Slow Food Recommendations - Gaps & Recommendations

In policy documents, plans to support small local food producers seem to be all set: subsidies, training, and digital support are all in place (European Commission, 2020, p. 16). But for the people who run these businesses, the release of a policy is often just the first step. Although funding is available, complex application processes can shut many of them out. Most of the digital tools are designed to meet the needs of large enterprises or other industries (European Partnership “Agriculture of Data”, 2023, pp. 2, 60). As a result, business owners know that support is “out there,” but they don’t know how to access it, let alone how to use it once they have it. Therefore, for these policies to truly reach the corner bakeries, family farms, and local food shops, three practical challenges must be addressed: whether financing is easily accessible, whether business owners possess the necessary skills, and whether digital tools are truly suited for small businesses.

1. Financing gap

Firstly, for many small-size enterprises, the transition to sustainable practices requires capital investment. For example, small agricultural processors may need to replace refrigeration equipment, establish new supply chains, and redesign packaging. However, such investments typically have long payback periods and generate slow cash flow, which can put pressure on these small agricultural businesses. 

Figure 1. Main barriers to climate and environmental investment among EU-24 agri-food SMEsSource: fi-compass (2023a, p. 61).

According to the fi-compass survey of agri-food SMEs in 24 EU member states, 56.8% of companies believe costs are too high and they are unable to generate sufficient returns, 55.2% believe upfront costs are too high, and 32.6% cite a lack of external financing (fi-compass, 2023a, p. 61). 

Figure 2. EU agricultural financing gap by farm size, 2017 and 2022Source: fi-compass (2023b, p. 15).

Moreover, the financing gap in the EU’s agricultural sector in 2022 was approximately 62.3billion euros, of which small farms accounted for 38.4 billion euros and the financing gap for food processing SMEs also reached approximately 5.5 billion euros (fi-compass, 2023b, pp. 11, 14–15, 18). This indicates that the market is not automatically providing sufficient funding for the green transition, particularly for smaller enterprises with limited collateral. 

Existing support programs often require businesses to advance funds to prepare complex documentation or secure complementary financing. While large enterprises can hire consultants to handle applications, small businesses may forgo applying due to limited time, personnel, and cash flow. Consequently, while unified funding programs may appear equitable on paper, they effectively favor larger enterprises in terms of actual accessibility.

These gaps can be addressed through the Rural Development Fund and EAFRD financial instruments outlined in the CAP Strategic Plan, in collaboration with local governments and the Enterprise Europe Network European Commission, 2020, p. 16; fi-compass, 2023b, pp. 22–23). This includes:

First, providing free corporate sustainability assessments to identify whether a company’s greatest need for improvement lies in energy, packaging, transportation, or food waste;

Second, for low-cost projects, businesses could be advised to use simplified cost options, or be offered one-time grants or green vouchers to reduce the need for reimbursement documentation;

A unified online application portal could also be established to eliminate the need for businesses to seek funding separately from agricultural, energy, digital, and local development programs;

2. Skill Gaps

The second issue is that the content of the support provided does not align with the actual needs of businesses. The survey shows that 28.7% of agri-food SMEs believe they lack the knowledge or capacity needed to make climate and environmental investments, while 36% report a lack of reliable technical solutions or relevant information (fi-compass, 2023a, p. 61). This means that even if businesses secure funding, the funds may not necessarily translate into effective action if they do not know what equipment to purchase, how to measure emissions, or how to assess the return on investment.

Existing general business training programs struggle to address this issue. A study by EIT Food of 112 participants in the food innovation ecosystem across the United Kingdom, Ireland, and Iceland found that many business support organizations serve multiple industries simultaneously and lack specialized expertise in the agri-food sector. These surveyed companies need quick, specialized technical facilities and industry-specific knowledge, not generic entrepreneurship courses (EIT Food, n.d., pp. 3–5).

In such situations, organizers should not simply conduct a one-size-fits-all training session, but rather:

First, when consultants visit a company, they should use energy bills, procurement records, and waste data to conduct a baseline assessment and develop short-term action plans tailored to the company’s specific industry. For example, bakeries should focus on oven energy consumption and food waste, dairy processors should focus on refrigeration and water usage; and retailers should focus on packaging and inventory. Second, to address knowledge gaps, short modules should be offered on carbon accounting, energy conservation, sustainable packaging, and grant applications. Third, through hands-on learning, businesses of the same type should participate in local demonstrations and peer-to-peer learning sessions, rather than merely attending theoretical courses followed by a check three to six months later to see if recommendations have been implemented and whether costs and environmental performance have improved.

CAP has already required member states to provide independent, targeted advice through Agricultural Knowledge and Innovation Systems (AKIS) and farm advisory services (European Commission, 2020, p. 16; European Commission, n.d.). Therefore, this recommendation does not involve establishing a new, costly system, but rather extending existing systems and connecting them to small agribusinesses.

3. The Digital Divide

The digital divide should not be simply understood as companies not yet using software; rather, it stems from a lack of affordable, easy-to-use digital tools that are designed for businesses of this scale. This includes tools for tracking energy use, managing inventory, and applying for grants.

Digital technologies can help businesses track energy consumption and trace product origins, as well as assist in inventory management and reduce food waste; however, their actual use is limited by skill levels and suitability. Research on agricultural data in the European Union has already pointed out that the adoption rate of digital technologies is affected by a lack of technical literacy and differences in investment capacity among businesses of various sizes (European Partnership “Agriculture of Data”, 2023, pp. 2, 60). This clearly illustrates that complex carbon accounting or supply chain platforms designed for large enterprises, even if technologically advanced, they are not suitable for local food businesses with only a few employees.

In this regard, digital tools should be tested by actual small businesses before being officially rolled out, rather than having policymakers unilaterally decide on their features.

This can be implemented through the existing European Digital Innovation Hubs. The system itself should provide small and medium-sized enterprises with technical testing, skills training, and financing advice, and allow these businesses to trial digital solutions before investing.

Figure 3. European Digital Innovation Hubs across EuropeSource: European Commission (2025).

References：

EIT Food. (n.d.). Supporting innovative agrifood SMEs: A review of the support ecosystems in the UK, Ireland, and Iceland. https://www.eit.europa.eu/sites/default/files/12._report_on_unmet_needs_of_agrifood_smes_in_north-west_europe.pdf

European Commission. (n.d.). Farm advisory services. https://agriculture.ec.europa.eu/cap-my-country/cap-strategic-plans/fas_en

European Commission. (2020). A farm to fork strategy for a fair, healthy and environmentally-friendly food system. https://food.ec.europa.eu/system/files/2020-05/f2f_action-plan_2020_strategy-info_en.pdf

European Commission. (2025). European Digital Innovation Hubs. https://digital-strategy.ec.europa.eu/en/policies/edihs

European Partnership “Agriculture of Data”. (2023). Unlocking the potential of data for sustainable agriculture: Strategic research and innovation agenda. https://research-and-innovation.ec.europa.eu/system/files/2023-08/AgData%20SRIA%20final_version.pdf

fi-compass. (2023a). Survey on financial needs and access to finance of EU agri-food micro, small and medium-sized enterprises. https://www.fi-compass.eu/sites/default/files/publications/AGRI%20FOOD%20Survey%20Report_2023_RTW_0.pdf

fi-compass. (2023b). Financing gap in the agriculture and agri-food sectors in the EU. https://www.fi-compass.eu/sites/default/files/publications/FinancingGapAgricultureAgrifood_RTW_0.pdf

 Yaxin Bao  is a second-year Accounting and Finance student at the University of Bristol, driven by the ambition to bridge the gap between financial systems and global sustainability. As part of his work with IRIS Sustainable Development, he is currently supporting research on the practical implications of EU sustainability frameworks, specifically the European Green Deal and the Farm to Fork Strategy. Polly is exploring how these policies may create both challenges and opportunities for small-scale food entrepreneurs. He aims to develop a career at the intersection of finance and international business, contributing to a more resilient and sustainable global economy.