11

John Lamb, Sr. Agribusiness Specialist Agriculture and Rural Development Department

Sustainable Development NetworkWashington, DC

Dialogue and information Dialogue and information exchange on compliance…exchange on compliance…

STDF Information Session on Private Standards, STDF Information Session on Private Standards, June 26 , 2008June 26 , 2008

22

..including… ..including… Private standard holdersPrivate standard holders SuppliersSuppliers CertifiersCertifiers

33

……other interested partiesother interested parties Private standard holdersPrivate standard holders SuppliersSuppliers CertifiersCertifiers BuyersBuyers Accreditation bodiesAccreditation bodies Regulatory agenciesRegulatory agencies Advocacy groupsAdvocacy groups WTO (both SPS and TBT) WTO (both SPS and TBT) International standard-setting bodiesInternational standard-setting bodies

Community of Practice

44

TSPN: TSPN: A GPP designed…A GPP designed…

To build a community of practice…To build a community of practice…

……actively promoting the adoption ofactively promoting the adoption ofimproved social, environmental, and foodimproved social, environmental, and foodsafety standards in developing countries…safety standards in developing countries…

and committed to sharing learning and and committed to sharing learning and experiences associated with supporting experiences associated with supporting those efforts those efforts

55

TSPN: ObjectivesTSPN: Objectives

Better enable developing countries to take Better enable developing countries to take advantage of, and participate more effectively in advantage of, and participate more effectively in standards-based markets. standards-based markets.

Through research, policy dialogues, application of Through research, policy dialogues, application of improved benchmarking and evaluation tools and improved benchmarking and evaluation tools and the use of a standards information clearinghouse..the use of a standards information clearinghouse..

……the TSPN provides a platform for identifying and the TSPN provides a platform for identifying and replicating better practices in development replicating better practices in development assistance related to standards management. assistance related to standards management.

66

TSPN: Thematic AreasTSPN: Thematic Areas

Knowledge sharing and dissemination (50%)Knowledge sharing and dissemination (50%)

Priority-setting and donor coordination (20%)Priority-setting and donor coordination (20%)

Support for national policy, reform, and capacity-Support for national policy, reform, and capacity-building (20%)building (20%)

Global advocacy (10%)Global advocacy (10%)

77

Premises: Agri-food Premises: Agri-food standards matter greatlystandards matter greatly

Commerce and tradeCommerce and trade Economic growthEconomic growth Social developmentSocial development Human healthHuman health Agricultural health Agricultural health Environmental protectionEnvironmental protection

Poverty Reduction!

88

Premises: Agri-food standards can Premises: Agri-food standards can affect many different objectivesaffect many different objectives

Volume/value growth in commerce or tradeVolume/value growth in commerce or trade Improved or sustained market share Improved or sustained market share Higher unit values for products soldHigher unit values for products sold Higher value addedHigher value added Productivity increasesProductivity increases Higher net returns to smallholdersHigher net returns to smallholders Improvement in food securityImprovement in food security Reduction in food-borne diseaseReduction in food-borne disease Preservation of biodiversity Preservation of biodiversity Prevention of environmental Prevention of environmental

degradationdegradation Better quality of lifeBetter quality of life

99

Premises: Private agri-food standards Premises: Private agri-food standards are here to stay, in fact gaining groundare here to stay, in fact gaining ground Arguably as old as official standardsArguably as old as official standards Boom started in the Nineties, even before Boom started in the Nineties, even before

WTO existed as suchWTO existed as such Proliferation of schemes, often overlapping or Proliferation of schemes, often overlapping or

contradictory, but never staticcontradictory, but never static Most producers interviewed say they spend Most producers interviewed say they spend

90% of quality management effort on them90% of quality management effort on them Major countries are benchmarking on themMajor countries are benchmarking on them

1010

Premise: Private standards can be Premise: Private standards can be seen as a problem…seen as a problem…

Not always based on good scienceNot always based on good science Not always uniform in their applicationNot always uniform in their application They are not always transparent They are not always transparent Undeniable impact on field of standardsUndeniable impact on field of standards They seem to be gaining tractionThey seem to be gaining traction They have tended to proliferateThey have tended to proliferate They occupy a lot of time and attention They occupy a lot of time and attention

among actors in productive chainsamong actors in productive chains They tend to raise costsThey tend to raise costs They may crowd out some playersThey may crowd out some players

1111

……or perhaps an opportunity, or perhaps an opportunity, to be embracedto be embraced

Bring attention to standards in generalBring attention to standards in general Market forces provide impetus, disciplineMarket forces provide impetus, discipline Contribute to ultimate SPS concernsContribute to ultimate SPS concerns Bridge to analogous domestic concernsBridge to analogous domestic concerns Better/greater implementation guidanceBetter/greater implementation guidance More holistic perspectiveMore holistic perspective Self-regulation mean lowers public burdenSelf-regulation mean lowers public burden More responsive to changing conditionsMore responsive to changing conditions They can add economic value They can add economic value

1212

Premise: Private standards are not Premise: Private standards are not inherentlyinherently incompatible with SPS incompatible with SPS

……yet more work is neededyet more work is needed

Use of risk analysis

Scientific basis

Precautionary principle

? MFN treatment

National Treatment

Fair competition

~ Transparency

Special & differential treatment

1313

Premises: The community of practice Premises: The community of practice needs a shared understandingneeds a shared understanding

Not mandatory, yet sometimes indispensable Not mandatory, yet sometimes indispensable They are guidelines for acceptable or even best They are guidelines for acceptable or even best

practicespractices Provide parameters for measuring compliance & Provide parameters for measuring compliance &

performanceperformance May cover not just primary production, but also May cover not just primary production, but also

processing, manufacture, distribution, marketing, and processing, manufacture, distribution, marketing, and analytical services analytical services

Primarily about commerce, secondarily about tradePrimarily about commerce, secondarily about trade

1414

Food safety and Animal/Plant Health (i.e. SPS) StandardsTechnical Requirements

(identity, quality, condition, presentation, etc)

Environ. Standards

Social Standards

Supply Chain Management

Service

They cover more ground than either They cover more ground than either the SPS or TBT agreementthe SPS or TBT agreement

1515

Examples of private schemes that Examples of private schemes that focus on GAP, GMP, GLP, GDPfocus on GAP, GMP, GLP, GDP

1616

GlobalGAP seems to have the GlobalGAP seems to have the greatest momentum on the farmgreatest momentum on the farm

V3 2008 V4 2011

1717

Private schemes that foster Private schemes that foster “ethical accountability”“ethical accountability”

1818

Private schemes that focus onPrivate schemes that focus onthe environmentthe environment

1919

What economic and social roles do What economic and social roles do private agri-food standards play?private agri-food standards play?

Identify and differentiate products, processes Identify and differentiate products, processes and circumstancesand circumstances

Shape access to different domestic marketing Shape access to different domestic marketing channels or specific value/supply chains channels or specific value/supply chains

Achieve markets that are more orderly in Achieve markets that are more orderly in conduct, less volatile in pricing, more profitable conduct, less volatile in pricing, more profitable to participants, yet more valuable to consumers to participants, yet more valuable to consumers

Manage risk to public health and food industry Manage risk to public health and food industry Regulate food safety and agricultural healthRegulate food safety and agricultural health Provide a uniform basis for tariffs or taxation Provide a uniform basis for tariffs or taxation

2020

They start with tangible, measurable They start with tangible, measurable technical specifications…technical specifications…

• IdentityIdentity: name; label; other : name; label; other markings; country of origin markings; country of origin

• Physical dimensions:Physical dimensions: size; count; shape; weightsize; count; shape; weight

• Maturity:Maturity: soluble solids; soluble solids; color break; other indicators color break; other indicators

• Quality:Quality: sugar level; firmness; percentage of sugar level; firmness; percentage of brokens, defects, foreign matter, or filthbrokens, defects, foreign matter, or filth

• Condition:Condition: freshness; firmness; freshness; firmness; percent decay; mechanical damagepercent decay; mechanical damage

• Organoleptic traits:Organoleptic traits: appearance; smell; taste; feelappearance; smell; taste; feel

2121

““Beauty is in the eye of the beholder”Beauty is in the eye of the beholder”

Baby Bok Choy

Conventional LettuceGiant Pumpkin

2222

Which tomato would you buy?Which tomato would you buy?

Roma

Grape

Beefsteak

HeirloomCherry

Yellow

2323

Intangible standards are becoming Intangible standards are becoming more important as markets maturemore important as markets mature

• Credence attributesCredence attributes::• Source areaSource area• Production methodsProduction methods• Impact on the Impact on the

environment environment • UniquenessUniqueness• LuxuryLuxury• Food safetyFood safety• Health effects onHealth effects on

consumers, workersconsumers, workers• Distribution ofDistribution of

benefitsbenefits

2424

Which tomato would you buy?Which tomato would you buy?

Organic @$3.99/lb

Pesticide free @$3.79/lb

Cluster @$3.25/lb

Vine ripes @$2.99/lb

High lycopene @$4.25/lb

2525

Let’s look at Let’s look at food safety challenge food safety challenge

Number of food-borne diseasesNumber of food-borne diseases About 250 of concern to CDCAbout 250 of concern to CDC

New or emerging diseasesNew or emerging diseases More than 150 agents of zoonotic infectionMore than 150 agents of zoonotic infection

Rise of vulnerable populationsRise of vulnerable populations % of young in developing countries% of young in developing countries % of elders in developed countries% of elders in developed countries Immuno-suppressed individualsImmuno-suppressed individuals

Limits to treatmentLimits to treatment Resistant strainsResistant strains Lack of research to replace antibioticsLack of research to replace antibiotics

2626

76 million cases of foodborne illness 76 million cases of foodborne illness each year in the U.S. aloneeach year in the U.S. alone

5,200 deaths5,200 deaths 325,000 cases result in average 325,000 cases result in average

of 5.8 days in hospitalof 5.8 days in hospital 1,991,311 cases who visit 1,991,311 cases who visit

physician and test positive for physician and test positive for specific pathogenspecific pathogen

12,878,489 cases who visit a 12,878,489 cases who visit a physician but have no test donephysician but have no test done

60,800,000 cases who do not 60,800,000 cases who do not seek medical careseek medical care

$5.6 billion in economic costs$5.6 billion in economic costs

2000 TACO BELL HEPATITIS A

OUTBREAK TIED TO GREEN ONIONS

2727

These illnesses have These illnesses have huge impacts on the individual…huge impacts on the individual…

Pain and sufferingPain and suffering Death and Death and

disabilitydisability Loss of wagesLoss of wages Reduced Reduced

productivityproductivity Medical expensesMedical expenses Legal costsLegal costs Loss of leisureLoss of leisure

2828

……and on societyand on society

QALYs and QALYs and DALYsDALYs

Reduced laborReduced laborproductivityproductivity

Loss of work and Loss of work and leisure time by leisure time by affected person affected person and family and family

1,397, 187 cases of salmonella means $2,467,322, 866 (2006 dollars) in lost wages and medical costs (USDA/ERS Cost of Illness Calculator)

2929

Regulatory agencies such as FDA Regulatory agencies such as FDA have quite a challengehave quite a challenge

Value of U.S. food imports Value of U.S. food imports exceeds $2 trillion (more than exceeds $2 trillion (more than twice the size of the Brazilian twice the size of the Brazilian economy)economy)

U.S. alone has 825,000 U.S. alone has 825,000 sources of imported food, sources of imported food, entering through 300 ports of entering through 300 ports of entryentry

>3,000 trucks carrying food >3,000 trucks carrying food cross through Nogales, AZ cross through Nogales, AZ border each day from Mexicoborder each day from Mexico

FDA can inspect only about FDA can inspect only about 1% of shipments1% of shipments

3030

……and try to respond accordinglyand try to respond accordingly

““I want to not only know where this was grown, I want to know who I want to not only know where this was grown, I want to know who planted it, I want to know the nutrients that were fed to it, I want to planted it, I want to know the nutrients that were fed to it, I want to know the quality of the water, I want to know who picked it, I want know the quality of the water, I want to know who picked it, I want to know what they did after they picked it, I want to know who to know what they did after they picked it, I want to know who shipped it. shipped it.

In other words, I want to know that quality was built in very step of In other words, I want to know that quality was built in very step of the way. So that when it gets to the shelf of a retailer it was not the way. So that when it gets to the shelf of a retailer it was not dependent simply on some border protection person checking it as dependent simply on some border protection person checking it as it comes through.”it comes through.” Michael Levitt, Secretary of Department of Health and Human Services, Michael Levitt, Secretary of Department of Health and Human Services, (i.e. FDA), November 2007(i.e. FDA), November 2007

3131

Cyclospora in red Cyclospora in red raspberries from Guatemalaraspberries from Guatemala

3232

Ripple effects spread far over timeRipple effects spread far over time

Initial blame on California blackberries caused $20-$40 Initial blame on California blackberries caused $20-$40 million in lost sales for all berriesmillion in lost sales for all berries

US and Canada blocked red raspberry imports from US and Canada blocked red raspberry imports from Guatemala next two years, resulting in $10 million loss to Guatemala next two years, resulting in $10 million loss to producers thereproducers there

Several major retailers cut off all produce imports from Several major retailers cut off all produce imports from GuatemalaGuatemala

Current demand for Guate berries in US is one-third of Current demand for Guate berries in US is one-third of earlier levels; Canada still closed.earlier levels; Canada still closed.

Many brambleberry producers went out of businessMany brambleberry producers went out of business Some growers moved to Southern MexicoSome growers moved to Southern Mexico Guatemalan berry industry never recovered despite Guatemalan berry industry never recovered despite

model plan of excellence developed jointly with FDA, model plan of excellence developed jointly with FDA, CDC, PMA, FMI and supported by gov’t, donorsCDC, PMA, FMI and supported by gov’t, donors

3333

Even if we consider only the 10 most Even if we consider only the 10 most worrisome foodborne pathogens..worrisome foodborne pathogens..

CampylobacterCampylobacter Clostridium botulinumClostridium botulinum E. coliE. coli 0157:H7 0157:H7 Listeria monocytogenesListeria monocytogenes NorovirusNorovirus SalmonellaSalmonella Staphyloccus aureusStaphyloccus aureus ShigellaShigella Toxoplasma gondiiToxoplasma gondii Vibrio vulnificusVibrio vulnificus

3434

...they continue to affect major ...they continue to affect major enterprises and a lot of individualsenterprises and a lot of individuals

Business interruptionBusiness interruption Wasted time and effortWasted time and effort Loss of clientLoss of client Loss of marketLoss of market Damage to reputationDamage to reputation

3535

……categories and source countries categories and source countries can be severely affectedcan be severely affected

3636

Effective prevention must start Effective prevention must start with top management…with top management…

3737

……committed to a quality culture…committed to a quality culture…

embodied in a QMS…embodied in a QMS…

3838

……which depends on employees which depends on employees acting responsibly…acting responsibly…

3939

……and also a code of practice…and also a code of practice…

4040

……that must be verified by that must be verified by third-party certification and audits...third-party certification and audits...

4141

...who in turn may be accredited...who in turn may be accredited

4242

Crisis response must Crisis response must be part of the planbe part of the plan

4343

A culture of compliance at the A culture of compliance at the industry level is also importantindustry level is also important

Vertical and horizontal cooperation

Public awareness

Benchmarking

Upgrading national and industry-specific standards

Training

4444

..as is public-private collaboration..as is public-private collaboration

Within clear limits, which are predominantly defined by international and Within clear limits, which are predominantly defined by international and (as relevant) EU legislation, the Dutch and Australian [livestock] (as relevant) EU legislation, the Dutch and Australian [livestock] industries have the ability to shape their own future. industries have the ability to shape their own future.

The national animal health services are co-managed by government and The national animal health services are co-managed by government and industry, each with clearly defined roles and responsibilities. industry, each with clearly defined roles and responsibilities.

Non-regulatory animal health issues are primarily the responsibility of Non-regulatory animal health issues are primarily the responsibility of the private sector, in both countries with substantial technical support the private sector, in both countries with substantial technical support from appropriate organisations and people. from appropriate organisations and people.

Financial support for these activities is almost exclusively from industry, Financial support for these activities is almost exclusively from industry, through compulsory levies. through compulsory levies.

In these countries, industry structures facilitate whole-of-sector In these countries, industry structures facilitate whole-of-sector cooperation.cooperation.

4545

In the developing world, In the developing world, donor support is more criticaldonor support is more critical

To raise awarenessTo raise awareness To stimulate stakeholder dialogueTo stimulate stakeholder dialogue To improve regulatory impact analysisTo improve regulatory impact analysis To improve the public comment process To improve the public comment process

for official standardsfor official standards To support industry involvement in setting To support industry involvement in setting

private standards within trading partnersprivate standards within trading partners To build capacity in both the public and To build capacity in both the public and

private sectors private sectors

4646

..which is why the World Bank ..which is why the World Bank remains engaged in standardsremains engaged in standards

Mainstreaming standards ESWMainstreaming standards ESW STDF co-funding and participationSTDF co-funding and participation E-learning series on agri-foood standardsE-learning series on agri-foood standards Development Marketplace 2008Development Marketplace 2008 SPS Action Plans SPS Action Plans Workshops on agri-food standards, private Workshops on agri-food standards, private

standards, smallholder linkagesstandards, smallholder linkages Regulatory impact analysis knowledge productRegulatory impact analysis knowledge product Trade Standards Practitioners NetworkTrade Standards Practitioners Network

4747

Main TSPN activitiesMain TSPN activities

Best practice conferences, preceded by a Best practice conferences, preceded by a research/consultation phase and post-ceded by action research/consultation phase and post-ceded by action plans for member organizations/partnerships to plans for member organizations/partnerships to replicate/scale-up findings; replicate/scale-up findings;

Refinement/field testing/dissemination of improved Refinement/field testing/dissemination of improved industry/company/project benchmarking and impact industry/company/project benchmarking and impact assessment diagnostic tools to support the assessment diagnostic tools to support the identification/prioritization of interventions and gauge identification/prioritization of interventions and gauge their effectiveness; their effectiveness;

Continued support to the TradeStandards.org Continued support to the TradeStandards.org information clearinghouse, project database, and information clearinghouse, project database, and learning centre to be used as a resource by various learning centre to be used as a resource by various stakeholders. stakeholders.

4848

TSPN research/action prioritiesTSPN research/action priorities

1.1. Interface of the public and private sectors in the Interface of the public and private sectors in the adoption of voluntary standardsadoption of voluntary standards

2.2. Promoting good governance in standards development Promoting good governance in standards development and implementationand implementation

3.3. Leveraging private finance to complement public Leveraging private finance to complement public funding for capacity-building effortsfunding for capacity-building efforts

4.4. Improving the effectiveness of technical assistance Improving the effectiveness of technical assistance delivery to developing country stakeholders, and delivery to developing country stakeholders, and

5.5. Means of assessing impacts of standards within the Means of assessing impacts of standards within the frame of development and poverty reduction objectives. frame of development and poverty reduction objectives.