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BRAZILIAN AND FRENCH POULTRY INDUSTRIES: GLOBALIZATION APPROACH
Agriculture contributes to the development and maintenance of rural areas both in Europe and in emerging countries (van der Werf and Petit, 2002). In this context, the poultry industry has a particular role, as a profitable and relatively simple activity for farmers, and at the collective level, where the poultry industry can provide jobs and animal protein. However, the production in very heterogeneous basins addresses a globalized market, with rapid transfer of production and processing instruments between production zones. This occurs among a small number of actors for industrial production at a global scale.
In this context, companies can plan their production in geo-strategic terms to ensure their profitability. For example the DOUX Group transferred a large part of their production from the West of France to Brazil. This company, which used to produce only in Europe, currently sells a large portion of its Brazilian products in the European market. A relevant question is to understand how a poultry production basin can become sustainable (van der Werf and Petit, 2002).
In terms of agriculture and sustainable development in Europe, the question has been raised whether European poultry production will continue or whether it will gradually migrate to other parts of the world. European poultry producers are looking for a model of sustainable agriculture that could be strengthened in order to continue supplying the European market. In Brazil the competitiveness aspects are not the main problem, but the regulatory aspects are very important. In Europe it is particularly interesting for France to strengthen its high quality production systems, since France supplies quality poultry products in Europe, but the current dynamics do not support this development. The American marketing approaches give priority to consumers, while the French marketing seems to be more « producer-oriented », which is reinforced by a health crisis that occurred in the past (Sarrazin, 2000).
This fact is consistent with the views of other authors (Rattner, 1994; Kalemli-Ozcan et al., 2009), who say that the globalization of business and financial activities, driven by the dynamism of international corporations and conglomerates, leads to new forms of interdependence and interaction, but without a real integration of economies and national policies.
Legal, social and environmental aspects
In terms of environmental criteria, the poultry production systems in Brazil and France are contrasting. In France, according to the size of farms and their locations, they are subject to strict rules regarding waste production and disposal, mainly nitrogen and phosphorus. Additionally, we should take into account the problem of greenhouse gas emissions (Magdelaine, 2008).
In Brazil, concerns about environmental problems are more recent and are now emerging in the South, a region traditionally focused on animal production (Spies et al., 2001). Today, the Brazilian poultry production also grows in the Centre West of the country, a region of major agricultural properties specializing in the production of maize and soybeans, where environmental restrictions are less stringent. So we have a contrasting situation: the vastness of Brazilian territories, even opening new areas of agricultural production and the smaller areas and for which several activities are competing in France.
Social integration is another issue coming to the agenda. The situations are very contrasting between the two countries, even considering that differences between countries are normal. On the one side the poultry industry provides jobs and low-cost animal protein in the two countries. However, for France, there is a system of chicken production that has a positive image with consumers and with the peaple of the production areas (“free-range farming” like “plein air” and “Label Rouge »), while there are also aspects sometimes perceived as negative (environmental impacts associated with intensive production, and welfare of chickens) (ITAVI, 1999).
For Brazil, the massive and rapid development of poultry production in traditional and new areas poses different problems: how can the new production regions adapt? What are the impacts on the use of the land, especially in transport infrastructure, which seems to be a critical point? For the traditional production basins, a question that arises concerns the consolidation and development. The cost of production gives a competitive advantage to Brazilian poultry products, as the resale price per kg of carcass of Brazilian industrial chicken is 45% lower than that of French industrial chicken (Magdelaine, 2008).
There are various explanations for this difference: the workforce is clearly cheaper in Brazil (average of EUR 300 per month for an employee), soybeans and maize are produced locally against massive imports of soybeans in Europe, cost for chicken houses are lower in Brazil and the exchange rate is favourable for Brazilian exports (AviTer, 2007). The consequences of this cost differential are experienced in France where major restructuring of the means of production and processing are observed. Thus, several important slaughterhouses were closed during the last five years. Production is clearly expanding in Brazil and decreasing in France. One of the issues raised by these contrasting scenarios is to know how they will further evolve (AviTer, 2007).
Besides the economic aspects, the sanitary condition of poultry supply chains is fundamental to their sustainability, especially because of non-tariff barriers that affect the market (Laisney et al., 2004). In the past sanitary requirements were higher in France than in Brazil, however, with globalization and increase in Brazilian exports, the market itself began to demand stricter sanitary control. Currently, the southern Brazil enjoys a high status in terms of sanitary control.
Whereas the economic performance of Brazilian and French systems is relatively well documented, currently there is not much quantitative information available about their environmental aspects (Wackernagel et al., 2004).
An important aspect in the sustainable development of a production site is its relative autonomy in terms of food and raw materials resources. The French dependence on external sources of protein (soybeans) for the livestock is questioned, and the intercontinental flows of feed biomass contribute to the generation of animal wastes, which result in considerable environmental impact (AviTer, 2007).
Overall, food autonomy contributes to the sovereignty and the sustainability of production chains in certain territories. This is evident in Europe, where almost 75% of raw materials rich in proteins used for animal feed are imported, mostly from Brazil and the United States (AviTer, 2007). Thus, the European proactive policy of biofuel production appears as a strong opportunity to use the protein-rich co-products, especially those derived from oil crops (rape seed, sunflower) to replace the imported sources, even if the poultry will not be the first user, chronologically speaking. This strategy will have important effects on the development of agro-energy supply chains (Guemene and Lescoat, 2007).
Supply chain of chicken production in Brazil
Brazilian poultry production is “integrated” (or integração) (Martins et al., 2007). Therein operations are coordinated vertically by the agribusiness and instruments are used to interfere in the various links in the supply chain. This interference seeks to improve the production systems, modernizing the slaughterhouse and chicken processing as well as enhancing efficiency and logistics of distribution and production of inputs.
Vertical integration is a generic concept, which can be characterized as a combination of several technological processes like production, processing, distribution and sales within the same company. This concept also implies command decision from a single company, corporation, and involves a total or partial ownership of the assets of this company (Carletti Filho, 2005).
The vertically integrated system model
The farmer owns a specific structure for the production of chicks with the needed equipment. In this arrangement, the integrated farmer’s function is to offer the infrastructure to produce the chick, with his own investment, to the point of slaughter, which is decided by the integrator company. In return, the company offers remuneration to the integrated farmer and provides most needs of the business. The company provides the “one day chick”, the feed and technical assistance. The integrated farmer is responsible for the construction of the chicken house, the installation of related equipment in accordance with the requirements of the company to the stage of delivery of the chicken to the slaughterhouse when it reaches the appropriate weight. All transportation needed is provided by the company. Payment is made in accordance with technical indicators defined in the contract (Fernandes Filho, 2004). However, most frequently the company covers the cost of ration, veterinarian and transportation supplies to the farms and poultry to the slaughterhouse (Martins et al., 2007).
Supply chain of chicken production in France
Since the 1960s the establishment of the major groups of poultry production was progressively structured around the slaughter link of the supply chain. Integration strategies by slaughterhouses with their upstream processes (hatching, feed) vary widely depending on the company. Some groups have strongly internalized the production of chicken feed, integrating most of their supplies and commercial collaborations are strong and sometimes exclusive.
The integration system characterizes the relationships with industry breeders, but farmers continue to own their building and some of their livestock. Over 90% of farmers are integrated when including cooperative agreements, and about 75% if one excludes them (Magdelaine, 2008). This vertical integration model works on the basis of very close links between farmers and the integrating company. This company supplies the farmers with their means of production (animal feed), the volume and quality of which are determined depending on the desired output. The company uses the finished products according to a pre–established schedule. The integrator takes the place of the farmer in his prerogatives as head of the company (choice of productions, means to implement, supplier selection, volume and qualities to be produced), but in return, it must bear the burdens imposed, including the remuneration of labour and the market risk, i.e. fluctuations of the price (Magdelaine, 2008).
Many environmental regulations are imposed on the entire poultry supply chain. The French legislation is essentially based on the system of “classified installations”, which affects all segments of the industry chain. Hatcheries, farms, feed mills and slaughterhouses are classified by size, according to their pollution potential. The nomenclature of the ICPE (classified facilities) of 1976 gives specific requirements regarding to the management of their waste, water management, and possible treatments to be implemented. Every company must declare its production volumes and destinations of its wastewater to the Water Agency (ICPE, law n° 76-663 of July, 19 1976). According to a survey conducted in 2004, there is a high variability of farm size based on different production systems. Half of the broiler farms owned livestock buildings with outdoor runs, with an average farm buildings area of 650 m², the other half of the holdings consist of closed buildings with an average area of 1450 m² (AGRESTE, 2006).
The total average area of farms producing poultry was 51 hectares (ha) in 2000, according to the Agricultural Census, which is higher than the average area of all farm types in France, which reached 42 ha. Poultry farms can be divided into two distinct groups, one gathering specialized farms with a small or very small area (23% of farms were under 10 ha in 2000) and the other involving larger farms (42% of farms over 50 ha in 2000).
Most French poultry farms are not specialized, for 70% of them income from poultry accounted for less than 75% of their total farm income. They represented about 60% of the poultry meat production capacity. These farmers usually have another animal production unit (milk or meat) or produce crops (AGRESTE, 2006).
France – Standard industrial chicken (ST)
To represent the system of standard industrial chicken in France, we chose the region of Bretagne, which concentrates among the largest quantities of animal production in Europe. In this region, the production of broilers is intended primarily to supply the French domestic market, and then demand from the European Union, and finally the market in other countries.
Bretagne houses around 15 slaughtering and processing industries, involving 95,200 jobs. The poultry production sector comprises 3,000 farms raising poultry (chickens and turkeys) and generates 6,000 direct and indirect jobs. The hatching sector counts about twenty hatcheries (800 employees) and 500 farms specializing in the production of breeding animals. The animal feed sector has forty industrial sites (specialized or not) in compound feed for animal production, and counts about 1,100 employees (CRAB, 2006b).
In this region the French poultry industry has suffered its greatest decline, resulting from a loss of market share to other EU countries and emerging countries, like Brazil (CRAB, 2006a).
France – Label Rouge (LR)
This system of poultry farming is common, amongst others, in the South-West of France in the Aquitaine region. Within this region the Label Rouge system is most frequent in the Landes department, which can be considered the cradle of French Label Rouge, knowing that Landes has a strong farmers union (syndicate) tradition. There are 36 million of Label Rouge chickens put in place each year and 1600 poultry producers (AviTer, 2007).
The largest pine forest in France is in this region, near the city of Bordeaux. In the Southern Chalosse area, with less forest, there is a high density of poultry farms. There are two kinds of Labels: Label Landes (that uses “maransines” a kind of movable cabins with 150 m2 surface, maximum), giving it a strong and characteristic image with consumers, although some 400 m2 buildings are used; and the Sud Ouest Label, that uses almost classical buildings (400 m2) (AviTer, 2007).
Within the group of Label Rouge producers in the Landes department we can find three types of poultry producers (Lebreton, 2008):
– Optimists: they represent 50% of total. They have confidence in the system. They are associated in groups of farmers. On average they are 44 years old, and their average farm surface is 54 ha.
– Farmers of obligation: 25% of total, somewhat confident. On average they are 50 years old, and their average farm surface is 41 ha.
– Farmers in abandonment of production: 25%, without confidence. They are 50 years old on average, and their average farm surface is 48 ha.
Table of contents :
CHAPTER 1 – General Introduction, issues and framework
1. Introduction
2. Brazilian and French poultry industries: globalization approach
2.1. Legal, social and environmental aspects
3. Research questions and objectives
3.1. Research questions
3.2. Aim and objectives
3.2.1. Aim
3.2.2. Objectives
4. Scenarios of poultry production
4.1. Brazilian poultry scenario
4.2. French poultry scenario
4.3. Supply chain of chicken production in Brazil
4.3.1. The vertically integrated system model
4.3.2. The links of the chain
4.4. Supply chain of chicken production in France
4.5. Research sites
4.6. Some characteristics of the sites studied
4.6.1. France – Standard industrial chicken (ST)
4.6.2. France – Label Rouge (LR)
4.6.3. Brazil – Standard industrial chicken (CW)
4.6.4. Brazil – Standard industrial chicken – family (SO)
5.1. Goal and scope
5.2. Life cycle inventory
5.3. Life cycle impact assessment
5.4. Interpretation
5.5. Limitations
6. Structure of the thesis
7. References
CHAPTER 2 – Estimating forest conversion to soybean land in Brazil and the associated life cycle impacts
1. Introduction
2. Materials and methods
2.1. Estimation of land transformation
2.2. Observation of deforestation and cropland expansion
2.3. A new proposition
2.3.1. Land transformation from rainforest
2.3.2. Land transformation from Cerrado
2.4. Assessing impacts of land transformation for different scenarios
3. Results and discussion
3.1. Implementation of values for land transformation
4. Conclusions
5. Acknowledgements
6. References
CHAPTER 3 – Variability in environmental impacts of Brazilian soybean according to crop production and transport scenarios
1. Introduction
2. Material and methods
2.1. Assessment methodology
2.2. Modeling
2.2.1. Production stage
2.2.2. Drying and storage
2.2.3. Transportation routes
2.3. Emissions from crop production
2.4. Land use
2.5. Characterization factors
3. Results
3.1. Impacts of soybean crop production
3.2. Impacts of soybeans delivered at Rotterdam
3.3. Contribution of life cycle stages and substances to impacts of soybean exportation
3.3.1. Climate change and Cumulative energy demand
3.3.2. Acidification and Eutrophication
3.3.3. Terrestrial toxicity and Land occupation
4. Discussion
4.1. Comparison with previous studies
4.2. Hot spots and recommendations
4.2.1. Environmental hot spots and recommendations
4.2.2. Methodological hot spots and recommendations
5. Conclusions
6. Acknowledgements
7. References
8. Annex
CHAPTER 4 – Intensity and scale effects for environmental impacts of French and Brazilian poultry production scenarios: an LCA approach
1. Introduction
2. Material and Methods
2.1. Scope of analysis
2.2. Technical indicators
2.3. Crop production stage emissions
2.3.1. Nitrate leaching
2.3.2. Ammonia emissions
2.3.3. N2O emissions
2.3.4. Phosphorus emissions
2.3.5. Heavy metals emissions
2.4. Poultry production stage emissions
2.5. Slaughterhouse stage
2.6. Characterization factors
2.6.1. Functional Units (FU)
3. Results
3.1. Impacts of live chicken production
3.2. Impacts of processed chicken production
3.3. Contributions of life cycle stages and substances
3.3.1. Climate change and cumulative energy demand
3.3.2. Acidification and eutrophication
3.3.3. Terrestrial ecotoxicity and land competition
3.4. Economic functional unit approach
4. Discussion
4.1. Comparison with previous studies
4.2. Scale effect
4.3. Intensity effect
4.4. Economic functional Unit
4.5. Hot spots and recommendations
5. Conclusions
6. Acknowledgements
7. References
8. Annex
CHAPTER 5 – General discussion and conclusion
1. Intensity effects
2. Scale effects
3. Origin of the chicken consumed in France
4. Hotspots and opportunities
4.1. Western France – standard system (ST)
4.2. South-West of France « Label Rouge » (LR)
4.3. Centre-West of Brazil (CW)
4.4. South of Brazil (SO)
4.5. Overall issues
4.5.1. Improving feed production
4.5.2. Improving chicken rearing
4.5.3. Improving slaughter stage
5. Changing the approach
6. Conclusion
7. References
