Building sustainable supply chains: shared rules for producers and processors
OI Pomodoro del Nord Italia ensures the entire production chain that the parties behave correctly, i.e., the producer organizations who cultivate and produce the tomatoes and the first industrial processing companies.
For over a century, we have developed a sophisticated contractual arrangement in which Producer Organizations (OP) and Processing Companies (IT) engage in negotiations at the start of each year to establish shared guidelines that both parties agree on, which then form the basis for the contracts.
In the tomato supply chain, agricultural producers don’t negotiate directly with industries on an individual basis. Instead, they collaborate through Producer Organizations, which provide farmers with stronger bargaining power, field-based technical support, and access to funding from the European CMO (Common Organization of the Markets under EU Regulation 1308/2013). Additionally, these organizations manage the collection of payments from the industry.
The contracts made are submitted to OI Pomodoro Nord Italia, ensuring that written and transparent agreements are applied and enforced, while also implementing the common rules agreed upon by the agricultural producers and the industry. As a result, both producer organizations and processing companies have established contractual terms, along with the assurance of a reference price that fairly compensates each stage of production. This price may vary based on the quality provided.
Such bargaining usually takes place before the start of the tomato crop year to offer protection to the agricultural stage, when informed production choices can be made. In other supply chains, agricultural production lacks sufficient protection, often leading to situations where producers are uncertain about receiving fair compensation or even about whether their products will reach the market. This creates the risk of fostering illegal or non-socially sustainable practices. Conversely, processing companies benefit from having secure contracts for raw material purchases from the outset, allowing them to plan effectively for industrial processing and the sale of the finished product.
Such an organized system ensures the growth of the supply chain as a whole, increasing its efficiency and strength, thus increasing its competitiveness against other global production districts. Over time, the supply chain has expanded, enabling farmers and processors to specialize in this crop. They’ve been able to employ skilled labor and invest in specialized, innovative machinery. This growth helps foster both economic and social sustainability.
The northern Italian supply chain is highly mechanized, relying on machinery for tomato harvesting rather than manual labor. It employs trained and specialized personnel, rather than cheap labor, to manage the harvesting process in the fields. This development, which has evolved over the years, has played a crucial role in creating safer and healthier working conditions, ensuring better protection of workers’ rights. The effective synergy between Producer Organizations and the Regions, that receive European funding for specialized agricultural machinery, has created the ideal conditions for producing tomatoes with high social sustainability. Processing companies have long required tomatoes to be grown under socially sustainable conditions, contributing by paying Producer Organizations and, in turn, farmers on time, following the agreements and legal deadlines. During the summer production cycle, when harvesting and processing take place, there is a peak in labor demand both in the fields and at processing plants. Protecting workers is in the best interest of both the employees and the employers, who rely on trained, specialized staff working in safe conditions within their companies.
OI Pomodoro del Nord Italia is the space where the agricultural production and industrial processing sectors come together to discuss and agree on objectives and strategies in an equal and collaborative manner. Both the agricultural and industrial sides have equal decision-making power, with decisions being made through a majority vote.
As a demonstration of its concrete commitment to the fight against illegal forms of labor, in 2022 OI Pomodoro del Nord Italia signed a Memorandum of Understanding with the association Terra! to promote among its members the re-employment of people who are victims of caporalato from other supply chains. Thanks to this initiative, 14 individuals who had previously been victims of exploitation in other agricultural supply chains were identified and trained that year. Of these, 8 were ultimately hired by tomato processing companies.
In a broader initiative, OI Pomodoro del Nord Italia has also contributed to the promotion of social responsibility by actively supporting the adoption in the European Union of the Corporate Sustainability Due Diligence Directive (CS3D) and the EU Forced Labor Regulation.
The CS3D directive, which was officially approved on May 24, 2024, holds both European and non-European companies operating within the continent accountable for the environmental and social sustainability of their supply chains. The regulation also includes a ban on the sale of products made with forced labor in the European market. OI Pomodoro del Nord Italia also called for its swift implementation and included it in the priorities presented at the Ministry’s Tavolo nazionale del pomodoro da industria.
Interested to learn more about our sustainability projects? Take a look at the brand new Tomato Water Project here.
