2011 Spring - A private future for food and fibre quality

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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).

$12.10


 
 




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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).

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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).

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