2.1. Research Gaps and Questions
We identified research gaps related to both theoretical and empirical aspects, with the use of computer simulation to support the introduced theses. The SFSC strategy is rarely described in the literature as a new trend or an area of scientific interest. The deficiencies in terms of theoretical foundations and support for future directions of research are visible. The existing studies refer to practical examples, without focusing on or defining a strong theoretical basis for the study, including the identification of SFSC solutions as a new supply chain strategy that can be part of global trends, related to sustainable development and the functioning of sustainable supply chains.
The novelties of this research include the application of simulation-based optimization in the search for the proportion of organic products supplied by a local farmer. The use of computer simulation with an optimization module allows the local farmer to find the best balance of supply for each type of market. From a theoretical viewpoint, we systematize the scientific knowledge and identify motivators, barriers, and drivers, and relate SFSCs to organic products in sustainable supply chains (SSCs) in order to search for profit and benefit opportunities for individual links serving different types of local markets and short food supply chains.
We raised the following research questions: How does a change in a market within the SFSC affect the achievement and change in producers’ profits? Which of the presented solutions are optimal for the selected organic products? How can local producers be encouraged to take interest in the new supply chain strategy, i.e., the SFSC, for organic products?
The research methods included the following: (1) a critical analysis of the literature showed that extensive theoretical foundations related to the discussed issues are lacking. (2) Computer simulation was used to identify possible scenarios of optimization of changes in the profits of producers servicing different markets within the SFSC, with the example of three selected products. (3) The data for empirical research were collected on the basis of interviews with farmers producing organic goods in the West Pomeranian Voivodeship in Poland. The selected products included goods produced in the studied area, which met the organic products requirements, with producers that served various markets, including those that were identified as a part or element of an SFSC.
2.2. Literature Review
We began by defining both local supply chains and markets, moving on to the SFSC concept and strategy. The vast majority of agricultural products are available worldwide through complex and often highly industrialized supply networks. These mostly include conventional products. Organic production represents a negligible percentage of the world’s agricultural production. Recent reports on organic production [
15] show that 69.8 million ha in 2017 were under organic agricultural management worldwide, representing 1.4% of the world’s farmland. The highest organic shares of the total agricultural land are found in Oceania (8.5%), Europe (2.9%), and Latin America (1.1%). In the European Union (EU), the organic share of the total agricultural land is 7.2%. Organic production resources have been implemented in 181 countries. The market value of this type of product is estimated to be 92 billion Euros, indicating that consumer demand is growing. When analyzing the supply and demand sides in relation to the sale of organic products, many barriers and drivers contribute to the change in demand [
16]. The production and trade of such products must reflect many requirements, both for the production and labelling of packaging [
17]. Alternative forms of food supply, including local food markets, are typical for small farmers, heterogeneous products, and short supply chains in which farmers also perform marketing functions, including storage, packaging, transportation, distribution, and advertising [
18].
Organic food can be produced using different systems and supply chain strategies. Alternative methods of delivering food are becoming increasingly popular [
19,
20]. The food supply system is transforming [
21] by combining production and consumption within a short geographical distance [
22]; organic farming is increasingly supported by the community, including direct farm sales. The most frequent and easiest method to market such products is through local food systems and short food supply chains. In the literature, a local food system is defined as a system in which food is produced, processed, and sold in a defined and close geographical area [
23]. These solutions are also referred to as alternative food chains [
24], as opposed to conventional solutions characterized by the mass production of food. Their structure is based on various criteria, including the number of intermediaries, geographical distance, organizational structure, and social relationships [
25]. These are essentially shortened relationships between producers, sellers, and consumers [
24]. The shortening of a supply chain plays a significant role in creating a new chain structure. Goland and Bauer [
26] stated that, traditionally, the average morsel of food travels 2092 km from the time it leaves the field (or pasture) and arrives on the table. When analyzing SFSC-related issues, many areas have already been explored, especially those related to the social and economic relationships of entities in the implementation of the SFSC principles [
27,
28]. Local food systems cover a short geographical distance from producers to consumers, usually containing little or no processed food, and the whole food chain of origin can be accurately and quickly identified. Today’s food systems are extremely complex and it is therefore difficult to practically determine a local system or supply chain, especially for processed products consisting of multiple products or requiring the production of inputs from remote locations. The intermediate stages (e.g., packaging or processing) may occur in places far from production sites, but returning to a place close to production and selling there may also indicate a local food system. A characteristic of SFSCs is that they allow the consumer to assess the value of the food used within the framework of their own knowledge and experience. This food is identified by the local community or even associated with a specific local farm. Short food supply chains [
29] are intended to redefine the relationship between the producer and the consumer, clearly and precisely indicating the origin of the product. Alternative supply chains are referred to as more natural or more local. They reflect the attempts of both producers and consumers to adapt to new types of supply and demand. The characteristic feature is an emphasis on the types of relationships that build value and improve the quality of offered products and services. The shortening of the distance between consumers and producers and the building of other types of consumer–producer relationships, and their redefinition, contribute to creating transparent chains, emphasizing information about the origin of the food, and focusing on the quality of the food, which, in turn, create added value. Shortening the distances and redesigning the relationship between the links in the chain (producers–local community) contribute to the reorientation of agriculture toward more sustainable and greener production methods [
24]. These activities result in increased chain activity between different actors in the agri-food chains: farmers, processors, wholesalers, retailers, and consumers. Changing shopping preferences and the development of different distribution channels, including e-commerce, can contribute to the success and development of alternative supply chains in terms of food supply [
30]. In the literature, there are three types of markets served by the SFSC. The characteristics are presented in
Table 1.
SFSC activities are beneficial to all participants. The benefits can be considered in terms of economic, social, and environmental aspects [
23]. The characteristics of the different types of benefits are presented in
Table 2.
This does not mean, however, that SFSCs only provide benefits. In many cases, actions do not produce better economic, social or environmental results. Profits and disadvantages may vary depending on the type of product, type of agricultural activity, transport used, season, scale of production, or research methodology. Problems in creating SFSCs include the expectations of consumers who demand a uniform range of products throughout the year [
33].
The general benefits of the SFSC activity may include: improved negotiating positions for farmers, increased communication between producer and consumer, reduced transportation costs, and increased transparency. The advantages of the SFSC in the context of the farmers were enumerated by Bimbo et al. [
34] using a different approach to the SFSC and its different contexts, including the farmer as a producer and an SFSC beneficiary. Introducing CSR principles into this strategy is easier [
35].
Although both positive effects and barriers have been identified, in-depth research into the motivation of farmers to participate and engage in SFSCs is lacking [
27,
36]. The characteristic features of such markets and chains include their dynamism, trust, social involvement, and identifiability. They have a better image, encourage initiatives, and often use other competencies (including soft skills) to conduct business rather than customer relationships; they offer products of better quality, and they more quickly adopt the principles of sustainable development. Their conduct and functioning require greater social skills and involvement of human resources. Creating added value within such a chain is easier, although networking is not excluded in making local products available to a wide range of audiences. SFSCs include community-supported agriculture systems, local farmers’ markets, basket delivery systems, or pick-it-yourself orchards [
37]. The literature shows that the SFSC is becoming a competitive tool for modern diversified farms, by allowing farms to obtain added value and consumers to save time and costs (close location). This consequently allows both parties to share and create added value simultaneously [
38]. Proponents of a sustainable food system combine the quality, distance, and biodiversity that can be supplied to the local community by local producers [
26]. Therefore, considering this issue seems important with particular reference to organic products. This is also because, by definition, the supply chains of organic products should be established in accordance with the principles of sustainable development. SFSCs can provide opportunities to market agricultural products by reducing food production costs and creating positive relationships between producers and consumers.