A. Liscova, L. Silina Food Supply Chain Formation Necessity in Zemgale Region FOOD SUPPLY CHAIN FORMATION NECESSITY IN ZEMGALE REGION Anna Liscova 1, Dr.oec.; Linda Silina , Dr.oec., assist. professor 1/DWYLDQ5XUDO$GYLVRU\DQG7UDLQLQJ&HQWUH 2 Latvia University of Agriculture Abstract. &RQVXPHUVLQFUHDVLQJO\FRQVLGHUWKHRULJLQDQGKDUPOHVVQHVVRIUDZPDWHULDOVRISURGXFWVZKHQSXUFKDVLQJ food. Therefore, the issue of the possibilities for purchasing human-health-friendly food becomes topical. The present research was performed to identify the necessity for forming a food supply chain in three municipalities of Zemgale region: Dobele, Auce, and Tervete. An expert group, which engaged in designing a questionnaire, was formed to carry out the research. A survey was conducted in the territory of the municipalities of Dobele, Tervete, and Auce, engaging ERWKFRQVXPHUVDQGEXVLQHVVPHQ7KHSUHVHQWSDSHULVEDVHGRQWKHVXUYH\¿QGLQJV,WFRQFOXGHVWKDWSUHVHQWO\ consumers most often choose to buy food at supermarkets; yet, they are very interested in purchasing food produced within a food supply chain, and the main product groups are meat and dairy products, meat, milk, and eggs. From the viewpoint of businessmen, the number of food suppliers and the quantity of food offered by them are small; thus, the assortment of food products has to be enlarged. Key words: home production, food supply chain, consumer, food. JEL code: Q13 Introduction &HSDQRQH GLYHUVLI\LQJ SURGXFWV RI KRPH Food, including food products consumed to raise the production (Klavina, 2012), development possibilities for feeling of comfort of oneself and family, play an important home production (Majore – Line, 2012), home production role in every individual’s daily life. Before purchasing food, as a job (Grutups, 2012) as well as small investments consumers increasingly study the origin of food products, made by home producers (Misina, 2012) were addressed the place of origin of agricultural raw materials, and the on the level of rural municipalities in 2012. harm caused by food, which encourages consumers to buy The research hypothesis is - the formation of a food food products of local producers. Yet, a problem arises, supply chain creates a possibility for developing home as no information on purchase possibilities is available. production in municipalities. Therefore, a need has emerged for a practical research Based of the hypothesis, the research aim is to WR¿QGRXWWKHRSLQLRQVRIFRQVXPHUVDQGEXVLQHVVPHQ ascertain the need for the formation of a food supply regarding establishing a short food supply chain in the chain in the municipalities of Dobele, Tervete, and territory of the municipalities of Dobele, Tervete, and Auce. Auce which are located in Zemgale region. To achieve the aim, several research tasks were It was concluded, after making an initial situation set: 1) to identify consumers’ opinions on the need for analysis, that a researcher L.Melece (2001., 2002, WKHIRUPDWLRQRIDIRRGVXSSO\FKDLQDQG WR¿QGRXW 2003a, 2003b, 2008a, 2008b) mainly focuses her businessmen’s opinions regarding the possibilities for research on milk and meat quality standards. However, forming a food supply chain. she relates her research to large-scale producers but To achieve the research aim, the survey was not to the level of households as well as researched carried out, and the questionnaire was designed in food safety in Latvia; thus, contributing to providing cooperation with a group of experts which included the the sustainability of food (Melece, 2011). Melece L., UHSUHVHQWDWLYHV RI 'REHOH &RQVXOWDQF\ %XUHDX RI WKH Praulins A., and Popluga D. (2009) have conducted /DWYLDQ5XUDO$GYLVRU\DQG7UDLQLQJ&HQWUH //.& WKH pieces of research on environmentally friendly farming 6HFUHWDULDWRIWKH1DWLRQDO5XUDO1HWZRUN'REHOH&RXQW\ in Latvia, revealing some economic aspects and &RXQFLO WKH $VVRFLDWLRQ RI )DUPHUV WKH $VVRFLDWLRQ RI setting priorities for development. /DWYLDQ 5XUDO &RRSHUDWLYHV WKH )RRG DQG 9HWHULQDU\ A practical guidebook with guidelines for best 6HUYLFHDQGWKH6WDWH5HYHQXH6HUYLFH//.&VSHFLDOLVWV practices was produced for those being engaged in crafts, in crop and livestock farming and in rural development including food processing (Rokasgramata labas…, 2011). as well as individuals who wanted to participate However, not a single practical research regarding the in establishing a food supply chain. The survey was situation in municipalities has been carried out, and the conducted from September to November of 2012. present paper may be considered a beginning of research The survey encompassed 343 respondents, including on it, so that the research results may be adapted to 220 consumers, 39 businessmen, and 84 farmers. and exploited in developing home production in other The following research methods were employed: municipalities. 1) analysis and synthesis; 2) induction and deduction; Several topics related with home production, for 3) the graphic method; and 4) a sociological method – instance, uniting home producers in an association a survey. ___________________________ &RUUHVSRQGLQJDXWKRU [email protected] 134 Economic Science for Rural Development No. 30, 2013 ISSN 1691-3078 A. Liscova, L. Silina Food Supply Chain Formation Necessity in Zemgale Region 22 20 Less than LVL 150 LVL 150-250 LVL 250-350 5 LVL 350-500 9 more than LVL 500 25 not specified 19 Source: authors’ construction Fig. 1. Percentage distribution of the respondents by monthly income 45 42 40 Supermarkets 35 Self-produced food 30 25 Small and specialised stores % 20 16 16 15 15 Local marketplace 10 10 Bought from local farmers 5 0 Source: authors’ construction Fig. 2. Percentage distribution of the most popular shopping sites of the respondents Research results and discussion 6XSHUPDUNHWV ZHUH VSHFL¿HG DV WKH PRVW 1. Consumer opinions on creating a short popular shopping sites by 80% of the respondents, food supply chain 69% purchased their food at small stores, while Initially, consumer opinions were found out by 31% of the respondents produced agricultural surveying 220 respondents. products themselves for their own consumption. $ VLJQL¿FDQW LQGLFDWRU ZDV WKH DJH VWUXFWXUH RI The frequency of shopping by the respondents is an consumers, which indicated the interest of local indicator showing how frequently local producers rural residents in and their need for purchasing food. have to supply their food products as well as what Potential customers of farmers and businessmen, NLQG RI WUDGH LV WKH PRVW HI¿FLHQW DQG SUR¿WDEOH which were interested in purchasing local food, were According to the survey, the greatest number of the the population aged 26-55 years that comprised respondents purchased food products for their family 71% of the respondents. once a week, and 32% of them did shopping two Of the respondents, 47% replied that their monthly or more times a week. Most often, the respondents family income was less than LVL 250, which indicated preferred to buy meat and meat products as well as dairy the low purchasing power of the respondents and products; yet, eggs, non-agricultural products, and fruit negatively affected their demand for short food supply and berries were most rarely purchased. chain products. Of the questioned individuals, 19% had While conducting the research on the need for a family income within a range of LVL 250-350, and only introducing a short food supply chain, an important 5% of them earned more than LVL 500 a month; 20% did goal was to identify the interest of potential consumers not reveal their income (Figure 1). in supporting local producers. Of the respondents, Nowadays, there are various food purchase sites, 72% said that such a possibility was necessary and thus, it was important to identify the most popular and FRQ¿UPHG WKHLU LQWHUHVW LQ LW 2QO\ ZHUH VFHSWLFDO preferable ones. The data are presented in Figure 2. about it. Economic Science for Rural Development No. 30, 2013 135 ISSN 1691-3078 A. Liscova, L. Silina Food Supply Chain Formation Necessity in Zemgale Region 100 88 92 90 80 70 60 50 39 42 34 40 28 Number 30 22 20 12 16 10 0 Source: authors’ construction Fig. 3. Distribution of the respondents’ most popular food products 140 125 120 100 80 70 60 number 41 43 40 20 8 0 Delivered at home Delivered by Marketplace Store for local Internetstore themselves products Source: authors’ construction Fig. 4. Most popular shopping sites and ways for consumers The most popular food products and food groups VLJQL¿FDQWIDFWRUVIRURIWKHUHVSRQGHQWVIROORZHG ZHUH LGHQWL¿HG LQ WKH VXUYH\ $FFRUGLQJ WR WKH VXUYH\ by price for 69%, and the place of origin of products meat as well as milk and dairy products were most often ZDVWKHWKLUGPRVWVLJQL¿FDQWIDFWRU3URGXFWSDFNDJLQJ purchased from local producers – 92% of the respondents played a smaller role in attracting consumers, as only admitted it (Figure 3). They were also interested in 11 respondents of 220 mentioned it. locally produced bread and bakery products as compared For producers, it is very important to be located as ZLWKRWKHUIRRGJURXSV+RZHYHU¿VKSURGXFWVZHUHQRW close to consumers and their preferable shopping site as popular, which might be explained by the small number possible. RI¿VKIDUPVLQWKHUHVHDUFKHGWHUULWRU\ The survey revealed that 125 respondents (Figure 4) When purchasing daily food products, several factors preferred to buy food products of local producers at a LQÀXHQFHFRQVXPHUV)RRGTXDOLW\ZDVRQHRIWKHPRVW specialised store intended only for local producers, thus, 136 Economic Science for Rural Development No. 30, 2013 ISSN 1691-3078 A. Liscova, L.