cured ham (A.11) differentiation for through integration and Cured ham price integration (A.7) Processors cured ham (A.13) diversification strategies index (V.4) geographical market (S.4) diversification for cured ham (A.12) Supply chain attitude to diversification and differentiation (C.1) CROSS- Intradiversity of chain relations / configurations (C.2) CUTTING Chain-based adaptation capacity through learning and innovation (C.3) INDICATORS Ability to mobilize public and societal support (C.4)

GLAMUR Report – Italian Case Study- Pork Chains –March 2015

4.2.4. Prices volatility indicators As pointed out by a FAO study (2011), “in a purely descriptive sense volatility refers to variations in economic variables over time … Here we are explicitly concerned with variations in agricultural prices over time. Not all price variations are problematic, such as when prices move along a smooth and well-established trend reflecting market fundamentals or when they exhibit a typical and well known seasonal pattern. But variations in prices become problematic when they are large and cannot be anticipated and, as a result, create a level of uncertainty which increases risks for producers, traders, consumers and governments and may lead to sub-optimal decisions. Variations in prices that do not reflect market fundamentals are also problematic as they can lead to incorrect decisions” (FAO et al, 2011). Volatility is determined by the speed of variation in prices. From a statistical standpoint, the greater the magnitude of its rate of change (up or down), the greater the speed of such change and the more changes there are in opposite directions, the more volatile a price will be. Along pork chains the volatility can be measured at four stages: - Volatility of feed prices (concentrate and other) - Volatility of live pig prices - Volatility of fresh ham prices - Volatility of cured ham prices The concentrate/feed price on the national/international market is not really under the control of the pig farming system, instead it should be considered mainly as a “factor risk” able to menace the supply chain resilience. Taking in account the relevance of costs of feed for pig farmers, their upstream integration initiatives can be interpreted as a way to cope with the feed prices volatility (see the following Indicators, in particular the indicator b). The degree of volatility of live pig, fresh ham and cured ham can be hardly impacted by the capability of the system (the supply chain) to manage prices. In this study, volatility is measured by the coefficient of variation, given by the ratio of mean and standard deviation of the current values of prices (Visciaveo and Rosa, 2012). In this way it is possible to obtain a dimensionless index that allows comparison between different series.

4.2.5. Pig farm indicators

Analytical indicators

A.1 and A.2 - Farmers upstream integration Concerning pig farming , the volatility of concentrate price, and in general of pig feed, is one of the main risk factors menacing the supply chain resilience. This is true mainly for intensive pig farming where net operating income per unit is very low and progressively eroded by the growing monopsony power of large buyers and distributors. Integration, in different forms, allows for lessen or eliminate the effects of volatility in feed prices. The direct upstream integration in feed production by farmers (ownership integration) allows them for a stronger control on feed supply. The efficiency of a pig farmer in feed production can be much lower than a specialized firm, and

GLAMUR Report – Italian Case Study- Pork Chains –March 2015 often structural conditions can impede feed production. This indicator is calculated as the share of pig farmers which self-produce the majority of feed over the total number of pig farmers, for each one of the three chains. Other indirect forms of integration, like contractual arrangements between feed producers (farmers or specialized firms) and farmers, can be very relevant in order to stabilize feed prices: another possible indicator is the presence and extent of mid or long-term contractual arrangements (like interprofessional agreements). Indicators are collected by means of expert consultation, except from Cinta Senese where a sample of firms was interviewed. A.3 - Farmers downstream integration The volatility of live pigs price affects farmers’ resilience. Downstream integration, in different forms, allows for the reduction of volatility in pigs prices. The direct downstream integration in processing by farmers (ownership integration) allows them for the stronger control. Technical efficiency of a pig farmer in processing is normally much lower than a specialized firm, and this imply economic inefficiency if not supported by appropriate marketing strategies. Farmers integration can be pursued also by means of co-operative firms operating in slaughtering and/or in processing. Other indirect forms of farmers downstream integration, like contractual arrangements between pig farmers and downstream activities can be very relevant in order to stabilize live pigs prices. Hence another possible indicator is the presence and extent of mid or long-term contractual arrangements (like interprofessional agreements). A.4 - Farmers product diversification The production portfolio of a firm should be balanced along the trade-off between high specialization with related scale economies on one side, and high diversification. Product diversification allows for a diversification of risks but entails higher production costs, even if lower economies of scale may be offset by greater economies of scope. This indicator is calculated as the share of (light/ heavy/Cinta) pigs for ham production on the total turnover of farm. The hypothesis is that the lower is this value and the higher the degree of diversification, the higher is the capability of the firm to be resilient against shocks on the market. Two different typologies of product diversification occur: the first one is a diversification linked to pork farming (like waste-flow valorization, but also meat processing is a way of diversification), the other one is outside the pork chain both on-farm (like developing agritourism activity on farm) and off-farm. A.5 - Farm-level resistance against price-volatility The resistance at farm level against price volatility of the input and output markets of relevance for pork production can be expressed in a synthetic way by considering its economic final result, that can be appreciated by means of added value. A proxy of the exposure of farmers to input and output volatility is the delta of the added value per kg live weight calculated at farm level for each year from 2009 to 2013. The higher this delta, the lower the ability of farmers to stabilize prices and/or to transfer input prices increases in output prices increases. A.6 - Use of antibiotics A completely different indicator for resilience is the use of antibiotics in pig farming. Intensive pig rearing systems are subject to epidemics and diseases, due to the high concentration of animals in small spaces. For this reason antibiotics are administered also in order to prevent and not

GLAMUR Report – Italian Case Study- Pork Chains –March 2015 only for treat diseases. Therefore high levels of use of antibiotics are indicative of high exposure to disease risks, and on the other side can generate negative effects on the meat quality and on human health.

Synthetic indicators

In this section are presented some synthetic indicators per each of the three main stages of the cured ham supply chains. Synthetic indicators are built on analytical indicators presented in the previous section, integrated by other qualitative information and expert advice. S.1 - Farm-level risk-spreading Upstream coordination with feed production, farm diversification and product diversification are key issues for farmers in order to escape the logic of mass market and be more resilient. The indicator “farm-level risk-spreading” synthetizes three of the aforementioned indicators, that is: Farmers upstream integration by ownership; Farmers upstream integration by contractual arrangements ; and Farmers product diversification. S.2 - Adaptation capacity of farmers through downstream actors cooperation, integration and diversification strategies This synthetic indicator take in account the strength of farmers interlinkages with downstream actors diversification strategies in terms of productfolio and marketing, that can be obtained thanks to coordination and adaptation to downstream actors or by means of direct vertical integration in processing activities. Downstream integration in ham meat processing (ham and other cold cuts) allows farmers for a better control on live pigs prices, escaping from monopsonistic power of downstream actors, and give access to higher added value activities by valorizing specific qualities of their pigs. This synthetic indicator is evaluated taking in account two analytical indicators, farmers product diversification and farmers downstream integration, and other qualitative evaluations based on empirical evidences and literature review. This indicator is evaluated by means of an ordinal scale, that is: level 1 (high adaptation capacity: in favor of resilience), level 2 (intermediate), and level 3 (very low adaptation capacity).

4.2.6. Slaughtering indicators

Analytical indicators

A.7 - Slaughterhouses/processors upstream integration Slaughterhouses and processors through upstream vertical integration aims at control and coordinate quantities, quality and prices of live pigs and/or fresh hams, in order to be able to better meet intermediate and final demand needs. A.8 - Slaughterhouses downstream integration Similar problems are fronted by slaughterhouses with regard to fresh hams prices. Also in this case downstream integration can be pursued by different tools, mainly by ownership and by contractual arrangements.

GLAMUR Report – Italian Case Study- Pork Chains –March 2015

A.9 - Slaughterhouses product diversification The production portfolio of a firm should be balanced along the trade-off between high specialization with related scale economies on one side, and high diversification. Product diversification allows for a diversification of risks but entails higher production costs, even if lower economies of scale may be offset by greater economies of scope. This indicator is calculated as the share of pigs slaughtered for production of generic / Parma PDO / Cinta Senese ham on the total turnover of slaughtering firms. The hypothesis is that the lower is this value and higher the degree of diversification, the higher is the capability of the slaughtering firm to be resilient against shocks.

Synthetic indicators

S.3 - Adaptation capacity of slaughtering firms through integration and diversification strategies Slaughterhouses are economically highly vulnerable as they operate in between two highly volatile markets. This synthetic indicator takes into account the capacity of firms to adapt to the evolution of market conditions by means of better integration with upstream and downstream actors, and of the development of diversification strategies aimed at risk differentiation. The indicator is evaluated taking in account some analytical indicators (volatility indexes, slaughterhouses upstream and downstream integration, and slaughterhouses product diversification) and other qualitative evaluations based on empirical evidences and literature review. This indicator is evaluated by means of an ordinal scale, that is: level 1 (high adaptation capacity: in favor of resilience), level 2 (intermediate), and level 3 (very low adaptation capacity).

4.2.7. Ham processing indicators

Analytical indicators

A.7 - Slaughterhouses/processors upstream integration The same indicator than for slaughtering. A.10 - Processors product diversification The production portfolio of a firm should be balanced along the trade-off between high specialization with related scale economies on one side, and high diversification. Product diversification allows for a diversification of risks but entails higher production costs, even if lower economies of scale may be offset by greater economies of scope. This indicator is calculated as the share of processing firms with a share of generic / Parma PDO / Cinta Senese ham higher than 70% on the total turnover of processing firms, on the total number of firms. The hypothesis is that the lower is this value and hence the higher the degree of product diversification, the higher will be the capability of the processing firm to be resilient against shocks on the market of cured ham. A.11 – Processors marketing channels diversification

GLAMUR Report – Italian Case Study- Pork Chains –March 2015

In front of the increasing market power of large retail companies, the capability of cured ham sellers to operate in different marketing channels and in different geographical markets is an important factor of resilience. Being impossible to analyze the dependence from single purchasers, the indicator of market diversification of cured ham sellers is calculated as the ratio between the number of processing firms with a share of turnover from (generic/Parma/Cinta) ham higher than 66% in one marketing channel and the total number of the processing firms in the supply chain. For generic ham and Parma Ham we considered four main types of marketing channels: Supermarkets groups (GDO), Traditional retailers, Wholesalers, and Other. A.12 – Processors geographical markets diversification Geographical market diversification is an other relevant element able to increase resilience, because it allows for a diversification of market risks. Market risks depend not only from consumer demand, but also from sanitary reasons and other trade barriers. A.13 – Processors product differentiation The capability to differentiate the product on the final market in order to increase loyalty of final consumers to own product is very relevant for cured ham producers in order to stabilize trade. Reputed individual trademarks and collective marks, like designations of origin, play a relevant role. In particular Designations of origin allow also to small producers access differentiation strategies. The reputation of Designations of origin is based also on traceability and control systems, that guarantee consumers about the compliance with product specifications and in particular about the provenance of raw material.

Synthetic indicators

S.4 - Adaptation capacity of ham processing firms through integration and diversification strategies Ham processing firms play a key role in the three chains, they links pig farming and slaughtering phases to the phase of distribution and to final consumption. This synthetic indicator take in account the capacity of firms to adapt their supply to final demand but also to influence its evolution, by means of better integration with upstream actors, diversification strategies and product differentiation that are more and more relevant in order to contrast the increasing market power of large retail companies. At the same time the capacity to orient, control and guarantee the even more complex quality characteristics of fresh hams (both material and immaterial ones, like environmental sustainability) is often a prerequisite for developing appropriate marketing strategies on cured hams. The indicator is evaluated taking in account some analytical indicators (volatility indexes, ham processing firms upstream integration, product diversification, market diversification and product differentiation) and other qualitative evaluations based on empirical evidences and literature review. This indicator is evaluated by means of an ordinal scale, that is: level 1 (high adaptation capacity: in favor of resilience), level 2 (intermediate), and level 3 (very low adaptation capacity).

Cross-cutting indicators

GLAMUR Report – Italian Case Study- Pork Chains –March 2015

C.1 - Supply chain attitude to diversification and differentiation The overall level of the supply chain attitude to diversification and differentiation can be evaluated by means of analytical indicators related to product differentiation in all the phases of the supply chains, marketing channels and geographical market diversification for cured ham, and product differentiation for cured ham. On the basis of these basic data expert can express an evaluation on an ordinal scale. C.2 - Intradiversity of chain relations / configurations This indicator is based on the idea that an internal diversity of organizational and business models and strategies can improve the resilience of the supply chain, allowing for a a diversification of risks. Indeed specific crisis factors may prejudice some models of chain organization, but not others. The evaluation of this indicator is based on expert consultation and on other information collected during the survey. C.3 - Chain-based adaptation capacity through learning and innovation As pointed out in the introduction, the concept of resilience does not refer only to capability of a system to absorb external disturbances but more in general to be able to cope with change and to evolve towards new equilibria. In this perspective learning and capability to innovate, both at individual and at collective/system level, is a key issue in making a supply chain resilient. The evaluation of this indicator is based on expert consultation and on other information collected during the survey. C.4 - Ability to mobilize public and societal support The ability to mobilize different types of public and societal support is a key feature of resilient supply chains, in particular in time of rapid changes. Public support can take many different ways, from national, regional and local public authorities: support to investments in the field of rural development plans, technical assistance, public investment in research and genetic improvement, support to develop systems to guarantee the origin and quality of products, and many others. Even the societal support is very important as it gives social legitimacy to pig farmers and to their activity them; social support constitutes an important prerequisite for the activation of public policy support. The indicator is calculated by means of an ordinal scale, by analyzing the presence of political and social support activities of various types and level (national, regional and local).

4.3. Chain governance

4.3.1. Description of the attribute Governance covers a wide range of meanings (cfr. WP2 Deliverable), from concepts related to the regulatory system (how food systems are regulated and decisions made), to more holistic concepts of power and democracy (who has influence over food systems and policy). Chain governance is a relevant attribute for both local and global chains where the PDO producers are represented by a collective body (Parma Ham PDO Consortium). The action of this collective organization distinguishes these regulated chains from the non-PDO generic ham chain, a supply chain without formal governance, while benefiting from the reputation of the geographical

GLAMUR Report – Italian Case Study- Pork Chains –March 2015 indication Parma Ham. The functions of control and supervision were clearly separated, with control to be carried out by a third party and the Consortia to supervise operations once the certification body had laid down standards. On this basis, the PDO Consortium supported the setting up of the certification body, the Istituto Parma Qualità (IPQ), which checks documentation of inspections and tests carried out at all farms, slaughterhouses and producer firms. The Consortium itself is active in supervising sales and has no hesitation in taking legal action against counterfeiting and abuse. It is this complex system of supervision and governance of the network which has helped to give the PDO product its widespread recognition for soundness The PDO Parma Ham Consortium in 2004 has amended its statutes to ensure a more balanced representation of the supply chain, as laid down by Law No. 526/99. The new statutes take different roles into account; Article 1.1 allows for farmers, slaughterers, cutters and packers to join the consortium and contribute to its budget as well as the processors themselves (Consortium statutes give 66% of votes to producers, and the remaining 34% are divided among other supply chain members, farmers, slaughterhouses, cutters and packers). The requirements for producers have also been relaxed: it is no longer necessary for at least 75% of ham output to be Parma Ham. PDO Parma Ham production is based on Consortium specification codes for each phase of production, which are approved at EU level. The definition of these rules by the Consortium members has built up an indissoluble link between product and district, with direct effects on employment and income (Giacomini et al., 2013a). The PDO Parma Ham Consortium is the central node of the network. Law No. 526/99 lays down its functions as tutelage, enhancement and consumer information (Figure 4.2). In governance it holds regular meetings where members are informed of strategy. The link is in two directions as members elect the Board of Administration and other panels and thereby influence policy. The Board is composed by 15 producers, 1 pig breeder, 1 slaughter house and 1 packager. All firms are today eligible to vote regardless of the proportion of Parma Ham that they produce. This means that big producers can influence the Board decisions more than small producers and this can affect the Consortium strategies, especially those related to quality definition. The Consortium therefore represents the interests of two types of producer of conflicting vocation and company strategy. On one hand, there are the small producers, often producing exclusively Parma Ham PDO, and on the other hand large and even multinational manufacturers for whom Parma Ham is simply a product to place on the market. Consortium decisions are inevitably a compromise between these two conflicting poles. Dentoni et al. (2012) also confirm that Parma Ham Consortium members have highly and increasingly heterogeneous characteristics, assets and strategies and that higher heterogeneity negatively affects members’ agreement on the future level of restrictiveness of Parma Ham PDO as geographical indication and therefore the effectiveness of the collective action.

GLAMUR Report – Italian Case Study- Pork Chains –March 2015

Figure 4.2 – Governance and accreditation relationships in the PDO Parma Ham network.

One way link Two ways link

Parma Ham PDO d Consortium a b

Istituto Parma Qualità (I.P.Q.) Parma Ham PDO c c producers Retailers a e a c

Generic Italian suppliers of raw cured ham Wholesalers material (fresh hams) producers

d Italian farms – Overseas certified pigs Source: Giacomini et al. (2013a).

For the generic non-PDO cured ham network (Figure 4.3) trade in resources is closely linked to the Parma Ham PDO network, partly because some of the players are the same and partly because generic cured ham takes advantage of the geographic and reputational spillover from the PDO version (Giacomini et al., 2013a). Generic cured ham manufacturers also benefit from synergy in the Parma Ham district, the widespread availability of information and know-how in production techniques built up over decades, as well as parallel services supplied by firms in the Localized Agri-Food System. It is mainly larger firms, often producing both types of ham, which benefit from this geographical spillover. This overlapping creates a competitive advantage for those producers trying to exploit economies of scale, instead of providing quality benefits. At the same time, small producers attempting to create value and gain a competitive advantage through providing superior product quality could be placed out when market prices are decreasing. The role of the Parma Ham Consortium in the generic non-PDO cured ham network can be seen from two angles. On one hand, the informational and enhancement carried out by the Consortium indirectly affects the generic ham network as geographic and reputation spillover. On the other hand, Consortium policy is influenced by its mixed membership (Dentoni et al., 2012).

GLAMUR Report – Italian Case Study- Pork Chains –March 2015

Figure 4.3- Trade in resource in the generic non-PDO cured ham network

Intangible flow Tangible flow One way link Two ways link Parma Ham PDO producers Retailers b d b

Mixed Italian suppliers of producers raw material (fresh Wholesalers hams) c

a Generic non-PDO Italian farms – ham Foreign suppliers of certified PDO pigs d producers Overseas raw material (fresh hams)

Services suppliers

Source: Giacomini et al. (2013a).

Summarizing in the same Localized Agri-food System of the Parma province, two different networks operate where agents, cooperating and competing at the same time, encourages the spread of technological and market know-how and the generation of positive geographical and reputational spillover. These latter generate the development of networks among firms, directly by way of alliances, or indirectly through intermediaries. The comparison of the two networks shows the relationships between operators acting inside and outside the district and particularly relationships with institutions of governance affecting firm behaviour and markets. Chain Governance of local supply chain of Cinta Senese relies on the action of the PDO Consortium which represents local farmers and processors. The main body involved in the governance of Cinta Senese PDO system is the Consorzio di Tutela della Cinta Senese, constituted in 2000 with the support of the province of Siena. The membership base of the consortium is composed by different groups of interest. Traditional farmers producing small quantities (40-60 pigs/year) of high quality Cinta Senese pigs in large extensions of land with forest; entrepreneurs/farmers involved more recently in the chain and producing larger quantities of pigs (100-800 pigs/year) and/or processing them into charcuterie products on farm; pork processors certifying a minor part of their production under the PDO scheme. Decisions are supported also by advice and information from representatives of the local government as regards for example the formal process of acknowledgement of the PDO scheme and relationships with the Ministry of Agriculture. The board of directors consists of representatives of farmers (5 members), slaughterhouses (1 member) , sausage and slicing firms (3 members).

GLAMUR Report – Italian Case Study- Pork Chains –March 2015

Indicators used to monitor the chain governance attribute are mainly qualitative in nature and based on literature review. The aim is to describe the specificity of chain management regarding the capacity to manage internal and external relations and thus to adopt appropriate and effective management actions. Indicators used to monitor the chain governance attribute are:

i) trust based internal relationships: this indicator represents the level of trust-based relations between chain actors, based on (1) absence of conflicts, (2) trust among chain partners, and (3) continuity of chain relations. It is measured on an ordinal scale: value 1 (maximum level of trust), value 2 (intermediate level), value 3 (low level of trust); ii) trust based external relationships: it indicates the level of trust-based external relationships based on chain partners' capacity to mobilise support from (1) social movements, (2) citizens and (3) policy actors. It is evaluated by means of an ordinal scale with value 1 (maximum level of trust), value 2 (intermediate level), value 3 (low level of trust); iii) self governance capacity: this indicator represents the level of self-governance capacity in terms of creation of distinctiveness. It is measured on an ordinal scale: value 1 (maximum level of distinctiveness), value 2 (intermediate level), value 3 (low level of distinctiveness); iv) chain-based value governance: this indicator represents an overall value governance characteristics conform the typology of Gereffi et al. (2005), that is market, modular value chains, relational value chains, captive value chains, and hierachy.

4.4. Territoriality

4.4.1. Description of the attribute The identity of several food products reflects the unique combination of local natural resources (climate, soils, local breeds and plant varieties, traditional equipments, etc.) and cultural ones (traditions, know-how and skills, some of which are transmitted through generations) in a given territory, linking the product, the people and the place (Vandecandelaere et al., 2009). Therefore, territory plays a relevant role in the production process considering the economic, environmental and social aspects that characterize the area of productions. The attribute territoriality can be considered the result of the interplay between characteristics and strategies of local producers in their business activity, social relationship among producers and employees, and environmental resources. The combination among these three dimensions (production, social relationships and environmental resources) characterizes every single production system and the related territory that support this activity. Territoriality encompasses the capability of a supply chain to represent and promote the localness of a product and its link with a specific terroir or place of production (GLAMUR WP2 definition). Sonnino (2007: 63) defined territoriality as “the ecological and cultural relationships that a food system has with its territorial context”. The scientific debate around the role of the territory in terms of contributing to the value creation process clearly underline the social aspects in that it involves the protection of jobs, culture, traditions and indeed whole communities (Bowen and

GLAMUR Report – Italian Case Study- Pork Chains –March 2015

Zapata, 2009). Sociologists have used the concept of embeddedness to examine the relationships between social networks, social capital, cultural and cognitive elements and the construction of markets and production systems within a particular territory (Bowen, 2010, 2011). Much has also been written within the scientific literature about the importance of developing food chains associated with specific territories that can help to maintain and promote non-standardized food products on new and existing markets, to preserve the associated socio-ecological system, to valorise traditional and artisanal food production, and to maintain population activities in rural areas. In this perspective, they can contribute from the production side to a territorial and integrative approach for sustainable development in particular in fragile areas (Vandecandelaere et al., 2009). The two main discourses in relation to territoriality include the protection of cultural identity, traditions, territory and so on for their own sake, but also the ability of territorially-linked produce to be able to add value and access markets as a result of increased distinctiveness. In this context, the production of “local” commodities is nested in wider regional, national, and international networks (Hinrichs, 2003). The other main discourse concerns the authenticity of the message that is being communicated to consumers about the underlying 'territoriality' of the produce they are buying. The resources of the region (landscape, cultural and historical resources and local savoir faire) become embedded in the food product, thereby synthesizing the territorial attributes in the product name (i.e. the geographical indication – GI). In the specific case of cured ham production, territoriality becomes relevant to describe the characteristics of the production system, the linkage with the local inputs and the level of embeddedness of the supply chain in the territory. Information regarding the characteristic of the production system allows to depict how and why the territory performs and manages its economic and social growth and the management of specific governance actions. Similarly, within the territory, other private sector actors, outside the production supply chain, can establish very useful and successful alliances with GI systems, in particular tourism activities as a result of synergies related to the territory reputation (Vandecandelaere et al., 2009). Finally, the product specification linked to a specific product may provide rules for applying the quality to the GI producers located in a delimited area. It defines the specific characteristics of the food product which are attributable to its geographical origin, justifying the link between the product and the territory (the same product cannot be elaborated in other territories). It must explain how a given quality (the specific attributes that make the product different of the other of the same category), a reputation (history of the product, past reputation, current reputation) or another characteristic (for instance know-how) are linked to the origin (Vandecandelaere et al., 2009). Therefore, the key elements defined within the territory affecting the supply chains are:  the structural characteristics of the territorially embedded agricultural units and food industries;  the link of the product with the local input (as defined by the product specification);  the promotion activities by collective bodies and institutions (e.g., PDO Consortia);  the marketing strategies developed on the territory, as a result of the cooperation between farms, food industries, PDO Consortia and other territorial actors (e.g., Gourmet Food and Wine Routes).

GLAMUR Report – Italian Case Study- Pork Chains –March 2015

The successful management of these specific elements can improve the competitiveness of the food system and, as a consequence, the improvement of the whole territory.

4.4.2. Indicators Seven main indicators, belonging to the three main areas Association of product with territory, Social cohesion and conviviality, and Links with local touristic activities, were measured to depict the territorial dimension of the local, regional and global chains analyzed. The idea is that those indicators can be considered as proxy of the specific characteristics of territorial attribute (Table 1).

Table 4.3: Attribute Territoriality (Social dimension)

Indicator Measurement Unit Data Source Association of product Pig farms on total farms with Percentage IPQ/INEQ, ISTAT with territory - Pig livestock in the territory (%) breeding importance Association of product Pig meat processing industries Percentage IPQ/INEQ, ISTAT, with territory - Pig meat on total food industry in the UNIPR processing importance territory (%) Association of product Is there a link between the Ordinal scale: level 1 (strong UNIPR, UNIFI with territory - Origin of origin of raw materials (e.g. link with the territory), level 2 raw materials fresh meat, feed) and the (intermediate link with the territory? territory), and level 3 (weak link with the territory) Social cohesion and Number of socio-cultural Pure number Interviews, secondary conviviality - Number of events in the territory data (Parma Ham events Consortium, UNIFI) Social cohesion and Number of visitors in socio- Pure number Interviews, secondary conviviality - Number of cultural events in the territory data (Parma Ham visitors Consortium, UNIPR) Links with local touristic Is there a Gourmet Food and Binary scale: 1 = yes, 0 = no Interviews, secondary activities - Gourmet Wine Route involved? data (UNIPR, UNIFI) Food and Wine Route Links with local touristic % of farms involved in on- Ordinal scale: level 1 (more Interviews, secondary activities - On-farm farm touristic activities (agri- than 40%), level 2 (from 10% - data (UNIPR, UNIFI) touristic activities tourism, food tasting, etc.) 40%), level 3 (less than 10%)

The dimension “Association of the product with territory” has been assessed by three indicators, considering both the rural and the industrial dimensions. First we assessed the number of pig farms involved in the supply chain as a percentage of total farms with livestock in the territory. The indicator shows the relative importance of pig breeding on total livestock breeding in the territory. These data were gathered by province (NUTS 3 level) from the Italian Census data of Agriculture (ISTAT, 2010) and from the third certification body of the PDO chains (INEQ for Cinta Senese PDO, and IPQ for Parma Ham PDO). The second indicator considered the number of pig meat processing industries involved in the supply chain as a percentage of total food industry in the territory. The indicator shows the relative importance of pig processing industries involved in the

GLAMUR Report – Italian Case Study- Pork Chains –March 2015 supply chain on total food industry. These data were gathered by province (NUTS 3 level) from the Italian Census data of Industry and Services (ISTAT, 2011) and from the third certification body of the PDO chains (INEQ for Cinta Senese PDO, and IPQ for Parma Ham PDO). Finally, we considered whether there is a link between the origin of raw material (e.g., fresh meat, feed) and the territory. This indicator is measured on an ordinal scale based on qualitative evaluations considering the specific chain's features and the product specification eventually applied, with level 1 indicating a strong link with the territory, level 2 an intermediate link and level 3 a weak link of raw materials with the territory. The dimension “Social cohesion and conviviality” was assessed by two indicators used to identify the socio-cultural relations and externalities linked with food chains, contributing to create social cohesion within the territory. First we considered the number and type of socio-cultural events favoured by the chain in the territory; secondly, we assessed the number of visitors in these socio-cultural events on the territory. These two indicators are based on information provided by Consortia and other local sources (e.g., direct interviews with stakeholders). Finally, two indicators were used to assess the chain “Links with local touristic activities”. In this case, we first qualitatively considered whether there is a Gourmet Food and Wine Route involved in the territory related with the food supply chain. This is basically a binary qualitative indicator. Secondly, we have assessed the percentage of farms within the territory involved in on- farm touristic activities, such as agri-tourism, food tasting, etc. These two indicators are based on information provided by Consortia and personal interviews with key stakeholders.

4.5. Resource use and pollution

4.5.1. Description of the attribute

Resource use concerns the use and management of the flows of available resources in the global and local food chains. Pollution encompasses any input into the natural environment which causes adverse changes to ecosystems. Global chains are presumed to pollute more and to use more resources compared to local chains because of the long distance transport of the raw materials and the end products. This common assumption generates the high interest of conscious consumers to purchase more local food than global food. It is however relevant to measure the different environmental impacts of global and local chains, as the nature of the production systems plays an important role in the final environmental assessment. The nature of the production system affects resource use and pollution significantly and much more than transport of raw materials and of end products. Several studies have demonstrated that transport only plays only a minor role in the overall environmental impact of food chains. A local food system based on highly intensive production systems may perform worse than a global food system in which an extensive use of resources predominates. Of course the total impact has to be broken down in the different impact categories such as carbon footprint, water footprint,

GLAMUR Report – Italian Case Study- Pork Chains –March 2015 eutrophication and land use and the final judgment will depend on which impact category will be chosen. The metodology of Life Cycle Assessment (LCA) has been developed according to to the ISO 14040 and 14044[standards. LCA is a method to evaluate the environmental impact during the entire life cycle of a product. Generally, two types of LCA methods are used: attributional and consequential LCA. In attributional modelling upstream emissions and resource extraction are allocated wherever multi-product processes occur. In consequential modeling the emissions amd resource extraction of marginal products that could substitute the co-products are subtracted from the product life cyle. In this study we have chosen attributional modeling since most of the inputs are directly attributed to the production. We have studied all the impacts generated throughout the various phases of production of the ham, from the breeding phase to the phase of slaughtering, seasoning down to retail. LCA joints the environmental impact to a unit function, which is the main reference of a production system. We have calculate all impacts per kg of cured ham at retail level. In different phases of production we have considered the kg of live weight (breeding), kg of carcass (slaughterhouse), kg of ham (seasoning) and at the end kg of slice ham (retail). One important aspect is related to the allocation issue in the case of supply chains that they have more than one type of product. In these situations, the environmental impact of the production system must be allocated to different outputs. Three main allocation methods exist (ISO, 2006): economic allocation, physical allocation and system expansion. We have adopted a physical allocation in function of the mass of the various output products from the processing steps. The impacts are based on the weight of the various products that gradually came out of the production cycle. Breeding: we have considered the live weight, selecting only the inputs necessary for the production of pig and ignoring all the inputs for other productions. Slaughterhouse: we have attributed all the impact at carcass mass (80% of live pig weight). Seasoning: we have attributed the impacts considering the fresh ham mass as carcass part (cured ham yield 70%), for retail we attributed the impact as part of ham really sold (slice yield 55% of cured ham).

4.5.2. Indicators

In this study the following environmental impacts (indicators) have been calculated with the program SimaPro 8.0.3. 1. Climate change, carbon foot print (CO2 eq/UF) Climate change describes changes in the global, average surface-air temperature and subsequent change of various climate parameters. This effects things such as storm frequency and intensity, rainfall intensity and frequency of flooding. Climate change is caused by the greenhouse effect which is induced by emission of greenhouse gases into the air (CO2, CH4, N2O). Factors are expressed as Global Warming Potential for time horizon 100 years (GWP100), in kg CO2-eq. (IPCC 2007 method developed by the International Panel on Climate Change)

GLAMUR Report – Italian Case Study- Pork Chains –March 2015

2. Land use (m2/year/UF) Land use is related to use (occupation) and conversion (transformation) of land area by product related activities such as agriculture, roads, housing, mining etc. Land occupation considers the effects of the land use, the amount of area involved and the duration of its occupation. The amount of either agricultural land or urban land occupied for a certain time are expressed as m2*year (ReCiPe midpoint method: agricultural land occupation impact category) 3. Cumulative energy demand (MJ/UF) Cumulative energy demand aims to investigate the energy use throughout the life cycle. It describes the total amount of energy that is needed for the product. The method to calculate Cumulative Energy Demand (CED) is based on the method published by Ecoinvent version 1.01 and expanded by PRé for energy resources available in the SimaPro database. Characterization factors are given for the energy resources divided in 5 impact categories: among these we have considered: non renewable fossil energy calculate in MJ/UF. 4. Water resource depletion (m3/UF) Water resource depletion is caused by the consumption of water resources, which lowers their availability for nature and future generations. The method used is based on the publication Hoekstra et al (2012) (Water Scarcity) This water scarcity indicator (WSI) is based on a consumption-to-availability ratio (CTA) calculated as the fraction between consumed (referred to as blue water footprint) and available water. The indicator is applied to the consumed water volume and only assesses consumptive water use. 5. Eutrophication (kg PO4-eq/UF) Eutrophication (also known as nutrification) includes all impacts due to excessive levels of macro-nutrients in the environment caused by emissions of nutrients to air, water and soil. Nutrification potential (NP) is based on the stoichiometric procedure of Heijungs (1992), and expressed as kg PO4/UF. calculate by EPD 2013 method. This method is the successor of EPD (2008) and is to be used for the creation of Environmental Product Declarations (EPDs), as published on the website of the Swedish Environmental Management Council (SEMC). An EPD is always created according to a Product Category Rule. Eutrophication impact categories are taken directly from the CML-IA baseline method.

4.6. Affordability

4.6.1. Description of the attribute

Affordability is essentially a consumer-oriented perspective attribute, and has to do with “accessibility to food by middle and lower income consumers” (cfr. GLAMUR WP2 Deliverable). Affordability applies to individuals / households but also to communities and groups (usually those with middle and low income). It is an increasing feature of public debate and relates directly to food security. It is referred to in terms of “the cost of food to the consumer” or described as “the price level that the product has for the final consumer”, related to various conditions and factors that

GLAMUR Report – Italian Case Study- Pork Chains –March 2015 influence the value chain “from farm to fork”, and is often connected to the issue of income distribution along the chain and among citizens. The Italian WP2 Deliverable asserts that price competitiveness of the supply chain influences the price of food to the final consumer. The WP2 Deliverable shows that local food products are often perceived as more expensive (e.g., Latvia, the UK, Belgium, Senegal) than those provided through global supply chains. The main discussion is about the ability of global food chains to cut costs by, for instance, outsourcing and hence offering affordable prices to consumers. Some reports argue that large scale production and distribution chains are more able to cope with economic risks/shocks, which allows global food chains to offer lower and more stable prices. Global food chains are thus perceived as more efficient and better at cutting down costs in order to provide affordable prices to consumers. However, the issue of economic and environmental trade- offs is often recalled; for instance, the case of pork meat carries several criticisms about the lack of ‘real cost pricing’ methods that more adequately succeed to include its negative externalities in terms of environmental problems, overconsumption threats, food related health problems, etc. In the case of Italian cured ham, affordability attribute is relevant since the local, regional and global supply chains have completely different level of price on the marketplace, serving different market segments and consumers. Affordability, interpreted as the price level that the product has for the final consumer, is affected by the following items:  production methods and costs; the global chain (generic ham) is characterized by foreign meat (cheaper meat, mostly because of the lower age and weight of the pigs), industrial production methods (chemical elements used in the processing phase) with exploitation economies of scale, absence of certification costs (control, monitoring, documentation), etc. The regional chain (Parma Ham PDO) is also characterized by huge production and economies of scales exploitation, but with higher costs from certification and traceability guarantee system, including supply with meat from heavier pigs slaughtered in certified plants and bred in controlled farms. The local chain (Cinta Senese PDO) is characterized by small production, local feed usage, traditional breed preservation and breeding methods (extensive livestock grazing), stronger linkage and integration with downstream sectors (e.g., slaughterhouses and cutting plants, agri- tourisms and short channels, etc.).  consumers’ perception of quality, preferences and willingness to pay (WTP); market evidence and choice experiment studies show different consumers' quality perception, preferences and willingness to pay for Parma Ham PDO compared to generic cured ham (Capelli et al., 2014). At the moment, there are few official retail data on prices and no experimental studies about consumers WTP for Cinta Senese PDO hams.

4.6.2. Indicators Three indicators were used to assess “Affordability” attribute, considering quantity consumed, retail price trends and consumers preferences and WTP (Table 1). The first concerns the consumption of pork meat. This indicator was measured collecting data about per capita and total pork meat consumption in Italy (ISTAT and Eurostat data) and

GLAMUR Report – Italian Case Study- Pork Chains –March 2015 quantity consumed on domestic market of the three considered products. Parma Ham PDO and generic non-PDO cured hams data on consumption are derived from Nielsen and Qualivita data. Cinta Senese PDO data are provided by the Consortium of Cinta Senese. The second indicator considers average retail prices (€/kg) on domestic market for the three products. Parma Ham and generic non-PDO cured hams prices have been provided by the Parma Ham PDO Consortium (Nielsen data) using time series for the period 2007-2013. The Cinta Senese PDO prices have been provided by interviews with key stakeholders and direct survey in retail outlets. The third indicator takes into consideration the consumers’ quality perception of hams measured on an ordinal scale with value 1 (high quality perception), value 2 (intermediate quality perception), and value 3 (low quality perception). This information was retrieved from an experimental study comparing generic non-PDO hams and the Parma Ham PDO (Capelli et al., 2014). No direct surveys or experimental studies were found on the consumers’ quality perception and WTP of Cinta Senese PDO ham. Nevertheless, key stakeholders and experts interviews allowed us to infer relevant information about this indicator.

Table 4.4: Attribute Affordability (Economic dimension)

Indicator Unit Data Source Cured ham Tons Nielsen, Parma Ham Consortium consumption and Cinta Senese Consortium Retail price in Euro/kg Nielsen, Parma Ham Consortium, supermarket interviews, secondary data Consumers’ quality Ordinal scale: level 1 (high quality Interviews, secondary data perception perception), level 2 (intermediate quality (Capelli et al., 2014) perception), level 3 (low quality perception)

4.7. Data quality check

Given the high heterogeneity between different attributes and indicators, it is not possible to present in general the methodology followed for the calculation of indicators. In the next sub-sections all indicators are presented in a detailed way, also in order to explain theiur relevance for the evaluation of the selected attributes.

As far as data quality check is concerned, the method provided by the WP3 case study guidelines has been followed. The guidelines offer a data pedigree matrix method, which assigns numerical scores to the type of data collected in respect of each of the indicators used in the case studies The sum of these scores allows researchers to rank their data on an A-E scale, where A represents a quality class range linked to a high level of ‘real’ quality data. E represents a lower ‘real’ quality of

GLAMUR Report – Italian Case Study- Pork Chains –March 2015 data, indicating that data have been collected from lower-tier or unverified sources; the lower the QS score, the higher the quality class.

The following table provides for all the indicators the unit of analysis, a short presentation of the method used for data collection, and the quality classifications for the data used.

Table Indicators, Unit of measeure, method of data collection and quality scoress

INDICATORS Quality score Chain Chain Chain Name Unit Method A B C Five year average (2009- 2013) for global and regional chain. Year 2013 Value added at farm level Quantitative A A A for Cinta senese, average of 3 pig farms (range 0,26-2,46 €/kg) Five year average (2009- 2013) for global and Value added at processing regional chain. Year 2013 Quantitative A A A industry for Cinta senese, average of 3 ham firms (range 19-39 €/kg) V.1 - Feed prices volatility index pure number Statistical A A A V.2 - Live pigs prices volatility pure number Statistical A A A index V.3 - Fresh ham price volatility pure number Statistical A A A index V.4 - Cured ham price volatility pure number Statistical A A A index A.1 - Farmers upstream % Statistical B B A integration by ownership ordinal 1,2,3: level 1 (very high part of farmers is involved: in favour of A.2 - Farmers upstream resilience), level 2 integration by contractual Qualitative B B B Intermediate, and level 3 arrangements (very small part is involved: unfavourable to resilience) Ordinal 1, 2, 3: level 1 (a A.3 - Farmers downstream Quantiative very high part of farmers B B A integration / Qualitative develops downstream

GLAMUR Report – Italian Case Study- Pork Chains –March 2015

integration), level 2 Intermediate, and level 3 (very small part of farmers develops downstream integration). A.4 - Farmers product % B B A diversification A.5 - Farm-level resistance €/ kg Quantitative B B B against price-volatility Ordinal scale: level 1 Quantitative (very low use), level 2 A.6 - Use of antibiotics / B B B (some use), 3 (significant Qualitative use) ordinal 1,2,3: level 1 (very high part of A.7 - slaughterhouses/process Slaughterhouses/processors ors is involved), level 2 Qualitative B B B upstream integration Intermediate, and level 3 (very small part is involved) Ordinal 1, 2, 3: level 1 (a very high part of farmers develops downstream A.8 - Slaughterhouses integration), level 2 Quantiative B B B downstream integration Intermediate, and level 3 / Qualitative (very small part of farmers develops downstream integration). Ordinal scale: level 1 (high product A.9 - Slaughterhouses product diversification), level 2 Quantiative B B B diversification Intermediate, and level 3 / Qualitative (very low product diversification). A.10 - Processors product % A A A diversification Ordinal scale: level 1 (high marketing channels A.11 - Processors marketing diversification), level 2 Quantiative channels diversification for cured B A A Intermediate, and level 3 / Qualitative ham (very low marketing channels diversification). A.12 - Processors geographical Ordinal scale: level 1 Quantiative B B B market diversification for cured (high geographical / Qualitative

GLAMUR Report – Italian Case Study- Pork Chains –March 2015

ham market diversification), level 2 Intermediate, and level 3 (very low geographical market diversification). Ordinal scale: level 1 (high product A.13 - Product differentiation for differentiation), level 2 Quantiative B B B cured ham Intermediate, and level 3 / Qualitative (very low product differentiation). S.1 - Farm-level risk-spreading Ordinal scale: level 1 Qualitative / (high risk-spreading), Participatory level 2 Intermediate, and C C C level 3 (very low risk- spreading). S.2 - Adaptation capacity of Ordinal scale: level 1 Qualitative / farmers through downstream (high adaptation Participatory actors cooperation, integration capacity), level 2 C C C and diversification strategies Intermediate, and level 3 (very low adaptation capacity). S.3 - Adaptation capacity of Ordinal scale: level 1 Qualitative / slaughtering firms through (high adaptation Participatory integration and diversification capacity), level 2 B B B strategies Intermediate, and level 3 (very low adaptation capacity). S.4 - Adaptation capacity of ham Ordinal scale: level 1 Qualitative / processing firms through (high adaptation Participatory integration and diversification capacity), level 2 B B B strategies Intermediate, and level 3 (very low adaptation capacity). C.1 - Supply chain attitude to Ordinal scale: level 1 Qualitative / diversification and differentiation (high attitude: in favor of Participatory resilience), level 2 B B B Intermediate, and level 3 (very low attitude). C.2 - Intradiversity of chain Ordinal scale: level 1 Qualitative / relations / configurations (high intradiversity), level Participatory 2 Intermediate, and level C C C 3 (very low intradiversity).

GLAMUR Report – Italian Case Study- Pork Chains –March 2015

C.3 - Chain-based adaptation Ordinal scale: level 1 capacity through learning and (high adaptation innovation capacity), level 2 C C C Intermediate, and level 3 (very low adaptation capacity) C.4 - Ability to mobilize public Ordinal scale: level 1 Qualitative / and societal support (high ability: in favor of Participatory resilience), level 2 B B B Intermediate, and level 3 (very low attitude) Trust based internal ordinal 1 (maximum level Qualitative / relationships of trust), 2 Participatory C A B (intermediate),3 (low level of trust) Trust based external ordinal 1 (maximum level Qualitative / relationships of trust), 2 Participatory C B B (intermediate),3 (low level of trust) Self governance capacity ordinal 1 (maximum level Qualitative / of distinctiveness), 2 Participatory C A B (intermediate),3 (low level of distinctiveness) Chain-based value governance nominal: 1,2,3,4,5 Qualitative / C B B Participatory LCA.1 - Eutrophication pure number Quantitative A A A pure number Quantitative A A A pure number Quantitative A A A pure number Quantitative A A A LCA.2 - Carbon foot print pure number Quantitative A A A pure number Quantitative A A A pure number Quantitative A A A pure number Quantitative A A A LCA.3 - Non renewabel, fossil pure number Quantitative A A A pure number Quantitative A A A pure number Quantitative A A A pure number Quantitative A A A LCA.4 - Water footprint pure number Quantitative A A A pure number Quantitative A A A pure number Quantitative A A A pure number Quantitative A A A LCA.5 - Land use pure number Quantitative A A A pure number Quantitative A A A

GLAMUR Report – Italian Case Study- Pork Chains –March 2015

pure number Quantitative A A A pure number Quantitative A A A Association of product with percentage Quantitative territory n.a. A A Association of product with territory percentage Quantitative A A A Ordinal scale: level 1 Qualitative / (strong link with the Participatory territory), level 2 Intermediate, and level 3 Association of product with (weak link with the territory territory) A A A Social cohesion and conviviality pure number Quantitative A B B Social cohesion and conviviality pure number Quantitative A B B Links with local touristic Binary scale: 1 = yes, 0 = activities no Qualitative A A A Ordinal scale: level 1 Qualitative / (more than 40%), level 2 Participatory Links with local touristic (from 10% - 40%), level 3 activities (less than 10%) n.a. B A Retail price in supermarket pure number Quantitative A A B Cured ham consumption pure number Quantitative A A A

GLAMUR Report – Italian Case Study- Pork Chains –March 2015

5. Results (performances)

5.1. Value added According to the calculations carried out on the Interpig data of the years 2009 – 2013 the value added of pigs raised an fattened in the Netherlands ranges between 0.16 and 0.22 € / kg liveweight. light pigs. The added value of heavy pigs (160 kg) used in Parma Ham circuit has an added value which oscillates between 0.19 and 0.32 €/ kg liveweight. The Italian pig farms are thus on average to add more value per kg pig meat than the Dutch pig farmers. The Italian heavy pig farmers have to face higher feed costs because: 1. The product specification imposes the use at least 60% of cereals on dry matter basis; 2. The feed conversion rate deteriorates significantly in the phase between 120 and 160 kg. On the Dutch pig farms 2.60 kg of feed is needed to produce one kg of pig meat, whereas on the Italian heavy pig farms this feed conversion ratio is 3.68. The average feed price for fattening pigs for Dutch pig farms in the period 2009-2013 has been 254 € /ton as against 258 €/ton for the Italian pig farms. Unlike the higher feed costs the pig farmers fattening pigs for Parma Ham do enjoy a higher value added per kg of meat, as the sales price of the heavy pigs more than compensates the structurally higher feed prices. The other non factor costs such as energy costs and veterinary costs do not differe significantly between the two groups of pig farms.

Table 5.1 Value added per kg of Dutch light pigs (€/kg live weight)

Sale price Feed costs Other non factor Value added costs 2009 1.02 0.60 0.24 0.18 2010 1.03 0.61 0.22 0.20 2011 1.10 0.76 0.22 0.12 2012 1.26 0.81 0.23 0.22 2013 1.26 0.85 0.25 0.16

Source: Elaborated by CRPA on Interpig data

Table 5.2.Value added per kg of heavy pig (€/kg live weight)

Sale price Feed costs Other non factor Value added costs 2009 1.21 0.76 0.22 0.23 2010 1.22 0.81 0.22 0.19 2011 1.41 0.92 0.22 0.27 2012 1.49 0.94 0.23 0.32 2013 1.51 0.96 0.24 0.31

GLAMUR Report – Italian Case Study- Pork Chains –March 2015

Source: CRPA

The results show a higher added value for the heavy pigs used for Parma Ham compared to the Dutch live pigs. On average, the added value of the Parma pigs is about 50% higher than the added value of Dutch live pigs.

The added value per kg of liveweight of Cinta Sense pigs in the three farms interviewed was calculated for the year 2013. It varies between 0.26 and 2.45 €/kg, due to the different feeding systems and number of heads, with an average value of 1,51 €/kg. The high value added depend on the high need of labour per head, which derives from the small dimension of the farms, from the method of breeding and from the low productivity of Cinta Senese breed. Table 5.3.Value added per kg of Cinta Senese pig (€/kg live weight), year 2013

Other non Sale price Feed costs Value added factor costs

Az. A 3,63 1,12 0,21 2,30 Az. B 3,5 2,99 0,25 0,26 Az. C 4 1,16 0,38 2,46 Average 3,71 1,75 0,28 1,67

Source: direct survey

Figure 5.1.Value added per kg pigmeat of Dutch light pigs and Italian heavy pig (€/kg live weight)

Value added per kg liveweight 0,35

0,3

0,25

0,2 Dutch light pigs 0,15 Euro/kg Italian PDO pigs 0,1

0,05

0 2009 2010 2011 2012 2013

Source: Elaborated by CRPA on Interpig and CRPA data

GLAMUR Report – Italian Case Study- Pork Chains –March 2015

The higher value added per kg of pig meat destined to the PDO Parma Ham certainly can be attributed to the quality distincteveness of meat of heavy pigs which according to the product specification are slaughtered at a minimum age of 9 months. At this age the meat reaches a higher level of maturity which makes this pigs suitable for a series of high quality processed meat products like Parma Ham, but also products like salamis, mortadella, zampone etc. which are governed by PDO product specification as well. Meat of pigs slaughtered at an age of about 6 months do not contain these particular quality characteristics. Most of the cuts of their carcasses are destined to the consumption of fresh meat and very few custs are used for processed meats. In order to establish the value added in the processing of imported Dutch hams and of Parma Ham two groups of companies have been selected either specialized in generic cured ham or in the production of Parma Ham. The production process show a series of similiarities. The figure below shows the main features of the production process of Parma ham.

Table 5.4.Main step in production process of Parma ham

° C Cooling under salt for 6/7 days 1 – 4 Cooling at ° C (2-3 weeks) 1 - 4 Resting period 60 – 90 days 1 – 5 Pre-seasoning until month 7 18 °C Greasing Final seasoning until at least 12 16°C months

1. The fresh hams for Parma Hams need to be cured for at least one year; 2. After trimming both fresh hams stay in refrigerated cells under salt for 6/7 days 3. A second period under salt for 15-18 days according to the weight of the hams 4. The pre-seasoning period until the 7th month 5. At the 7th month the uncovered meat part of the hams are covered with a mixture of cereals and fat 6. From the 7th until the 12th months the Parma Ham are cured at 16 °C The generic cured hams follow the same steps of the production process, but as the fresh hams are lighter and smaller all steps have a shorter duration. From the calculations based on the company balance sheets made the results show a higher added value in the case of Parma Ham compared to generic cured ham On average, the added value of the PDO Parma Ham, 0,41 €/kg, is 30% higher than the added value of generic cured ham, which registers an added value of 0,28 €/kg.

GLAMUR Report – Italian Case Study- Pork Chains –March 2015

Table 5.5.Value added per kg of fresh Parma Ham with bone (€/kg)

Sale price Purchase price Cost of processing Value added 2009 8.03 3.04 4.37 0.62 2010 8.47 3.82 4.32 0.33 2011 6.76 4.03 2.35 0.38 2012 7.79 4.06 3.36 0.37 2013 7.26 4.07 2.82 0.37 Average 7.66 3.80 3.44 0.42

Source: Elaborated by CRPA on company balance sheets

As can be seen from the tables described the difference varies widely ranging from a minimum of 4% found in 2010 to a maximum of 48% found in 2009, while in 2012 and 2013, the difference tends to conform around 25%-

Curing ham demands a high energy input related to the consumption of electricity for air conditioning the curing cellars. The variable processing costs related to the Parma curing process clearly appears 67% higher than the costs of curing generic ham. If we examine the price difference between the sales price of Parma Ham with the purchase price of fresh hams destined to Parma Ham we end up with 3.58 €/kg, whilst this price difference for generic ham is 2.34 €/kg, which is 64% lower. Although both products operate on the cured ham market, the price difference between the two products is significant. At wholesale level Parma Hams are sold at 90% higher prices than generic cured hams, whereas the fresh hams are purchased at more than twice the price of fresh ham used fo generic cured hams. Table 5.6.Value added per kg of fresh generic ham with bone (€/kg)

Sale price Purchase price Cost of processing Value added 2009 3.72 1.60 1.80 0.32 2010 4.11 1.66 2.13 0.32 2011 4.03 1.69 2.13 0.21 2012 3.95 1.65 2.04 0.26 2013 4.35 1.85 2.21 0.29 Average 4.03 1.69 2.06 0.28

Source: Elaborated by CRPA on company balance sheets

Figure 5.2.Value added per kg of cured ham (€/kg ham)

GLAMUR Report – Italian Case Study- Pork Chains –March 2015

0,70

0,60

0,50

0,40 Generic cured ham

0,30 Parma ham Euro/kgham 0,20

0,10

0,00 2009 2010 2011 2012 2013

Source: Elaborated by CRPA on company balance sheets

The case of Cinta Senese cured ham is very specific, because of the great variability of processing and marketing models, which are completely different from those of the Parma and Generic hams: the ham processing is often made on farm in small laboratories, the production scale is small, and all enterprises process and market all the Cinta Senese head. The analysis of three processing firms representing the two main models (the integrated one, and the long chaan one), even if indicative because of the complexity of the calculation process, highlights a variability of value added (year 2013):

- 39.8 €/kg for the smaller company, a family pig farmer and processor which produces 100 Cinta Senese pigs and process 70 of them per year (with some other pigs), marketing all the products by direct selling channels - 25.9 €/kg for the bigger pig farmer-processor, which produces 220 Cinta Seense pigs per year and process 180 of them - 23 €/kg for the professional ham processor, that process 180 Cinta Senese heads per year representing the 15% of the total turnover. The contribution of the Cinta Senese processed products to the overall reputation of the enterprise is very relevant. The value added is very variable accaroding to the type of processing and to the type of marketing channel. The firm sell the cured ham also on supermerkets channel, where the value added is lower.

GLAMUR Report – Italian Case Study- Pork Chains –March 2015

5.2. Resilience

See Appendix 1 for a detailed presentation of volatility indicators and of analytical indicators.

5.2.1. Prices volatility results

Global Region Local Definition Unit Source Indicator chain al chain chain Coefficient of variation of monthly feed CRPA, prices over 3 years (concentrates prices Interpig, V.1 - Feed prices pure for heayy and light pigs, representative Chamber of 0,081 0,086 0,099 volatility index number agricultural products for feed for Cinta commerce of Senese) Siena data) Coefficient of variation of monthly live ISMEA and pigs prices over 3 years (Heavy live V.2 - Live pigs prices pure Chamber of Italian pigs for B; Cinta Senese live pigs n.r. 0,103 0,013 volatility index number Commerce of for A; Light live pigs imported from NL Siena data) not relevant) Coefficient of variation of monthly fresh ham prices over 30 months (Fresh ham V.3 - Fresh ham price pure 14 kg for generic ham ; Fresh ham 11- CUN data 0,053 0,051 0,013 volatility index number 13 kg for Parma PDO ; not relevant for Cinta Senese) V.4 - Cured ham Coefficient of variation of monthly pure Parma market 0,049 0,04 n.a. price volatility index cured ham prices number data

GLAMUR Report – Italian Case Study- Pork Chains –March 2015

5.2.2. Pig farming results

Analytical indicators

Global Regiona Local Definition Unit Source Indicator chain l chain chain A.1 - Farmers % of pig farmers which UNIFI- upstream self-produce the majority % UNIPR- 100 90 70 integration by of feed CRPA ownership Part of pig farmers ordinal 1,2,3: level 1 (very high A.2 - Farmers involved in mid-long part of farmers is involved: in upstream UNIFI- term upstream favour of resilience), level 2 integration by UNIPR- 3 2 3 contractual arrangements Intermediate, and level 3 (very contractual CRPA with animal feed small part is involved) arrangements producers Ordinal 1, 2, 3: level 1 (a very A.3 - Farmers high part of farmers develops UNIFI- Relevance of farmers downstream downstream integration), level UNIPR- 3 2 2 downstream integration integration 2 Intermediate, and level 3 CRPA (very small part of farmers). A.4 - Farmers % of (light/ heavy/Cinta) % UNIFI- product pigs for ham production UNIPR- 100% 90% 53% diversificatio on the total turnover of CRPA n farm A.5 - Farm- Price volatility of the €/ kg GLAM 0,10 0,13 n.a. level input and output markets UR resistance of relevance for pork against price- production, defined as volatility the max delta added value per kg live weight per year over the periode 2009-2013 Ordinal scale: level 1 (very low Expert A.6 - Use of Use of antibiotics in pig use), level 2 (some use), 3 consulta 3 3 1 antibiotics farms (significant use) tion

Synthetic indicators

S.1 - Farm-level risk-spreading On the basis of the value of the indicators related to farmers upstream integration in feed production and of product diversification, which are reported in the table below, a qualitative synthetic evaluation about the level of risk-spreading was formulated on a three-levels scale. Generic ham (global) Parma PDO (regional) Cinta S. PDO (local) Farmers upstream integration by 0% 10% 30% ownership (self-production of feed) Farmers upstream integration by 3 2 3 contractual arrangements with feed producers Farmers product diversification 0% 10% 47%

GLAMUR Report – Italian Case Study- Pork Chains –March 2015

Results of the comparison are expressed in the following table. Cinta Senese pig farmers are in general quite able to deal with input and output price volatility thanks to vertical integration strategies : a) in upstream feed production, and b) in downstream ham processing activities. However these are strategies at firm-level, therefore there is a varied range of farm-level resistance. According to analytical indicators, local supply chain performs better than the other for two of the three indicators considered in the analysis. Cinta Senese chain can be considered more resilient due to the direct control of feed supplying and to their high diversified in many different activities than production of pigs. In fact many pig farmers produce other agricultural products like olive oil, wine, cereals, and/or practice forestry, and/or diversify in agritourism activities. Additionally, often the members of the family work also in non-agricultural sector. On the other side generic ham pork farmers are the lower degree of risk-spreading due to their high specialization and dependence on market for their supplying. The regional chain is in an intermediate position. Farm-level risk-spreading Indicator S-1 Cured ham chain Value Notes Risk-spreading by farm-level diversification and Generic ham (global) 3 Qualitative-participatory producing feed. Parma PDO (regional) 2 Qualitative-participatory This indicator synthesizes indicators B1,B2, and D1. Cinta S. PDO (local) 1 Qualitative-participatory NOTE: the ordinal scale is the following: Ordinal scale: level 1 (high risk-spreading: in favor of resilience), level 2 Intermediate, and level 3 (very low risk-spreading). Source: our findings

S.2 - Adaptation capacity of farmers through downstream actors cooperation, integration and diversification strategies This indicator take in account two analytical indicators, farmers product diversification and farmers downstream integration, integrated by other qualitative evaluations made by researchers on the basis of their direct knowledge, literature analysis and interviews with supply chain actors. Global supply chain presents very low levels of adaptation capacity, there are very few initiatives by farmers aiming at downstream integration, and there are not opportunities to develop collaborative initiatives with downstream actors of the generic cured ham chain. This is also due to the geographical distance between pig farmers (mainly the Netherlands and other northern countries) and ham processors, but mainly because differentiation strategies in the generic ham chain are based only on individual processors trademarks. For the Regional supply chain the situation is not much better, despite the strong diversification strategies linked to Parma Ham PDO. In fact the real degree of involvement of pig producers in PDO is low, and heavy pigs farmers are not able to really connect actively to these strategies and to develop vertical integration and diversification strategies. In Cinta Senese chain there is a very heterogeneous situation. Some pig farmers process their own pigs developing downstream integration at firm level; this allow them for a good valorization of their pigs also by means of marketing strategies centered on the full control by farmer of all the process and on the artisanality of process and products (hams and other could cuts). For Cinta Senese farmers who sell their pigs to downstream firms the situation is diversified: some

GLAMUR Report – Italian Case Study- Pork Chains –March 2015 pig farmers are linked by means of contractual arrangements to ham processors, while other farmers act in a completely disconnected way from ham processors, without any coordination. In general, despite the PDO the actors complain however the lack of systemic initiatives at the collective level. Adaptation capacity of farmers through downstream actors cooperation, integration and diversification strategies Indicator S-2 Cured ham chain Value Notes Strength of interlinkages with downstream actors Generic ham (global) 3 diversification strategies in terms of productfolio - Parma PDO (regional) 3 and marketing Cinta S. PDO (local) 2

NOTE: the ordinal scale is the following: Ordinal scale: level 1 (high adaptation capacity: in favor of resilience), level 2 Intermediate, and level 3 (very low adaptation capacity). Source: our findings

5.2.3. Slaughtering results

Analytical indicators

Global Regional Local Definition Unit Source Indicator chain chain chain Part of ordinal 1,2,3: level 1 (very A.7 – slaughterhouses/processor high part of firms UNIFI- Slaughterhouses / s involved in pig farming involved), level 2 UNIPR- 3 2 1 processors upstream and/or in long term Intermediate, and level 3 CRPA integration contractual arrangements (very small part) Ordinal 1, 2, 3: level 1 (a A.8 - very high part of farmers Relevance of UNIFI- Slaughterhouses develops downstream slaughterhouses UNIPR- 3 2 3 downstream integration), level 2 downstream integration CRPA integration Intermediate, and level 3 (very small part of farmers). Part of activity not linked Ordinal scale: level 1 (high A.9 - to production of generic / product diversification), Expert Slaughterhouses Parma PDO / Cinta level 2 Intermediate, and consultati 2 3 1 product Senese ham on the total level 3 (very low product on diversification turnover of slaughtering diversification). firms

Synthetic indicator

S.3 - Adaptation capacity of slaughtering firms through integration and diversification strategies Slaughtering sector plays very different roles in the three supply chains considered. In the global chain the slaughtering sector is dominated by big firms which have a strong market power and pursue their own conglomerate strategies; slaughtering activities are managed outside the region where the cured ham is processed, in Netherlands or in other EU Northern countries (see the Dutch report for more details on the characteristics of slaughtering sector in the Netherlands). Conversely, in the Cinta Senese sector slaughtering firms are very small (because breeding has become an activity of secondary importance in Tuscany region) and merely play a role of

GLAMUR Report – Italian Case Study- Pork Chains –March 2015 slaughtering service of Cinta Senese pigs on behalf of pig farmers or of pig meat processors; their role in the strategic management of the chain is very limited even if very relevant from a technical point of view (also because of the relevance of transportation costs of live Cinta Senese pigs from farms to slaughterhouses). The strategic involvement of slaughtering firms in the cured ham is very different among different local, regional and global chain. Cured ham is only one of many markets for the slaughtering firms in the global chain; the same, but for different reasons, happens in Cinta Senese chain, where the slaughtering of Cinta Senese pigs is a very marginal and episodic activity, and often perceived by firms as a burden than as a business. On the contrary, slaughtering firms in PDO Parma Ham area are very involved in the cured ham chain with the aim of increase resilience by capturing the value added generated in the processing industry. By means of take overs and mergers the main Italian slaughterhouses control more than 50% of the production of Parma Ham. Big slaughtering firms in both global and regional chains develops strategies aiming at control and coordinate quantities, quality and prices of live pigs also through upstream vertical integration, in order to be able to better meet intermediate and final demand needs. In particular vertical integration is increasing in heavy Italian pigs sector; this allows an increased resilience for the whole Parma Ham chain, but can create unbalanced market relationships. In Parma Ham chain also downstream vertical integration is increasing, by means of direct ownership of farms, but primarily through long term contracts with pig farmers . Summarizing these results in the synthetic indicator “Adaptation capacity of slaughtering firms through integration and diversification strategies” is not a simple task, because of the complexity of the issues and partly conflicting indications that come from the analytical indicators. According to the Glamur expert team, Cinta Senese and Parma Ham chains have both an intermediate level adaptation capacity, but for different reasons. In the Cinta Senese chain the result comes mainly from the diversification of slaughterhouses, which, however, are not dynamic and able to develop proactive strategies. Instead in the regional chain there is an the high dependence of firms from the chain of Parma Ham PDO, but some firms are able to develop strategic initiatives seeking for a better product qualification. Heavy pigs slaughtering is concentrated in a few large companies (about 10), compared with about 120 certified slaughterhouses. The resilience of these large slaughtering companies is based on economies of scale and on vertical integration strategies implemented both by slaughterhouses towards cured ham factories, and by feed mills towards slaughterhouses by means of agistment contracts with pigs farms. Adaptation capacity of slaughtering firms through integration and diversification strategies Indicator S-4 Cured ham chain Value Notes Synthetic indicator based on upstream, downstream and Generic ham (global) 3 diversification analytical indicators Parma PDO (regional) 2 Cinta S. PDO (local) 2 NOTE: the ordinal scale is the following: Ordinal scale: level 1 (high adaptation capacity: in favor of resilience), level 2 Intermediate, and level 3 (very low adaptation capacity). Source: our findings

GLAMUR Report – Italian Case Study- Pork Chains –March 2015

5.2.4. Ham processing results

Analytical indicators

Global Region Local Definition Unit Source Indicator chain al chain chain ordinal 1,2,3: level 1 Part of (very high part of A.7 - slaughterhouses/processor slaughterhouses/processor UNIFI- Slaughterhouses/proc s involved in pig farming s is involved), level 2 UNIPR- 3 2 1 essors upstream and/or in long term Intermediate, and level 3 CRPA integration contractual arrangements (very small part is involved) Share of processing firms % with a share of (generic / A.10 - Processors Parma PDO / Cinta UNIFI- product Senese) ham higher than UNIPR- 33% 49,50% 0% diversification 70% on the total turnover CRPA of processing firms, on the total number of firms Ordinal scale: level 1 A.11 - Processors Degree of market (high marketing channels UNIFI- marketing channels diversification of ham diversification), level 2 UNIPR- 1 2 1 diversification for processors, in terms od Intermediate, and level 3 CRPA cured ham marketing channels (very low marketing channels diversification). Ordinal scale: level 1 A.12 - Processors Degree of market (high geographical market UNIFI- geographical market diversification of ham diversification), level 2 UNIPR- 2 2 3 diversification for processors, in terms od Intermediate, and level 3 CRPA cured ham geographical markets (very low geographical market diversification). Ordinal scale: level 1 Degree of product (high product A.13 - Product differentiation for cured UNIFI- differentiation), level 2 differentiation for ham by means of UNIPR- 2 1 2 Intermediate, and level 3 cured ham collective labelling CRPA (very low product systems differentiation).

Synthetic indicators

S.4 - Adaptation capacity of ham processing firms through integration and diversification strategies Ham processing firms are at the heart of the cured ham chains. Data about volatility indexes highlight that Parma supply chain have a volatility, for both fresh hams and cured hams, lower than generic ham chain. This may be the result of a greater adaptation capacity of Parma Ham PDO processing firms. These firms in fact are dependent on ham production, but they are able to differentiate their products on the market by means of PDO collective mark which is very reputed on Italian and foreign markets, also thanks to collective marketing initiatives carried out by the Parma Ham Consortium. The level of geographical market and marketing channel diversification is good. What is relevant to say is that some Parma Ham processing firms have increased their

GLAMUR Report – Italian Case Study- Pork Chains –March 2015 adaptation capacity through the entry in the segment of generic ham. According to Glamur expert evaluation, the adaptation capacity of Parma Ham processing sector is high. In local (Cinta Senese) supply chain PDO on fresh Cinta Senese meats play a relevant role, even if its reputation is lower than in the Parma Ham also because not supported by strong collective marketing initiatives. A number of firms processing Cinta ham are farmers which integrate downstream; specialized Cinta ham processors are not dependent from Cinta Senese because it represent only a small part of their business. Ham processors more involved in Cinta Senese and interested in high quality products tend to a strong control over pig farming, by means of ownership or agreement with pig farmers mainly based on trust. According to Glamur expert evaluation, the adaptation capacity of Cinta ham processing sector is intermediate, also compared to the Parma Ham chain. The capacity of adaptation of generic ham processing firms is more linked to marketing channels diversification and rest on the development of individual trademarks, which only may allow to escape a very strong price competition, and on the reputation of Italian traditional hams (like the Parma PDO). The development of the chain of generic ham is born as a strategy of differentiation of some Parma Ham producers, in order to have in their product portfolio a low-price cured ham (very attractive in times of crisis of domestic demand). Generic cured ham is interesting for firms because of faster a faster capital disinvestment cycle (thanks to the shorter period of maturation). Generic ham consumption is now increasing also because it feed the sector of pre- sliced ham sold under the umbrella marks of supermarkets.According to Glamur expert evaluation, the adaptation capacity of generic ham processing sector is close to Parma Ham. Adaptation capacity of ham processing firms through integration and diversification strategies Indicator S-4 Cured ham chain Value Notes Synthetic indicator based on upstream, Generic ham (global) 1 downstream, diversification and differentiation Parma PDO (regional) 1 analytical indicators Cinta S. PDO (local) 2 NOTE: the ordinal scale is the following: Ordinal scale: level 1 (high adaptation capacity: in favor of resilience), level 2 Intermediate, and level 3 (very low adaptation capacity). Source: our findings

Cross-cutting indicators

C.1 - Supply chain attitude to diversification and differentiation The overall level of the supply chain attitude to diversification and differentiation can be evaluated by means of related analytical indicators, which are synthesized in the following graph. Firms belonging to the local supply chain are more oriented to product diversification, while the regional supply chain is strongly oriented to product differentiation in order to escape from market competition by consumer loyalty; the high level of specialization of firms in the regional chain tends to limit the degree of resilience.

GLAMUR Report – Italian Case Study- Pork Chains –March 2015

Figure 5.3 Analytical indicators related to diversification and differentiation

D.1 - Farmers product diversification 100

G - Product differentiation for 60 D.2 - Slaughterhouses product cured ham diversification 40

F - Processors geographical D.3 - Processors product market diversification for diversification cured ham

E - Processors marketing channels diversification for cured ham

Global (Generic ham) Intermediate (Parma Ham PDO) Local (Cinta Senese PDO)

Source: our findings Supply chain attitude to diversification and differentiation Indicator C.1 Cured ham chain Value Notes Synthetic indicator based on diversification and Generic ham (global) 2 differentiation analytical indicators related to all Parma PDO (regional) 2 stages of the supply chain Cinta S. PDO (local) 1 NOTE: the ordinal scale is the following: Ordinal scale: level 1 (high attitude: in favor of resilience), level 2 Intermediate, and level 3 (very low attitude). Source: our findings

C.2 - Intradiversity of chain relations / configurations In the Cinta Senese supply chain there are three main types of organization, that is the fully integrated firm (a pig farmer that produces part of feed and process their own pigs selling them to final consumers), the contract model (an ham processor buy Cinta pigs from farmers on the basis of – written or not – mid-term agreements), and the market model (where the coordination is left to interaction between supply and demand on single basis). These three models are complementary and each of them has specific abilities to resist against different risk factors. In both Parma and generic ham chains there is a lower degree of intradiversity. Some more artisanal firms exist close to very “industrial” big firms (often slaughterhouses and processing firms operating in Parma PDO chain process also non-Parma Hams), but the dominant model is based on big firms pursuing scale economies and marketing mainly to big supermarkets firms.

GLAMUR Report – Italian Case Study- Pork Chains –March 2015

Intradiversity of chain relations / configurations Indicator C.2 Cured ham chain Value Notes Intradiversity of chain relations / configurations Generic ham (global) 2 Parma PDO (regional) 2 Cinta S. PDO (local) 1 NOTE: the ordinal scale is the following: Ordinal scale: level 1 (high intradiversity: in favor of resilience), level 2 Intermediate, and level 3 (very low intradiversity). Source: our findings

C.3 - Chain-based adaptation capacity through learning and innovation In the Cinta Senese supply chain there is a limited ability of pig farmers in learning and innovation, also due to the very limited dimension of farms. The large majority of pig farmers are disconnected from a technical assistance system and they are not able to really innovate; indeed often a resistance to change was detected, as well as to communicate or collaborate with other firms. The same happens for firms (vertically integrated farmers and specialized firms) involved in ham (and pig meat) processing. At the same time the Cinta local production system (with the support of local administrations and breeder organizations) was able to elaborate the application for a PDO and now is capable to support the collective reputation of the product on the market. As a conclusion, chain-based adaptation capacity seems more developed for market issues than for technical issues. In the Parma Ham supply chain the adaptation capacity through learning and innovation at farm level is quite low, primarily because of the lack of a common and unique direction of the breeding program. A lack of collaboration in the chain does not allow the emergence of a common future vision on the Parma Ham chain, for example with reference to internal quality grading. At the ham factory level instead learning and innovation are at a good level: in this stage of the chain attitude to innovation is supported by a strong collaboration between firms, by technical assistance provided by the Experimental Research Station for Processed Food, and also by the local mechanical industry (mainly small and medium enterprises) highly specialized in providing equipment to ham factories. The global chain benefits from the spillover effects coming from the Parma chain, also because of some important firms operates simultaneously in both chains. Differently than the Parma Ham, this learning and innovation capacities are not really chain-based, because of the lack of involvement of (foreign) pig breeders and slaughtering firms. Chain-based adaptation capacity through learning and innovation Indicator C.3 Cured ham chain Value Notes Chain-based adaptation capacity through learning Generic ham (global) 2 and innovation Parma PDO (regional) 1 Cinta S. PDO (local) 2 NOTE: the ordinal scale is the following: Ordinal scale: level 1 (high adaptation capacity: in favor of resilience), level 2 Intermediate, and level 3 (very low adaptation capacity). Source: our findings

GLAMUR Report – Italian Case Study- Pork Chains –March 2015

C.4 - Ability to mobilize public and societal support According to the analysis of policies, to interviews and researchers’ direct knowledge, the ability to mobilize different types of public and societal support is more developed in both Cinta Senese and Parma Ham supply chains. Cinta Senese has benefited greatly from incentives and technical assistance measures for the recovery of the breed, which in the 90s was considered at risk of genetic erosion. Regional and local public authorities (Provincia of Siena) contributed to the PDO registration. Also regional Universities (Pisa and Firenze) contributed to developing relevant knowledge about the breed and rearing systems. Cinta Senese is perceived as an identitary product, and also local population in many rural areas are available to support this pig breed. On the other hand the system representation of the supply chain is not so strong, representative and organized to orient in their favor local public policies in a systematic way. Parma PDO ham enjoys a similar situation of interest by public authorities. Given the strong economic role Parma Ham plays in the territory of Parma and near Provinces, local authorities are available to support this supply chain. The Parma Ham Consortium is well organized and representative, and is able to play their lobbying role at local level. Generic ham supply chain is less able to mobilize public and societal support, also because the companies are not organized in a specific Consortium Many companies though adhere to the association of meat processors (ASSICA), which lobbies at national and international level for policies favorable for this sector . Moreover, it can benefit from trickle down effects from the Parma Ham chain, considering that some firms operating in Parma Ham produce also generic cured ham. Ability to mobilize public and societal support Indicator C.4 Cured ham chain Value Notes Presence of political and social support activities of Generic ham (global) 2 various types, at national, regional and local level Parma PDO (regional) 1 Cinta S. PDO (local) 1 NOTE: the ordinal scale is the following: Ordinal scale: level 1 (high ability: in favor of resilience), level 2 Intermediate, and level 3 (very low ability). Source: our findings

5.2.5. Performance comparison

Resilience is a multifacetted and complex attribute, which can be evaluated at firm, sector and supply chain level; it should not be considered only as the capability of a system to absorb external disturbances but also in a dynamic way. The ability to evolve towards new equilibria without change its identity is a key feature of resilient supply chains. Our analysis put in evidence that cured ham pork chains undergo the pressure of many factors and are embedded into a context that evolves rapidly. Price volatility is one of the major factors of instability. An overview of the different indicators of volatility does not allow to draw general and uniform conclusions about the performance of the three supply chains. The local supply

GLAMUR Report – Italian Case Study- Pork Chains –March 2015 chain present higher values of volatility for feed, due to the narrowness of the market which derives from the obligation of local purchasing, but a very low volatility of live pigs prices; due to the niche character of the final market it is not possible to calculate volatility on the final market. The global chain is less exposed to volatility than the regional one (Parma) in the upstream phases of the chain, and more exposed in the downstream phases. These evidences should be interpreted on the basis of actors’ (individual and collective) behaviour. A working hypothesis is that the Regional supply chain can better control prices of the final product thanks to the PDO differentiation strategy. Volatility Indexes : overview Feed Live pigs Fresh ham Cured ham Supply chain Indicator V.1 Indicator V.2 Indicator V.3 Indicator V.4 Generic ham (global) 0.081 N.R. 0.053 0.049 Parma PDO (regional) 0.086 0.103 0.051 0.040 Cinta S. PDO (local) 0.099 0.013 0.013 Very low Source: our findings

Synthetic indicators and cross-cutting indicators evaluated for the three chains are depicted in the following graph, that highlights the good performance of the local chain, the Cinta Senese one, while the worst performance is from the global chain (generic cured ham). Figure 5.4 Analytical indicators related to diversification and differentiation

S.1 - Farm-level risk-spreading 100 S.2 - Adaptation capacity of farmers C.4 - Ability to mobilize public and 80 through downstream actors societal support cooperation, integration and 60 diversification strategies

20 S.3 - Adaptation capacity of C.3 - Chain-based adaptation slaughtering firms through capacity through learning and 0 integration and diversification innovation strategies

S.4 - Adaptation capacity of ham C.2 - Intradiversity of chain relations processing firms through / configurations integration and diversification strategies

C.1 - Supply chain attitude to diversification and differentiation

Global (Generic ham) Intermediate (Parma Ham PDO) Local (Cinta Senese PDO)

GLAMUR Report – Italian Case Study- Pork Chains –March 2015

The resilience performance profiles of the three cured ham supply chains can be synthesized as follows

- Regional supply chain: Parma cured ham chain have an high level of resilience, mainly thanks to ham processing firms that are the core actors in the chain. The chain is characterized by a good adaptation capacity through learning and innovation. This satisfactory level of resilience is obtained partly at the expenses of pig breeders, who seems to be the weak stage of the chain. The ability to mobilize public support is a relevant feature in Parma Ham chain. Two interconnected factors helps chain resilience: the Product designation of origin link the product to the territory to one side and to consumers on the other, and the strong governance system (Parma Ham consortium) that helps collaboration between firms and interaction with other local stakeholders. - Local supply chain: Cinta Senese ham chain have an high resilience in terms of recovering from shocks but intermediate in terms of search for new equilibria. The performance is good in particular in terms of diversification, differentiation and intradiversity of chain organizational configurations, allowing for risk-spreading. This good performance originates from a low dimension and a subsequent low level of specialization of firms, which on the other side causes an intermediate performance in terms of adaptation capacity and learning and innovation. The Product designation of origin, even if it cover only the fresh meat, play a relevant role. - Global supply chain: the generic cured ham present the lower degree of resilience. It presents an high exposure to risk and low opportunities for collaboration between different phases of the chain. Considered the territorial contiguity and the fact that many PDO ham firms produce also generic ham, the global supply chain benefit from spillover effects from Parma Ham sector and helps the level of resilience of the Parma Ham chain.

Local and regional chains seems to be less vulnerable to volatile prices and to risks in general, for the following main reasons:

- regional and local supply chains are more diversified, both at single firm level, in terms of market diversification and product differentiation, and at a whole supply chain level, in terms of intradiversity of business models and chain relations - pig breeding is more centered on local resources and then less dependent on world markets, in particular for feed provision - local and regional chains more able to raise consumers prices thanks to strong differentiation initiatives centered on regional non-reproducible factors. The ability to differentiate the product on the basis of “irreproducible” factors (as breeds, rearing methods, specific processing abilities, …) can have a relevant impact on resilience. Some of these factors are linked to specific territories in their physical and cultural identity, giving a potential advantage to local and regional cured ham chains. Institutional tools for the protection and assurance of food quality, like Protected designations of origin, play a key role in building these product regional identities - firms in local and regional chains are more motivated to develop collaborative relationships with other firms: in principle territorial and cultural contiguity allows for better

GLAMUR Report – Italian Case Study- Pork Chains –March 2015

opportunities of coordination, lowering transaction costs, easing common vision about different supply chain actors and generating awareness about the interdependence with other firms operating in the area defined according to the PDO. In the case of the Parma Ham is possible to identify a real organizational model of the type “agrifood industrial district” (Mora and Mori, 1995; Arfini and Mora, 1998; Giacomini et al., 2013b). ). - Horizontal collaboration amongst producers and vertical collaboration between different stages of the chain is more developed, in particular in the case of the Parma Ham, arising from collective action and governance developed by means of the Consorzi di tutela.

5.3. Chain governance

5.3.1. Indicator "Trust based internal relationships" Internal relationship is considered one of the main aspects responsible of quality management and transmission of quality and price signals to the market. Trust plays a fundamental role since the quality of the meat is not evaluated by objective criteria but instead by subjective criteria of chain agents and since the organisation of the chain that imply to procure raw material from suppliers that are far from the processing area. Level of trust-based relations between chain actors, is based on the observation of three parameters: i) absence of conflicts, 2) trust among chain partners, 3) continuity of chain relations.

Table 5.7 Indicator “Trust based internal relationships”

Supply chain Name Value * Notes Generic cured Global chain: 3 Direct interview to supply chain operator ham

Parma Ham Regional chain: 2 O’Really et al. (2003), Dentoni et al. (2012) PDO

Cinta Senese Local chain: 2 Direct interview to supply chain operator PDO

* Ordinal scale: level 1 (maximum level of trust), level 2 (intermediate level of trust), and level 3 (minimum level of trust). Source: our elaborations.

On the basis of interview to economic actors appear evident as the “Global chain cured ham” present the lowest level of trust due to the variability in quality and the continuous research of lowest price of pig cuts. In this chain do not exists specific certifications systems and coordination system at institutional level thus problems related to the quality of the meat have to be managed by ham factories located in Parma district and elsewhere in Italy where the generic ham companies operate. Regional chain present a lower level of conflict with respect the global chain but research in this filed (O’Really et al., 2003; Dentoni et al., 2012) and direct interviews shows the presence of

GLAMUR Report – Italian Case Study- Pork Chains –March 2015 conflicts between farmers and slaughterhouses and between slaughterhouses and PDO ham processor. According to the PDO product specification quality is standardized, nevertheless fresh ham characteristics could differ according to pig breed, feed quality, farm management systems and ham weight. Slaughterhouses differentiate meat quality of the fresh ham according to the quality strategies of their costumer. Relationship are based on trust between actors but sometime slaughterhouses may favour some costumer instead of other clients. The presence of the PDO Consortia and the regional dimension of fresh and cured ham market create the condition of a social control between economic actor increasing the level of trust. Local chain of Cinta Senese present a strong social control process along the chain. Interviews of pig producers and processor shows some conflict arise between actors due to presences of “new” pig farmers that, have started the breeding of Cinta Senese pigs due its market success, but have modified the equilibrium among the chain actors. In particular they have an impact on prices and on quality to a more intensive breeding technique in pig managements. For this reason, even though the presence of common rules and the active participation of local actors, the presence of conflicts is reduced without resetting.

5.3.2. Indicator "Trust based external relationships" External relationships plays a relevant role for manage the political and social dimension of the food chain in each area of production. This indicator consider the ability to create the ability to connect with territorial and policy stakeholders (at local, national and European level) with the aims to develop appropriate actions of local development of marketing promotion but also to create a political and social consensus for adoption of appropriate policy intervention that support the chain. Trust plays a fundamental role since the perception of stakeholders is based on the reputation and lack of opportunistic behaviours of chain members. External relationship indicator is then evaluated on the chain partners' capacity to mobilise support from: i) social movements, ii) citizens and iii) policy actors. This indicator is evaluated by the use of quality approach mainly based on direct interviews to relevant stakeholders and by specific publication.

Table 5.2 Indicator “Trust based external relationships”

Supply chain Name Value * Notes Generic cured Global chain: 3 Direct interview to supply chain operator ham

Parma Ham O’Really et all., 2003; Parma Ham PDO Regional chain: 2 PDO Consortium, Annual Yearbook, several years;

Direct interview to supply chain operator; Cinta Cinta Senese Local chain: 1 Senese Consortium: Annual Yearbook, several PDO years; Website;

* Ordinal scale: level 1 (maximum level of trust), level 2 (intermediate level of trust), and level 3 (minimum level of trust). Source: our elaborations.

GLAMUR Report – Italian Case Study- Pork Chains –March 2015

On the base of interview to economic actors the “Global chain cured ham” presents the lowest level of trust due to the main reason that this chain is “hidden” to most of territorial social actors and local policy makers. In the past this chain was a minor production of the Parma Ham district but nowadays the size of this production is greater of the PDO hams. Local policy actors consider positively the presence of a global chain for the link with the economic growth and for the implication of employment inside the indsutrial district, but they recognize the presence of negative externalities specially at environmental level. In addition, the same local policy actors are worried about the possible of negative economic impact on the economic performance of the Regional chain. As consequence the trust on global external relationship is considered very low. Meanwhile Regional chain present a higher trust level among social and economic actors and on policy makers too. Reputation come from Parma Ham Consortium, the relevance of the economic sector and the strong culinary tradition of Parma area. At the same time PDO Parma Ham Consortium show high ability to cope with policy actors by means of a strong lobbing activity. Members of PDO Parma Ham consortium are present in different national and international organisation aiming to protect and promote PDO products include Parma Ham. PDO Parma Ham Consortium shows high capacity to talk with public institution at local, regional and national level. A partial drawback is due to the “distance” between local consumers and local producers. Even if the product is very well know and used, PDO producers are not know at the outlet and is difficult for consumers distinguish small producers of artisanal PDO Ham respect larger producers of more industrial PDO ham. In addition, PDO Parma Consortium shows low interest to initiative aimed to promote local economy by means of territorial marketing actions as the participation to the Quality route of wine and Ham that collect local producers. Considering the local chain of PDO Cinta Senese, analysis conducted by interview of local stakeholders and members of PDO Consortium appear evident as the whole is very rooted in the territory of production by the strong involvement of local stakeholders. Local administrations (like Siena Province and some Municipalities) play an important role in developing and supporting the governance of the PDO system. This feature underline the territorial governance that surround the activity of the Consortium that, in turn, influence the governance of the PDO chain. The link with local policy makers is reinforced by the initiative of the Consorzio di Tutela della Cinta Senese, which is asking for its acknowledgement by the Ministry of Agriculture, in order to be able to act according to the “erga omnes” criterion, allowing to extend control activities to farms and companies not associated within the consortium. In sum, external trust on PDO Consortia and on its members by local stakeholders is very high and is the result of the strong territorial approach of the Chain governance.

5.3.3. Indicator "Self governance capacity" Self governance capacity is considered as the capacity of the chain to adopt appropriate policy and strategies for create, maintain and increase distinctiveness on the product and on the producers. This indicator deal with the capacity of the chain to create the condition of market success by offering the appropriate quality to costumers trough different retails models. This indicator is strongly related to the previous indicators and reproduce how the presence of trust,

GLAMUR Report – Italian Case Study- Pork Chains –March 2015 combined with management capacity, is able to solve conflict and adopt appropriate governance strategies with respect intrinsic and extrinsic feature of the goods sold by different retail systems. This indicator is evaluated by the use of quality approach mainly based on direct interviews to relevant stakeholders and by specific publication.

Table 5.3 Indicator “Self governance capacity”

Supply chain Name Value * Notes Global chain: Generic cured ham 3 Direct interview to supply chain operator

O’Really et al. (2003); Parma Ham PDO Regional chain: Parma Ham PDO 1 Consortium, Annual Yearbook, Istituto Parma Qualità Certification body; Dentoni et al. (2012)

Direct interview to supply chain operator; Cinta Local chain: Cinta Senese PDO 2 Senese Consortium: Annual Yearbook, several years; Website;

* Ordinal scale: level 1 (maximum level of distinctiveness), level 2 (intermediate level of distinctiveness), and level 3 (minimum level of distinctiveness). Source: our elaborations

The Global value chain do not have governance bodies (such as Consortia or producers' associations); thus, apparently, the definition of rules and distinctiveness strategy are left to the initiative of the single producers. These latter initiatives follow as a “guide”: i) the quality standards of the PDO Parma Ham (since producers adopt procedures very similar to those used for the Parma Ham PDO and with the same technologies); ii) others marketing signals or labels, such as retailer private labels (producers must meet their customers standards, in particular those of the large scale retailers, especially if hams are sold sliced in trays with commercial brands). Considering the regional chain of the Parma Ham PDO, the PDO Consortia has demonstrate along the time a strong capacity to define and manage the quality system for the whole chain coping possible quality variability with respect: i) the territorial distribution of the chain – pigs can be breed in 10 Italian regions -; ii) the dimension of the chains – more than 4000 pig farmers are registered in the Parma Ham Control plan -; iii) the innovation systems along the chain both at farmers level – introduction of new breeding systems that has innovate the animal welfare standards, the feeding techniques, etc.. - and at processor level – ham producers have to comply with new hygienic regulations from UE and have introduced new technologies for refrigerate and ripen meat -; iv) market innovation – the segment of sliced ham sold in food trays is increasing every year and represents the most innovative market segment for the Parma Ham PDO chain. The capacity to manage quality and to produce distinctiveness is due to the composition of the PDO Consortia board –the Board composition reflect the structure of the PDO chain and include representatives of farmers, and ham producers differentiated by size of productions – and by the presence of a effective marketing office that cover the necessity of the domestic and international market. Giving this structure, the PDO Parma Ham Consortium is able to manage the image and the

GLAMUR Report – Italian Case Study- Pork Chains –March 2015 reputation of Parma Ham - also by effective advertising campaign using different media channels and by participation on food fairs at national and international level – and support their members to implement promotional campaign in outlets. The self-governing capacity is strengthened by the fees that members pay to the PDO Consortium for all its activities, and allow to employ efficient and capable managers that represent adequately the whole PDO chain. Finally the local food chain represented by the Cinta Senese PDO is show also a good self- governace capacity by means of a representation of the chain in the PDO Consortia. Most of the producers of Cinta Senese pigs are member of the Consorzio, as well as many firms involved in processing - traditional farmers, entrepreneurs/farmers and pork processors – and provide effective strategies for increase the quality and the reputation too. The activity of the PDO Consortium is supported by INEQ that is the PDO Control body, which control the conformity of PDO fresh meats to the PDO Product specifications. It is an independent body (3rd party certification), according to the EU PDO-PGI rules. The objectives of the PDO Consorzio di Tutela della Cinta Senese is changing over the time. In the 90s was to prepare the necessary information and documents for the application of the PDO label on Cinta Senese meat, and after the PDO registration to assemble all interested actors in one organisation having the objective to defend the interest of its members, safeguarding the breed, developing marketing activities. Nowadays there are different strategic visions between those who want to keep a close rural dimension (enhancing both the product and the territory) and who wants to promote primarily the product separating, in part, from the territory. Because the PDO Consortium is “small”, “local and agricultural dependent” do not have the economic independence and the economic strength to develop “alone” effective strategies that increase distinctiveness on the market by promotional campaign. In addition the self-regulation capacity is influenced by the difficulties to find a common strategic vision for “old” and “new” chains members.

5.3.4. Indicator "Chain-based value governance" Overall value governance characteristics are conform the typology described by Gereffi et al. (2005) in its paper on governance typologies of value chains. Gereffi and his colleagues consider the presence of 5 governance typologies and the basis of the characteristics of transactions: Market, Modular value chains, Relational value chains, Captive value chains, and Hierarchy. Table 5.4 Indicator “Chain-based value governance”

Chain governance model Global chain Regional chain Local Chain Generic cured ham Parma Ham PDO Cinta Senese PDO

Market high low low Modular medium low absent Relational absent high high Captive high medium medium Hierarchy medium low absent

Source: our elaborations on Gerffi et al. (2005).

GLAMUR Report – Italian Case Study- Pork Chains –March 2015

The three chains do not present a single governance model since the each phase of the chain (breeding, slaughter and processing) present different networks, dynamics and governance strategies. Table 5.4 reproduces for the chain the intensity of each governance model in each chain. Regarding to the global chain the dominant governance models are the Market model and the Captive model. Both are present at farmers and processing level since is observed the lack of stability in trade relationships and the strong influences of larger buyer. Nevertheless, modular and hierarchy models are present for some ham processing companies. The regional chain is the most fragmented one since the three chains phase present own specificity in trade and quality relationships among chain members. The dominant governance model is the Relational model given the presence of complex interactions between buyers and sellers, which often creates mutual dependence and high levels of asset specificity. It should be noted the presence of Captive governance model due to the strong activity control by private certification body that act for guarantee quality to big retailer. Even in the Parma Ham PDO system other governance form are present, even if do not involve the majority of companies. Finally, the local chain present a dichotomy of governance model: the relational and the captive model. The first one is due mainly to the strong connections between the members of the chains between them and with their customers. This model involve mainly the old members of the Cinta Senese Chain. On the other hand, the “new” members adopt a strategy more close to the Captive model since they are dependent from market signal and larger buyers. Even so, a small part of pig producers sell their pig on the “free” market without any type of agreement. A graphical overview of the three indicators with difference in performance is described in Figure ***

GLAMUR Report – Italian Case Study- Pork Chains –March 2015

Figure 5.5 : Difference of performance of local, intermediate, global chains for “Chain Governance” attribute.

Global (Generic ham)

Trust based Intermediate (Parma Ham PDO) internal Local (Cinta Senese PDO) relationships 100

Trust based Self governance external capacity relationships

Note: all the measurement indicators have been linearly transformed on a 0-100 scale.

GLAMUR Report – Italian Case Study- Pork Chains –March 2015

5.4. Territoriality The “Association of the product with territory” dimension has been measured by three indicators. We fist considered the rural dimension, measuring the relevance of the farming system associated with each product on the territory. Therefore, we have measured the number of pig farms involved in the supply chain as a percentage of total farms with livestock in the territory. Unfortunately, this data was only available for Cinta Senese PDO and Parma Ham PDO supply chain, since no precise data or information is available on the farming system supplying the generic non-PDO ham production. The production chain of Parma Ham PDO involves 4,199 breeding farms located in ten Italian regions. The pigs bred in these farms were approximately 8 million in 2013 (IPQ, 2014)1. However, 70% of these farms are located in only ten provinces within four Italian Regions (Lombardia, Emilia-Romagna, Piedmont and Veneto), where 78% of the pigs are bred (Annex Table A1). On the other hand, the Cinta Senese production represents a small quota of the overall pig production in Tuscany. In fact only 81 pig farms are at the moment enrolled in the Cinta Senese Consortium (INEQ, 2014) and about 100-150 farms are breeding Cinta Senese pigs (Annex Table A2). The average size of the pig farms is much lower in the Cinta Senese PDO supply chain (average value of 46 pigs per farm, Annex Table A2), than in the Parma Ham PDO one (average value of 1,922 pigs per farm holding, Annex Table A1). These figures depict a completely different picture between these two supply chains: on the one hand, the Parma Ham PDO chain is mainly based on an industrial livestock production and an intensive animal farming, whereas the Cinta Senese PDO chain is mostly based on extensive livestock farming systems. Figure 1 shows that the percentage of farms with pigs on total farms with livestock on the territories (i.e. Italian provinces, NUTS 3 level) is much higher within the Parma Ham PDO supply chain (the blue bars) than for the Cinta Senese PDO one (the green ones).

1 It has to be considered that these pigs are supplying not only the Parma Ham PDO producers, but also those of the main other Italian PDO hams (i.e., San Daniele Ham PDO, Modena Ham PDO, Toscano Ham PDO, etc.).

GLAMUR Report – Italian Case Study- Pork Chains –March 2015

Figure 5.6: Indicator "Association of product with territory - Pig breeding importance", Pig farms on total farms with livestock within the territory (%) by territorial unit (Italian provinces, NUTS 3).

Parma Ham PDO 9,7% Verona 4,0% Modena 8,6% Pavia 9,7% Bergamo 2,9% Reggio Emilia 11,2% Lodi 25,9% Cuneo 9,1% Cremona 21,0% Mantova 17,5% Brescia 9,9% Cinta Senese PDO 0,8% Massa-Carrara 0,0% Siena 3,3% Prato 1,0% Pistoia 0,2% Pisa 0,8% Lucca 0,1% Livorno 0,5% Grosseto 0,6% Firenze 1,1% Arezzo 0,4% 0,0% 5,0% 10,0% 15,0% 20,0% 25,0% 30,0%

Note: Cinta Senese PDO provinces are displayed in green colour, Parma Ham PDO provinces in blue. Source: our elaborations on data of the 2010 Agriculture Census (ISTAT, 2010), INEQ (2014) and IPQ (2014).

On average, the score for the Parma Ham PDO supply chain shows that 9.7% of farms with livestock on the considered territory2 are breeding pigs within the PDO system (Table 2); nevertheless, some provinces score higher than this average value (e.g., Lodi 26%, Cremona 21%, Mantova 17.5%). In Tuscany the average score shows that only a very small share of farms with livestock is breeding Cinta Senese PDO pigs (0.8%), with only a peak in the Siena province (3.3%) (Table 2).

2 This is the average value of the first ten provinces within the PDO system in terms of pigs bred (i.e., Brescia, Mantova, Cremona, Cuneo, Lodi, Reggio Emilia, Bergamo, Pavia, Modena and Verona).

GLAMUR Report – Italian Case Study- Pork Chains –March 2015

Table 5.5: Indicator “Association of product with territory - Pig breeding importance” measured aspig farms on total farms with livestock in the territory (average value, %)

Supply chain Name Value Notes Global Generic cured ham Not available Foreign production

Regional Parma Ham PDO 9.7% Average value of the 10 more relevant provinces

Local Cinta Senese PDO 0.8% Average value of all provinces in Tuscany

Source: our elaborations on data of the 2010 Agriculture Census (ISTAT, 2010), INEQ (2014) and IPQ (2014).

We have then considered the industrial dimension of the “Association of the product with territory” indicator by measuring the relevance of the ham processing system associated with each product on the territory (Indicator "Association of product with territory - Pig meat processing importance"). Therefore, we have measured the number of pig meat processing industries involved in the supply chain as a percentage of total food industry in the territory. This index shows the relative importance of pig processing industries involved in the supply chain on total food industry. This data was available for the three considered supply chains. The production chain of Parma Ham PDO involves 150 processors (ham producers) within the Parma province, that have produced approximately 9 million hams in 2013. According to the estimations made by Giacomini et al. (2013a), the generic non-PDO ham producers, within the same territory, are 190 and are producing around 15 million hams every year. The Cinta Senese PDO processors within the traditional territory are 27.. Table 5.6 shows that the percentage of pig meat processing industries on total food industry on the territories is quite relevant for the global chain (15.7%) and for the regional one (12.4%), whilst is almost non significant for the local chain (0.7%). These data show the importance of the pig processing industry within the Parma territory, where both generic non-PDO hams and Parma Hams PDO are produced. This has been also demonstrated by other authors showing a high level of specialization in the territory, also in terms of employment in the meat sector on total manufacturing within the Parma territory (Giacomini et al. 2013b). On the other hand, these data show the almost non-significant role of the pig meat processing industry within the Tuscany territory (traditional territory of the Cinta Senese PDO), if compared to other food sectors.

GLAMUR Report – Italian Case Study- Pork Chains –March 2015

Table 5.6: Indicator “Association of product with territory - Pig meat processing importance”, measured as pig meat processing industries on total food industry in the territory (average value, %).

Supply chain Name Value Notes Global Generic cured ham 15.7% Based on estimates made by Giacomini et al (2013a)

Regional Parma Ham PDO 12.4%

Local Cinta Senese PDO 0.7% Average value of all provinces in Tuscany

Source: our elaborations on data of the 2011 Industry and Services Census (ISTAT, 2011), INEQ (2014), IPQ (2014) and Giacomini et al (2013a).

Finally, we have considered whether there is a link between the origin of raw material (e.g., fresh meat, feed) and the territory. This is measured with an ordinal scale based on qualitative evaluations considering the specific chain's features and the product specification applied. The case of the generic non-PDO hams chain shows a very weak territorial embeddedness, since genetics, pigs, feeds and raw legs come from all Europe and are only processed in the local production system of the Parma Ham PDO. This suggests a weak link of raw materials with the territory. For the Parma Ham PDO chain genetics, pigs and row legs come from other 10 Italian regions, and feed are purchased from different sources, included a large share of imports (e.g., soybean). Only the processing phase of hams is made within the traditional Parma territory. Therefore, we can conclude indicating in this case an intermediate link of raw materials with the territory. In the Cinta Senese PDO chain most of the inputs come from the region giving it a strictly rural dimension. This is especially true for the genetic material pigs and for feeds which, according to the product specification, have to be produced at least for 60% in Tuscany. Moreover, for this supply chain all the territorial dimensions are embedded in the local food chain: from the production of inputs to the consumption in local restaurant or local outlets. This shows a strong link of the supply chain with the territory. Table 5.7: Indicator “Association of product with territory” – Origin of raw materials “Is there a link between the origin of raw material (e.g. fresh meat, feed) and the territory?”.

Supply chain Name Value * Notes Global Generic cured ham Level 3 (weak link) No limits to the origin of raw material

Regional Parma Ham PDO Level 2 (intermediate link) Fresh meat from delimited area

Local Cinta Senese PDO Level 1 (strong link) Fresh meat and feed from delimited area

* Ordinal scale: level 1 (strong link with the territory), level 2 (intermediate link), and level 3 (weak link with the territory). Source: our elaborations.

GLAMUR Report – Italian Case Study- Pork Chains –March 2015

5.4.1. Indicator “Social cohesion and conviviality” The “Social cohesion and conviviality” dimension has been measured with two indicators. We fist considered the number and type of socio-cultural events favoured by the chain in the territory and then the number of visitors in these socio-cultural events in the territory. These cultural events organized around products representing a region, link together traditions, culture and gastronomic itineraries. We couldn't retrieve any socio-cultural event linked to the global chain, i.e. the generic cured ham. At least two main events have been found for the Parma Ham PDO case: the "Festival del Prosciutto di Parma" ("Parma Ham Festival") and the "Finestre Aperte" ("Open Windows") events. These two events are directly organised and sponsored by the Parma Ham PDO Consortium. The "Parma Ham Festival" presents a full calendar of events dedicated to gastronomy, entertainment and culture organized in the 13 municipalities within the traditional area of production of Parma Ham. According to the Parma Ham Consortium, about 70,000 people have participated in this event in 2013. Over 6,000 visitors have joined the “Open Windows” event where they could attend the processing of Parma Hams in selected ham factories. In Tuscany there are a number of festivals and fairs (named “sagre”) which focus on Cinta Senese as main product. We counted at least seven small town festivals that refers explicitly to Cinta Senese in their denomination3, but there are many others festivals and fairs where Cinta Senese products play an important role. However, it is impossible to determine the exact number of these events, since there is no an official census. These events are often organized by local communities (e.g., non-profit associations of citizens), mainly in small towns and mainly in the Siena province. In many cases, these small-scale events are capable of attracting only few hundred of visitors, mostly local people and tourists.

Table 5.8 Indicator “Social cohesion and conviviality” – Number of events measured as “Number of socio-cultural events in the territory”.

Supply chain Name Value Notes Global Generic cured ham 0

Regional Parma Ham PDO 2 " Parma Ham Festival " and " Open Windows "

Local Cinta Senese PDO 10 Small town festivals managed by local communities

Source: our elaborations on Consortium data and other local sources.

3 The festivals explicitly focused on the Cinta Senese are: Sagra della Cinta Senese e del Maiale Brado - San Casciano dei Bagni (Siena), Sagra della Cinta Senese a Celle sul Rigo (Siena), Sagra della Cinta Senese e maiale brado (San Casciano dei Bagni), Sagra della Cinta Senese – Ville di Corsano, Sagra dello Stringozzo alla Cinta – Buti (Pisa), Sagra del Maiale Cinto a Casole D'Elsa (Siena).

GLAMUR Report – Italian Case Study- Pork Chains –March 2015

Table 5.9 Indicator “Social cohesion and conviviality” – Number of visitors measured as Number of visitors in socio- cultural events in the territory”.

Supply chain Name Value Notes Global Generic cured ham 0

Regional Parma Ham PDO 76,000 Approximate number of participants

Local Cinta Senese PDO 6,000 Few hundred visitors for each festival

Source: our elaborations on Consortium data and other local sources.

Finally, two indicators were used to assess the “Links with local touristic activities”. We first considered whether there is a Gourmet Food and Wine Route involved in the territory related with the food chain, and then we assessed the percentage of farms within the territory involved in on- farm touristic activities, such as agri-tourism, food tasting, etc. There is no Gourmet Food and Wine Route dedicated to the global generic non-PDO cured ham. The Parma Ham product has a dedicated Gourmet Food and Wine Route named “Strada del Prosciutto e dei Vini dei Colli di Parma” (“Road of Ham and Wines of Parma Hills”) involved in the circuit “The Roads of Wines and Flavours” of the Emilia-Romagna region4. This itinerary covers the low hills crossed by vineyards and the foothills of the Apennines in the Southern part of the Parma province. The Road of Ham and Wine of the Parma Hills offers five different routes of taste among art, culture, nature and local products. For instance, in Langhirano, the center of the cured ham district, it is also possible to visit the Museum of Parma Ham and Charcuterie. Several castles, fortresses and strongholds of the ancient Duchy of Parma and Piacenza can also be visited on the route combining in this way the pleasure of food with art and history. In Tuscany there is a system of “Tuscan wine routes”, defined as “itineraries for the enjoyment of the wine, olive oil and good food of Tuscany” which are recognized by a Regional Law as integrated touristic local systems focused on a typical wine and/or other agri-food typical products5. There are 22 Gourmet Food and Wine Routes recognized in Tuscany. Even if there is not any typical product route focused on the Cinta Senese meat and salami, these products are an important part of the basket of goods promoted by many of these Routes, explicitly recalled in the basket of goods of 5 out of the 22 wine routes. The symbolic value that the Cinta Senese has for Tuscany is evidenced, for example, by the silhouette of an animal of this breed that has been adopted as emblem of the typical products of Tuscany in the recent edition of the “Salone del Gusto – Terra Madre”, organized by Slow Food.

4 The Roads of Wines and Flavours of Emilia Romagna: see http://strade.emilia-romagna.it/web/. 5 The Wine Roads of Tuscany Federation: see http://www.stradevinoditoscana.it/.

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Table 5.10: Indicator “Links with local touristic activities” – Gourmet and Wine Route measured by “Is there a Gourmet Food and Wine Route involved?”.

Supply chain Name Value * Notes Global Generic cured ham 0 (No)

Regional Parma Ham PDO 1 (Yes)

Local Cinta Senese PDO 1 (Yes)

Binary scale: 1 = yes, 0 = no. Source: our elaborations on Consortium data.

Unfortunately, it was not possible to gather data or information about the percentage of farms of the global chain involved in on-farm touristic activities. Similarly, very few information is available about the percentage of farms of the Parma Ham PDO chain involved in on-farm touristic activities. However, as noted before, the Parma Ham PDO chain is mainly based on intensive animal farming, which is not particularly suited for parallel touristic activities. Therefore, although some experiences of agri-tourisms managed next to the heavy pig breeding activities exist, these represent less than 10% of the overall number of breeding farms. On the other hand, the rearing of Cinta Senese pigs and in particular the processing of Cinta meats are very often linked to agri-touristics activities managed inside the same firm (recognized by a National and Regional Laws) and to other touristic activities managed by members of the family farm. In fact the extensive rearing method are compatible with on-farm tourism activities, and the Cinta Senese breed as its products (ham, salami and fresh meat) are important elements of attraction mainly in the hilly area in the center of Tuscany. In a sample of 57 farms enrolled in the Consortium of Cinta Senese PDO (out of the total 81 farms), 20 farms manage agri-tourism activities (35%), and 6 more managed food and wine tasting and/or didactic activities (10%). Thus, we can conclude that almost half of the Cinta Senese PDO farms are carrying out on-farm diversification activities in the field of tourism and hospitality.

Table 5.11: Indicator “Links with local touristic activities - On-farm touristic activities”, measured as % of farms involved in on-farm touristic activities (agri-tourism, food tasting, etc.).

Supply chain Name Value * Notes Global Generic cured ham Not available Foreign production

Regional Parma Ham PDO Level 3 (less than 10%)

Local Cinta Senese PDO Level 1 (more than 40%)

* Ordinal scale: level 1 (more than 40%), level 2 (from 10% - 40%), level 3 (less than 10%). Source: our elaborations on Consortium data and personal interviews with key stakeholders.

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5.4.2. Concluding remarks The attribute territoriality can take different forms and specificity in relation to the structure of the supply chain which directly influences some specific territorial elements. These have been shown by the seven indicators that we have considered (Figure 2). In the case of chains completely embedded in the territories (as is Cinta Senese PDO), most of the inputs (especially genetic material pigs and feeds – which have to be produced at least for 60% in Tuscany) come from the region of origin denoting a strong link with the territory. Although the Cinta Senese pig breeding and processing activities are not numerically relevant, as compared to other traditional food chains in Tuscany (e.g., olive oil, wines, cheese, beef, etc.), they represent a niche produce which is part of a strictly rural dimension. Thus, the “quality concept” is not only referred to the product characteristics, but consider also all the territorial dimensions that are included in the local food chain: from the production of inputs to the consumption in local restaurant or local outlets. The economic agents who benefit from this system are all the actors of the food chain: pig farmers, local trader, local butchers, local restaurants and local food shops.

Figure 5.6: Difference of performance of local, regional/intermediate, global chains for “Territoriality” attribute.

Note: all the measurement indicators have been linearly transformed on a 0-100 scale.

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In case of chains that are partially embedded in the territory, as is Parma Ham PDO, genetics, pigs and row legs come from other 10 Italian Regions. The product specification oblige PDO producers to process the hams within the traditional Parma territory. The specificities of this latter are set in the local environment characteristics, in the skills of workers in the ham curing phase and in the ability of PDO ham processing industries to develop efficient strategies in the marketing, individually or collectively. The economic agents that benefit from this system are mainly PDO ham companies and others companies which offer services to them (specific technical operations and logistics). The quantitative indicators combined demonstrate a high level of concentration and specialization of companies involved in the pork industry in the Parma territory, as also reported in other studies demonstrating the industrial district of Parma province (O’Reilly et al., 2003; Dentoni et al., 2012; Giacomini et al., 2013a, 2013b). Similarly, the farming stage is often based on an industrial livestock production and an intensive animal farming in the related territories. Others economic agents, as those involved in Gourmet Food and Wine Routes, benefit only indirectly from the efficiency of the PDO market and from reputation that PDO ham generate on the territory. The global generic cured ham represents a chain not at all embedded in the territory; genetics, pigs and row legs come from all Europe and are processed in the local production system of the PDO Parma Ham. The global chain takes advantage from the externalities of the Parma Ham PDO system. Their producers are mostly the same that are producing the PDO Hams and their strategies is to maximize the production capacity of their technical structures simultaneously following a strategy of scale and scope (Dentoni et al., 2012; Giacomini et al., 2013a). Who benefits from this specific chains are the global ham producers and the service companies which contribute to improve the efficiency of plant structures. Local pig farmers and economic agents involved in quality routes can have a negative feedback both in economic terms and in loss of reputation of the territory. By the contrary, the entire region can benefit only for the economic growth that the combination of PDO and global chains can generate in economic terms.

5.5. Resources use and pollution

5.5.1. Results

Three supply chains producing cured ham have been analysed comparing the global supply chains with local ones. In particular it concerns the production of generic global cured ham, PDO Parma Ham and the local supply chain of the Cinta Senese ham. Several studies concerning the environmenal impact of pigmeat supply chains have been carried out in the recent years. Williams et all (2006) have analyzed the environmental impact of pig meat in terms of tons of slaughter weight of four different supply chains: heavy pigs, indoor and outdoor breeding and conventional light pigs: GWP (Global Warning Potential) ranges from 6,080- 6,420 kg CO2-eq/t slaughter weight, nutrients or eutrophication potential 95-119 kg PO4-eq t slaughter weight, land use 6900-7500 m2/ t and 15.5-16.7 MJ/ t.

GLAMUR Report – Italian Case Study- Pork Chains –March 2015

In an other study Basset-Mens and Van der Werf (2005) use live weight as denominator instead of slaughter weight and obtain a GWP in a range of 2.3-3.5 kg CO2-eq/kg live weight, nutrients 0.021-0.017 kg PO4-eq/kg, 5.4-6.3 m2 of land occupation/kg and an energy consumption of 16-18 MJ/kg. Also Blonk et al (1997) use as functional unit the pig live weight obtaining the follows results: GWP 3.7 kg CO2-eq/ kg live weight, nutrients 0.018 kg PO4-eq/kg and energy consumption 16 MJ/ kg. Zhu-XueQin and Van Ierland (2004) adopted a different functional unit: t of protein and obtain in a conventional breeding system 2.3 kg CO2-eq/ t protein, 2,491 N-eq (eutrophication), land use 55 m2/t protein and energy consumption 397,252 MJ/t protein. In a more recent Danish study Nguyen et al (2011) obtain: 3.1-3.4 kg CO2-eq/ kg of pork delivered by the slaughterhouse. J.Y. Dourmad et al (2014) in a study on evaluating environmental impact of contrasting pig farming system they obtained for GWP values between 2.3-3.5 kg CO2-eq/kg live weight, nutrient: 0.016-0.034 kg PO4-eq /kg LW, CED 16-24 MJ/kg LW, land use 4.1-10.6 m2/kg LW. It must considered that it is very risky to compare directly different LCA studies as different functional units are used, different inputs, different methods and different allocations systems. So the data reported should not be compared with the results of the present study, but they can serve just to have an indication of the range of the impacts achieved. In this study the environmental impacts of cured ham production have been calculated: breeding, slaughtering, seasoning and retailing of the three chains: Generic cured ham, Parma Ham, Cinta Senese ham. The first two chains are fully realised and analysed in Italy. In the third supply chain (generic) the fresh hams are imported from the Netherlands and for the phase of breeding and slaughtering we have used data from a CML Dutch study. We have studied all the impacts generated throughout the various phases of production of the ham, from the breeding phase to the phase of slaughtering, seasoning and retail. We have calculate all impacts up to the sales of cured ham in the retail shop. In different phases of production we have considered the kg of live weight (breeding), the kg of carcass (slaughterhouse), the kg of cured ham (seasoning) and at the end kg of slice ham (retail). The impacts are based on the weight of the various products that come out of the different phased of production. Breeding: we have considered the live weight selecting only the inputs necessary for the production of the heavy pigs and ignoring all the inputs for other productions. Slaughterhouse: we have attributed all the impacts to the carcass mass (80% of live pig weight). Seasoning: we have attributed the impacts considering the fresh ham mass as carcass part (fresh uncured ham yield is 70% of the ham cut) , for retail we attributed the impact as part of cured ham really sold and consumed (slice yield is 55% of cured ham). We calculated the following impacts - Eutrophication (kg PO4-eq/UF) - Climate change, carbon foot print (CO2 eq/UF) - Consumption of fossil energy (MJ/UF) - Water footprint (m3/UF)

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- Land use (m2/year/UF)

These five environmental impacts have been calculated with the program SimaPro 8.0.3.; for the methodological approach and for the inventory phase see annex 1 chapter 13.1.

Livestock phase The environmental impact of the livestock phase of the three supply chains are reported in table 5.12 and in figure 5.7 The functional unit used for the breeding phase is 1 kg of pig live weight at farm gate.

Table 5.12 - Environmental impact of livestock phase

Environmental Unit/kg Cinta Senese Parma Light impacts L.W. pig pig pig Eutrophication kg PO4-eq 0.0285 0.0278 0.0249 Carbon foot print kg CO2-eq 3.55 3.92 2.24 Non renewable, fossil MJ 18.10 20.14 17.85 Water footprint m3 H2O 1.93 2.06 2.60 Land use m2/year 9.12 4.85 5.21 Figure 5.7– Comparison of the impacts of the livetsock phase(maximaal 100%)

Livestock (Live weight) 120,0%

100,0%

80,0%

60,0%

40,0%

20,0%

0,0% Eutrophication Carbon foot Energy demand Water footprint Land use print

Cinta Senese pig Parma pig Light pig

The livestock phase generates the highest environmental impacts. In particular, the duration of the fattening period, which differs significantly among the three production chains (about 15 months for the Cinta Senese pig, 9 months for the Parma pig and 6 months for the light pigt) influences significantly the results. The length of the growing cycle influences all impacts as a decisive factor for the production efficiency. Cinta Senese and Parma pigs have a higher eutrophication potential, probably depending on feed and to a lesser extend due to manure management; in the Cinta Senese pig the manure deposited by animals during grazing is not managed.

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From a eutrophication point of view, environmental impact per kg product may not be sufficient for making a fair decision. Cederberg (2002) suggests that assessment of eutrophication in animal production systems should be made both per unit product, but also per unit area.

Cinta Impact breeding system Unit Senese pig Parma pig Light pig Eutrophication g PO4/m2 3.13 5.74 4.77

By dividing the eutrophication for m2 of land occupation we obtain a quantity of PO4 eq, expressed in grams per m2. In this case we have a different situation where Cinta Senese has the best results regarding eutrophication.

In the case of greenhouse gas emissions the results between Parma and Cinta Senese is reversed. The breeding of the heavy Parma pigs requires a higher energy consumption then in the case of the Cinta Senese pig that also takes advantage of the resources of the forests. The much lower GHG emissions of the Dutch pigs are explained by the shorter length of the of the production cycle. For the energy demand impact category the Cinta Senese pig is approximately equal to the light pigs in the Netherlands, while the Parma pig has the highest impact, but in comparison to the other impacts the differences are less evident. Water consumption is higher for the Dutch light pigs, while the Cinta Senese pig has the lowest values. This depends mainly on the different water requirements of the feeds that make up the rations. Land use in Cinta Senese breeding included the pasture area (wood) and therefore it is higher in the Cinta Senese pig production. This area is quantified taking account of livestock density laid down in the PDO product specification of the Cinta Senese: 1,500 kg liveweight per hectare. We have not calculated an allocation between wood and pigs because they are marginal forests with insignificant timber production. This forest are in fact dedicated to pasture to make it productive. The small advantage of the Parma pig compared to the light pig can be explained by the different components of the feed ration: for example in the feed of the light pig tapioca is included, a crop that has a lower yield/ha compared with other components of the ration.

Slaughterhouse phase The functional unit at the end of the slaughterhouse phase is 1 kg carcass weight. A 80% slaughter yield has been hypothesized. Environmental impacts are shown in table 5.13 and in figure 5.8

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Table 5.13 - Environmental impact of slaughterhouse phases.

Environmental impacts Unit/kg Carcass Cinta Senese pig Parma pig Ligth pig Eutrophication PO4-eq 0.0360 0.0349 0.0311 Carbon foot print CO2-eq 4.63 5.05 2.86 Non renewabel, fossil MJ-eq 27.74 27.82 23.51 Water footprint H2O m3 2.45 2.71 3.24 Land use m2/year 11.48 6.13 6.52

Figure 5.6.1.2.1 – Comparison of the impacts of the slaughterhouse phase (maximaal 100%)

Slaughterhouse (carcass) 120,0%

100,0%

80,0%

60,0%

40,0%

20,0%

0,0% Eutrophication Carbon foot Energy demand Water footprint Land use print

Cinta Senese Parma Generic

The results after the slaughter phase reflect the results already obtained for the livestock phase except for the consumption of fossil energy equivalent where the Cinta Senese pigs equal the values of Parma pigs. In fact slaughtering of the Cinta Senese pigs takes place in small local slaughterhouses that are usually less energy efficient.

In the following graphs are showed the different impacts, after breeding and slaughterhouse phases, divided by feed, on farm and slaughterhouse. The impacts derived mainly from the feed production from in all the cases.

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GWP kg CO2/kg carcass Eutrophication kg PO4/kg carcass 4,00 0,04

3,00 0,03

2,00 0,02

1,00 0,01

0,00 0,00 Cinta pig Parma pig Light pig Cinta pig Parma pig Light pig

Feed On Farm Slaughterhouse Feed On Farm Slaughterhouse

CED MJ/kg carcass LU m2/year/kg carcass 25,00 12,00 20,00 10,00 8,00 15,00 6,00 10,00 4,00 5,00 2,00 0,00 0,00 Cinta pig Parma pig Light pig Cinta pig Parma pig Light pig

Feed On Farm Slaughterhouse Feed On Farm Slaughterhouse

WSI mc/kg carcass 4,00

3,00

2,00

1,00

0,00 Cinta pig Parma pig Light pig

Feed On Farm Slaughterhouse

When the feed is produced, there are environmental impacts from the fields, the processing and transport. The slaughter and the “On farm” stages are less significant, but the impacts from feed production can be seen to have a far greater impact.

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Seasoning phase The functional unit after the seasoning phase is 1 kg ham weight. A 70% cured ham yield has been hypothesized. Environmental impacts are shown in table 5.14 and figure 5.9

Table 5.14- Environmental impact of seasoning phases.

Environmental impacts Unit/kg Ham Cinta Senese Parma Generic Eutrophication PO4-eq 0.0525 0.0511 0.0457 Carbon foot print CO2-eq 7.68 8.56 5.41 Non renewabel, fossil MJ-eq 54.25 64.56 56.94 Water footprint H2O m3 4.89 5.48 6.07 Land use m2/year 16.49 8.85 9.40

Figure 5.9 – Comparison of the impacts of the seasoning phase (maximum is 100%)

Seasoning (ham) 120,0%

100,0%

80,0%

60,0%

40,0%

20,0%

0,0% Eutrophication Carbon foot Energy demand Water footprint Land use print

Cinta Parma Generic

The consumption of fossil energy equivalent returns higher in the Parma pig. The generic cured ham and the Cinta Senese ham have a production process with a much shorter maturation period than the Parma Ham (from a minimum of 6 months to a maximum of 12 months). This factor determines a longer stay of the hams in the various seasoning cells. The Cinta Senese energy demand impact ham is slightly lower than the light pig ham due to the transport (from the Netherland to Italy) of the fresh thighs at the sausage company.

Retail phase The functional unit in the retail phase is 1 kg of edible slice of ham. The average yield from the whole ham to ham slice is very low: 55%. Environmental impacts are shown in table 5.15 and in figure 5.10

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Table 5.15- Environmental impact of retail phases.

Environmental Unit/kg slice Cinta impacts ham Senese Parma Generic Eutrophication kg PO4-eq 0.0956 0.0931 0.0831 Carbon foot print kg CO2-eq 14.01 15.71 9.91 Non renewable, fossil MJ 99.35 119.54 104.70 Water footprint m3 H2O 8.91 10.03 11.06 Land use m2/year 29.99 16.09 17.10

Figure 5.10 – Comparison of the impacts of the retail phase (maximum 100%)

Retail (slice ham) 120,0%

100,0%

80,0%

60,0%

40,0%

20,0%

0,0% Eutrophication Carbon foot Energy demand Water footprint Land use print

Cinta Parma Generic

The results after this last step reflect the data obtained in the livetsock phase except for the consumption of fossil energy which is higher for the slice of ham of the generic light pig than in that of the Cinta Senese pig (less transport operations).

Impact in different phases In the following graphs (Figure 5.11, 5.12, 5.13) the share of the different impacts at the different production phases is shown.

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Figure 5.11 – Parma: comparisons of the different phases. Parma 120,0%

100,0%

80,0%

60,0%

40,0%

20,0%

0,0% PO4-eq CO2-eq MJ-eq H2O m3 m2/year

Livestock Slaughterhouse Seasonig Retail

Figure 5.12 – Cinta Senes: comparisons of the different phases. Cinta Senese 120,0%

100,0%

80,0%

60,0%

40,0%

20,0%

0,0% PO4-eq CO2-eq MJ-eq H2O m3 m2/year

Livestock Slaughterhouse Seasonig Retail

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Figure 5.13– Generic : comparisons of the different phases. Generic

120,0%

100,0%

80,0%

60,0%

40,0%

20,0%

0,0% PO4-eq CO2-eq MJ-eq H2O m3 m2/year

Livestock Slaughterhouse Seasonig Retail

In all cases the livestock phase is predominant in the eutrophication and land use impacts. Fote the livestock phase most relevant are eutrophication, the carbon foot print, the water foot print impacts and land use. The seasoning phase instead is very important for energy use. The phase of slaughter is relatively high for the Cinta Senese pig due to the small size of the local slaughterhouses.

5.5.2. Conclusion

A first important difference between the Cinta Senese, Parma Ham and Generic Ham chain regards the age at slaughtering of the pigs and hence the length of the period they live on the farm. In the Dutch cases the pigs are slaughtered at 6 months, while the Italian Cinta Senese pigs are slaughtered at about 15 months and the Parma pigs at least 9 months. As shown by the results of the LCA the feed given to the pigs has the major impact on the differences. Furthermore, if pigs are kept longer on the farm (i.e. the daily growth is lower) more feed will be administered per kg of meat. Another difference concerns how the pigs are housed. Pigs can be housed in stables as in pig farms of the Generic Cured Ham and Parma Ham chain. Pigs can however also be kept outdoors as is the case of the Italian Cinta Senese pigs that live outdoor and in the forests. This influences land use, feed and manure management.

Production efficiency, the energy intensity and the input of technical resources are crucial in the determining the emissions: with the same technical inputs, a higher productive performance permits to get significant reductions in emissions, because these are diluted on larger quantities of product. When we look at the subsequent phases of further processing of the ham only the

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Drawing up a kind sort of ranking starting from lowest impacts we have:

Eutrophication (by unit product): 1 Generic ham, 2 Parma, 3 Cinta Senese Eutrophication (by unit area): 1 Cinta Senese 2 Generic ham, 3 Parma. Climate change: 1 Generic ham, 2 Cinta Senese, 3 Parma Cumulate energy demand: 1 Cinta Senese, 2 Generic ham, 3 Parma Water footprint: 1 Cinta Senese, 2 Generic ham, 3 Parma Land use: 1 Parma, 2 Generic ham, 3 Cinta

The generic cured ham supply chain has the lowest environmental impact in terms of eutrophication and contribution to climate change, the local Cinta Senese pig chain is the best in saving water and use of energy and in the calculation by unit area, while the Parma Ham chain is the one that has the lowest land use. About the eutrophication if this impacts is calculated per unit area and not per product unit the Cinta Senese breeding get the best result.

The extensive livestock production like that of the the Cinta Senese occupies a larger area of land, but on the contrary allows for higher water savings and less consumption of fossil resources. The intensive livestock production (Parma pig and light pig) has usually better performances with benefits in the climate change, land use and eutrophication impacts.

5.6. Affordability

Indicator “Cured ham consumption” The price level that the product has for the final consumer is related to various conditions and factors influencing the value chain from farm to fork. The dynamics in pork meat consumption in Italy during the last decade is shown in Figure 5.14 In the considered period, the overall pork meat consumption increased by 8%, from 2,259 thousand tons in 2003 to 2,442 thousand tons in 2013. The per-capita apparent pork meat consumption in Italy ranges from a minimum of 38 kg/person to a maximum of 42 kg/person (average value 40.2 kg/person).

Figure 5.14 Dynamics in pork consumption in Italy, overall (.000 tons) and per-capita consumption (kg/person).

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Source: our elaborations on ISTAT and Eurostat data.

The main dynamics in Parma Ham PDO and generic ham consumption from 2007 to 2013 are shown in Figure 5.14. The consumption of Parma Ham PDO in Italy steadily stands upon the consumption of generic cured ham. However, it is quite evident that the gap between the consumption of the two products is variable, ranging from a maximum of 6,700 thousand tons in 2009 to a minimum of 4,700 tons in 2013. In fact, the Parma Ham PDO consumption declined by 5% since 2009, while generic ham consumption increased by 1% in the same period. Overall, the consumption of generic ham seems more stable than the consumption of Parma Ham PDO. The production of Cinta Senese cured ham is very limited, due to difficult production conditions and limited profitability. The production under PDO is even lower, because of strict rules on feeding and production and of related costs. Recall that the Cinta Senese PDO protects meat and not processed products, but Consortium developed a collective mark assuring consumers that fresh ham are PDO certified. There are not available data on Cinta Senese pork ham and salami consumption. Ham consumption can be estimated from the number of slaughtered certified PDO. On average in 2009- 2012 3.539 PDO pigs were slaughtered, and about 7.000 cured hams produced. The average weight of a Cinta Senese cured ham is about 8 – 9 kilos (bone included). Therefore, it is possible to estimate a Cinta Senese PDO ham annual production and consumption of approximately 600 q (60 tons). The average consumption of Parma Ham PDO is approximately 32 thousand tons, while the average consumption of generic cured ham is about 26.6 thousand tons.

Figure 5.15 Dynamics in pork consumption in Italy – domestic market Parma Ham and generic ham

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Dynamics in pork consumption - domestic market 35.000 8.000 32.881 32.837 32.037 32.130 32.156 7.000 31.471 31.168 6.000 30.000 5.000

27.037 26.884 26.765 4.000 26.530 26.155 26.527 26.437

3.000 (gap) Tons 25.000

2.000 Tons (overall consumption)(overall Tons

1.000

20.000 0 2007 2008 2009 2010 2011 2012 2013 Consumption gap PDO Parma ham Generic cured ham

Source: our elaborations on Parma Ham Consortium, Nielsen data.

Table 5.16: Cinta Senese estimated production and consumption 2009 2010 2011 2012 PDO certified heads 3,452 3,386 3,454 3,862

PDO ham Certified production (kg) 435,376 434,605 464,247 494,228

Hams produced (n.) 6,904 6,772 6,908 7,724

Estimated PDO cured hams (kg) 58,684 57,562 58,718 65,654

Source: our elaborations on Cinta Senese Consortium data.

Table 5.17: Indicator “Cured ham consumption”, tons. Supply chain Name Value Notes Global Generic cured ham 26.619 National representative retail survey (Nielsen data)

Regional Parma Ham PDO 32.097 National representative retail survey (Nielsen data)

Local Cinta Senese PDO 60 Estimated on the basis of production data

Source: our elaborations on Parma Ham Consortium, Cinta Senese Consortium, Nielsen data.

Indicator “Retail price in supermarket” Local food products are often perceived as more expensive than those provided through global supply chains. Figure 5.16 shows the average retail price in Italy of the Parma Ham PDO and generic cured ham. The dynamics reveal a higher average price of the Parma Ham PDO (on average 24.4 €/kg) and a lower price of the global generic cured ham (average price 18.2 €/kg).

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In this case, as also argued by Giacomini et al. (2013a), the global chain (i.e. the generic ham chain) seems more competitive because of a higher flexibility in the procurement of less expensive raw material (i.e. fresh hams), mostly imported (e.g., from Northern European countries like Germany and the Netherlands), and because of a shorter curing period and financial cycle, as well as absence of certification costs. Moreover, the larger companies involved in the production of generic hams achieve scale economies more than the Parma Ham PDO producers (Dentoni et al. 2012; Giacomini et al. 2013a), which allows global food chains to offer lower and more stable prices. It is also evident that the price gap between the two product is declining, from 7.1 €/kg in 2009 to 5.3 €/kg in 2013. It can be presumed that, as also shown by Figure 5.16, demand switched to the less expansive generic ham, which indeed experienced a more steady demand, strengthening firms’ interest in a product positioned in a lower price band (Giacomini et al. 2013a). From these considerations, the global food chain is more efficient and hence better at cutting down raw material costs in order to provide affordable prices to consumers.

Figure 5.16: Retail price in Italy, Parma Ham PDO and generic ham, domestic market (€/kg).

Source: our elaborations on Parma Ham Consortium, Nielsen data.

Due to its limited production and very high production costs, the Cinta Senese ham is not an everyday product, so it is hardly comparable with the other cured hams. The price of Cinta Senese ham is variable according to different marketing channels and selling types. The most expensive is the pre-sliced ham packaged in controlled atmosphere, sold in supermarkets at a price between 120 and 140 €/kg (increasing trend). Sliced Cinta Senese ham (not pre-packed) is sold in supermarkets (not very common) or gourmet groceries at a prices between 65 and 75 €/kg. Marketing of vacuum packaged pieces of ham or of whole hams is not very common. In these cases the price takes in account the non edible parts (25% of the total weight). In these cases the price may drop to 35 €/kg

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Table 5.18: Indicator “Retail price in supermarket”, €/kg. Supply chain Name Value Notes Global Generic cured ham 18.1 National representative retail survey (Nielsen)

Regional Parma Ham PDO 24.4 National representative retail survey (Nielsen)

Local Cinta Senese PDO 70.0 Based on direct retail observation

Source: our elaborations on Parma Ham Consortium, Nielsen data, direct retail observation.

Indicator “Consumers’ quality perception” Finally, we have considered the consumers’ quality perception of cured hams of the three chains in Italy. Recently, an on-line choice experiment was conducted on a sample of 250 Italian consumers to test for the relative importance of quality attributes of cured ham, by applying a multinomial logit model (Capelli et al., 2014). Although its sample was not fully representative of the Italian population, this study provides several important insights on consumer’s quality perception of Parma Ham PDO and generic non-PDO cured ham. In particular, the survey has shown a higher quality perception of the Parma Ham PDO as compared to the generic non-PDO ham. In particular, it was estimated that consumers in general are willing to pay and average 5.0 €/kg extra for the PDO labelled Parma Ham compared to the product without quality signals. This result is similar to the retail price gap shown in Figure 5.16. However, the study shows that consumers would appreciate an enhanced quality strategy by the Parma Ham PDO Consortium, for instance by means of a “High Quality – PDO label”; it was estimated that consumers would be willing to pay an extra 9.7 €/kg for the high quality PDO label compared to the generic non-PDO ham. These results suggest a low quality perception by consumers for the generic cured hams and an intermediate quality perception for the Parma Ham PDO. Although no surveys or experimental studies are available on the consumers’ quality perception and WTP for Cinta Senese PDO ham, we can argue from key stakeholders and experts interviews that the Cinta Senese PDO ham, mostly sold in local markets and restaurants, is perceived by consumers as a top quality product. This also justifies the extremely high market price of the product.

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Table 5.19: Indicator “Consumers’ perception”. Supply chain Name Value * Notes Global Generic cured ham 3 Based on secondary data (Capelli et al., 2014)

Regional Parma Ham PDO 2 Based on secondary data (Capelli et al., 2014)

Local Cinta Senese PDO 1 Based on secondary data (interviews)

* Ordinal scale: level 1 (high quality perception), level 2 (intermediate quality perception), and level 3 (low quality perception). Source: our elaborations on interviews and secondary data (Capelli et al., 2014).

Concluding remarks It is quite evident that the global food chain is more efficient and hence better at cutting down raw material costs in order to provide affordable prices to consumers. This is also shown by the quantity of generic cured hams consumed in Italy which, from 2009 to 2013, has increased by 1% whereas the Parma Ham PDO consumption declined by 5% in the same period. In this way, the gap between the consumption of the two products has gradually declined to the minimum of 4,700 tons in 2013. On the other hand, the Cinta Senese PDO ham is hardly comparable from this point of view with the other cured hams since, while carrying features of superior quality, it is sold on the market at extremely high price; therefore it is not affordable for all consumers, especially for low income consumers.

Figure 5.17: Difference of performance of local, regional, global chains for “Affordability” attribute.

Note: all the measurement indicators have been linearly transformed on a 0-100 scale (a higher value denotes a more “affordable” feature).

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6. Discussion on the research questions

6.1. Global-Local performance comparison (research question 1)

The following table synthezises the results of the comparison with regard to the six attribues analysed and contains the main conclusions of this study. For each attribute was then given a score, expressed by researchers on the basis of the mearuse performances on a three-level qualitative scale, on which was built a radar chart. In the next steps of the project a participatory evaluation by stakeholders involved in the three chains is planned.

Table 6.1 Performance profiles of Italian cured ham cases and synthetic evaluation (1: high; 2: intermediate); 3: low)

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Generic ham (global) Parma PDO (regional) Cinta S. PDO (local) VALUE ADDED Low value added, large Average value added is Very high added both at pig farms and large moderately high both at farm and at processing companies in cured ham farm and industry level. industry level which can production. Relatively low Allows the coexistence of be attributed to the market priced product which small and large processing having typical niche competes on the global companies within the market characteristics. relevant market of cured Parma Ham supply chain Very small volumes with a hams very high quality product meets high income consumers in Tuscany and adjacent regions Value added 3 2 1 Lower resilience. High High resilience, mainly High resilience in terms of RESILIENCE exposure to risk and low thanks to ham processing recovering from shocks opportunities for firms that are the core but intermediate in terms collaboration between actor in the chain, of search for new different phases of the characterized by a good equilibria. The chain. Disconnected from adaptation capacity performance is good in public and societal through learning and particular in terms of support. innovation. This diversification, satisfactory level of differentiation and resilience is largely intradiversity of chain obtained at the expenses of organizational pig breeders, who seems to configurations, allowing be the weak stage of the for risk-spreading. This chain. The ability to good performance mobilize public support is originates from a low a relevant feature. Two dimension and a low level interconnected factors of specialization of firms, helps chain resilience: the which on the other side Product designation of causes an intermediate origin link the product to performance in terms of the territory to one side adaptation capacity and and to consumers on the learning and innovation. other, and the strong The Product designation of governance system (Parma origin, even if it cover Ham consortium) that only the fresh meat, play a helps collaboration relevant role. between firms and interaction with other local stakeholders.

Resilience 3 1 1 CHAIN Coordination managed High coordination Good management activity GOVERNANCE only by chain members activities, mainly thanks to especially in the process of without a formal ham processor firms. They quality construction of the intervention of chain show a good capacity to PDO Product members. High flexibility cope with quality specifications, but which and indirect effect on the management, refers only to the fresh Parma PDO chain. technological innovations, meat and not to the cured marketing strategies and ham. Nowadays the supply political lobbying to chain suffer the action of institutional stakeholders. new members more

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This satisfactory level of vacated to market Cinta chain management senese meat instead the supporting the whole territory. The system got quality chain. the strong support of local Institutions that consider this model relevant for the rural area. Chain governance 3 1 2 TERRITORIALITY The chain is not embedded The code-of-practice in the territory. Raw forces PDO producers to The Cinta Senese PDO is materials om from all process the hams within completely embedded in Europe. It takes the traditional Parma the territories, since most advantage from the territory, but fresh meat of the inputs (including positive externalities of comes from 10 Italian feeds) come from the region of origin (Tuscany). the Parma Ham PDO regions (partially The “quality concept”, in system. Risk of loss of embedded). High reputation of the this case, is not only concentration of pig referred to the product territory. The region can meat industry in Parma. characteristics, but benefit for the economic High reputation benefits consider also all the growth (e.g., other actors (e.g., territorial dimensions that occupation). turistic operators are included in the local involved in Gourmet food chain: from the Food and Wine Routes) production of inputs to the consumption in local restaurant or local outlets Territoriality 3 2 1 RESOURCE USE Because of the higher The carbon footprint, the The Cinta Senese supply AND POLLUTION efficiency level in pig fossil energy consumption chain has the lowest production, the shorter life and the water footprint of consumption of fossil time of the pigs and the the Parma Ham supply energy and water, but the shorter seasoning period of chain are the worst of all highest use of land. The hams the generic cured three chains, because of carbon footprint is better hams chain has the best the lower production than in the Parma chain performance related to efficiency of heay pigs, the because of the shorter eutrophication and carbon extensive use of water on seasoning period of the footprint. farms and the high hams, but the level of electricity use during the eutrophication is the worst long seasoning process. of all three supply chains Land use instead is the lowest in the Parma chain Resource use and 2 3 1 pollution AFFORDABILITY The global chain is more The regional is inbetween The local chain is hardly efficient and hence in providing hams at comparable from this better at cutting down prices higher than generic point of view with the raw material costs in cured ham (+34%) but at other cured hams since, order to provide higher perceived quality. while carrying features However, these high affordable prices to of superior quality, it is prices are moving consumers. Low quality consumption from Parma sold on the market at perception of Ham to generic hams. extremely high price; consumers, but lower therefore it is not prices as compared to affordable for all

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Parma Ham. consumers, especially for low income consumers. Affordability 1 2 3

Figure 6.1.Overall evaluation of attributes for local, regional and global supply chain

Value added 100

60 Affordablity Resilience 40

Resource use and pollution Chain governance

Territoriality

Global (Generic ham) Intermediate (Parma Ham PDO) Local (Cinta Senese PDO)

The comparison of the three cured ham supply chains highlights the very low performance of the global ham supply chain, which is the worst one for all the 6 attirbutes excluded Affordability (1st position) and Resource use and pollution (2nd position). The globalization of the production process allows for a control of costs, obtained by means of economies of scale and not (only) by means of the worsening of environmental impcts of production, which anyway remain critical. At the local level of the processing phase (the Italian province of Parma and neighbouring provinces, trhe delolcalisation of super-intensive pig farming allows for an improvement of environmental impacts resulting in a greater social acceptability. The low level of value added per Kg is partly compensated by the large scale of production and processing. The low level of resilience is perhaps the most cirtical issue, even if some big processing enterprises operate on both generic ham and PDO Parma ham chains, obtaining in this way a good level of resilience at the enterprise level. On the other side there is the local chain, the Cinta senese PDP one, that seems to have the better performance. The low level of affordability is inherent to the identity of the product itself; at the same time is thanks to the high prices of the cured ham that it is possible to create an high value added and to remunerate actors involved a production process able to preserve a traditional, low-

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6.2. Global-local interactions (research question 3)

Global and local food chains interact at different levels. From our empirical analysis many points of contact between different logics (global and local) and different chains emerge.This is particularly clear when we consider resilience. Resilience of the Parma Ham PDO system is based non only to the strong link with the territory, but also on the existence of strong contact points with the generic cured ham chain. In fact many Parma Ham firms process both Parma and generic cured ham. In this way Parma Ham processing firms can work on multiple markets, characterized by different trends and exposed to different risks. In this time of economic crisis, this allows for some Parma Ham processors to diversify in a low-price market segment in order to recover the lost sales in the Parma Ham market (characterized by higher prices). The Generic Cured ham exploits the image of Parma Ham being the low cost alternative, but at the same produced primarily in the same production area. This interaction enables the generic cured ham to be sold at slightly higher prices than when this positive interaction with the territory would not have taken place, The implementation of individual and collective strategies allowing for a strong resilience may involve a transformation of the real identity of the Parma ham supply chain, that can lose some key features of localness. As a result, global and local logics coexists in the same chain. The local Cinta Senese chain influences in its turn the Parma Ham chain when some PH companies invest in small outdoor pig facilities in order to create an image of localness to their products.

6.3. Methodological reflections (research question 2)

The methodology was based on an integration between quantitative (indicators selection and measurement) and qualitative (mainly in-depth interviews) approaches, allowing for a better understanding of the cases.

However, some critical points emerged:

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- the three products are not perfect substitutes and they are characterized by different ways of consumption, in particular Cinta senese ham is a speciality food, while Parma and generic hams are daily products

- the different dimension and level of organization of the three chains entails a different availability of data. Cinta senese chian is characterized by a higher level of informality

- hybridities between different chians emerges, and inside each chain (Parma, generic and Cinta Senese hams) there are different models more or less inspired by a local or by a global approach. The three chains partly overlap

- participatory approaches had a secondary role and was applied only partially. The analysis relied on qualitative data collection by means of interviews and expert conclustions. Indicators were identifies thanks to an informed judgment. A very participatory approach ask too much time compared to that available for this research.

- the choice of indicators was restricted to the indicators available or quickly computable, being impossible to make long observations. In addition, some indicators should be measured for a long time in order to observe some supply chain attributes (like resilience)

- the differences in perfomances of the three chains cannot always be attributed directly and certainly to the global and local character, due to the presence of many “disturbance factors” impacting on attribute poerfoamnces but not being directly attributable to the local or local chacaracter of the chains.

- some indicators, like resilience, are multifacetted and complex. In this work resilience was decomposed in some key aspects, in order to give an empirically-based evaluation. For each of them one analytical indicator was built. Subsequently, synthetic and cross-cutting indicators were calculated in order to provide a general overview of the performance of the three chains in terms of resilience.

- there are interrelationships and contradictions between attributes at sector level (pig farming, slaughtering, ham processing) and at the whole supply chain level. This is for example the case of resilience. One sector can gain higher levels of resilience by transferring risks and losses to other weak sectors of the chain. This seems to be the case of the Parma Ham chain, where ham processors succeeded in transferring risks to farmers

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7. Annexes

7.1. Annex 1– Volatility indicators and Analytical indicators results

7.1.1. Prices volatility results

Results are presented according to the four stages: - Volatility of feed prices (concentrate and other) - Volatility of live pig prices - Volatility of fresh ham prices - Volatility of cured ham prices V.1 - Feed prices volatility Feed prices evolution measure a pressure from global markets on the pork system, and they cannot be interpreted per se as an indicator of system resilience. For Dutch light pigs and Italian heavy pigs the monthly average price of finishing feed is considered. For Cinta Senese, due to the small market and to the rule of the PDO Product specification which oblige to feed animals with at least 60% of feeds from Tuscany, the average price of national feed is not representative; we used instead the average price on local market of some ingredients for pigs feeding, that is barley, oat, maize and broad bean. Trends of feed prices are illustrated in the following graphs. Volatility indexes (coefficients of variation) shows that the local supply chain is the more exposed to feed volatility, probably due to the restrictiveness of the regional market, while the less exposed is the global one (Netherlands pigs production).

Average price of finishing pigs feed 500,00

400,00

300,00

/tons 200,00 € 100,00

0,00

jul-09 jul-10 jul-11 jul-12 jul-13

jan-09 jan-10 jan-11 jan-12 jan-13

oct-09 oct-10 oct-11 oct-12 oct-13

apr-12 apr-09 apr-10 apr-11 apr-13

Netherlands Italy

Source: CRPA / Interpig

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Raw materials for Cinta Senese feeding, prices on local market

300

250

/tonn. 200 €

150

set set set

lug lug lug

nov nov nov

mar mar mar

mag mag mag

gen-11 gen-12 gen-13

Maize Oat Barley Broad bean

Source: Chamber of Commerce of Siena

Volatility Index for feed prices Indicator V.1 Type of chain Volatility Notes index Years Coefficient of variation of Generic ham Av. price of finishing pigs monthly feed prices over 3 (global) 0.081 2011-13 feed (concentrates) years Parma PDO Av. price of finishing pigs (regional) 0.086 2011-13 feed (concentrates) Cinta S. PDO (local) Av. price of representative 0.099 2011-13 agricultural products for feed Source: our elaboration on CRPA and Chamber of Commerce of Siena

V.2 - Live pigs price volatility Trends of live pigs prices are illustrated in the following graphs. Data on light pigs are not available because there is a limited import of live animals from Northern Europe (global chain). According the interviewed farmers, Cinta Senese actual prices are more differentiated than the official ones surveyed by the Chamber of Commerce of Siena, depending on the rearing and feeding systems. Were reported prices up to 4 Euros per kilo for the pigs of better quality. The volatility (measured by the coefficient of variation, given by the ratio of mean and standard deviation of the current values of prices) is much lower for Cinta Senese than for Heavy Italian pigs for the production of Parma PDO, as illustrated by the following table.

Weekly pigs prices 156/176 kg - at farm gate 2,0

1,8

1,6

1,4

Euro/kg 1,2

1,0

1 3 5 7 9

27 31 11 13 15 17 19 21 23 25 29 33 35 37 39 41 43 45 47 49 51 2012 2013 2014

Source: Ismea

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Monthly Cinta Senese PDO live pigs prices - at farm gate 3,5

3,4

3,3

3,2

Euro/kg 3,1

3,0

ott

dic

giu lug set

feb

apr

nov

gen ago mar 2011 mag 2012 2013

Source: Chamber of Commerce of Siena

Volatility Index for live pigs prices Indicator V.2 Type of chain Volatility Years Notes index Coefficient of variation of Generic ham n.r. n.r. Light live pigs are imported monthly live pigs prices over (global) from NL: not relevant 3 years Parma PDO 0.103 2012-2013 Heavy live Italian pigs (regional) Cinta S. PDO (local) 0.013 2012-2013 Cinta Senese live pigs Source: our elaboration on CRPA and Chamber of Commerce of Siena

V.3 - Fresh ham price volatility Fresh ham prices are quoted officially for both heavy pigs (fresh hams for the production of Parma Ham and other PDO Italian cured hams) and other national pigs (non-PDO hams. Prices of fresh hams for PDO are systematically higher than those of the non-PDO, but the two volatilities are comparable over the period examined. Fresh ham prices are not quoted for Cinta Senese pigs, because there is no a market for fresh hams but only for pigs as whole; the volatility for Cinta Senese PDO fresh ham prices can be approximated by the price of live pigs..

Fresh ham prices 4,50 4,00

3,50 /kg

€ 3,00 2,50 2,00

Fresh ham for Parma PDO (11-13 kg) Fresh ham for generic ham (14 kg)

Source: our elaboration on CUN data

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Volatility Index for fresh ham prices Indicator V.3 Type of chain Volatility Years Notes index Coefficient of variation of Generic ham 0.053 06/2011 – Fresh ham for generic ham (14 monthly fresh ham prices (global) 12/2013 kg) over 30 months Parma PDO 0.051 06/2011 – Fresh ham for Parma PDO (regional) 12/2013 (11-13 kg) Cinta S. PDO (local) 0.013 2012-2013 Cinta Senese live pigs Source: our elaboration on CUN data

V.4 - Cured ham price volatility Cured ham prices are measured at the final stage of the supply chain, that is selling from producer to the final seller / distributor. According to our elaborations, volatility is higher in the global chain than in the regional one. It is not possible to calculate a price representative for the Cinta Senese cured ham at the final stage of the chain, because the high variability between marketing channels and also because of there is not really a wholesale market for this niche product.

Cured ham prices 12,00

10,00

/kg 8,00 € 6,00

4,00

set-11 set-12 set-13

lug-11 lug-12 lug-13

gen-11 gen-12 gen-13

nov-13 nov-11 nov-12

mar-11 mar-12 mar-13

mag-11 mag-12 mag-13

Cured Parma ham PDO, <16 months, 9-11 kg, from producer to final seller Generic cured ham, >9Kg, from producer to final seller

Source: our elaboration on Parma market data Volatility Index for cured ham prices Indicator V.4 Type of chain Volatility Years Notes index Coefficient of variation of Generic ham (global) 0.049 2011-2013 Generic cured ham, >8Kg, from monthly live pigs prices producer to final seller over 3 years Parma PDO (regional) 0.040 2011-2013 Cured Parma Ham PDO, <16 months, 9-11 kg, from producer to final seller Cinta S. PDO (local) N.A. N.A. N.A. Source: our elaboration on Parma market data

7.1.2. Pig farming analytical indicators results

A.1 and A.2- Farmers upstream integration

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As far as farmers upstream integration by ownership is concerned the following considerations can be made. The Dutch pig farmers raising light pigs often have a limited land area which are both pasture and arable land for the production of maize silage. Self production of feed on these farms is therefore negligible. The Italian heavy pig farms often dispose of some arable land for the production of cereals which is either sold on the market or used as self produced feed. Moreover many large pig farms do have their own feed mill and buy the raw materials directly on the market. In the Cinta Senese PDO chain many farmers feed their animals with its own products, but it is not possible to estimate the percentage of feed produced directly by farmers. The traditional rearing system was based on a seasonal pasture in the woods, and the Product specification imposed a maximum limit on the amount of feed that can be bought on the market: feed should be provided primarily by forests and pastures, and supplementary feeding is allowed up to a maximum of 2% of live weight, or 3% of live weight when adverse weather conditions occur. In addition, this supplementary feed shall for at least 60% be produced in Tuscany. What is happening, also in response to increasing prices of concentrate and other feed raw materials, is that many Cinta pig farmers are trying to produce on their own the feed. On the basis of our enquiries on a sample of 11 farmers, approximately 30% of Cinta Senese farmers self- produce the majority of feed they need. Another 40% buys raw materials for producing feed instead of concentrates.

Farmers upstream integration by ownership Indicator A.1 Cured ham chain Value Notes % of pig farmers which Generic ham 100% Expert consultation don’t self-produce the (global) majority of feed Parma PDO 90% Expert consultation (regional) Cinta S. PDO (local) 70% Sample of 11 Cinta Senese farmers Source: our findings Concerning the presence and extent of mid or long-term contractual arrangements, in Parma PDO chain Italian heavy pig farmers primarily buy their feed on the free market, except for those pig farmers which are part of an integrated company such as Veronesi-Montorsi group, Martini and other smaller companies. These companies represent about 12% of the market. Contractual arrangements are not spread in global supply chain. In Cinta Senese PDO system up to now there are not formal contractual arrangements between pig farmers and farmers growing cereals or oilseeds for animal feeding, but Cinta Senese consortium is trying to support the development of these kind of arrangements but up to now without tangible results. Farmers upstream integration by contractual arrangements Indicator A.2 Cured ham chain Ordinal scale Notes Part of pig farmers involved Generic ham 3 Expert consultation in mid-long term upstream (global) contractual arrangements Parma PDO 2 Expert consultation with animal feed producers (regional) Cinta S. PDO (local) 3 Expert consultation and direct interviews/focus group NOTE: level 1 (very high part of farmers is involved: in favour of resilience), level 2 Intermediate, level 3 (very small part is involved: unfavourable to resilience). Source: our findings

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A.3 - Farmers downstream integration As far farmers downstream integration is concerned, in the local chain (Cinta Senese) a number of farmers process their own pigs and produce cured ham and other cold cuts. This allows them a better control on prices and gain higher added value. On 58 farms of Cinta analyzed (out of a total of about 80 entered in PDO), 26 are engaged in processing and sale of Cinta Senese PDO meat products (45% of firms). However in terms of quantities the weight of products processed by farmers is much lower. In global and regional chains, downstream integration is pursued mainly by means of farmers’ cooperatives or producers organizations. Dutch pig farmers operate on the free market, even if one big cooperative (Vion) was created by a regional producers’ association. The large majoity of pig farmers operate on the free market in Italy too, however some producer organizations are able to concentrate supply and their role increased significantly in recent years. Organizations like OPAS, ASSICOM and ASSER aggregated in the national organization UNAPROS now represent about 10% of the market. Pig farmers delegate their market power to these organization which sell the pigs to slaughterhouses on behalf of their members. Due to lacking exhaustive quantitative data, downstream integration is evaluated by means of qualitative indicators based on a comparison between the three chains (scale from 1 = very high to 3 = very low or absent). Farmers downstream integration Indicator A.3 Cured ham chain Ordinal scale Notes Relevance of farmers downstream Generic ham (global) 3 Expert consultation integration Parma PDO (regional) 2 Expert consultation Cinta S. PDO (local) 2 Qualified sample of Cinta firms. NOTE: level 1 (a very high part of farmers develops downstream integration: in favour of resilience), level 2 Intermediate, and level 3 (very small part of farmers develops downstream integration). Source: our findings

A.4 - Farmers product diversification The Dutch light pig farmers are very specialized in pig rearing, so their product diversification is almost completely absent. The Italian heavy pig farmers may produce some cereals and maize silage on their arable land and sell these products on the market. Their share in the total receipts of the pig farm does not go beyond 10%. In the Cinta Senese chain the situation is very different. Traditionally, the rearing of Cinta Senese represent for farmers an integration of their income, although after year 2000 - because of the fame and commercial success of Cinta Senese ham, salami and other cold cuts – some farmers have specialized in Cinta Senese rearing making this their main activity. Even in these cases, firms must still comply with the rules established by the PDO Product specification, that is the maximum density of 1.500 kg of live weight per hectare and the limit of feed purchased in the market. The Cinta Senese pig farms are in most cases highly diversified and their income relies on many different activities than production of pigs. According to our enquiries on a sample of 11 farmers, approximately 47% of the total turnover deriving from farming comes from Cinta Senese pigs (value calculated on the basis of the price for live pigs). This high level of diversification is often due also to the fact that many farmers manage agritourism activities and other services activities,

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GLAMUR Report – Italian Case Study- Pork Chains –March 2015 and/or developed downstream integration, managing Cinta Senese meat processing activities and selling their products directly to consumers Farmers product diversification Indicator A.4 Cured ham chain Value Notes % of (light/ heavy/Cinta) Generic ham 100% Expert consultation pigs for ham production on (global) the total turnover of farm Parma PDO 90% Expert consultation (regional) Cinta S. PDO (local) 53% Sample of 11 Cinta Senese farmers. The value is calculated on the basis of the price for live pigs. Agritourism revenues are non considered in the total revenue. Source: our findings

A.5 - Farm-level resistance against price-volatility Added value is calculated taking the difference between farm gate, wholesale and retail prices and non-factor costs at each stage of the pork chain taking into account the valuation of the pig carcass from producer to consumer. For Dutch pig farms data refer to a representative sample of Dutch pig farms, source of data is Interpig (BPEX, 2013). For Italian pig farms source is the yearly bulletins of CRPA dedicated to the production costs of heavy pigs in Italy (CRPA, 2013), making reference to a representative sample of Italian pig farms, which are certified for the production of heavy pigs for the PDO Parma Ham value chain. Price volatility of the input and output markets of relevance for pork production, defined as the max delta added value per kg live weight per year over the period 2009-2013, points out a better performance of the global chain (0.10 €/kg added value delta) than the regional chain (0.13 €/kg). No data are available for Cinta Senese pig farmers for the years considered.

Farm-level resistance against price-volatility Indicator S-1 Cured ham chain Value Years Notes Maximum delta of added value per Generic ham (global) 0.10 2009/13 Interpig data kg live weight per year Parma PDO (regional) 0.13 2009/13 CRPA data Cinta S. PDO (local) n.a. 2009/13 Quantitative data not available Source: our calculations on Interpig and CRPA data. The interpretation of this delta is not easy, also due to the short period, but if we look at the components of value added in Parma Ham chain (see the graph) it seems that the trend of sale price of heavy pigs compensate the increasing trend in feed costs. The comparison between the trend of the added value of Dutch light pigs and Heavy pigs shows a greater variability of the value added of the Dutch live pigs not that of heavy pigs, even though the former has a smaller difference between the maximum and minimum values.

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Value added and its components per Kg of heavy pig ((€/kg live weight) 1,6 1,4 1,2 1 Sale price 0,8 Feed costs 0,6 Other non factor costs 0,4 Value added 0,2 0 2009 2010 2011 2012 2013

Source: CRPA Value added per kg of Dutch light pigs and Heavy pigs (€/kg live weight) 0,35 0,3 0,25

0,2 Dutch live pigs 0,15 Heavy pigs 0,1 0,05 0 2009 2010 2011 2012 2013 Source: CRPA

A.5 - Use of antibiotics The very high productive results of both Dutch light pigs and Italian heavy pigs raised in very large production units are supported by a significant use of antibiotics. In particular pigs until the age of 2 months are treated. According to an expert consultation of veterinarians there is no significant difference in the use of antibiotics between Dutch and Italian pig farms. Cinta Senese pig farms do not use or use antibiotics only to a very limited extent. This local autochtonous pig breed is rather resistant against diseases. Moreover, the pigs are raised in small to very small groups, where the sanitary pressure is quite low

Use of antibiotics in pig farms Indicator A.5 Cured ham chain Value Notes Use of antibiotics on pigs Generic ham (global) 3 Expert consultation Parma PDO (regional) 3 Expert consultation Cinta S. PDO (local) 1 Expert consultation NOTE: the ordinal scale is the following: level 1 (low use of antibiotics), level 2 Intermediate, and level 3 (high use of antibiotics).

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7.1.3. Slaughtering results

A.7 - Slaughterhouses/processors upstream integration Vertical integration for heavy Italian pigs tends to increase. After market crisis and price shocks a growing number of pig farmers adhere to agistment contracts proposed by downstream firms. As stated above these interest about 15% of the pigs marketed. This allows to the whole Parma Ham chain to increase resilience at one side, but introduces at the other side also unbalanced market relationships. In Cinta Senese supply chain, two important ham processing firms manage directly a pig farm. It is also common for ham processors to have ongoing relationships, though often not formal, with the farmers to secure animals fit their needs. Slaughterhouses/processors upstream integration Indicator A.7 Cured ham chain Ordinal scale Notes Part of Generic ham 3 There are no contracts between Dutch pig slaughterhouses/processors (global) farmers and Italian slaughterhouses. involved in pig farming and/or Expert consultation in long term contractual Parma PDO 2 Direct surveys and expert consultation arrangements (regional) Cinta S. PDO 1 Relevant both by ownership and by means of (local) long term arrangements (often informal) Direct survey and expert consultation NOTE: the ordinal scale is the following: level 1 (very high part of slaughterhouses/processors is involved: in favour of resilience), level 2 Intermediate, and level 3 (very small part is involved). Source: our findings

A.8 - Slaughterhouses downstream integration In Parma PDO supply chain downstream vertical integration is increasing, mainly by means direct ownership. According to a survey on 94 ham processors (out of 150 in the Parma district) representing the 55% of the PDO Parma cured ham production (Dentoni et al, 2012), 14 firms (14,9% out of the 94 interviewed) were vertically connected to upstream firms (both owners of a slaughterhouse and/or a pig farm). These 14 firms produce the 34,0% of the total PDO Parma cured ham production. The main reason for downstream integration of slaughterhouses is to increase their resilience by capturing the value added generated in the processing industry, as the value added of slaughterhouses is very limited. Moreover, slaughterhouses are economically highly vulnerable as they operate in between two highly volatile markets. Dutch slaughterhouses do not present significant degrees of downstream integration, also because most of the meat of light pigs is sold unprocessed and directly on the retail market In Cinta Senese PDO supply chain slaughterhouses are not specialized in Cinta Senese. There are not cases of downstream integration. Due to lacking exhaustive quantitative data, downstream integration is evaluated by means of qualitative indicators based on a comparison between the three chains (scale from 1 = very high to 3 = very low or absent).

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Slaughterhouses downstream integration Indicator A.8 Cured ham chain Ordinal scale Notes Relevance of slaughterhouses downstream Generic ham (global) 3 integration (qualitative) Parma PDO (regional) 2 Cinta S. PDO (local) 3 NOTE: the ordinal scale is the following: level 1 (a very high part of slaughterhouses develops downstream integration), level 2 Intermediate, and level 3 (very small part of slaughterhouses develops downstream integration). Source: our findings

A.9 - Slaughterhouses product diversification No quantitative official data are available on Dutch and Parma PDO district slaughterhouses, but in general they are very specialized firms and, also according to expert advice, their degree of diversification is very low. On the other side, pigs – and Cinta Senese pigs – represent only a small part of the activity of Tuscan slaughterhouses. In Tuscany the slaughtering phase is fragmented and there are not big firms unlike Emilia Romagna and other Northern Italian regions. Anyhow slaughtering firms in Tuscany don’t play a strategic role in the supply chain. Slaughterhouses product diversification Indicator A.9 Cured ham chain Value Notes Part of activity not linked to production of generic / Parma Generic ham (global) 3 Expert PDO / Cinta Senese ham on the total turnover of slaughtering consultation firms Parma PDO (regional) 3 Expert consultation Cinta S. PDO (local) 1 Expert consultation NOTE: the ordinal scale is the following: level 1 (high product diversification: in favour of resilience), level 2 Intermediate, and level 3 (very low product diversification). Source: our findings

7.1.4. Ham processing results

A.7 - Slaughterhouses/processors upstream integration The same than Slaughtering. A.10 - Processors product diversification On average, in the Parma Ham district the share of hams production on total production is higher for firms producing Parma Ham (60.1%) than for firms producing generic ham (50.5%) (see table below).

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Share of ham production on total production in Parma Ham district % of Parma Ham on total production (mean) 60,1% % of Parma Ham on total production (median) 68,0% % of Parma Ham on total production (std dev) 33,3% % of generic ham on total production (mean) 50,5% % of generic ham on total production (median) 46,2% % of generic ham on total production (std dev) 37,9% Source: Elaboration UNIPR on Parma Ham consortium and AUSL Out of 216 processors in the district of Parma Ham (year 2013), 178 were producing Parma Ham while 38 were specialized in the only production of generic ham. Out of the 178 firms producing Parma Ham PDO, in 23 cases Parma Ham production is marginal (<10%), while for a large part of firms Parma Ham is very important (51 out of 178 produced almost exclusively Parma) (see table below). Degree of specialization in the production of Parma Ham PDO Share of Parma Ham PDO on total production Number of firms % of firms 0 - 10% 23 12,9% 10% - 20% 10 5,6% 20% - 30% 11 6,2% 30% - 40% 10 5,6% 40% - 50% 9 5,1% 50% - 60% 14 7,9% 60% - 70% 13 7,3% 70% - 80% 14 7,9% 80% - 90% 23 12,9% 90% - 100% 51 28,7% Total 178 100,0% Source: Elaboration UNIPR on Parma Ham consortium and AUSL In the Cinta Senese supply chain, the PDO covers only fresh meat and not processed products, but the Cinta Senese Consortium has created a collective mark for ham and other cold cuts made from Cinta Senese PDO certified meats. In Cinta Senese supply chain the situation is very different, first of all because of, unlike that in Parma district, here processors transform the whole carcass producing not only cured ham but all types of meats: this allows for a first type of diversification. Secondly, we observe two distinct groups of processors:

- The first group consists of pig farmers who manage also meat processing, by means of a downstream integration: in this case normally the vast majority of the production is of Cinta Senese products, even if in some cases farmers breed also other kind of pigs. - The second group consists of firms (more or less) specialized in processing pigs meats. It’s a very composite group: together with some bigger industrial firms there are some artisanal firms, and also some small butchers shops. In this group the share of Cinta Senese processed products over the total turnover is low, but the contribution of Cinta Senese ham and other cold cuts is often very high because of they improve the perceived quality of the whole assortment of the firm.

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Processors product diversification Indicator A.10 Cured ham Value Notes chain Share of processing firms with a share of Generic ham 33.0% (generic / Parma PDO / Cinta Senese) (global) ham higher than 70% on the total Parma PDO 49.5% turnover of processing firms, on the total (regional) number of firms Cinta S. PDO 0% Due both to the fact that firms process also (local) meats different from the Cinta Senese one, whether over the Cinta ham also other Cinta cold cuts are produced. Source: our findings

A.11 – Processors marketing channels diversification Data on market diversification for Generic cured ham producers are not available. For Parma Ham, as far as marketing channels are concerned, a recent survey done by University of Parma on the Parma Consortium firms (94 respondents). On average, firms make 28% of sales with Supermarkets groups, 30% with traditional retailers, 3% wholesalers with and 40% in other ways (eg. direct channels, export, catering). Considering single firms data, 52% of firms depend for more than 66% from a single market channel out of the four considered. Number of processing firms with a share of turnover higher than 66% in one marketing channel Marketing Supermarkets Total Total firms Traders Whoelsalers Other channels chains firms not diversified interviewed Number of firms 13 9 0 27 49 94 In % 13,8% 9,6% 0,0% 28,7% 52.1% 100,0% Source: UNIPR Cinta Senese ham and other processed products are niche products, and they are sold on more fragmented marketing channels. Small producers, both integrated pig farmers and small processing firms, follows a range of marketing channels: direct selling (both on-farm and on farmers’ markets), local restaurants and butcher shops, consumer purchasing groups, delicatessen shops, and in some cases also supermarkets. The few bigger processors sell normally most of their Cinta products to supermarkets, but they keep also a distribution network directly managed.

Processors marketing channels diversification for cured ham Indicator A.11 Cured ham chain Value Notes Degree of market Generic ham (global) 1 Expert consultation diversification of ham Parma PDO (regional) 2 Based on quantitative data processors, in terms of Cinta S. PDO (local) 1 Data from direct survey and expert consultation marketing channels NOTE: the ordinal scale is the following: level 1 (high marketing channels diversification: in favour of resilience), level 2 Intermediate, and level 3 (very low marketing channels diversification). Source: our findings

A.12 – Processors geographical markets diversification Generic cured ham is produced almost exclusively from imported fresh hams. Most of the cured ham is sold on the domestic market, but a significant share is exported both to EU and non-EU

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GLAMUR Report – Italian Case Study- Pork Chains –March 2015 countries. On the retail market this product often enjoys and exploits the reputation of PDO Parma Ham. Parma Ham, thanks also to PDO and collective promotional efforts, is exported in many EU and non-EU countries and interest almost 30% of the total production. The main export countries are the USA, Germany and France. Cinta Senese ham is sold mainly in Tuscany and on niche channels in Northern regions of Italy. Some firms sell small quantities of ham on foreign markets, while important are sales made to foreign customers who spend their vacation in Tuscany. Processors geographical market diversification for cured ham Indicator A.12 Cured ham chain Value Notes Degree of market diversification of ham processors, in terms of Generic ham (global) 2 geographical markets Parma PDO (regional) 2 Cinta S. PDO (local) 3 NOTE: the ordinal scale is the following: level 1 (high geographical market diversification: in favour of resilience), level 2 Intermediate, and level 3 (very low geographical market diversification). Source: our findings

A.13 – Processors product differentiation In both regional (Parms PDO) and local (Cinta Senese) supply chains collective marks play a relevant role. In particular Parma PDO is very reputed on Italian and foreign markets, also thanks to promotion campaigns. On the other side Cinta Senese cured ham enjoys a collective trademark that link the cured ham production to the PDO on fresh Cinta Senese meat, guaranteeing consumers about the provenance and quality of the raw material. Cinta Senese ham is less known by consumers, and it suffers from the competition of labels which made a generic reference to the Cinta Senese breed. Generic ham differentiation is based only on individual trademarks and cannot count of an collective “umbrella” trademark. Large companies exploiting economies of scale are able to promote their company trademarks. Moreover, they enjoy the positive reputation of PDO Parma Ham. Product differentiation for cured ham Indicator A.13 Cured ham chain Value Notes Degree of product differentiation for cured ham by Generic ham (global) 2 means of collective labelling systems Parma PDO (regional) 1 Cinta S. PDO (local) 2 NOTE: the ordinal scale is the following: level 1 (high product differentiation: in favour of resilience), level 2 Intermediate, and level 3 (very low product differentiation). Source: our findings

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7.2. Annex 2 – Methodological approach used for LCA

The methodological approach adopted for each of the production chains is based on the data collection at some typical farms, slaughterhouses, ham curing companies and retailers which were representative of the different chains.

7.2.1. Parma pigs To choose the type of farm of heavy pigs for the production of Parma we have collected data from the recent CRP study that analyzed data from regional Nitrate Database (Emilia Romagna and Lombardia). These regions are highly representative of the pig population, in particular for the 64% and 89% for Italian pigs respectively.

For the Parma Ham supply chain we identified a typical farm size of 3,200 fattening pigs with a housing system with fully-slatted floors following the EU legislation.

In Figure 13.1.1 are included the main input data typical of the farm for the production of heavy pigs for the production of Parma Ham.

Figure 13.1.1 – Pig breeding farm for heavy pigs destined to Parma Ham

Region Parma Ham area Area plain n° animals (25-160 kg) 3 200 Starting weight [kg] 25 Final weight [kg] 160 Fattening period [d] 192 Period for the cleaning of the structures [d] 10 N* of cycles per year 1.8 Mortality [%] 3.3 Feed conversion index [kg feed / kg meat] 3.1 Meat production per year [t live weight] 925

Pig housing fully-slatted floor Crop area [ha] 58 Tyoe of crop Maize

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Feed extra needed [t/y] 2066 Slurry [t/y] 9444

In the case of fattening breeding the inputs of the piglets must also be considered. The calculation of the impact of the piglets have been obtained using methodology similar to the fattening breeding, (figure 13.1.2.

Figure 13.1.2 – Pig breeding farm for Parma piglets destined to Parma Ham

Region Parma Ham area Area Plain n° calving sows 128 n° pregnancy sows 473 n° weaning piglets (0-12 kg) 1370 n° weaning piglets (12-25 kg) 1155 n° growing sows 60 n° boars 13 Variable in the different phases (from Mortality [%] 9.9 to 1 %) Piglets per year, live weight [t(y] 241 In the box, fully slatted without Housing piglets defecation external passage and the storage pit In the box crate with storage pits and Housing farrowing sows removal slurry at end of cycle Fully slatted without defecation Housing growing adn pregnancy sows external passage and storage pit Crop area [ha] 21.4 Type of crop Maize Feed extra needed [t/y] 1003 Slurry [t/y] 5892

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The ration is a primary element for the assessment of environmental impacts of farming. In the table 13.1.3 are reported rations adopted in this farming system.

Figure 13.1.3 – Composition of the pig rations

amount Ration (%) composition [%] [kg/d]

Maize Barley Soy Supple- Bran Soy oil Whey meal meal meal ment

Piglets 0-12 kg 0.38 43.0 23.5 14.5 5.0 3.5 3.0 7.5 Piglets 12-25 kg 0,89 45,2 24,7 13,4 8 3,5 2,6 2,6 Pigs 25-50 kg 1,5 45.5 21.0 17.5 10.0 2.5 3.5 Pigs 50-100 kg 2,4 42.0 23.0 18.0 14.0 3.0 Pigs 100-160 kg 3,1 50.0 25.0 16.0 6.0 3.0 Pregnancy sows 2,3 30.8 29.0 14.2 24.5 1.5 Lactating sows 5,5 32.8 28.0 15.7 18.5 3.0 2.00 Boars 2,3 30,8 29 14,2 24,5 1,5

The feeding of pigs is based largely on maize. The 57.4% of maize was product in local farm: 21.4 ha of local production with a yield of 13 t/ha. We included the impact of maize milling. For the remaining part of the diet components consist of barley, soy, supplements etc. In the Figure 13.1.4 you find data for Electric consumption for pig and piglets, that have been collected in a CRPA research named “RE Sole”. Figure 13.1.4 – Electricity consumption for pigs and piglets

Electric consumptions Fattening pigs Piglets KWh/year/LU KWh/year/LU Feed milling 14.32 27.87 Feed distribution 61.31 20.14 Ventilation and heating 95.08 85.12 + 70.84 termic Slurry removal 10.01 8.4 Slurry treatment 10.06 6.03 Slurry distribution 31.08 19.35 Lighting 2.85 6.47

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Other input We have also considered: washing agents 0.17 kg/pig (CRPA data); packaging and others 0.18 kg/pig (CRPA data); transports (transport feed 50 km, transport piglets 70 km) and water consumption: pig: 10.347 m3/farm/year; piglets 6.863 m3/farmyear.

7.2.2. Cinta Senese pigs We identified a typical farm also for Cinta Senese pig, representative of the supply chain raised indoor/outdoor. We have chosen a typical farm: breeding confined indoors for lactating and weaning, breeding with commercial feed during growth and fattening, exclusive grazing in the forest in the final stage (four last months). Exclusive outdoor breeding with poor dietary supplementation or only indoor breeding can be ignored because is not conforming to the classic Cinta Senese pig production. According to the product specification of the breeding Cinta Senese pig: in outdoor breeding is allowed a maximum of 1,500 kg of liveweight per hectare. During the grazing additional feed is permitted with quantities not exceeding 2% of the live weight of the animal. Based on the data collected in the publications of the Tuscany Region about specific studies on Cinta Senese we opted for a breeding a closed cycle with 21 sows. In the Figure 13.1.5 5 are included the main input data

Figure 13.1.5 – Base data for the Cinta Sense pig farm

Region Tuscan Region Area Hill area n° calving sows 4 n° pregnancy sows 17 n° of weaning piglets [0-12 kg] 28 n° of weaning piglets [12-25 kg] 24 n° of weaning piglets [25- 50kg] 37 n° of fattening pigs [50-130 kg] 115 n° of grazing fattenig pigs [130-150 kg] 53 n° boars 2 Final weight [kg] 150 Fattening period [d] 448 Weaning mortality [%] 10 Feed conversion index [kg feed / kg meat from-to] 4.5-9.3

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Meat production per year [t live weight] 31.5

In cages with multiple storage Housing piglets pits below In the box crate with storage pits Housing farrowing sows and removal slurry at end of cycle Other pigs Outdoor breeding and grazing

In the Cinta Senese breeding the supplementary feed must derive at least 60% of the total weight coming to the geographical area of production. For these additions are allowed the following products: - Energy products: all grains, EN 8.7.2011 Official Journal of the European Union C 200/17 - Protein products: oil (with the exception of soy and derivatives) and all legumes grains, - Fibers: fodder, fruit and vegetables, cereal milling byproducts. It also allowed the use of vitamin and / or mineral. In Figure 13.1.6 is described the rations composition of Cinta Senese pig.

Figure 13.1.6 – Feed ration of the Cinta Senese pigs

amount Ration (%) composition [%] [kg/d]

Protein Rape Supple- Fava Maize Barley Bran peat oil ment bean

Piglets 0-12 kg 0.38 43.0 23.5 14.5 5.0 3.5 3.0 7.5 Piglets 12-25 kg 0,89 45,2 24,7 13,4 8 3,5 2,6 2,6 Pigs 25-50 kg 1,4 28.0 40.0 15.0 1.0 16.0 Pigs 50-130 kg 2,55 28.0 40.0 15.0 1.0 16.0 10 Pigs 130-150 kg (Acorns) Pregnancy sows 2,4 30.8 29.0 14.2 24.5 1.5 Lactating sows 5,1 32.8 28.0 15.7 18.5 3.0 2.00 Boars 2,4 30,8 29 14,2 24,5 1,5

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For the other input energy and more are estimating the same input for Parma in proportion to the size of the Parma in particular with a lower energy consumption farm outdoors livestock.

7.2.3. Emissions

For the ammonia emissions we used a methodology included in the calculation file for the NH3 manure management from EMEP/EEA emission inventory guidebook 2013 (http://www.eea.europa.eu/publications/emep-eea-guidebook-2013) For the nitrous oxide emissions we adopted the IPCC emission factor N-N2O 0.001 (indoor) and 0.02 N-N2O (grazing). N2O= N excreted x 0.001 (0.02 grazing) x 44/28

For the quantification of the enteric pig emissions CH4 (methane) we used the emission factors adopted in the Italian national inventory (1.5 kg CH4/pig/year).

For the manure/slurry management CH4 emissions we adopted the IPPC Tier 2 that it is included in the calculation tool CoolFarm, a software developed by the University of Aberdeen, Unilever and Sustainable Food Lab (http://www.coolfarmtool.org/CoolFarmTool.

The leaching from manure/slurry is included in the production of the feed where transportation and application of manure is included. Emissions of the application of surplus manure are allocated to the receiving crop (so; in our case it is not included because the receiving crop is no feed for the pigs).

7.2.4. Slaughtering for Parmapig and generic light pig

For the phase of slaughter data were collected at the Italcarni swine slaughterhouse in the Parma Ham central zone where pigs are slaughtered for Parma Ham and for the generic crude ham. Founded in 1987 Italcarni Sca is the leading company in Italy for meat pork butchering and processing. The activity of Italcarni covers the entire processing range : butchering, boning and portioning of fresh meats - offers of the various types of cuts - and the production of meat portions and products. Italcarni distributes its products throughout the entire Country and abroad; the main sales channels are Industry and Supermarkets. Italcarni is dedicated to innovation in terms of technologies and production processes, in order to protect consumers, collaborators and their work

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The slaughterhouse in 2013 slaughters about 750,000 pigs with 167 kg average heavy live; the carcass yield is about 80%. In the figure 13.1.7 the data collected in Italcarni Slaughterhous are reported

Figure 13.1.7 –Italcarni slaughterhouse data

Input Per Year Per Pig Electricity kWh 15,265,803 20,354 Natural gas m3 1,415,682 1,888 Tap water m3 200,163 0.267 Well water m3 200,096 0.267 Detergents kg 39,191 0.052 Kraft paper kg 421,608 0.562 Plastic kg 193,183 0.258 Disposable material kg 1,668 0.002 Pallet n° 2,517 0.003 Lubricating oil 2,355 0.003 Transport pig tkm 37,575 50

7.2.5. Slaughterhouse for Cinta Senese pig

For the Cinta Senese pig we have collected data at the slaughterhouse “Macelli di San Miniato Srl” located in the Cinta Senese area. This slaughterhouse is recognized and authorized to operate in accordance with the procedures of the specification for the DOP of Cinta Senese.

The slaughterhouse slaughters in 2013 about 750 Cinta Senese pigs with 120 kg average heavy live; carcass yield is about 80%. Figure 13.1.7 –San Miniato slaughterhouse data Input Per Year Per Pig Electricity kWh 250 0.33 Natural gas m3 4500 6 Tap water m3 540 0.72 Well water m3 1100 1.47 Detergents kg 40 0.053 Transport pig tkm 5400 7.2 Diesel fuel l 3000 4

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7.2.6. Ham factory for Parma and generic crude ham

After slaughtering, the fresh thighs are transported to the next stage for processing and seasoning at the ham factory. As a reference we used data from a ham company for the exclusive production of Parma Hams: Monica & Grasso S.p.A. work in the food industry currently produces about 90,000 hams per year, he works and seasonig exclusively prosciutto di Parma DOP. The data are obtained from average of nine years of data collection and derived from the Environmental Statement in May 2010 (figure 13.1.8).

Figure 13.1.8 –Monica&Grasso SpA company data – average of the last nine years Input Per kg of ham fresh Electricity kWh 1.29 Natural gas m3 0.114 Tap water m3 0.011 Detergents kg 0.0004 Packaging kg 0.0254 Sugna (fat) kg (greasing mix) 0.0049 Salt kg 0.0718 Transport fresh ham tkm 0.08

Weight of fresh hams: fresh hams trimmed, weight preferably ranges between 12 and 14 kilograms, must not in any case weighing under 10 kilograms (DOP). We have considered an average weight of 12.86 kg of fresh ham and a final weight at the end of seasoning of 9 kg with a weight loss of 30% during the seasoning

7.2.7. Generic crude ham seasoning

For transport we estimated a distance between the Dutch slaughterhouse and the Italian ham Company of 1,200 km. The generic cured ham you get with the conventional technique, based on dry salting, and seasoned (no more than 22 ° C) for a total production time of at least 7 months (hams smaller) or 9 months (weigh more than 8 kg). For the curing of ham generic calculations we considered a ham with weight of 8 (30% weight loss, fresh ham 11.43 kg). We have estimated nine months of seasoning with lower energy consumption by 25% and increased use of estimated amount of salt in 25% more compared to the Parma Ham processing.

7.2.8. Ham seasoning company for Cinta Senese The data for the curing of Cinta Senese ham derived from the Sapito srl company from Montaione (FI). That produces about 1500 hams per year (Figure 13.1.8). The 60% of the 1500 pig

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Figure 13.1.8 –Sapito srl company data Input Per kg fresh ham Electricity kWh 1.06 Tap water m3 0.075 Detergents kg 0.0004 Packaging kg 0.0254 Sugna (fat) kg (greasing mix) 0.0057 Salt kg 0.1143 Transport fresh ham tkm 0.04

7.2.9. Transport and retail At the end of the seasoning the product is transported to the sale. We considered impacts from transport and refrigeration. For transportation we estimated a medium transport in Italy. For Parma Ham we esstimated a transport of 400 km is approaching at a distance of distribution media in Italy. For generic ham , who is seasoned in many geographical areas, we estimated a transport medium of 200 km. For Cinta Senese ham which includes a distribution generally local a transport operation we estimated 100 km. For the impacts resulting from conservation of the ham in the refrigerator store we used the data from the Ecoinvent database; supermarket for Parma and Generic and small store for Cinta Senese.

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7.3. Annex 3 – Dataset for Attribute Territoriality

Table A1: Parma ham PDO farming system Pig farms on Pig farms within N. pigs within the N. pigs /farms Farms with Province Region farms with the PDO a PDO a within the PDO a livestock b livestock (%) Brescia Lombardia 545 1,267,264 2,325 5,524 9.9% Mantova Lombardia 448 1,178,149 2,630 2,557 17.5% Cremona Lombardia 338 999,329 2,957 1,613 21.0% Cuneo Piemonte 672 922,795 1,373 7,363 9.1% Lodi Lombardia 158 424,026 2,684 610 25.9% Emilia- Reggio Emilia 235 365,633 1,556 2,099 11.2% Romagna Bergamo Lombardia 104 317,925 3,057 3,632 2.9% Pavia Lombardia 94 279,149 2,970 968 9.7% Emilia- Modena 186 256,353 1,378 2,151 8.6% Romagna Verona Veneto 142 255,776 1,801 3,574 4.0% Total 10 2,922 6,266,399 2,145 30,091 9.7% provinces* Other Italian 1,277 1,805,327 1,414 187,358 - provinces Total Italy 4,199 8,071,726 1,922 217,449 -

* first 10 provinces within the PDO system in terms of pigs bred. Sources: our elaborations on data of a) the IPQ (2014) and b) the 2010 Agriculture Census (ISTAT, 2010).

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Table A2: Cinta Senese PDO farming system Pig farms on Pig farms within N. pigs within the N. pigs /farms Farms with Province Region farms with the PDO a PDO a within the PDO a livestock b livestock (%) Arezzo Tuscany 5 336 67 1,308 0.4% Firenze Tuscany 14 623 45 1,294 1.1% Grosseto Tuscany 13 581 45 2,182 0.6% Livorno Tuscany 2 86 43 384 0.5% Lucca Tuscany 1 43 43 1,197 0.1% Pisa Tuscany 8 367 46 959 0.8% Pistoia Tuscany 1 43 43 442 0.2% Prato Tuscany 2 86 43 196 1.0% Siena Tuscany 35 1,546 44 1,051 3.3% Massa-Carrara Tuscany 0 0 0 887 0.0% Total 81 3,709 46 9,900 0.8% Sources: our elaborations on data of a) the INEQ (2014) and b) the 2010 Agriculture Census (ISTAT, 2010).

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Table A3: Parma ham PDO ham processing industry Parma PDO Generic ham Parma PDO Generic ham processing processing Province Region processing processing Food Industry c industries on food industries on food industries a industries b industry (%) industry (%) Emilia- Parma 150 190 1,209 12.4% 15.7% Romagna Sources: our elaborations on data of a) the IPQ (2014), b) Giacomini et al. (2013a) ,and c) the 2011 Industry and Services Census (ISTAT, 2011).

Table A4: Cinta Senese PDO ham processing industry. Cinta Senese PDO Province Region Cinta Senese PDO a Food Industry b processing industries on food industry (%) Arezzo Tuscany 5 355 1.4% Firenze Tuscany 6 773 0.8% Grosseto Tuscany 1 330 0.3% Livorno Tuscany 1 362 0.3% Lucca Tuscany 0 412 0.0% Pisa Tuscany 2 338 0.6% Pistoia Tuscany 3 333 0.9% Prato Tuscany 0 203 0.0% Siena Tuscany 9 341 2.6% Massa-Carrara Tuscany 0 253 0.0% Total 27 3,700 0.7% Sources: our elaborations on data of a) the INEQ (2014), and b) the 2011 Industry and Services Census (ISTAT, 2011).

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8. References

(Cumulate energy demand) Frischknecht, R.; Jungbluth, N.; Althaus, H.J.; Doka, G.; Dones, R.; Hischier, R.; Hellweg, S.; Humbert, S.; Margni, M.; Nemecek, T.; Spielmann, M. 2007. Implementation of Life Cycle Impact Assessment Methods: Data v2.0. ecoinvent report No. 3, Swiss centre for Life Cycle Inventories, Dübendorf, Switzerland. (Eutrophication) General programme instructions date 2013-09-18 General programme instructions for the international EPD® System 2.0. (ReCiPe) Goedkoop, M.J.; Heijungs, R.; Huijbregts, M.A.J.; De Schryver, A.M.; Struijs, J.; Van Zelm, R. 2009. ReCiPe 2008: A life cycle impact assessment method which comprises harmonised category indicators at the midpoint and the endpoint level; First edition Report I: Characterisation. 6 January 2009, http://www.lcia-recipe.net. (Water foot print) Hoekstra AY, Mekonnen MM, Chapagain AK, Mathews RE, Richter BD (2012) Global Monthly Water Scarcity: Blue Water Footprints versus Blue Water Availability. PLoS ONE 7(2): e32688. doi:10.1371/journal.pone.0032688. Arfini, F., & Capelli, M. G. (2009). The resilient character of PDO/PGI products in dynamic food markets. Paper prepared for presentation at the 113th EAAE Seminar “A resilient European food industry and food chain in a challenging world”, Chania, Crete, Greece, September 3 - 6, 2009. Arfini, F., Mora, C. (1997). Typical products and local development: the case of Parma area. In: Arfini, F., Mora, C. (Eds.), Typical and traditional productions: Rural effect and agro-industrial problems. Proceedings 52nd EAAE Seminar, Parma, Italy. Basset-Mens, C., Van der Werf, H.M.G., 2005. Scenario-based environmental assessment of farming systems: the case of pig production in France. Agriculture, Ecosystems and Environment 105, 127–144. Becchetti, L., De Panizza, A., Oropallo, F. (2007). Role of Industrial District Externalities in Export and Value-added Performance: Evidence from the Population of Italian Firms. Regional Studies, 41(5), pp. 601– 621. Belletti G., Marescotti A. (2010), Il distretto rurale. In: Pacciani A., Toccaceli D. (eds), Le nuove frontiere dello sviluppo rurale: l'agricoltura grossetana tra filiere e territorio, Franco Angeli, Milano. Blonk, H., Lafleur, M., Van Zeijts, H., 1997. Towards an environmental infrastructure of the Dutch food industry: exploring the information conversion of five food commodities. Amsterdam, The Netherlands IVAM Environmental Research. University of Amsterdam. Capelli, M.G. 2014. Indicazioni Geografiche, Strategie di Differenziazione e Politiche per il Consumatore. Phd Thesis, Department of Economics, University of Parma Capelli M.G., Menozzi D., Arfini, F. (2014). Consumer willingness to pay for food quality labels: evaluating the Prosciutto di Parma PDO quality differentiation strategy. XIVth EAAE Congress Agri-Food and Rural Innovations for Healthier Societies. Ljubljana, August 26th – 29th, 2014. Cederberg C. 2002. Life Cycle Assessment (LCA) of Animal Production. Doctoral thesis, Dept of Applied Environmental Science, Göteborg University, Sweden.

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Cinta Senese (Regolamento (CE) N. 510/2006 del consiglio «Cinta Senese» N. CE: IT-PDO-0005-0491- 6.09.2005 DOP ( X ) IGP). Darnhofer, I. (2014). Resilience and why it matters for farm management. European Review of Agricultural Economics. Vol. 41(3), 461-484 Dentoni D., Menozzi D., Capelli M.G.(2012), Group heterogeneity and cooperation on the geographical indication regulation: The case of the “Prosciutto di Parma” Consortium, Food Policy, vol 37(3), pp. 207-216 Ecoinvent, 2014. Ecoinvent Database v3. Swiss Centre for Life Cycle Inventories, Dübendorf, Switzerland. EFFP (2009), New ways of working towards a resilient pork supply chain, London FAO, IFAD, IMF,OECD, UNCTAD, WFP, the World Bank, the WTO, IFPRI and the UN HLTF (2011), Price Volatility in Food and Agricultural Markets: Policy Responses, Policy Report Franci O. (2004), La Cinta Senese, gestione attuale di una razza antica, ARSIA – Regione Toscana, Firenze Franci O., Crovetti A., Esposito S., Sirtori F. (2011), La realtà della Cinta Senese,in: Regione Toscana (2011), “Il progetto europeo QUBIC attualità e prospettive della razza suina Cinta Senese”, Pacini Editore, pp. 21-48 Giacomini, C., Arfini, F., & Menozzi, D. (2010). Processi di qualificazione e spillovers: il caso del Prosciutto di Parma Dop. QA Rivista dell’Associazione Rossi-Doria, 3/2010, pp.55-80. Giacomini, C., Arfini, F., Menozzi, D. (2013a). Qualification and spillover effects for geographical indications: the case of Prosciutto di Parma PDO. Revista de la Facultad de Agronomìa, La Plata 112 (SIAL), 11-22. Giacomini, C., Mora, C., Menozzi, D. (2013b). Applying the concept of industrial district to companies active in the processing of pig meat in Emilia-Romagna. Sviluppo Locale, XVI, 40, pp. 19-46. Guinée, J.B.; Gorrée, M.; Heijungs, R.; Huppes, G.; Kleijn, R.; Koning, A. de; Oers, L. van; Wegener Sleeswijk, A.; Suh, S.; Udo de Haes, H.A.; Bruijn, H. de; Duin, R. van; Huijbregts, M.A.J. 2002. Handbook on life cycle assessment. Operational guide to the ISO standards. Part III: Scientific background. Kluwer Academic Publishers, ISBN 1-4020-0228-9, Dordrecht, 692 pp. Huijbregts, M.A.J.; Breedveld L.; Huppes, G.; De Koning, A.; Van Oers, L.; Suh, S. 2003. Normalisation figures for environmental life-cycle assessment: The Netherlands (1997/1998), Western Europe (1995) and the World (1990 and 1995). Journal of Cleaner Production 11 (7): 737-748. IPCC (2007) Intergovernmental Panel on Climate Change. 2007. IPCC Fourth Assessment Report. The Physical Science. IPCC, 2006. Egglestone, S., Buendia, L., Miwa, K., Ngara, T., Tanabe, K. (Eds.). In: Guidelines for National Greenhouse Gas Inventory, Volume 4, Chapter 10. Prepared by the National Greenhouse Gas Inventories Programme. Institute for Global Environmental Strategies, Hayama, Japan. ISO, 2006. Environmental Management – Life cycle Assessment – Principles and Framework. EN ISO 14040, Brussels, Belgium. ISTAT (2010). Data warehouse of the 6th Agricultural Census 2010, Available at http://dati- censimentoagricoltura.istat.it/ ISTAT (2011). Data warehouse of the 9th Industry and Services Census 2011, Available at http://dati- censimentoindustriaeservizi.istat.it/

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J.Y Dourmad, J. Ryschawy, T. Trousson, M. Bonneau, J. Gonzalez, H.W. J. Houwers, M. Hviid, C. Zimmer, T. L. T. Nguyen, L. Morgensen 2014. Evaluating environmental impact of contrasting pig farming system with life cycle assessment (Animal 2014 8:12 pp 2027-2037). Leat, P. M., & Revoredo-Giha, C. (2013). In search of differentiation and the creation of value: the quest of the Scottish pig supply chain. British Food Journal, 115(10), 1487-1504. Leat, P., & Revoredo-Giha, C. (2013). Risk and resilience in agri-food supply chains: the case of the ASDA PorkLink supply chain in Scotland. Supply Chain Management: An International Journal, 18(2), 219-231. Mancini, M.C. (2003). Le produzioni alimentari tipiche. L’impatto economico e organizzativo della normativa europea. Monte Università Parma, Parma, Italy. Mancini, M.C. (2012). Protected Designation of Origin: an instrument of consumer protection? The case of Parma Ham. Progress in Nutrition 14 (3), 161-176. Marchal P, Wallian L, Groussard P. Evaluation d’un systeme de separation feces-urines en elevage porcineinfluence des choix technologiques sur la composition des produits. Journées Recherche Porcine en France 1995;27:3518. Mora C., Mori S. (1995), Sulle tracce dei distretti agroindustriali: un caso di studio, La Questione Agraria, 59, pp. 157-185 Nguyen T. L. T. Hermansen J. E.Mogensen L. 2011. Environmental assessment of Danish Pork. Internal Report, Faculty of Agricultural Sciences, Aarhus University, Aarhus, Denmark. 34 pp. 2011. Environmental assessment of Danish Pork. Internal Report, Faculty of Agricultural Sciences, Aarhus University, Aarhus, Denmark. O’Reilly, S., Haines, M., Arfini, F. (2003). Food SME networks: process and governance. the case of Parma ham. Journal on Chain and Network Science 3, 21–32. Oreste Franci 2004 La Cinta Senese Gestione attuale di una razza antica (Arsia Regione Toscana). Piewthongngam, K., Vijitnopparat, P., Pathumnakul, S., Chumpatong, S., & Duangjinda, M. (2014). System dynamics modelling of an integrated pig production supply chain. Biosystems Engineering, 127, 24-40. Porter, M.E. and Ketels, C. (2009). Clusters and industrial districts: common roots, different perspectives. In Becattini, G., Bellandi, M. and L. De Propris (eds.), The Handbook of Industrial Districts, 172-183. Cheltenham, UK: Edward Elgar. Prosciutto di Parma Denominazione di origine protetta (Disciplinare Generale e Dossier di cui all'articolo 4 del Regolamento CEE n° 2081/92 del Consiglio del 14 luglio 1992). Prosciutto di Parma PDO Consortium, 2013. Economic figures. (Accessed 28.10.2014). Regione Toscana (ed.) (2011), Il progetto europeo QUBIC: attualità e prospettive della razza suina Cinta Senese, research report of the projet “QUBIC. Animal breeding - Quality Biodiversity Innovation Competitiveness” funded within the MED transnational programme of European territorial cooperation (2007-2011). Richner W., Oberholzer H.R., Freiermuth R., Huguenin O. & Walter U. (2006) Modell zur Beurteilung des Nitratauswaschungspotenzials in Okobilanzen -SLACA Nitrat, Agroscope Reckenholz – Tanikon Art, 25p Serhiy Y. Ponomarov, Mary C. Holcomb, (2009) "Understanding the concept of supply chain resilience", The International Journal of Logistics Management, Vol. 20 Iss: 1, pp.124 – 143

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Sforzi F., Mancini MC. (2012), The Reinterpretation of the Agri-Food System and Its Spatial Dynamics through the Industrial District. Agricultural Economics - Zemědělská ekonomika 58 (11): 510–519. Sleeswijk, A.W.; van Oers, L.F.; Guinée, J.B.; Huijbregts, M.A.J. 2007. Normalization in product life cycle assessment: An LCA of the global and European economic systems in the year 2000. Sci Total Environ 390 (1):227-240. Soldevila, V. (2010). Pork Value Chains: A Comparison of Catalonia, Spain and Manitoba, Canada. Soldevila, V., Viladomiu, L., & Frances, G. (2009). Catalonian pork value chain’s resilience: ready for environmental challenge?. Paper prepared for presentation at the 113th EAAE Seminar “A resilient European food industry and food chain in a challenging world”, Chania, Crete, Greece, September 3 - 6, 2009. Van der Werf, GR, Morton, DC, DeFries, RS, Olivier, JGJ, Kasibhatla, PS, Jackson, RB, Collatz, GJ, Randerson, JT: CO2 emissions from forest loss, Nature Geoscience, 2, doi:10.1038/ngeo671, 2009. Vandecandelaere, E., Arfini, F., Belletti, G., & Marescotti, A. (2010). Linking People, Place and products. A guide for promoting quality linked to geographical origin and sustainable geographical indications (pp. 1- 220). FAO. Visciaveo M, Rosa F. (2012), Volatilità dei prezzi agricoli: un confronto fra prodotti e paesi dell'UE, Agriregionieuropa anno 8 n°31, Dic 2012 Vlajic, J. V., Van der Vorst, J. G., & Haijema, R. (2012). A framework for designing robust food supply chains. International Journal of Production Economics, 137(1), 176-189. Vlajic, J. V., van Lokven, S. W., Haijema, R., & van der Vorst, J. G. (2013). Using vulnerability performance indicators to attain food supply chain robustness. Production Planning & Control, 24(8-9), 785- 799. Walker, B., C.S. Holling, S. Carpenter, and A.Kinzig (2004). Resilience, adaptability and transformability in social-ecological systems. Ecology and Society9(2): 5. http://www.ecologyandsociety.org/vol9/iss2/art5 Williams, A.G., Audsley, E., Sandars, D.L., 2006. Determining the environmental burdens and resource use in the production of agricultural and horticultural commodities. Main Report Defra Research Project ISO205, Bedford: Cranfield University and Defra. Xueqin Zhu, Ekko C van Ierland (2004) Protein Chains and Environmental Pressures: A Comparison of Pork and Novel Protein Foods (Environmental Sciences volume 1 p254-276).

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8.1.1. List of the main sources

Reference Description Data available CINTA SENESE Disciplinare di produzione della Cinta Senese Production Regulations: shows the standards which must be met to obtain the protected designation of origin (PDO), which is reserved exclusively for fresh pork. Franci O. (2004), La Cinta Senese, gestione This book describes the Description of the attuale di una razza antica, ARSIA – Regione characteristics of the Cinta Senese chain, actors, labelling Toscana, Firenze of farming systems, the market schemes and the situation of farms Franci O., Crovetti A., Esposito S., Sirtori F. Results of a survey of the Cinta (2011), La realtà della Cinta Senese,in: Regione Senese supply chain Toscana (2011), “Il progetto europeo QUBIC attualità e prospettive della razza suina Cinta Senese”, Pacini Editore, pp. 21-48

Regione Toscana (2011), “Il progetto europeo It 'a photograph of the reality of Survey on firms in QUBIC attualità e prospettive della razza suina the supply chain of the Cinta different stages of the Cinta Senese”, Pacini Editore Senes. It’an project funded by the supply chain; EU (MED programme) centered definition of good on 7 typical Mediterranean pigs practices breeds Websites http://www.cintasenese.org Consortium for the protection of the Cinta Senese http://www.mattonedue.it/consorziosuini.html Website of the farmers and http://www.cintasenese.eu/I_nostri_prodotti.html processors http://www.sergiofalaschi.com/lista.php?idCateg oria=4 http://www.renieri.net/cinta-senese.html http://cintasenese.blogspot.it/

PARMA HAM PDO Prosciutto di Parma (Parma Ham) Protected Specifications and Dossier, Product parameters Designation of Origin including all standards to obtain (e.g., moisture, salt) the protected designation of origin Feed admitted during (PDO), the breeding phase Dentoni, D., Menozzi, D., Capelli, M.G. 2012. Study aiming to analyze the Primary data available Group heterogeneity and cooperation on the heterogeneity of Parma Ham about the firms geographical indication regulation: The case of Consortium members characteristics (n=79) the ‘‘Prosciutto di Parma’’ Consortium. Food characteristics, and the effect on and questionnaire Policy 37, 207–216. the Consortium strategies items Giacomini, C., Arfini, F., Menozzi, D., 2010. Study analyzing and comparing Primary data available Processi di qualificazione ed effetti spillover: il the Parma Ham PDO network and about the Parma Ham caso del Prosciutto di Parma Dop. QA – Rivista the non-PDO network production and prices dell’Associazione Rossi-Doria 3, pp. 55–80. O’Reilly, S., Haines, M., Arfini, F., 2003. Food Study analyzing the Parma Ham SME networks: process and governance. the case PDO network of Parma Ham. Journal on Chain and Network Science 3, 21–32. Mancini, M.C., 2003. Le produzioni alimentari This book provides a detailed tipiche. L’impatto economico e organizzativo description of the governance of

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GLAMUR Report – Italian Case Study- Pork Chains –March 2015 della normativa europea. Monte Università Parma Ham PDO and related Parma, Parma, Italy. traceability system Capelli, M.G. 2014. Indicazioni Geografiche, Phd dissertation aiming to analyze Primary data available Strategie di Differenziazione e Politiche per il the consumers preferences and on the consumers Consumatore. Phd Thesis, Department of willingness to pay for different WTP an questionnaire Economics, University of Parma quality labels associated with the items designation Parma Ham PDO

Websites http://www.prosciuttodiparma.com/ Consortium of the Parma Ham PDO http://www.parmaqualita.it/chi_siamo.php Independent organization I.P.Q. (Istituto Parma Qualità) http://www.parmacotto.com/ Websites of the processors http://www.grandisalumificiitaliani.it/ http://www.negroni.com/ http://www.borsamerci.pr.it/ Mercantile Exchange of Parma Prices of the PDO hams and certified meat

GENERIC NON-PDO HAM Giacomini, C., Arfini, F., Menozzi, D., 2010. Study analyzing and comparing Primary data available Processi di qualificazione ed effetti spillover: il the Parma Ham PDO network and about the non-PDO caso del Prosciutto di Parma Dop. QA – Rivista the non-PDO network ham production and dell’Associazione Rossi-Doria 3, pp. 55–80. prices

Websites http://www.assica.it/ Italian association of pig meat producers http://www.borsamerci.pr.it/ Mercantile Exchange of Parma Prices of the non-PDO hams

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Attribute Indicator Detailed indicator Source of indicator Affordability Retail price Retail price in supermarket CPP Retail price Retail price in supermarket ASSICA/Infoscan

Retail price Retail price at speciliased retailer shop Interviews Dynamics in pork consumption Domestic market and exports CPP,ASSICA, CCS

Dynamics of pig meat ISTAT CRPA Notizie, Interpig Added value VA at farm level/AWU Price of pigs- non factor costs Interviews VA slaughterhouse/AWU Price of fresh PDO ham-non factor costs Bilance sheets

VA ham factory/AWU Price PDO Parma Ham-non factor costs Balance sheets

Price of generic ham - non factor costs Balance sheets Price of Cinta ham-non factor costs Interviews Resilience Volatility of concentrate price Concentrate price Interpig Volatility of live pig prices Price of live heavy pigs,light and Cinta pigs CCIAA Volatility of fresh ham Price of fresh hams CCIAA Volatility of cured ham Price cured ham CCIAA Degree of diversification % heavy pigs on total turnover of farm Sample of farms % light pigs on total turnover of farm Sample of farms % Cinta pigs on total turnover of farm Sample of farms

% heavy pigs on total slaughterings

% light pigs on total slaughterings Balance sheets

% Cinta pigs on total slaughterings Interviews

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% of Parma Ham on total turnover Balance sheets

% of generic ham on total turnover Balance sheets

% of Cinta ham on total turnover Degree of downstream integration % ham by integrated companies CPP, CCS Labour relations Qualitative analysis Chain governance Degree of self governance % pigs marketed by producer orgn % composition of CPP

% composition of CCS CCS Animal welfare Level of animal welfare Risk assessment EFSA Territoriality Degree of artisanality % AWU in artisanal phases of production Effectiveness of PDO % feed produced within PDO

Events organised in the territory related to the product Number of events and number of visitors CPP/Local authorities

Number of events and number of visitors CCS Links with local touristic activities Ham routes; agritourism Province of Parma Resource use Use of water LCA m3/kg carcass weight/fresh ham/cured ham Farm and company data (water footprint) Use of fossil energy LCA MJ/ kg carcass weight/fresh ham/ cured ham Farm and company data Use of nutrients LCA kg NO3-eq/carcass /fresh hamd/cured ham Farm and company data

Greenhouse gas emissions Pollution (Carbon footprint) LCA kg CO2-eq/carcass /fresh ham/cured ham Farma and company data Biodiversity Presence of local breeds Saving of local breed Interviews

Landscape conservation Conservation of forests Interviews

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Land use LCA m2 land/carcass/fresh ham/cured ham Farm and company data

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