{"id":4775,"date":"2019-02-15T11:50:48","date_gmt":"2019-02-15T10:50:48","guid":{"rendered":"http:\/\/www.ripess.eu\/?p=4775"},"modified":"2021-03-29T16:01:28","modified_gmt":"2021-03-29T15:01:28","slug":"citizen-currencies-strengthen-agricultural-supply-chains","status":"publish","type":"post","link":"https:\/\/dev.eu.ripess.rio20.net\/en\/citizen-currencies-strengthen-agricultural-supply-chains\/","title":{"rendered":"Citizen currencies strengthen agricultural supply chains"},"content":{"rendered":"\n<p class=\"has-small-font-size\"><em>by Antonin Calderon &amp; Jean Rossiaud (<a href=\"http:\/\/monnaie-leman.org\/\">Leman Currency<\/a> \/ <a href=\"https:\/\/www.apres-ge.ch\/\">APRES-GE&nbsp;<\/a>in collaboration with Ga\u00eblle Bigler (FRACP \/ <a href=\"https:\/\/urgenci.net\/\">URGENCI)<\/a><\/em><\/p>\n\n\n\n<p>This is the third issue of the series we started in October, on the theme of &#8220;local currencies&#8221;, after a general presentation of the advantages and challenges of local currencies through the example of the Leman currency (<a href=\"http:\/\/europe.ripess.rio20.net\/?lang=en\/e-leman-a-local-blockchain-currency-in-switzerland-and-beyond\/\">October 2018)<\/a> and the avenues for collaboration and synergies between local currencies and sustainable food (<a href=\"http:\/\/europe.ripess.rio20.net\/?lang=en\/strengthening-local-agriculture-with-local-currencies\/\">December 2018<\/a>), we propose today to reflect in terms of production\/supply chains, for different types of agricultural products, and starting once again from the Geneva experience: from seed to production, from production to processing, from processing to distribution, from distribution to consumption. The five key agricultural sectors on which Leman and the Chamber of the Social and Solidarity Economy (APRES-GE) are currently working are the following:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>\n\n\t\t <em><strong>Beer<\/strong>:\n\t\tfrom hops to pints<\/em>\n\t\t<\/li><li>\n\n\t\t <em><strong>Vegetables<\/strong><\/em><em>:\n\t\tfrom pitchfork to fork<\/em>\n\t\t<\/li><li>\n\n\t\t <em><strong>Bread<\/strong>:\n\t\tfrom seed to bread<\/em>\n\t\t<\/li><li>\n\n\t\t <em><strong>Wood<\/strong><\/em><em>:\n\t\tfrom tree to stere<\/em>\n\t\t<\/li><li>\n\n\t\t <em><strong>Wine<\/strong><\/em><em>:\n\t\tfrom vine shoot to glass<\/em>\n\t<\/li><\/ul>\n\n\n\n<p>\nEach\nproduction\/supply chain presents its own particularities, and each\nactor &#8211; each link in the chain &#8211; its own reality and challenges. This\nis why it is particularly interesting to bring the different actors\nin a production\/supply chain together around the same table, in order\nto reflect together on current and potential value flows &#8211; and the\nresulting cash flows. Many economic actors generally do not have the\ntime to take this step back. The local currency offers producers a\ngreat opportunity to strengthen the links between them, and between\nthem and consumers, and thus to strengthen the local economy in the\nface of competition from globalized markets. The service provided by\nthe local currency is &#8220;economic facilitation&#8221;: it is a form\nof brokerage that allows producers to better choose their local\nsuppliers, and in case of overproduction to sell stocks in the\npayment community.<\/p>\n\n\n\n<p>\n<em><strong>The\nbeer production\/supply chain: from hops to pints<\/strong><\/em><\/p>\n\n\n\n<p>Let us take the example of the beer sector to illustrate what we are saying. The development of artisanal breweries is currently in full expansion and their operation is easily modelable. The main links in this chain are: farmers, malthouse, breweries, distributors, as well as bars, restaurants or grocery stores. The diagram below illustrates this.<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img loading=\"lazy\" decoding=\"async\" width=\"720\" height=\"226\" src=\"https:\/\/europe.ripess.rio20.net\/wp-content\/uploads\/sites\/4\/2019\/02\/eng2.png\" alt=\"\" class=\"wp-image-4780\" srcset=\"https:\/\/dev.eu.ripess.rio20.net\/wp-content\/uploads\/sites\/4\/2019\/02\/eng2.png 720w, https:\/\/dev.eu.ripess.rio20.net\/wp-content\/uploads\/sites\/4\/2019\/02\/eng2-300x94.png 300w\" sizes=\"(max-width: 720px) 100vw, 720px\" \/><\/figure>\n\n\n\n<p>\nIf\nyou still don&#8217;t know it, you should know that 90% of beer is made up\nof water, which is used as the basis for adding malt, hops and then\nyeast. To this can be added additional ingredients, such as coffee,\nfruit, spices or other condiments or herbs.<\/p>\n\n\n\n<p> <strong>Farmers<\/strong> (1) grow the cereals, which will then be processed into malt by the <strong>Malting plant<\/strong> (2). At the same time, <strong>hops<\/strong> (2&#8221;), a climbing plant, must be cultivated and its flowers harvested and dried; <strong>yeast<\/strong> (2&#8221;) must be produced, usually in a laboratory.<\/p>\n\n\n\n<p>\nThese\nthree ingredients are used by <strong>artisanal<\/strong> <strong>breweries<\/strong> (3),\nwith water, for the production of beer. Other goods are also needed\nto produce beer, including bottles, capsules, labels, glue, and of\ncourse water. These products are considered as secondary in the beer\nproduction chain, although they are obviously necessary. More and\nmore often, breweries collect their bottles, through a deposit\nsystem, and reuse them.<\/p>\n\n\n\n<p>\nThen,\nthe <strong>distributors<\/strong> (4) are responsible for transporting the\ndrinks produced in <strong>bars<\/strong>, <strong>restaurants<\/strong> and <strong>grocery\nstores<\/strong> (5), where they are sold for consumption, and in\nparticular to <strong>employees<\/strong> (6) of the various companies in the\nbeer industry. Indeed, some of the beer consumers work in the sector.<\/p>\n\n\n\n<p>\nA\nnew activity should also be integrated into this beer sector:\n<strong>mushroom houses<\/strong> (4&#8242;). They work with breweries, recovering the\nused malt (spent grains) and using it as a substrate on which\nmushrooms (especially shiitake and oyster mushrooms) will grow. The\nrecovery of the substrate is currently being studied for use as\nprotective packaging, for its lightweight and shock absorbing\nproperties.<\/p>\n\n\n\n<p>\nAll\nthese actors also have costs for premises, energy, production and\ntransport machinery, IT, printing and administration. This is what we\ncall the secondary network of suppliers.<\/p>\n\n\n\n<p> The following diagram summarizes the primary network of the beer sector, by modelling the flows of goods\/services, as well as the cash flows that allow these exchanges.<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"579\" src=\"https:\/\/europe.ripess.rio20.net\/wp-content\/uploads\/sites\/4\/2019\/02\/flux_eng-1024x579.png\" alt=\"\" class=\"wp-image-4813\" srcset=\"https:\/\/dev.eu.ripess.rio20.net\/wp-content\/uploads\/sites\/4\/2019\/02\/flux_eng-1024x579.png 1024w, https:\/\/dev.eu.ripess.rio20.net\/wp-content\/uploads\/sites\/4\/2019\/02\/flux_eng-300x170.png 300w, https:\/\/dev.eu.ripess.rio20.net\/wp-content\/uploads\/sites\/4\/2019\/02\/flux_eng-768x435.png 768w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<p>\n<em><strong>The\neconomic relationship<\/strong><\/em><\/p>\n\n\n\n<p>\nThe\nlocal currency is above all a tool for establishing economic links\nbetween the actors of a sector. While stakeholders are convinced of\nthe value of creating a strong local economy, they do not always have\nthe time, energy or even the knowledge to analyse all current and\npotential flows in their own economic production\/supply chain Pressed\nby short-term economic constraints and lack of liquidity, they\nusually go as fast and cheap as possible, whereas their real economic\ninterest in the medium or long term would be to favour a concerted\nand solidarity-based approach, for example in a pooled credit system.<\/p>\n\n\n\n<p>Working\nin their own local currency encourages economic actors to be aware of\nthe specificities and various constraints within the chain and puts\neveryone in commercial contact with their potential suppliers and\ncustomers: the farmer with malting, malting with breweries,\ndistributors with breweries, and bars, restaurants and grocery stores\nwith distributors.<\/p>\n\n\n\n<p>The\nstakes are not only economic and ecological. Admittedly, it makes it\npossible to increase the volumes of activity of each individual and\nthe wealth produced on the territory; and the development of this\nterritory, in short circuits, reinforces economic resilience and\necological sustainability (reduction of CO2 emissions). On the social\nand political level, the economic network thus created breaks the\nisolation of each actor and it is the social fabric that is\nstrengthened. Together, it will be easier to defend your collective\ninterests and become stakeholders in public policies to promote local\nagriculture.<\/p>\n\n\n\n<p>\n<em><strong>Monetary\nliquidity for the sectors<\/strong><\/em><\/p>\n\n\n\n<p>\nThe\n<em><strong>pooled\ncredit system<\/strong><\/em>\noffered by a complementary local currency such as the Leman in the\nLake Geneva region provides significant liquidity to the\nproduction\/supply chains. Indeed, each actor is granted an operating\ncredit line (currently between LEM 1,000.- and LEM 20,000.-,\ndepending on its size) that can be used without interest rates and\nwithout limit as long as it remains below the established threshold.\nThe potential for economic exchange for the entire economic chain\nconcerned is therefore increased by the sum of the credit limits of\nall its players.<\/p>\n\n\n\n<p>\nThis\nancestral system of credit pooling, which has practically disappeared\ntoday, swallowed up by the contemporary banking system, is\nnevertheless a very simple and very stable system. The network as a\nwhole is by definition always totally balanced &#8220;at zero&#8221;:\nthe sum of the positive amounts is always equal to the sum of the\nnegative amounts, and there is no monetary creation. The more money\nturns, the more wealth is produced. The lack of liquidity is a\nbarrier to activity. Shared credit therefore replaces bank credit\nvery advantageously.<\/p>\n\n\n\n<p>\nConventional\nbank credit is expensive &#8211; when it is granted, because banks often\nrefuse risk. It raises the price of products, because it is necessary\nto include the cost of money (interest) in the selling price, and\nweakens the seller in a competitive market occupied by large groups\nthat lower prices.<\/p>\n\n\n\n<p>\nBy\nworking in local currency, we recreate a parallel economy, and we\navoid pressure from large groups and foreign products. Getting\nstarted with the complementary currency, particularly for\nagricultural sectors, must be seen as a survival and development\nstrategy. But we must play the game together, companies, employees\nand consumers, so that the currency can continue to supply the local\neconomy continuously, without stagnating in bottlenecks.<\/p>\n\n\n\n<p>\n<em><strong>Towards\nhealthy irrigation of the production\/supply chains<\/strong><\/em><\/p>\n\n\n\n<p>\nThe\nmain challenge is therefore to avoid the formation of pockets of\nlocal currency retention, which indicate an economic blockage. Such a\nblockage is beneficial if it allows the actor in question to question\nhimself about his partners who do not accept the local currency. It\nmay be time to change it, and to opt for suppliers who also fit into\nthe logic of relocation and social and environmental responsibility.<\/p>\n\n\n\n<p>\nThis\nis where the services of local currency &#8220;facilitators&#8221; come\ninto play: they work with companies to integrate suppliers into the\npayment community, if they meet the conditions of the charter and, if\nnot, to find new partners.<\/p>\n\n\n\n<p>\nOn\nthe other hand, pockets of local currency are problematic if\ncompanies cannot put as much currency back into the circulation as\nthey accept: the currency then loses its primary function, which is\nto facilitate trade. The risk of devaluation of the currency (it will\nbe exchanged below its official value, for example 120 units will be\nrequested for a good\/service worth 100 in state currency) is\ntherefore significant. \n<\/p>\n\n\n\n<p> Two types of actors can find themselves structurally in this &#8220;bottleneck&#8221; position. First, the company that would occupy a central place in the supply chain, and would have no or too few substitutes. In the &#8220;beer&#8221; sector, it is the malting industry, with which all local breweries have an interest in working in local currency. Secondly, the company at the &#8220;end of the chain&#8221;. In our example, it is the farmer who grows the cereals that will then be processed into malt. The following diagram shows this problem of pocket retention of local currency at the end of the supply chain.<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"338\" src=\"https:\/\/europe.ripess.rio20.net\/wp-content\/uploads\/sites\/4\/2019\/02\/eng_poche-1024x338.png\" alt=\"\" class=\"wp-image-4816\" srcset=\"https:\/\/dev.eu.ripess.rio20.net\/wp-content\/uploads\/sites\/4\/2019\/02\/eng_poche-1024x338.png 1024w, https:\/\/dev.eu.ripess.rio20.net\/wp-content\/uploads\/sites\/4\/2019\/02\/eng_poche-300x99.png 300w, https:\/\/dev.eu.ripess.rio20.net\/wp-content\/uploads\/sites\/4\/2019\/02\/eng_poche-768x253.png 768w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<p> For these two cases, there is a simple theoretical answer, but it is not so easy to put into practice, because it already requires a dense economic network: the payment of part of the salaries in local currency. However, the money supply redistributed monthly is a powerful lever for boosting the local and sustainable economy through consumption. This is explained in the diagram below.<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img loading=\"lazy\" decoding=\"async\" width=\"719\" height=\"364\" src=\"https:\/\/europe.ripess.rio20.net\/wp-content\/uploads\/sites\/4\/2019\/02\/eng3.png\" alt=\"\" class=\"wp-image-4783\" srcset=\"https:\/\/dev.eu.ripess.rio20.net\/wp-content\/uploads\/sites\/4\/2019\/02\/eng3.png 719w, https:\/\/dev.eu.ripess.rio20.net\/wp-content\/uploads\/sites\/4\/2019\/02\/eng3-300x152.png 300w\" sizes=\"(max-width: 719px) 100vw, 719px\" \/><\/figure>\n\n\n\n<p>\nWe\nhave therefore seen that producers in the agricultural sectors have a\nclear interest in using the local currency to resist competition from\nlarge groups and foreign producers. However, this success is based on\nthe balance of flows. Strengthening the local economy therefore\nrequires organization and patience, as it involves bringing all its\nstakeholders into the payment community into a virtuous circle.<\/p>\n\n\n\n<p>\nIt\nis up to the local currency to carry out this work of economic\nfacilitation and credit pooling, and it must be given the means to do\nso. Once this work is done, in the same way that an irrigation system\nwould be installed in a crop, money can then flow in a virtuous way\nby creating value in the local and sustainable economy, and by\nstrengthening economic resilience, in the face of systemic financial\ncrises. 2008 should be a lesson to us! \n<\/p>\n\n\n\n<p>\n<em>In\na future newsletter, we will take the example of one or more\nparticular companies and how they use local currency on a daily basis\nto make sense of their work: an economic sense, of course, but also\nthe feeling of participating fully in improving the common good.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>by Antonin Calderon &amp; Jean Rossiaud (Leman Currency \/ APRES-GE&nbsp;in collaboration with Ga\u00eblle Bigler (FRACP \/ URGENCI) This is the third issue of the series we started in October, on [&hellip;]<\/p>\n","protected":false},"author":7021,"featured_media":4338,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","wds_primary_category":0,"footnotes":""},"categories":[93,4398,4],"tags":[1558,1556,928,725,734],"class_list":["post-4775","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-home","category-lets-talk-about-sse","category-news","tag-0219-en-2","tag-0219-en","tag-local-currencies-2","tag-local-currencies","tag-local-currency","et-has-post-format-content","et_post_format-et-post-format-standard"],"_links":{"self":[{"href":"https:\/\/dev.eu.ripess.rio20.net\/en\/wp-json\/wp\/v2\/posts\/4775"}],"collection":[{"href":"https:\/\/dev.eu.ripess.rio20.net\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dev.eu.ripess.rio20.net\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dev.eu.ripess.rio20.net\/en\/wp-json\/wp\/v2\/users\/7021"}],"replies":[{"embeddable":true,"href":"https:\/\/dev.eu.ripess.rio20.net\/en\/wp-json\/wp\/v2\/comments?post=4775"}],"version-history":[{"count":0,"href":"https:\/\/dev.eu.ripess.rio20.net\/en\/wp-json\/wp\/v2\/posts\/4775\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/dev.eu.ripess.rio20.net\/en\/wp-json\/wp\/v2\/media\/4338"}],"wp:attachment":[{"href":"https:\/\/dev.eu.ripess.rio20.net\/en\/wp-json\/wp\/v2\/media?parent=4775"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dev.eu.ripess.rio20.net\/en\/wp-json\/wp\/v2\/categories?post=4775"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dev.eu.ripess.rio20.net\/en\/wp-json\/wp\/v2\/tags?post=4775"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}