Food Safety Policy and Impacts to Producers,

Consumers and International Trade

ORGANIZED SYMPOSIUM

Southern Agricultural Economics Association

43rd Annual Meetings Program

February 5-8, 2011

Corpus Christi, Texas

www.csufcab.com

Presented by

Mechel Paggi

Director, Center for Agricultural Business

Authors: Mechel Paggi & Fumiko Yamazaki, CSUFLuis Ribera, Ronald D. Kuntson, Juan Anciso, & Marco Palma, TAMU

Jay Noel, California Polytechnic State University, San Luis Obispo

•Food Safety is an Important Goal

•Food Safety is a problem that can

occur at any point in the supply chain

•International efforts are necessary to insure

food safety in an increasingly global food supply Chain

Detection and control of foodborne illness

Is difficult, timely and damage has usually

Already been done, or at least some damage

By the time the source is identified correctly

The time from the beginning of the patient’s illness to the confirmation

that he or she was part of an outbreak is typically about 2-3 weeks. Case

counts in the midst of an outbreak investigation must be interpreted

within this context.

The Centers for Disease Control

Has Finally Updated the Estimate

Of People Suffering from Foodborne Illness

In the US

Illnesses Hospitalizations Deaths

1999 76 million 325,000 5,000

2010 47.8 million 127,839 3,037

Major Pathogens 9.4 million 55,961 1,351

Unspecified Agents 38.4 million 71,878 1,686

Note to self: In a linear sense by 2030 the problem will be solved

Major Pathogens 1. norovirus (formally Norwalk agent) likely responsibleFor 90% of the outbreaks of gastroenteritis around the world. Fecally contaminatedFood or water. 2. salmonella 3. T. gondii (the cat bug)

Food Safety is A Complicated Goal

Salmonella Saint Paul In Fresh Tomatoes

June 3, 2008

Ultimately Actual Cause Linked to:

From Mexico

Estimated Cost to U.S. Tomato Industry: $100 million

Food Safety Issues

The Economic Health of the Industry

Roberta Cook, November 2007

New Ex-Post Assessments May Add Knowledge

To Aid in Prevention in the Future

• So Taking Measures to Minimize contamination is a sensible approach

• Standards that are acceptable across governmental boundaries is a good idea in a global environment

• But who sets those standards?

• Can one size fit all?

• Where are we?

• Where might we be going?

Who sets the standards

• International organizations (CODEX, OIE, IPPC, WTO, ISO)

• National government organizations (Mexico, US, EU)

• Private international organizations (GLOBALGAP)• Private national organizations (FLSC)• Private firms (WalMart, COSTCO)• Producer organizations (LGMA)• All influenced to some degree by advocacy groups

(PETA etc)

Standards Have Proliferated and

Compete

Industry seeks accord on single GAP audit standardby Joan Murphy

10/15/2009

The produce industry has long complained about comp eting Good Agricultural Practice audits,

and now a new working group will meet next month to start hammering out a single standard for all third-party GAP

audits by October 2010.

"We've created a monster allowing different standar ds to propagate," said David Gombas, project coordinator for the GAP harmonization effort and senior vice president f or food

safety and technology at the United Fresh Produce Association.

So A Move Toward Harmonization has Emerged

In the Private Sector

As We Can See, this is a very complex issue

Many different areas to examine

Our study takes a look at one small, but we think

Important, piece of the puzzle.

What is the impact of this quest for improved food safety

On producers.

To Make it even more manageable we look at fresh

produce, and do not try to take on milk, meat, eggs and

more processed product categories.

The Multiple Standards Issue is not Unique to the US

Producer

Information Suggest There are Economies of Scale and that

Small Holders Face Disadvantages

Small holder up to 2 acres; small holder groups 15 members;

The exact number of smallholders that have been marginalized by the IFSS is unknown, but in Kenya, evidence from a few

leading exporters suggests that more than half of the small growers were dropped immediately following imposition of IFSS.

Consequently, while over 60% of green beans were produced by smallholders in Kenya in 1980s, this share had dropped to about

30% by 2003 (Jaffee, 2004, Kimenye, 1993).

IFPRI Discussion Paper 00737

December 2007

Information Suggest There are Economies of Scale and that

Small Holders Face Disadvantages

Small holder up to 2 acres; small holder groups 15 members;

The exact number of smallholders that have been marginalized by the IFSS is unknown, but in Kenya, evidence from a few

leading exporters suggests that more than half of the small growers were dropped immediately following imposition of IFSS.

Consequently, while over 60% of green beans were produced by smallholders in Kenya in 1980s, this share had dropped to about

30% by 2003 (Jaffee, 2004, Kimenye, 1993).

IFPRI Discussion Paper 00737

December 2007

Various Standards Facing US Fresh Produce Producers

Cost of Standards Compliance, Fresh Strawberry Production

Average Food Safety Related Costs Increases From LGMA Compliance

Regulatory Cost Compliance Across Interstate Boundaries

Food Safety & Others

Influence of Increased Costs on Profitability

Influence of Increased Costs on Profitability

Proposed Food Safety Administration : “One Program/One Strategy

Proliferation of Influences Particularly Evident in the West

A Formidable Task to Address the All

Major Challenge

Need for Convergence of Multiple Process Standards *

International

GlobalGAP

National

United States

Food and Drug Administration

Producer

California Leafy Green

Marketing Association

Industry/Retail

Safety

Leadership Council

Wal-Mart

X

Producer

Dilemma

* The International Federation for Produce Standards (IFPS)

Work is Continuing

• Lettuce: CA / ARZ

• Strawberry: CA /FLA/Mexico

• Fresh Tomatoes: CA/FLA/Mexico

• Additional Monitoring of the