2011 Spring - A private future for food and fibre quality

Farm Policy Journal - Vol 8 No 3 2011 Spring - Full Journal - A private future for food and fibre quality

Farm Policy Journal, Vol. 8, Number 3, Spring 2011, A private future for food and fibre quality, Australian Farm Institute, 76 pp

ISSN: 1449-2210 (print), 1449-8812 (online) 

Historically, public authorities specified safety and quality standards for agricultural products, and provided reassurance to consumers that products were safe. Increasing consumer demands and the rise of food and fibre brands, and retailer brands have led to the development of private quality and safety standards. These private standards are a form of risk management for food and fibre brands, and retailers; but also create barriers to entry and exit for farmers supplying these brands and retailers. The Spring 2011 Farm Policy Journal sheds light on the pros and cons for the farming sector of these new trends – analysing impacts on domestic and international trade and economics. The Journal also provides useful tools for upgrading your knowledge of this topic, including a lexicon, and case studies from China and South-East Asia.

FPJ0803 - Potard, G, Hugonnet, M - Agricultural product quality - lexicon and examples

Potard, Gaétane & Hugonnet, Mickael, Agricultural product quality: lexicon and examples, Farm Policy Journal,A private future for food and fibre quality, Australian Farm Institute, pp. 5-15, ISSN: 1449-2210 (print), 1449-8812 (online).Vol. 8, Number 3, Spring 2011,

This article proposes some definitions of terms often used in discussions of 'food quality' or 'food labelling'. This lexicon is all the more important as most of the technical words in this field are commonly used in everyday life. The following definitions may help the reader to better understand the papers published in this journal. 

FPJ0803 - Hobbs, JE - Public and private standards for food safety and quality - international trade implications

This article examines the implications for the international trade environment of public and private standards for food safety and food quality. Public (mandatory) standards are a response to a perceived market failure and include mandatory risk assessment procedures, restrictions on harmful products, and labelling requirements. Disparate public standards create challenges for international trading partners and are dealt with through the World Trade Organization (WTO) Application of Sanitary and Phytosanitary Measures (SPS), and Technical Barriers to Trade (TBT) Agreements. Private standards for food safety and quality are becoming a prominent feature of international food markets and include proprietary, consensus and third-party standards. The WTO has no jurisdiction over private standards. Key questions include whether private standards divert or reduce trade or whether they can be trade enhancing, and under what conditions. The implications for the WTO are discussed, and future trade policy research needs pertaining to the coexistence of public and private standards for food safety and quality are identified.

Hobbs, Jill E, Public and private standards for food safety and quality: international trade implications, Farm Policy Journal, Vol. 8, Number 3, Spring 2011, A private future for food and fibre quality, Australian Farm Institute, pp. 5-15, ISSN: 1449-2210 (print), 1449-8812 (online).

FPJ0803 - Gale, HF, Hu, D - China’s food quality challenge

The 21st century modernisation of China’s food system has led to major upheaval in a country where most of the population is only one generation removed from subsistence agriculture. China’s food processing and retail sectors have grown at an extremely rapid pace since the 1990s, but agriculture remains dominated by small-scale farms. This article discusses the quality and safety problems arising from the lack of coordination between agricultural producers, processors and retailers. It describes quality problems that emerged in the export of apple juice concentrate and a conflict in the pork industry between demand for lean pork and use of banned pharmaceuticals as feed additives. A new program encouraging supermarket chains to purchase produce directly from farms recognises the importance of direct interaction between final users and agricultural producers. Finally, the experience of a company supplying fruit to a multinational supermarket chain shows that Chinese growers can supply quality products, but the case also illustrates the costly testing, monitoring, training and guidance required.

Gale, H Frederick, Hu, Dinghuan, China’s food quality challenge, Farm Policy Journal, Vol. 8, Number 3, Spring 2011, A private future for food and fibre quality, Australian Farm Institute, pp. 17-25, ISSN: 1449-2210 (print), 1449-8812 (online)

FPJ0803 - Umberger, W, Griffith, G - Beef cattle producer strategies to accommodate more concentrated and organised value chains, and more discriminating consumers

The market structure of red meat processing and retailing in Australia is becoming increasingly concentrated. This is causing ongoing concern about the possible abuse of market power against suppliers, especially beef cattle producers. Meat consumers are also changing and significant segments of shoppers are paying greater attention to intrinsic and extrinsic quality attributes. Demand for differentiated meat products which satisfy consumers’ needs in this area is growing. Retailers and processors are increasingly demanding suppliers meet private standards.
These private standards are usually more stringent or extensive than public food safety and quality standards. They are likely justified as consumer demand is changing and retailers are concerned about liability issues related to food safety and the integrity of product claims. While they can create new marketing opportunities for producers who are able to meet the production and/or process requirements and establish and maintain mutually-beneficial relationships with buyers, there are also potential negative implications for producers. For example when there is a substantial cost in meeting the stringent quality and logistical requirements, or when the standards criteria decrease farm productivity. Additionally, there are other concerns regarding the increasing use of private standards: private standards are not necessarily science-based and may mislead consumers, and the ‘top down’ manner in which private standards are imposed on the food supply chains may lead to equity and market access issues as a result of further consolidation and integration of agrifood markets. Nevertheless, there are many other opportunities for producers aside from just being involved in retailer or processor-driven supply chains. A plethora of opportunities remain for other motivated producers who wish to participate in these new marketing systems.

Umberger, Wendy & Griffith, Garry, Beef cattle producer strategies to accommodate more concentrated and organised value chains, and more discriminating consumers, Farm Policy Journal, Vol. 8, Number 3, Spring 2011, A private future for food and fibre quality, Australian Farm Institute, pp. 27-37, ISSN: 1449-2210 (print), 1449-8812 (online).

FPJ0803 - Lapar, MLA, Tiongco, MM - Private standards in pork value chains - role, impact and potential for local innovation to improve food safety and enhance smallholder competitiveness

Changing demand for livestock products has motivated transformation in the structure of agrifood systems to efficiently deliver products with the desired attributes. Consumers of food from animal-sources are increasingly concerned about food safety, due to recent food scares from food-borne diseases or zoonoses. In cases where there are weak or nonexistant public standards to regulate food safety compliance along the supply chain for animal-source foods (eg by farmers, traders, processors, retailers) private standards have emerged. Private standards by definition are voluntary, but they may in practice become de facto mandatory standards where compliance is required for entry into certain markets. Using insights from available literature and empirical evidence from case studies on the pig sectors in Vietnam and the Philippines, this paper looks at private standards and the role they play in improving the delivery of safe, good quality, pork. The specific case of contract farming is used to illustrate how this form of market organisation and coordination can facilitate the innovation of processes for upgrading smallholders and enhance their competitiveness in an increasingly consumer demand-driven food system.
The main focus of private standards is management of food safety risk along the value chain in order to achieve a higher level of assurance in terms of regulatory compliance, and to capture price premiums and market share of the ‘certified’ product. In most cases, private standards are implemented at the production and processing stage. However, the cost of implementing these standards is considerably high and as such may not be economically viable for small farm businesses. Contract farming is a form of market organisation that acts as a mechanism for establishing and implementing private standards to produce products with the attributes desired by consumers. In the developing country context, suppliers of products (eg pig growers) are required to follow specific process (eg specific types of inputs used, adhering to specific production practices, etc) and performance standards (eg feed-conversion ratio, mortality rates, etc). Non-compliance will result in penalties such as price discounts for pigs. The use of private standards is seen as a potentially effective strategy to jumpstart local innovation for the adoption and adaptation of new norms to enhance food safety and improve product quality.

Lapar, Ma Lucila A & Tiongco, Marites M, Private standards in pork value chains: role, impact and potential for local innovation to improve food safety and enhance smallholder competitiveness, Farm Policy Journal, Vol. 8, Number 3, Spring 2011, A private future for food and fibre quality, Australian Farm Institute, pp. 39-53, ISSN: 1449-2210 (print), 1449-8812 (online).

FPJ0803 - Freguin-Gresh, S, Anseeuw, W - Contract agriculture and private norms in South Africa - trends and issues for smallholders

South Africa is characterised by a highly unequal farming sector, an apartheid ‘legacy’ which excluded black farmers from resources, market-oriented agriculture, and main input and output markets. In that context, restructuring agriculture appears to be a condition of socio-political stabilisation.
From the early 1990s onwards, the end of apartheid resulted in significant changes regarding the country’s production environment: withdrawal of the state, economic deregulation and market liberalisation. The latter is becoming increasingly consumer-driven and vertically integrated. In this context, contract agriculture is regarded as instrumental in integrating (black) smallholders into the mainstream agricultural economy, in overcoming the duality of the agricultural sector, and in alleviating poverty.
This paper contributes to the debate on how contract agriculture could contribute to this objective in South Africa. It focuses on whether or not contracts can successfully help black smallholders to improve market access, and to develop viable farming businesses. The paper is based on insights from the citrus sector, an industry characterised by significant restructuring and the recent emergence of contract farming opportunities for smallholders.
A first section will present an overview of the implications of South Africa’s macro-economic restructuring and transformation in the citrus sector. The second section will analyse the effectiveness of contract farming and discuss the factors that affect the likelihood of the establishment and sustainability of these contracts for smallholders in South Africa. Related to the latter, conclusions and recommendations are presented in the third section.

Freguin-Gresh, Sandrine & Anseeuw, Ward, Contract agriculture and private norms in South Africa: trends and issues for smallholders, Farm Policy Journal, Vol. 8, Number 3, Spring 2011, A private future for food and fibre quality, Australian Farm Institute, pp. 55-65, ISSN: 1449-2210 (print), 1449-8812 (online).