A Pre-Feasibility Study: Would Product Certification...

World Bank Study – Contract 7148617

A Pre-Feasibility Study: Would Product Certification Promote Environmental Sustainable Beef Production in Developing Countries?

Wataru Yamamoto

Muhammad Ibrahim Hein-Willem Leeraar

Haruo Yamane Claudia J. Sepúlveda L.

Mihoko Uramoto

Final Report

June 2009

RECS International Inc. in association with CATIE

Pre-Feasibility of product to

RECS International. promote environmental in association with CATIE certification to sustainability

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Abbreviations ARCDM: Afforestation and Reforestation Clean Development Mechanism BSE: Bovine Spongiform Encephalopathy CARTV: Conseil des appellations réservées et des termes valorisants CATIE: Centro Agronomico Tropical de Investigacion y Ensenanza CDM: Clean Development Mechanism COS: Canadian Organic Standards DFID: Department for International Development, UK EUREGAP: European Retail Produce Good Agriculture. Practices FAO: Food and Agriculture Organization FAOSTAT: FAO Statistics FMD: Foot and Mouth Disease GAP: Good Agricultural Practice GTZ: German Technical Cooperation HACCP: Hazard Analysis Critical Control Point IFAT: The global network of Fair Trade Organizations IFOAM: The International Federation of Organic Agriculture Movements INAC: National Meat Institute of Uruguay JAS: Japan Agriculture Standards LEAD: Livestock Environment and Development Initiative, FAO LOHAS: Lifestyles of Health and Sustainability NAFTA: North American Free Trade Agreement NOP: National Organic Program of the USDA OFPA: Organic Food Production Act of the USA REDD: Reduction of Emission from Deforestation and Degradation SAG: Agriculture and livestock service of Chile USAID: United States Agency for International Development USDA: US Department of Agriculture UKROFS: United Kingdom Register of Organic Food Standards WFTO: World Fair Trade Organization WHO: World Health Organization WTO: World Trade Organization Cover page photo: Silvo-pastoral system in Matiguas, Nicaragua

http://en.wikipedia.org/wiki/Bovine_spongiform_encephalopathyhttp://en.wikipedia.org/wiki/World_Trade_Organization



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Table of Contents Executive summary .........................................................................................................................1 Chapter 1 Introduction.....................................................................................................................4

1.1 Background................................................................................................................................. 4 1.2 Objective..................................................................................................................................... 4 1.3 Methodology............................................................................................................................... 5 1.4 The structure of report ................................................................................................................ 6

CHAPTER 2 Beef certification: General considerationS................................................................7 2.1 Beef consumption trends ............................................................................................................ 7 2.2 Beef trade between developed and developing countries........................................................... 8 2.3 Criteria for beef certification .................................................................................................... 10 2.4 Beef certification in product flow............................................................................................. 13 2.5 Types of existing beef certification........................................................................................... 14

Chapter 3 Regulations and Market trends for Certified Beef........................................................16 3.1 Organic beef ............................................................................................................................. 16 3. 2 Good Agricultural Practice (GAP) Certification ..................................................................... 28 3.3 Certification for natural and grass-fed beef.............................................................................. 28 3.4 Other beef certification labels in Europe.................................................................................. 31 3.5 Certification for other products ................................................................................................ 31 3.6 Market trends............................................................................................................................ 35 3.7 Summary................................................................................................................................... 41

Chapter 4 Consumer Demands and Perceptions............................................................................43 4.1 Methodology............................................................................................................................. 43 4.2 General characteristics of respondents ..................................................................................... 43 4.3 The popularity of beef .............................................................................................................. 44 4.4 Frequency of beef consumption ............................................................................................... 44 4.5 Beef purchase behaviour .......................................................................................................... 45 4.6 Beef selection criteria ............................................................................................................... 46 4.7 The perception of beef production............................................................................................ 46 4.8 Comparison of important criteria for certified beef.................................................................. 49 4.9 Voluntary payment for a better beef production system........................................................... 50 4.10 Knowledge about imported beef and beef certification.......................................................... 51 4.11 Summary................................................................................................................................. 53

Chapter 5 Food Industry interest in Environmentally Sustainable Beef Production..................55 5.1 Retailers in North America ....................................................................................................... 55 5.2 Retailers in Japan...................................................................................................................... 56 5.3 Retailers in the Netherlands...................................................................................................... 57 5.4 Two fast food chains................................................................................................................. 58 5.5 Steak restaurants in Costa Rica ................................................................................................ 60 5.6 A livestock cooperative in Costa Rica ...................................................................................... 60 5.7 Summary................................................................................................................................... 61

Chapter 6 Concept and Criteria for Environmentally Sustainable Beef Production .....................62 6.1 Beef certification for environmental sustainability .................................................................. 62 6.2 Silvopastoral systems: a key component for environmental sustainable livestock production 63 6.3 Criteria for environmentally sustainable beef production practices......................................... 66

Chapter 7 .......................................................................................................................................74 Pathway to environmentally sustainable beef production in developing countries.......................74



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7.1 Constraints and potential .......................................................................................................... 74 7.2 Pathways promoting environmentally sustainable beef production in developing countries .. 79 7.3 Recommendations: Strategy for promoting environmentally sustainable beef production in developing countries....................................................................................................................... 85

References .....................................................................................................................................88



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List of Tables, Figures and Boxes Table 2.1 Global beef consumption: 2002-07 (1,000mt).................................................................7 Table 2.2 Per capita annual beef consumption, 2002-07 (Unit: kg) ................................................8 Table 2.3 Beef imports to USA by country (unit: ton) ....................................................................8 Table 2.4 Beef imports to Netherlands by country, 2003-2008 (Unit: ton).....................................9 Table 2.5 Beef imports to Japan by country (Unit: ton) ................................................................10 Table 2.6 Five criteria of beef certification ...................................................................................11 Table 2.7 Comparing types of existing beef certification..............................................................15 Table 3.1 Four dimensions of Organic Agriculture principles ......................................................16 Table 3.2 Farms producing organic products, by certification status, Canada, 2006 ....................18 Table 3.3 Comparison of Organic Standards .................................................................................22 Table 3.4 Natural beef certification in Uruguay ............................................................................30 Table 3.5 Annual income and expenditure of MSC secretariat, 2006/2007 ..................................33 Table 3.6 Global distribution of FSC-certified forest....................................................................34 Table 3.7 Revenues and Expenses of the FSC secretariat, 2004 ...................................................35 Table 5.1: Beef exports by Montecillos.........................................................................................61 Table 6.1. Influence of dispersed trees in pastures on animal production.....................................64 Table 6.2 Impact on environmental sustainability by each measure .............................................67 Table 6.3 Criteria for environmentally sustainable beef production .............................................72 Table 7.1 Environmental standards, traceability, and market development of beef certification

scheme .......................................................................................................................................75 Table 7.2 Consumer perspectives in surveyed countries...............................................................76 Table 7.3 Payment of Environmental Services and impact on land use and emission..................80 of greenhouse gases in Esparza, Costa Rica..................................................................................80 Figure 2.1 Beef import to Netherlands from Latin America (except for Brazil and Argentina) .....9 Figure 2.2 Beef import to Japan from Developing countries (Unit Ton) ......................................10 Figure 3.1 Organic status and organic products, Canada, 2006 ....................................................18 Figure 3.2 Organic agriculture in Europe, 2006 (unit: thousand ha).............................................37 Figure 4.1 Meat preferences ..........................................................................................................44 Figure 4.2 Frequency of beef consumption ...................................................................................45 Figure 4.3 Place to purchase beef..................................................................................................45 Figure 4.4 Place for beef consumption..........................................................................................46 Figure 4.5 Selection Criteria for Beef purchase (Comparison with Price =1.0) ...........................46 Figure 4.6 Problems perceived in conventional beef production ..................................................47 Figure 4.7 Major concerns of Food Safety in conventional beef production (comparison with Animal

Disease =1.0) .............................................................................................................................47 Figure 4.8 Major criteria for Global Environment in conventional beef production (Comparison

with Land use change = 1.0)......................................................................................................48 Figure 4.9 Major criteria for Animal Welfare in Conventional beef production (comparison with

housing =1.0) .............................................................................................................................48 Figure 4.10 Major criteria concerning Social Justice in conventional

beef production (comparison with payment to farmers = 1.0) ..................................................49 Figure 4.11 Secondary criteria for certified beef in Canada and Japan.........................................49 Figure 4.12 Selection criteria for certified beef in the Netherlands (the first priority) .................50 Figure 4.13 Selection criteria for certified beef in the Netherlands ..............................................50 (the second priority by persons who chose Environment for the first priority) ............................50



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Figure 4.14 Willingness to pay premium price for certified beef production ...............................50 Figure 4.15 Purchase of imported beef..........................................................................................51 Figure 4.16 Imported beef: countries of origin..............................................................................51 Figure 4.17 Reasons for not purchasing imported beef.................................................................52 Figure 4.18 Willingness to purchase beef from developing countries ..........................................52 Figure 4.19 Knowledge about beef certification ...........................................................................53 Figure 5.1. Aspects of beef certification considered important by restaurateurs in Costa Rica.60 Figure 6.1 Concept of product certification for environmental sustainability ..............................63 Figure 6.2 Concept of Environmentally Sustainable Animal Production .....................................71 Figure 7.1: Concept of Environmental Sustainable Cattle Farm Belt ...........................................85 Box 1 An economic comparison between organic and conventional farms in the Netherlands38 Box 2 Spring Festival on Terschelling Island................................................................................58 Box 3 On farm investments for converting to environmental sustainable production systems ....77 Appendices Appendix 1: RESUMEN – MEMORIA TALLER: Pre- viabilidad para la certificación de productos

cárnicos producidos con sistemas de conservación del ambiente .............................................94 Appendix 2: Questionnaire on Criteria of Eco Beef Certification ................................................98 Appendix 3: Summary of consumer survey (Unit: percent)........................................................103 Appendix 4 Results of consumer survey in Canada (Unit: percent) ...........................................104 Appendix 5: Results of consumer survey in Japan (Unit: percent) .............................................107 Appendix 6: Results of consumer survey in the Netherlands (Unit: percent) .............................110 Appendix 7: Results of consumer survey in Costa Rica (Unit: percent).....................................114 Appendix 8: Terms of Reference.................................................................................................117

Pre-Feasibility of product certification to RECS International. promote environmental sustainability in association with CATIE of beef system

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EXECUTIVE SUMMARY

The livestock sector plays an economically and socially significant role in the developing world, generating 1.4 percent of the world’s GDP, growing in line with overall economic growth. On the other hand, livestock production has a significant impact upon the environment, upon land use and soil erosion, climate change, water quality, and biodiversity.

The objective of this study is to determine the potential of certification for beef produced in developing countries in accordance with the demands of environmental sustainability.

Types of beef certification and market trends

Essentially four types of beef certification were found in the market; certified organic, good agricultural practice (GAP) certified, natural and grass-fed. The demand for these certified beefs are growing globally:

• Sales and production of organic beef are increasing dramatically in Europe, the USA, and Canada. In the US, the number of organic beef cattle in 2005 grew 257% compared with 2003. In Canada, organic beef herds increased 30% in 2005. In the Netherlands, the sales of organic beef were 20 million Euro in 2007, with 17% annual growth. European retailers have started to offer fixed contracts to organic meat producers in order to secure supply over five years.

• GLOBALGAP, a certifier of good agricultural practice initiated by retailers, is becoming a major certifier in Europe and has expanded rapidly in the last few years. GLOBALGAP benchmarking standards officially recognize the Certified Natural Meat Program of Uruguay and ChinaGAP. GLOBALGAP is attempting to have its standards adopted by small holders in Africa.

• Natural beef certifications are emerging from private sector initiatives, particularly in the US, connecting consumer demands with the interests of producers. The number of cattle certified by Food Alliance as being raised as natural is growing dramatically, 29% annually by acreage between 2004 and 2008. The amount of natural and grass-fed beef certified by the Uruguayan government and targeted for export to the US is increasing rapidly.

• The grass-fed beef market is growing in the US. Approximately 2000 producers were raising grass-fed beef in 2008, worth nearly US$350 million retail. Food Alliance launched grass-fed beef certification in 2008. A new association, the Manitoba Grass Fed Beef Association, was formed in the spring of 2008 in Canada, targeting grass-fed demands in the US.

These certification schemes have criteria with regard to environmental sustainability in their standards, but most of them do not specify these criteria. Organic standards typically have criteria that include a general description concerning Environment (land use, biodiversity conservation, and manure management). GLOBALGAP has criteria aimed at controlling the impact of farming on the environment and on biodiversity, but the criteria are not specified and enforced. Food Alliance has ecological standards focusing on wildlife conservation, soil conservation, and water quality protection.

Traceability is required by Certified Organic, except in the US and Canada. GLOBALGAP and the Certified Natural Meat Program in Uruguay have taken initiatives to develop a traceability system.

The consumer’s perspective: preference, environmental concerns, and voluntary payment

Consumer surveys carried out in Canada, Japan, the Netherlands, and Costa Rica revealed that high percentages of respondents were interested in purchasing beef from developing countries as long as they obtain reliable quality at reasonable prices. Freshness and price are more important criteria than brand, indicating that good and


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reliable quality beef can be imported and consumed in developed countries. On the other hand, Food Safety, especially the prevention of animal diseases, was considered the most important issue by consumers in developed countries. In order to have Food Safety, traceability is regarded as necessary, especially in the wake of BSE incidents, particularly in Japan and Europe.

In the Netherlands 15% of respondents were more concerned about Environment than Food Safety, suggesting that they trust public inspection systems for food safety and have greater expectations concerning certification schemes directed at environmental sustainability.

Of all environmental concerns caused by beef production, land-use change was regarded as the most important. This suggests that sustainable land management for beef production in developing countries is an important aspect of certification standards. Respondents in the Netherlands who chose Environment as the first priority selected Animal Welfare and Social Justice as the second, suggesting that certification should include these criteria.

More than two-thirds of respondents were willing to pay a premium for beef produced in environmentally sustainable ways. However, the average premium is rather low; Japan and the Netherlands (13 and 14%, respectively) were higher than Canada and Costa Rica (8 and 11%, respectively. Certain populations were willing to pay more than 30% for the premium (3 and 6 %, in Japan and Netherlands, respectively). The niche market is found in single young people in Canada (particularly women in their 20s and 30s) and in middle-aged women (40-50s) in the Netherlands and Japan. Members of this market are considered to belong to LOHAS (Lifestyles of Health and Sustainability).

The interest of the food industry

The food industry, especially fast-food chains and supermarkets, needs to develop a way to provide affordable products to consumers while considering the aims of sustainability, engaging in equitable trade practices, limiting the spread of agricultural diseases, and having a positive impact upon local communities and the environment. Several positive signs were found.

• Wal-Mart Stores has made several initiatives in the interest of global sustainability. Wal-Mart has decided to buy produce, meat, and seafood only from suppliers accredited by private-inspection offices.

• McDonald’s is working toward developing a sustainable supply chain with newly developed animal welfare guidelines.

• Supermarkets in Japan have started producing natural beef in Australia and New Zealand.

• A butcher shop in Canada has shown interest in purchasing beef from Latin American countries (Uruguay, Costa Rica, and Argentina) if it is not restricted of quota, of good quality (brighter red in color, soft in texture), and reasonably priced.

• The owners of steak restaurants for the upper class in Costa Rica are interested in commercializing beef produced in environmentally sustainable ways.

Feasibility of beef certification for environmental sustainability

The premium price of certified beef (organically raised cattle in the Netherlands cost 15-25 % more) is almost equivalent to the potential premium the niche population is willing to pay in developed countries. The domestic supply of organic beef is limited in Europe because of the cost of organic feed and available lands. It is noteworthy that the cost of converting conventional to environmentally sustainable beef farms in developing countries is much lower than in developed countries.

The cost and administrative burden associated with certification can be considerable, particularly for smaller-scale producers. The cost would be an even larger burden for producers in developing countries paying international prices. There may also be production risks associated with limiting management options or changing production practices to comply with certification requirements.


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In order to develop a certification scheme for environmentally sustainable livestock products, funding support is needed. The Marine Stewardship Council (MSC) and Forest Stewardship Council (FSC) are largely supported by donation.

Certification by itself rarely guarantees market access, market benefits, or price premiums. Certification functions best as a tool that supports marketing efforts. The provision of market access to developing countries is the primary role of the certification scheme. Additional skills and resources have to be consistently brought to bear to leverage benefit from certification–and product quality is always paramount.

Traceability is becoming more and more important in developed countries, particularly in Japan and Europe. In order to sell beef in developed countries with an environmental sustainability premium, it is necessary to develop traceability systems.

Pathway to promoting environmentally sustainable beef production in developing countries

Certification for beef trade

The first step to promoting environmental sustainable production in developing countries is to subsidize such farm practices that meet requirements for payment for environmental services (PES). It is important to emphasize that the subsidies should be given to farmers with activities intended to improve farm organization and promote market development in order to connect with future markets.

The second step is to form a value chain to connect producers with processers, distributers, and retailers. The value chain can exist for local markets or for international retailers in developed countries.

A new certification scheme for environmentally sustainable beef needs long-term planning. For sales in developed countries, LOHAS should be a target population. Benchmarking with existing certification schemes, as well as forming food industry partnerships, should be sought in order to connect to the market. In addition, environmentally sustainable beef production would appeal to those seeking the reduction of carbon emissions, pointing to the likely interest of consumers in developed countries. It is important for planning to involve technical measures to guarantee lower risks of the spread of animal diseases, as well as to promote international trade dialogue for the establishment of special quotas.

Certification for carbon credit

The silvopastoral project implemented by CATIE in Central America showed carbon sequestration in pasturelands and reduction of carbon emission from animals by better diets through the payment for environmental services to farmers who commit to silvopastoral systems. Unlike product certification for beef trade, the certification for carbon credit can directly support farmers who are engaged in silvopastoral systems without having the problems related to the animal disease. The certification system can also contribute to the reduction of emission from deforestation, the new carbon credit mechanism (Reduction from Deforestation and Degradation, REDD) that is in the process to be established after COP15. A feasibility study for certification for carbon credit together with a pilot project based on the results of the silvopastoral project is recommended.


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CHAPTER 1

INTRODUCTION

1.1 Background

The livestock sector plays an economically and socially significant role in the developing world, generating 1.4 percent of the world’s GDP, growing in line with overall economic growth (FAO, 2006). The livestock sector contributes to 40 percent of the agricultural GDP, with strong tendency to increase towards the 50 percent mark (FAOLEAD, 2006). Livestock provides a rural livelihood for an estimated 987 million people (Livestock in Development, 1999), equivalent to 36 percent of the total number of poor in the world (World Bank, 2006). Food products produced from livestock contributed an average of 17 percent of the energy and 33 percent of the protein content of total dietary intake in 2003 (FAOLEAD, 2006).

On the other hand, livestock production has a significant impact upon the environment, upon land use and soil erosion, climate change, water quality, and biodiversity. The livestock sector, occupying 26% of the ice-free terrestrial surface, is responsible for 18% of green house gas emissions (FAO LEAD, 2006). Large natural forests have been destroyed for cattle ranching in Latin America, leading to an increase in carbon emissions and a loss of biodiversity. Subsistence livestock production has destroyed the vegetation in upper watersheds in densely populated areas in Asia and Africa, causing social conflicts.

Recently the demand for organic beef has increased globally (Sawyer et al., 2007; Willer et al., 2008). One reason for this is that consumers pay more attention to the quality of animal feed because of the problem of Bovine Spongiform Encephalopathy (BSE, or mad cow disease). However, consumers also voluntarily pay a premium for environmental services, as well as better animal welfare and social conditions of workers who are directly engaged in cattle production in the developing countries.

A recent development in the food industry is the interest in using beef that is produced in an environmentally sustainable way, at lower costs in developing countries, thereby differentiating products from those of competitors and produce higher profits. Wal-Mart Stores and McDonald’s are leading retailer/hamburger shop to consider environmental sustainability of their products to create better relations with their customers as strategies of corporate social responsibility (Goldberg and Yagan, 2007). When a proper and reliable certification scheme is established, high quality beef produced in environmentally sustainable ways in developing countries is good for consumers and food industries in developed countries, protecting the environment locally, regionally, and globally, and supporting the rural poor.

The potential for importing such beef from developing countries are not well documented on a global scale. Attitudes of food industries are not described because the treatment of livestock products is a sensitive subject owing to epidemic disease and the protection of local industries. In addition, the actual criteria at farm level for environmentally sustainable beef production systems are not well established.

1.2 Objective

The objective of this study is to determine the potential for beef certification in accordance with the demands of environmental sustainability. The study carried out consumer surveys in Canada, Japan, the Netherlands, and Costa Rica, representing developed countries in North America, Asia, and Europe, and an advanced developing country in Central America. Also, the study involved the review of materials published by food industries, as


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well as interviewing representatives of food industries. Criteria for an environmentally sustainable cattle production system were elaborated as a logical framework for certification standards.

Livestock production is highly diversified: from the intensive system based on heavy use of supplements to the extensive system based on grazing on large rangelands, and from subsistence mixed farming to commercial grazing. Livestock systems can be classified as either intensive or extensive, and commercial or traditional (Neely and Hatfield, 2007). Due to the heterogeneity of livestock systems, it is impossible to identify general criteria for environmentally sustainable livestock production (de Wit et al., 1995).

Therefore, the study mainly focuses on production systems classified according to the levels of intensity and commercialization, climate conditions, and geographical areas:

- Extensive commercial system (ranching), where large impact on the environment is found and enhancement is expected to be realized through developing better trading systems;

- Humid tropics where the problems related to biodiversity conservation, deforestation, climate change, water depletion caused by excessive livestock production are more serious; and

- Geographical region of Latin America, the highest potential area of beef export where the participation in trade in the organic livestock products is predominant (Harris, 2003).

1.3 Methodology

The activities of the study can be broadly divided into six parts:

1) Literature review of protocols and market trends of existing beef certification

Recent studies showed that there is an increasing trend in the demand for beef produced organically and/ or with environmentally sustainable farming practices. General criteria for certified beef and existing types of certification were classified. In this report, criteria for certification are classified in five categories: food safety with respect to human health, sustainable production, environment, animal welfare, and social justice or the issue of working conditions. Beef certification is generally of four types: organic, good agricultural practice, natural, and grass-fed. The study explored the potential of consumer markets for each type in the different parts of the world.

2) Workshop with beef experts in Latin America

To obtain general information regarding the Latin American beef market and potential certification, a workshop was held on November 14, 2008 at CATIE in Turrialba, Costa Rica with livestock experts from Latin America.

3) Consumer survey on eco-beef products

Consumer surveys were carried out by questionnaire. General information was sought concerning consumption of beef, perspectives about beef production and the environment, willingness to pay for certified beef, and types of beef for certification. The samples were collected in Halifax, Canada, in Tokyo and Yokohama, Japan, in Raerd, the Netherlands, and in San Jose and Turrialba, Costa Rica between November 2008 and January 2009.

4) Survey of food industries regarding environmentally sustainable beef products

In order to determine the potential for promoting certified beef, the study reviewed published materials and surveyed retailers in the food industry: supermarket chains, butcher shops, hamburger restaurants, and steak restaurants. The survey asked questions about current market conditions for beef, including certified beef. It sought to determine interest in certified beef, the price potential for certified beef, the criteria for accepting a certification scheme, and the potential interest in helping to develop a system to produce certified beef in developing countries. Surveys were carried out in Japan, the Netherlands, Canada, and Costa Rica.


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5) Development of criteria for beef certification in an environmentally sustainable system

Based on the review of literature concerning sustainable agriculture, the study has developed a framework for criteria for sustainable beef production systems, combined with land use (tree/vegetation cover, pasture management, use of legume plants, etc.), production methods (animal health, feed, grazing, etc.), environmental management (waste management, biodiversity conservation), animal welfare, and social conditions.

6) Elaboration of the potential to promote environmentally sustainable beef production in developing countries

Based on the literature review and on consumer and food industry surveys, the study elaborated the obstacles and potential and developed the pathways to promote environmentally sustainable beef production in developing countries.

1.4 The structure of report

The remainder of this report is structured in the following way. Chapter 2 presents general considerations regarding beef certification. The classification of criteria for certification and types of beef certification are described. Chapter 3 presents regulations and market trends of each type of certified beef. The standards and regulations for organic beef in United States, Canada, the European Union, and Japan are described. The private groups that organize natural and other types of beef certifications are presented. Market trends for organic and natural beef in USA/Canada, Europe, and Japan are described. Chapter 4 presents the results of consumer surveys in Canada, the Netherlands, Japan and Costa Rica. Chapter 5 presents the results of food industry surveys concerning environmentally sustainable beef. Also presented are the current positions of Wal-Mart and McDonald’s, information about natural beef production by a Japanese supermarket chain, and trends regarding organic beef in a giant supermarket chain in the Netherlands. Interviews carried out at beef restaurants in a tourist region of Costa Rica are also described. Chapter 6 presents the criteria for environmentally sustainable beef production, fundamental to which is the concept of sustainable agriculture. Chapter 7 presents the constraints upon the development and the potential of certification for environmentally sustainable beef. The strategies of developing product certification are demonstrated in line with provision of subsidies and value chains development.


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CHAPTER 2

BEEF CERTIFICATION: GENERAL CONSIDERATIONS

The production of meat has increased 90% in the last quarter of a century (FAOSTAT, 2006). This increase was realized by the expansion of productive lands, as well as by the increased productivity per hectare. Large areas of tropical forest have been deforested and turned into pasture lands in order to produce cattle. Technological change, including advanced breeding and feeding techniques as well as increased crop production supported by fertilization technology and improvements in mechanization, has made the intensification possible (FAO LEAD, 2006). However, excessive focus on increasing productivity have made production systems less favorable to human health and to the environment. Also, farm animals are treated in less natural ways in order to realize higher productivity. Given these conditions, consumers are increasingly concerned about health, the environment, the ethics of animal welfare, and development issues (FAO LEAD, 2006).

2.1 Beef consumption trends

Global beef consumption has increased by 9 percent during 2002-2007 (Table 2.1. USDA, 2008). The increases are largely found in advanced developing countries (China, Brazil, Argentina, Mexico, India, and Pakistan) but slight increases are also found in USA and EU.

During the period, per capita beef consumption has increased in Argentine, Uruguay, New Zealand, and Brazil, while those in USA and EU have been slightly reduced (Table 2.2)

Table 2.1 Global beef consumption: 2002-07 (1,000mt) Market/Year 2002 2003 2004 2005 2006 2007

USA 12,737 12,340 12,667 12,664 12,834 12,830 EU 8,416 8,596 8,582 8,550 8,649 8,674

China 5,825 6,281 6,712 7,041 6,967 7,404 Brazil 6,445 6,285 6,417 6,795 6,964 7,311

Argentina 2,364 2,430 2,519 2,451 2,553 2,673 Mexico 2,423 2,319 2,376 2,428 2,519 2,568 Russia 2,441 2,369 2,300 2,492 2,361 2,392 India 1,399 1,528 1,638 1,633 1,694 1,765 Japan 1,304 1,348 1,169 1,188 1,159 1,182

Pakistan 925 949 975 1,004 1,090 1,119 Rest of the World 10,598 10,907 11,261 11,505 11,921 12,067

Total 54,877 55,352 56,616 57,751 58,711 59,985 Source: USDA, 2008.


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Table 2.2 Per capita annual beef consumption, 2002-07 (Unit: kg) Market/Year 2002 2003 2004 2005 2006 2007

Argentina 61.6 62.7 64.4 62.0 63.9 65.9 Uruguay 49.4 49.7 56.5 55.6 53.6 56.0

USA 44.3 42.5 43.2 42.8 43.1 42.6 New Zealand 31.5 39.7 34.1 33.7 38.5 38.1

Brazil 35.8 34.5 34.9 36.5 37.0 37.3 Australia 35.6 40.9 38.7 37.8 36.9 37.0 Canada 31.1 32.9 31.5 32.9 32.8 32.6 Mexico 23.3 22.2 22.4 22.7 23.3 23.3

EU 18.0 17.7 17.7 17.6 17.6 17.5 Russia 16.7 16.2 15.7 17.1 16.3 16.8

Source: USDA, 2008.

2.2 Beef trade between developed and developing countries

Beef is largely imported to developed countries from developing countries throughout the world, particularly from Latin American countries. According to the statistics of 2006, 26% of beef is imported to USA from Latin American countries (Uruguay, Brazil, Argentina, Nicaragua, Mexico, Costa Rica and Honduras) (Table 2.3).

In the Netherlands, more than 90% of beef is imported from other European countries. Along with USA and Australia that showed overwhelming increase of beef export, South and Central American countries showed significant increase in 2008 (62%, Table 2.4). Argentine and Brazil are main beef exporters in Latin America, but Brazil showed significant drop in 2008. The import from other Latin American countries is increasing steadily in the last few years (Figure 2.1).

Japan, the second importer in terms of values, is also importing beef from Latin American countries (Mexico, Chile, Panama and Costa Rica) (Table 2.5). In particular import from Mexico is conspicuously increasing in the last few years (Figure 2.2).

Table 2.3 Beef imports to USA by country (unit: ton)

Country 2003 2004 2005 2006 % in 2006 increase in 2006 (%)

Australia 512,379 507,771 408,607 402,976 28.8 -1.4 Canada 335,990 482,339 495,926 383,150 27.4 -22.7 New Zealand 292,652 293,018 273,858 255,853 18.3 -6.6 Uruguay 46,931 182,916 252,901 138,653 9.9 -45.2 Brazil 93,627 99,604 97,317 124,037 8.9 27.5 Argentina 39,902 52,939 50,102 38,952 2.8 -22.3 Nicaragua 22,073 29,690 28,785 28,416 2.0 -1.3 Mexico 7,211 8,851 12,131 18,505 1.3 52.5 Costa Rica 13,743 10,729 11,676 8,797 0.6 -24.7 Honduras 102 2,253 2,132 701 0.1 -67.1 Other countries 73 262 288 399 0.0 38.5 Total 1,364,683 1,670,371 1,633,723 1,400,438 100.0 -14.3

Source: USDA statistics


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Table 2.4 Beef imports to Netherlands by country, 2003-2008 (Unit: ton)

Figure 2.1 Beef import to Netherlands from Latin America (except for Brazil and Argentina)

0

1,000

2,000

3,000

4,000

5,000

6,000

2003 2004 2005 2006 2007 2008

Year

Impo

rt (to

n)

Region/country 2003 2004 2005 2006 2007 2008 % in 2008

Annual increase in 2008

(%) Europe 234,618 234,879 221,460 265,902 282,792 314,894 91.3 11 USA 26 127 156 121 1,242 3,510 1.0 183

Canada 20 17 35 10 1 0 0.0 -100 Brazil 28,853 31,155 34,374 32,471 37,806 9,437 2.7 -75

Argentine 5,149 7,815 7,726 6,588 7,457 8,694 2.5 17 Other

Central/South America

1,564 1,507 1,669 3,537 3,336 5,388 1.6 62

Australia 3 23 0 0 1,069 2,477 0.7 132 Others 128 68 99 520 487 614 0.2 26 Total 270,361 275,591 265,520 309,148 334,191 345,013 100.0 3


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Table 2.5 Beef imports to Japan by country (Unit: ton) Country* 2003 2004 2005 2006 2007 2008 Australia 132,742 190,450 188,466 197,392 205,676 199,072

USA 153,194 1,276 0 2,232 16,333 22,967 New Zealand 14,221 29,780 33,424 32,322 27,529 25,023

Canada 5,199 0 0 364 1,200 2,680 Hungary 0 0 1.7 0 0 0 Norway 0 0 0.0 60.5 0 0 Sub-total 305,356 221,505 221,892 232,370 250,738 249,743 Mexico 0.2 1,127 4,209 3,781 5,516 7,959 Chile 0.5 665 2,924 483 451 122

Vanuatu 573 448 534 547 411 510 Panama 0 3 146 211 321 83

Costa Rica 0 4 196 98 157 119 Nicaragua 0 13 0 0 0 4

Sub-total** 574 2,261 8,009 5,120 6,855 8,797 Total 305,930 223,766 229,901 237,489 257,593 258,540

Source: Trade Statistics of Japan homepage Note: *All the countries from which Japan imported beef between 2003 and 2008 are listed. **Developing countries

0

2000

4000

6000

8000

10000

2003 2004 2005 2006 2007 2008

Year

Impo

rt (

Ton)

Mexico

Chile

Vanuatu

Panama

Costa Rica

Nicaragua

Figure 2.2 Beef import to Japan from Developing countries (Unit Ton)

2.3 Criteria for beef certification

The criteria for beef certification can be classified into five categories: food safety, sustainable production, effects on the environment, animal welfare, and social justice. Food safety is related to the health of consumers themselves, while environmental concerns (over issues involving water and air pollution, carbon emissions, and biodiversity) are long-term and affect future generations. Sustainable production involves a commitment to recycling and using renewable resources with an efficient use of energy. Concerns about animal welfare and social conditions for workers are ethical matters for consumers, who value the lives of sacrificed animals and disadvantaged people.


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Table 2.6 Five criteria of beef certification Criterion Subject of utility/concern Conditions

Food safety Health of consumer Meat does not cause disease for consumers

Sustainable production

Self-sustaining Environmental management at local level

Production with low outside input, Efficient use of energy Use of renewable resources and recycling Soil conservation

Environment Water, Air, CO2 and Biodiversity Water, air, and biodiversity well protected for future generations

Animal welfare Animal Animals well treated, basic conditions met Social justice Workers Fulfillment of basic human needs

2.3.1 Beef production and food safety Conventional mass beef production systems, which rely on the factory farm, have been criticized because of danger to public health and cruel treatment of animals. In particular, the following ingredients commonly used in such production systems create dangers for public health.

• Excessive use of grain-feeding

• Use of animal by-products for protein in feed

• Hormonal treatment for growth promotion

• Use of drugs and chemicals, including antibiotics and anti-microbials

• Use of feed produced from genetically modified organisms.

In the United States, nearly all factory-farm cattle are grain-fed before slaughter. Scientific evidence shows that grain-fed livestock has a different fat structure. It was found that livestock fed on grain have more omega-6 fat and less omega-3 fat. Omega-6 fat promotes heart disease, while omega-3 fat is beneficial for cardiac health (Acevedo, 2006).

Animal by-products like bone meal can be risk factors in transmitting bovine spongiform encephalopathy (BSE), when healthy animals consume tainted tissues from infected animals. In the US, use of animal by-products in feed is prohibited. Over 16 million tones of animal by-products are produced in the European Union each year.1 In the EU, only materials derived from animals declared fit for human consumption following veterinary inspection may be used for the production of feed.

A consumer survey in Kansas, USA suggests that consumers are more concerned about beef produced with the assistance of hormones and antibiotics (Peterson, et al., 1999; Shelquist, 2002). Cows raised on industrial farms are often fed antibiotics to keep from getting sick in close quarters. Human beings who ingest the antibiotics indirectly are often susceptible to antibiotic immunities as a result. Antibiotics are routinely added to grain feed to serve as growth stimulants. Cattle consume 70% of all the antibiotics consumed in the United States. This practice widely contributes to the rise of antibiotic-resistant bacteria, including MRSA.

Growth hormones improve meat quality by increasing lean meat and reducing fat contents and improving feed efficiency, but meat produced by means of growth-hormone treatment may cause infertility in humans, the early onset of puberty in girls, and some diseases related to these problems. Growth hormones in beef production are approved for use in Canada and the US but banned in the EU.

Genetically modified crops are widely used in feed for animals, and genetically modified ingredients are commonly used in human food. However, the use of genetically modified feed is controversial. The major concern is whether modified DNA in plants may be transferred into the food chain with harmful consequences. It 1 European Union. http://ec.europa.eu/food/food/biosafety/animalbyproducts/index_en.htm

http://en.wikipedia.org/wiki/Bovine_spongiform_encephalopathyhttp://www.findingdulcinea.com/news/science/July-August/Grass-Fed-Beef-Better-for-Health--Environment-.html#4#4http://en.wikipedia.org/wiki/MRSA


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has been pointed out that, unlike the human diet, animal diets largely consist of single-plant products, and this may increase the possibility of negative effects on animals (Friend of Earth, 2006).

2.3.2 Beef production and resource degradation

Beef production has significant impact on the environment: land use and soil erosion, climate change, water quality, and biodiversity in tropical countries. The livestock sector occupies 26% of the ice-free terrestrial surface of the earth (FAO LEAD et al., 2006). Livestock can be a major source of land degradation because of the exploitation of nutrient and organic matter in the soil, and because of water pollution caused by the release of pathogens and drug residues. Animals and their waste emit methane, which contributes to climate change. Land use increases because of the high demand for grain-feed and grazing land. It was estimated that total deforestation in Central America was around 400,000 hectares per year in the late 1970s and 300,000 hectares in 1990, mainly as a result of conversion to pasture (Hecht, 1992; Nicholson et al., 1995; Kaimowitz, 1996).

Livestock grazing can severely degrade riparian zones, the wetland environment adjacent to rivers or streams. Riparian zones and rivers are the lifeline of ecosystems, making them more productive and serving as homes to plants and animals. Damage by periodic floods is mitigated by retaining trees in riparian zones.

2.3.3 Beef production and animal welfare

Unnecessary suffering of animals should be avoided. The UK government set up the Farm Animal Welfare Advisory Committee in 1967, which became the Farm Animal Welfare Council in 1979. The committee provided the first guidelines for animal welfare, known as the Five Freedoms:

• Freedom from thirst and hunger

• Freedom from discomfort caused by inadequate living conditions

• Freedom from pain, injury, and disease

• Freedom to express normal behavior for the species

• Freedom from fear and distress

2.3.4 Beef production and social justice

The criteria for social conditions in international trade have been developed through Fair Trade, a social movement and market-based approach that empowers producers in developing countries and promotes sustainability through exports from developing countries to developed countries. The movement advocates the payment of a fair price as well as good working conditions and prohibits discrimination by race, gender, age, religion and social/political class. The main products traded through Fair Trade include handicrafts, coffee, cocoa, sugar, tea, bananas, honey, cotton, wine, fresh fruit and flowers.

The World Fair Trade Organization (WFTO, previously IFAT) prescribes the following ten standards for Fair Trade affiliates.

1) Creating opportunities for economically disadvantaged producers

Fair Trade is a strategy for poverty alleviation and sustainable development. Its purpose is to create opportunities for producers who have been economically disadvantaged or marginalized by the conventional trading system.

2) Transparency and accountability

Fair Trade means having transparent management and commercial relations to deal fairly and respectfully with trading partners.

3) Capacity building

http://en.wikipedia.org/w/index.php?title=Farm_Animal_Welfare_Advisory_Committee&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Farm_Animal_Welfare_Advisory_Committee&action=edit&redlink=1http://en.wikipedia.org/wiki/Farm_Animal_Welfare_Councilhttp://en.wikipedia.org/wiki/Social_movementhttp://en.wikipedia.org/wiki/Social_movementhttp://en.wikipedia.org/wiki/Handicraftshttp://en.wikipedia.org/wiki/Coffeehttp://en.wikipedia.org/wiki/Cocoahttp://en.wikipedia.org/wiki/Sugarhttp://en.wikipedia.org/wiki/Teahttp://en.wikipedia.org/wiki/Bananashttp://en.wikipedia.org/wiki/Honeyhttp://en.wikipedia.org/wiki/Cottonhttp://en.wikipedia.org/wiki/Wine


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Fair Trade relationships provide continuity, which enables producers and their marketing organizations to improve their management skills and access to new markets.

4) Promoting Fair Trade

Fair Trade Organizations raise awareness of Fair Trade and the possibility of greater justice in world trade.

5) Payment of a fair price

A fair price in the regional or local context is one that has been agreed upon through dialogue and participation. It not only covers the costs of production but enables production that is socially just and environmentally sound. It provides fair pay to the producers and takes into account the principle of equal pay for equal work by women and men.

6) Gender Equity

Women are always paid for their contribution to the production process and are empowered in their organizations.

7) Working conditions

Fair Trade provides a safe and healthy working environment for producers.

8) Child Labor

Fair Trade Organizations respect the UN Convention on the Rights of the Child, as well as local laws and social norms, in order to ensure that the participation of children, if there is any, in production processes of fairly traded articles does not adversely affect their well-being, security, educational requirements and need for play. Organizations working directly with informally organized producers disclose the involvement of children in production.

9) The environment

Fair Trade actively encourages better environmental practices and responsible methods of production.

10) Trade Relations

Fair Trade organizations trade with concern for the social, economic, and environmental well-being of marginalized small producers and maintain long-term relationships without maximizing profit at their expense.

2.4 Beef certification in product flow

Before reaching to consumers, beef is transferred from farms to slaughterhouses, where they are processed, and from there the beef is delivered to market and finally purchased by consumers. In the five categories pertaining to beef certification conceptualized in this project, food safety is relevant to all stages of production (from farm to folk), but environment, animal welfare, and social conditions are mainly relevant to producers and operators of slaughterhouses. Sustainable production is immediately relevant only to producers. Producers affect the environment in all stages of production and are responsible for such environmental matters as the conservation of biodiversity, the protection of water resources, soil conservation, etc. But slaughterers affect the environment only with regard to water contamination from their operations. It should be noted that the certification scheme aiming at adding value to the operation in order to secure a premium price paid by consumers needs to cover “from Farm to Folk”, the entire production systems.


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2.5 Types of existing beef certification

Essentially there are five types of beef in the market: conventional, certified organic, certified as products being produced by good agricultural practices, natural and grass-fed (Table 2.7). As for the certification mechanism, certified organic beef is regulated by official standards and regulations, while GAP, natural and grass-fed beef are regulated by private bodies.

Conventional (non-certified) beef comes from cattle raised in pastures most of their lives. Prior to slaughter cattle are moved to a feedlot are kept on a high-energy grain diet for three to six months. During the last grain-feeding period, producers are allowed to use a wide variety of technologies, including fertilizers for pastures and grains, synthetic herbicides, chemicals for parasite control, hormonal treatment for growth promotion, and sub-therapeutic antibiotics. In the US, approximately 800,000 beef producers produce beef under this system.2

Certified organic beef is produced under the organic standards of each country. For certified organic products, producers are officially certified and periodically inspected by accredited agencies. Organic standards are established for crops and livestock in each country and therefore vary. The general criteria for certified organic beef are summarized as follows.

• Animals are given no antibiotics or growth hormones except for therapeutic reasons.3

• Organic products are produced without using conventional pesticides, synthetic fertilizers, sewage sludge, bioengineering, or ionizing radiation.

• Cattle are fed 100% organic feed but allowed certain vitamin and mineral supplements.

• Producers are encouraged to enhance environmental quality by conserving soil and using renewable resources and energy-efficient technologies.

• Cattle have access to sufficient pasture and space.

Good Agricultural Practice (GAP) certified beef is a private certification scheme developed in Europe. The certification is primarily designed to reassure consumers about how food is produced on the farm by minimizing

2 The National Cattlemen’s Beef Association, USA. 3 Under the US National Organic Program, animals treated with antibiotics are taken out from the program.

Producer Slaughter house

Supermarket Butcher shop

Consumer

Food safety Sustainable production Environment Animal welfare Social justice

Food safety Environment Animal welfare Social Justice

Food safety

Processor


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detrimental environmental impacts of farming operations, reducing the use of chemical inputs and ensuring a responsible approach to worker health and safety as well as animal welfare.

Natural beef is a private certification scheme developed in USA. By official definition, natural beef is minimally processed, without artificial ingredients and colors, and without preservatives. However, in general responding to the consumer demand in the market, natural beef is raised without antibiotics or growth hormones and ionophores (Acevedo, et al., 2006).

Grass-fed beef4 is produced from cattle raised only on pasture their entire lives. Antibiotics and growth promoters may be given to the animals, but most producers restrict the use of antibiotics and hormones.

Table 2.7 Comparing types of existing beef certification Attributes Conventional beef Organic beef

Good Agricultural Practice Natural beef Grass-fed beef

Main market Europe/North America Europe USA USA

Certified scheme Public Private Private Private

Main Characteristics Profit driven Organic

production (non synthetic)

Retailer initiated Properly controlled

No use of antibiotic/ growth hormone in daily

feeds

Fed by grass only

Restricted to Organic crop for feed No Yes No No No

Antibiotics (therapeutic use) Yes No Yes Yes Optional

Antibiotics (subtherapeutics use) Yes No No No No

Hormones Yes No No No No Genetically modified feed source Yes No Optional

1 Optional Optional

Ionophores Yes No - No No Pesticides Yes Restricted Restricted Restricted Optional Herbicides Yes Restricted Restricted Restricted Optional Synthetic fertilizers Yes Restricted Restricted Optional Optional Vaccination Yes Yes Yes Yes Yes Feedlots (grain) Yes Restricted Restricted Optional No Modified from Acevedo, et al., 2006. 1Compliance with Government legislation.

4 Since grain-fed cattle are fed with grain only at the fattening stage, grass-fed is often said “grass-finished”.


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CHAPTER 3

REGULATIONS AND MARKET TRENDS FOR CERTIFIED BEEF

Four types of beef certification are described in Chapter 3: organic, certified as good agricultural practice, natural, and grass-fed beefs. Each certification scheme has different requirements, and markets for these products vary in different regions. This chapter provides a brief historical background of the development of standards, the regulations related to importation, and information concerning production and sales trends for certified beef in North America (USA and Canada), Japan, and Europe (the Netherlands).

3.1 Organic beef

3.1.1 Guidelines for International Organic Standards

There are two guidelines for international organic standards: IFOAM Basic Principles and Basic Standards, developed by an international Non Governmental Organizations (NGO), and Codex Alimentarius, developed by an inter-governmental organization.

(1) IFOAM Basic Principles and Basic Standards

The International Federation of Organic Agriculture Movement (IFOAM) is an international organization promoting organic agriculture worldwide. IFOAM aims to harmonize standards developed by private and voluntary organizations and has a major influence on the development of national regulations related to organic beef production (Harris, et al., 2003). IFOAM sets up minimum standards that provide a basis for developing more specific production standards by each local organization. IFOAM standards became a basis for many NGO/private standards. Certifiers in Europe, including Soil Association in the UK, Bio Suisse in Switzerland, and KRAV in Sweden, to a certain extent rely on the IFOAM Basic Standards for their approval of imports. IFOAM organic standards are based on four principles or dimensions, namely health, ecology, fairness and care.

Table 3.1 Four dimensions of Organic Agriculture principles Dimension Description Health Sustain and enhance the health of the soil, plants, animals, humans, and the planet as one and

indivisible. Ecology Work with, emulate and help sustain living ecological systems and cycles Fairness Build relationships that ensure fairness with regard to the common environment and life

opportunities Care Manage operations in a precautionary and responsible manner to protect the health and well-being

of current and future generations and of the environment. Adopted from Juma, M. A. 2007

(2) The Codex Organic Guidelines

The Codex Alimentarius commission, an international trade commission, is operated under the auspices of Food and Agriculture Organization (FAO) and World Health Organization (WHO), and sets food safety standards for 168 nations. The commission's main aims are stated as being to protect the health of consumers and ensure fair practices in international food trade. The Codex Alimentarius is recognized by the World Trade Organization as

http://en.wikipedia.org/wiki/Consumer_protectionhttp://en.wikipedia.org/wiki/World_Trade_Organization


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an international reference point for the resolution of disputes concerning food safety and consumer protection. At its foundation in 1994, the WTO accepted the standards of the Codex, and by the end of 2009, all member countries of the WTO will be required to implement the Codex, “to harmonize the standards” for the global trade of foods. The Codex Organic Guidelines serve as an international reference for the development of regional organic standards, and therefore foster harmonization of all the standards.

3.1.2 Organic Standards and Regulations for importing organic beef

Organic agriculture is legally defined in most developed countries. Thus it is illegal to sell organic products with an “organic” label that have not been properly certified. In order to export “organic” beef to developed countries, products need to be certified following the standards of each country. The regulations of developed countries allow accredited certifiers to certify farms in developing countries.

(1) United States

In the USA, the National Organic Program (NOP) was initiated in 2002 based on the Organic Food Production Act (OFPA) which passed Congress in 1990. As a general rule the National Organic Standards require that organic products to be sold are certified by an agent accredited by the US Department of Agriculture (USDA). Farms whose annual sales of organic products are less than US $5,000 are exempted from USDA certification (and are allowed to use the term “organic” without labeling). All natural substances are allowed to be used, but no synthetic substances are allowed except for those listed in the National List of Allowed Synthetic and Prohibited Non-Synthetic Substances. The details of NOP standards are described in Table 3.3.

Imported organic products may be sold in the USA if they are recognized by USDA through certification by accredited agents in the exporting countries. Accredited agents are recognized by USDA when the foreign governments of the agents are able to assess and accredit certifying agents as required by NOP.

As of 2008, there are 95 accredited certifying agents (domestic 55 and foreign 40). There are 19 countries that have certifying agents recognized by NOP. Most of these countries are found in Europe and Latin America: Argentina, Australia, Austria, Belgium, Bolivia, Brazil, Canada, Costa Rica, Germany, Greece, Guatemala, Israel, Italy, Mexico, the Netherlands, Peru, Spain, Switzerland, and Turkey.

(2) Canada

In Canada, the National Organic Standards were developed in 1999. Originally the standards were voluntary rather than mandatory, but in 2006, in order to obtain access to foreign markets, mandatory standards were introduced.

The revised National Organic Standards, to be known as the Canadian Organic Production Systems Standard, comprises CAN/CGSB-32.310 Organic Production Systems General Principles and Management Standards and CAN/CGSB-32.311 Organic Production Systems - Permitted Substances List. The Canadian standards are based on the guideline developed by the Codex Alimentarius commission for the “Production, processing, marketing and labeling of organically produced food”. The Standard Council of Canada uses ISO 65 for the basis of accreditation.

Currently in Canada, organic products can be produced and sold with or without certification. National Census results show 16,132 farms, or 7.0% of all Canadian farms, reported producing organic products for sale in 2006 (Table 3.2). Seventy-four percent of farms that produce or plan to produce organic products are not certified. This percentage is particularly high in livestock production, representing approximately 90% of producers (6,380 farms) (Figure 3.1). In Canada mandatory regulations for organic products are expected to be in place by the middle of 2009. After the enactment of the regulations, organic products traded inter-provincially will need to be certified.

http://en.wikipedia.org/wiki/Dispute


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Table 3.2 Farms producing organic products, by certification status, Canada, 2006 Certification status Number of farms reporting Percentage of all farms in Canada

Organic but not certified 11,937 5.2%

Certified organic 3,555 1.5%

Transitional 640 0.3%

Total 16,132 7.0% Source: Statistics Canada, 2006 Census of Agriculture.

Figure 3.1 Organic status and organic products, Canada, 2006

After the enactment of the organic regulations, all organic products for sale in Canada must be certified according to the Canadian standards and accredited by an accreditation body recognized by the Canadian Organic Office (COO). Canadian Organic Standards are directly controlled by the organic sector. The General Standards Board, and committees on organic agriculture and industry representatives are arranging standards and regulations by harmonizing with the national regulations, and clarify guidelines within the standards. The contents of Canadian Organic Standards include: regulation scope, import requirements, labeling requirements, and the roles and responsibilities of certifying bodies, accreditation bodies, and the Canadian Organic Office.

(3) European Union

Organic farming (called biological farming in Europe) is a large movement throughout Europe based on the extensive use of natural processes, including the partial or total substitution of chemical fertilizers and insecticides. Most EU countries have organic farming on more than a few percent of the total of cultivated lands (Figure 3.2).

In the EU, production certification for organic beef is governed by Regulation (EEC) 2092.91 (Table 3.3). Non-EU countries can be legally registered as granted third-country status (Article 11) in order to operate production rules and systems of inspection equivalent to those within the EU. As of 2008, these countries include Argentina, Australia, Costa Rica, Czech Republic, Hungary, India, Israel, New Zealand, and Switzerland, but


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organic livestock imports are allowed only from Argentina, Switzerland, and New Zealand. Import authorization must be obtained for each importing country; however, once imported, organic products may be re-exported to other EU countries without further authorization.

Traceability is required for any organic food by having proper documentation and records of the products. Any stage of packing or processing if the products are mixed with other products, the operation is subject to further inspection as required for the primary production. In the UK, certification bodies aiming to achieve higher standards must be approved by UKROFS (United Kingdom Register of Organic Food Standards).

Political agenda for organic agriculture in the Netherlands

The political agenda to increase availability of organic products is in progress. In the Netherlands, in order to strengthen the organic food chain, the 3rd Covenant Market Developments of Organic Agriculture5 was agreed between the government and the representatives of trade and industry in the beginning of 2008. The contents of the agreement include the recognition of 10% of market share for organic products, collective promotion, reduction of the cost of conversion for producers, stimulation of exports and imports, research, product innovation, and the interaction between members of organic sector and those with sustainable development initiatives. The management of organic chain to match supply and demand as well as promotion has already started. The covenant covers the period until the end of 2011.

Labels and requirements for organic beef in the Netherlands

In the Netherlands there are two organic labels: the EKO-Label and the Demeter-Label. The EKO-Label designates official certification recognized by the EU and the Dutch government. The Demeter-Label is a private certification that has stricter standards than the EKO-Label. Thus, products with the Demeter-Label are always sold with an EKO-Label.

EKO-Label

The most well known eco-labelling in the Netherlands is the EKO-label. This label belongs to SKAL, an organization that provides official certificates for farms with organic agriculture. The production protocols are as follows.

• The switching period for permanent grassland is 2 years. For cows meant for meat production, a switching period of 1 year is maintained. For dairy cattle: ½ year.

• Cattle must always have free access to grassland if weather, soil, and health-conditions allow. Stock-rate should prevent overgrazing. For bulls > 1 year grazing is not compulsory, but they must have an individual space of at least 30 m² per animal.

• Animals brought into the farm must be of organic origin. Animals at the beginning of the switching-period can stay after permission from SKAL. For breeding, males can be brought in, on condition that they are kept organically afterwards.

• In stables, enough daylight and natural ventilation has to be available. Half of the total surface must be fully closed. Every animal must be able to lie down dry and clean on a bed of natural sawdust.

• All feed has to be of organic origin. Nutritional calculations have to be based on dry matter content. Calculations take place over a period of a year. A minimum 60 % of a daily ration has to be silage. Silage from traditional farms can never be used. Natural milk is fed to calves.

• Homeopathic medicaments are preferred. Under guidance of a vet a traditional medicine can be used. Preventive use of synthetic-based medicines and antibiotics is forbidden, just as growth hormones and the like. After using medicine a waiting period of twice the legal period is demanded or at least 48 hours, before any product is delivered to consumers. Twice a year antibiotics can be used. Vaccinations and obligatory treatments are not counted as such, nor is treatment against parasites.

• Manure has to be of organic origin. Manure from traditional farms is allowed. Liquid manure has to be fermented, diluted, aired. No more animals are allowed than the equivalent to produce 170 kg N/ha. However, more animals

5 Often called Biological agriculture in Europe.


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are allowed if the manure is transported to an organic farm.

Demeter-Label

A less common label is the Demeter-Label. The production protocols are as follows.

• Maximum livestock: 2/hectare. Maximum livestock rate allowed is as high as the equivalent of 112 N/hectare. • Sawdust needs to be of organic origin. • Minimum 25 Lux of stable daylight is required. • No cutting of horns. • Bulls born from embryo-transplantation are not allowed to be used.

(4) Japan

In Japan, a Guideline for organic agricultural products was issued in 1992, and Organic JAS (Japan Agriculture Standards) was introduced in 1999. Upon the establishment of Organic JAS, all agricultural products to be labeled “Organic” are obliged to be inspected and certified by designated organizations.

Following the BSE incident in 2001, food safety became a major issue in Japan. The modification of the JAS Law in 2005 was aimed at reinforcing the Traceability Law put in force in December 2003, focusing on the dissemination of information on beef during the production process. The Traceability Law covers not only the production process, but also distribution and retailing. The new stipulation on organic livestock products was introduced in 2004 in response to rising consumer awareness about healthier food and international initiatives represented by the establishment of the Codex Guideline on organic livestock products in 2001.

The JAS label can be accorded to foreign products as long as they fulfill the standards required and are certified by designated organizations. The JAS Law’s stipulation on labeling demands that all food products indicate the name of the product, the raw materials, the ingredients, and the place of origin.

There are fifteen registered certifying organizations for organic beef in Japan, and nine of them can certify producers in foreign countries. The developing countries that have registered certifying organizations include Ukraine, South Korea, Chile, Vanuatu, and Mexico.

(5) Argentina

ARGENCERT is a private company established in Argentina in 1991 with inspection and certification as main objectives. ARGENCERT was recognized as an organic certifier by a number of government programs and private organizations, including the EEC, the National Organic Program of the United States, Japan Agricultural Standards, CARTV (Conseil des appellations réservées et des termes valorisants) of Québec, Canada, SAG (Agriculture and Livestock Service) of Chile, KRAV of Sweden, Soil Association of UK, and IFOAM.

ARGENCERT certifies a wide range of products (apples, pears, oils, beef, grains, wine, honey, etc.) that are traded worldwide. ARGENCERT carries ISO 65/EN 45011 accreditation, granted by DAP, 2002. ARGENCERT certifies products produced in Argentina, Chile, Paraguay, Portugal, Nepal, and Vietnam, and products it certifies are sold in the European Union, Russia, Greece, USA, Canada, Japan, Australia, Israel, Argentina, Brazil, Paraguay, Ecuador, Chile, Malaysia, and South Africa.

(6) Costa Rica and Nicaragua

In Costa Rica regulations for organic beef were prepared in 1999 but never approved, owing to difficulties in farm operations. In Nicaragua, the organic beef project initiated by USAID (2003-2006) also was not successful, owing to a lack of demand and incentives for farmers.

3.1.3 Comparison of Organic Standards

Organic standards regulate the details of farm activities for animal husbandry, including conversion, breeding, health management, facility and general management, soil amendment methods, pest/weed control, feed, housing conditions for animals, and so on (Table 3.3).


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The regulations are changeable through political dialogue between consumers and producers. In order to encourage trade of organic products, harmonization of standards is expected. In general, embryo transfer, hormonal treatment for reproduction, and use of genetically modified products are not allowed. The distinctive characteristics are summarized as follows.

• US NOP standards have exemption for small farms with sales less than US $5,000 • Categories of percentage of organic contents for above 95%, between 70-95% are found in US, Canadian,

and IFOAM standards • Environmental considerations provide only general description about ecological balance, biodiversity

conservation, soil conservation, etc. • Only IFOAM standards have a minimum farm supply of 50% (at least 50% of animal feed needs to be

supplied from the source in the farm. • Embryo transfer is not mentioned in US standards • Compost is required in US and Japanese standards • Social justice is mentioned in IFOAM standards but not in others.


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Table 3.3 Comparison of Organic Standards Item CODEX Third Edition EU REG 834/2007 USA NOP Title 7

Chapter 94 2007 Canada

32.310-2006 Japan IFOAM Basic

Standards Objective/Description Guideline by commission

for international trade and harmonization

Official Standards by EU council

Official Standards by USA Federal government

Official Standards by Canadian Federal government

Official Standards by Japanese government

Guideline by international NGO for harmonization and to develop own standards worldwide

Categorization of Labeling

Not mentioned At least 95% organic

100% organic, 95% organic, 70-95% organic, 70% organic ingredient

95% organic, 70-95% organic, >70% for organic ingredient

At least 95% is certified organic, 70% contents (organic may appear in ingredient list)

Exemption Smaller farm annual sales less than US$ 5,000 (use word “organic” as non certified (no label)

Conversion Conversion of land/pasture

3 years (12 months with decision of authority)

12 months (generally two years for annuals and three years for perennials, with some exceptions)

3 years 3 years 2 years before seeding (3 years before harvest for perennial crops)

Simultaneously with animal’s conversion

Conversion, Cattle 12 months, at least 3/4 of life span organically managed

12 months Managed organically from last trimester of gestation

For dairy cattle 12 months. (80% organic first 9months, 100% organic last 3months )

Managed organically from last trimester of gestation

12 months (breeding stock)

For dairy cattle 12 months. (80% organic first 9months, 100% organic last 3months )

12months, at least 3/4 of life span organically managed

Meat 12 months, Dairy 90 days

Breeding Breeding general Adaptation to local

conditions. Adaptable choice for environment

Traceable Conventional up to

Purchased not in the last third of gestation period

Adapted to local conditions

Mother Organically managed 6 months before gestation

Less than 12 months old, lighter than 300-340kg varied

Adaptable choice for environment

Traceable organic farms; conventional

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