Sustainable Agri-food Value Chains

FOOD STANDARDS

IDCF-SSRP Grant | Agricultural Voices Syria | January-July 2021 1. Introduction The increasing globalisation of food production and consumption has posed significant challenges for national governments to oversee entire value chains, and to identify quality, safety and sustainability issues across borders (Garcia Martinez & Poole, 2004). As a result, global agri-food trade is governed by a range of standards and regulations which operate at different scales (Herzfeld et al., 2011). One group of food standards is formed by countries imposing regulations on imports: such regulations are subject to the Agreements on Sanitary and Phytosanitary barriers (SPS) and Technical Barriers to Trade (TBT). Another group of food standards has emerged from action by retailers and other private global value chain actors. Such standards pose requirements related to quality, safety and sustainability with which retailers, wholesalers and food service companies must comply (Herzfeld et al., 2011).

Over the last 20 to 30 years, private standards have emerged as important modes of market governance (Jaffee & Henson, 2004). They have been considered to act as substitutes for inadequate public regulation, or responding to increasingly stringent regulation, or as a way of ‘going beyond’ public regulations to differentiate products in a credible way (Henson & Humphrey, 2010). At the same time, standards related to certain forms of food production such as organic agriculture, , origin- based and quality can be considered to be alternatives to productivist, industrial systems; a way of bringing to mainstream markets social, economic and ecological relations that are fair and just (Pugliese et al., 2013; Hatanaka, 2010). Producers may adopt standards as they imagine opportunities to add value to their products, while improving rural development livelihoods; while citizens rely on standards to address their concerns for food safety and quality, ecological sustainability, social justice, and cultural heritage (Pugliese et al., 2013).

Food standards for governing agri-food systems are increasingly widespread and established, and given their power in global value chains and their governance, they bring important questions about the role of public and private institutions in ensuring food safety, food quality and the economic, environmental, social sustainability of the agri-food system (Henson & Humphrey, 2010).

PAGE 1 2. Case studies GlobalGAP for fresh fruits and vegetables

GlobalGAP is a private standard that promotes good agricultural practices (GAP) on imports of fresh fruits and vegetables. It was established by the European-Retail Working Group, originally an association of German, Dutch and British retailers. Since then, over 40 retailers from 15, mainly Western European, countries require their suppliers to be GlobalGAP-certified. Although the standard was originally established by European retailers, it developed a membership and governance structure that included significant producer representation (from within Europe and beyond) in both its technical committees and on its main board (Henson & Humphrey, 2010). The countries with the highest number of GlobalGAP certificates are Spain and Italy, both with more than 12,000, and Greece with more than 8,000 certified farms (Herzfeld et al., 2011). GlobalGAP is an “in-chain standard”, that is not intended to be communicated to the consumer via product labels (Herzfeld et al., 2011). Monteiro and Caswell (2009) examined the GlobalGAP adoption behaviour of Portuguese pear growers, which found that producers’ orientation towards exporting and their involvement in producer organisations increases the probability of GlobalGAP certification. Across countries, GDP per capita is shown to be positively correlated with the number of issued certificates. Smaller countries are less likely to have any farms certified. Certification is highly influenced by previous trade relationships, and farmers’ participation in organisational innovation has been found to be negatively affected by poor quality national institutions (for example in the case of poor rule of law) (Herzfeld et al., 2011). The environmental benefits from GAP have been considered rather modest (Fuchs et al., 2009).

Fair Trade Palestinian Extra-Virgin Olive Oil

“Fairtrade means fairer pay and more power in the hands of farmers, so that they can create change for us all, from investing in climate friendly farming techniques and clean water for their community, to nurturing women leaders and making sure children get an education” (Fairtrade UK, 2021). Even if Palestinian olive oil meets international chemical and organoleptic tests for export, it is difficult for this oil to flow into foreign markets without fair trade accreditation. Through this fair trade accreditation, consumers abroad are made aware of the harsh conditions faced by Palestinian farmers and how these are being tackled through fair trade (Meneley, 2014). In response to this challenge, there have been numerous initiatives to support the farmers. Standards have been used to grow and add value to the Palestinian olive

PAGE 2 oil industry, and make new distinctions for olive oil, organoleptic tasting practices, organic certifications, Denomination of Protected Origin (DOP), and through fair trade strategies seek to connect producer and consumer (Meneley, 2014). Meneley (2014) finds that these practices are aimed toward an international audience and consumers, who are encouraged to engage in the “taste of solidarity” with Palestinian farmers. Palestine’s biggest agricultural NGO, Palestinian Agricultural Relief Committee (PARC), founded in 1983, and LLC, founded in 2004, have made significant investments in supporting farmers to attain fair trade certifications from international accreditation bodies (Fairtrade Labelling Organization (FLO)) and from local bodies (such as the Palestinian Fair Trade Association (PFTA)) (Meneley, 2014). It has been important to connect the Palestinian farmers with fair trade networks internationally – for example, PARC is a member of IFAT (The International Fair Trade Association) and has partnerships with fair trade organizations and solidarity movements in Europe, the United States, Canada, and Japan. Another company, Zaytoun, connects Palestinian farmers with UK consumers through (achieved in 2009). It is a “Community Interest Company” whose profits are reinvested into furthering its mission of supporting Palestinian farmers through fair trade.

Central-southern Italy: Consumers of protected designation of origin (PDO) and EU–organic certification

Organic farming aims to produce food using natural substances and processes, encouraging the responsible use of energy and natural resources, biodiversity maintenance, enhancing soil fertility, maintaining water quality and preserving regional ecological balances (European Commission, 2021a). The EU sets out rules and regulations governing the production, distribution and marketing of organic products in the EU (ibid.). For trade of organic products with countries outside the EU, there are specific requirements depending on the countries of origin. Key principles in organic farming include the prohibited use of Genetically Modified Organisms (GMOs), no use of ionising radiation, limited use of artificial fertilisers, herbicides and pesticides. According to EU rules, organic food and feed products must be processed separately from non-organic products, a minimum organic content of 95% of organic agricultural ingredients is required (with strict conditions for the remaining 5%), clear rules on labelling and on which products can use the EU organic logo, and specific limits to the substances, additives and processing aids for product processing (European Commission, 2021b).

PAGE 3 Spognardi et al. (2020) investigated the behaviour and the habits of the consumers from central-southern Italy in relation to extra olive oil consumption, focusing on the impact of protected designation of origin (PDO) and EU–organic certification on purchase intention and quality perception. Through a comparison of three Italian samples: (1) an extra-virgin olive oil without certification, (2) an organic extra-virgin olive oil and (3) a PDO extra-virgin olive oil, the study found that people interviewed prefer local olive oils; they are positively influenced by PDO/organic certification, and price was not a decisive factor for purchasing choices. Implications of this study are that information campaigns could help consumers to distinguish products, correctly identify food attributes and overcome their scepticism towards quality of organic products (Spognardi et al., 2020).

3. Types of food standards In many agri-food value chains, public regulations and private standards operate simultaneously (Henson & Humphrey, 2010). For example, private standards may include criteria for producers and other value chain actors to demonstrate legal compliance, and public regulations may include requirements based on private standards and certification (for example the EU Timber Regulations refer to Forest Stewardship Council certification). This interaction between public and private standards can be beneficial, as industry and firms are highly knowledgeable regarding product quality, and public regulation can generate reputation-based incentives to monitor quality (Garcia Martinez & Poole, 2004).

Henson and Humphrey (2010) distinguish between the following types of public and private standard, which in practice, interact in global value chains:

1. Public mandatory standards: More accurately (and commonly) referred to as ‘regulations’. These can be enforced through criminal and/or administrative action by regulatory authorities.

2. Public voluntary standards: Standards created by public bodies but whose adoption is voluntary, or ‘optional laws’ (Brunsson & Jacobsson, 2000). An example of this is the French Government’s ‘Label Rouge’ food (and unprocessed agricultural product) quality assurance standard.

3. Legally-mandated private standards: Standards developed by the private sector which are then made mandatory by public bodies.

PAGE 4 4. Voluntary private standards: Standards developed and adopted by private bodies. These may be enforced by third party certification to demonstrate independence and credibility (Hatanaka et al., 2005). Such voluntary private standards may include:

➢ Individual firm standards such as ‘From Field to Fork’ by UK retailer Marks & Spencer, and ‘Shared Planet’ by Starbucks. ➢ Collective National Standards such as Assured Food Standards (Red Tractor) and RSPCA Assured UK in the UK, and the German QS Qualität und Sicherheit assurance standards for food safety and quality. ➢ Collective International Standards such as GlobalGAP, British Retail Consortium, Marine Stewardship Council, Rainforest Alliance, IFOAM for organic products, and SA 8000 (the international certification standard for social accountability covering companies, factories, and farms). Private adopters of standards, such as supermarket chains, can compel implementation with standards by encouraging other private entities to implement these standards, such as food processors and agricultural producers they are sourcing from. Through the market power of the initial adopters, standards can become de facto mandatory for producers and processors to access important markets (Henson & Humphrey, 2010). Coordinated supply chains require members not only to belong to industry-led assurance schemes but also to meet the additional costs of complying with proprietary specifications, safety and quality requirements (Garcia Martinez & Poole, 2004).

Not all standards are ‘top down’ and driven by government or powerful retailers: producer groups and organisations develop standards ‘from below’ to differentiate products based on particular production systems (e.g. organic production, high animal welfare), or produced in particular regions (Henson & Humphrey, 2010).

4. Economic benefits and challenges of food standards The positive opportunities from the adoption of private agri-food standards are associated with product differentiation and added value to products, as firms can communicate product attributes to customers that set them apart from their competitors (Henson & Humphrey, 2010). Such product differentiation can be seen in the trend towards quality-based competition in agri-food markets (Busch & Bain, 2004), particularly evident in the case of (Ponte, 2004). Another important

PAGE 5 benefit of food standards is the prevention of safety risks in value chains, in response to food crises such as salmonella, dioxins and BSE (Bovine Spongiform Encephalopathy). Standards have emerged that improve the traceability of global value chains, which is critical for identifying the sources of food safety risks, developing appropriate responses, and securing consumer trust (Fuchs et al., 2009).

For poorer countries, integration into global markets is considered to offer the potential for more rapid growth and poverty reduction (Garcia Martinez & Poole, 2004). Private standards may act as catalysts of processes of upgrading in developing countries and/or competitive positioning in international markets (Jaffee & Henson, 2004). Studies have found positive evidence of smallholder market integration through third-party certification in African countries, e.g. Maertens and Swinnen (2009).

However, there are concerns that retailer driven standards increase the inequality within countries, between farmers that are able to comply and those that are not (Herzfeld et al., 2011). Although food standards have been promoted to secure market access, standards may in fact create a new trade barrier for agricultural producers in developing and transition countries, excluding small farmers and/or farmers in developing countries from European and North American export markets as they might not be able to comply with standards (Ponte, 2008). This may be particularly pronounced for countries that do not have current trade relations (Herzfeld et al., 2011).

Garcia Martinez and Poole (2004) found that the lack of a harmonised approach to food safety and quality among European retailers may result in a ‘compliance gap’ for developing Mediterranean exporting countries that varies depending on the nature of destination markets, and the supply chain chosen to deliver their products. More critical perspectives consider Western company-led standards are reproducing colonial food relations (Campbell, 2005).

5. Environmental benefits and challenges of food standards Most retail standards aim to ensure whole-chain food quality and safety, and many standards also cover environmental and social sustainability requirements (Fuchs et al., 2009). Environmental requirements include pollution prevention, use of energy, water and other natural resources, recycling and reuse of material, and emissions

PAGE 6 (ibid.). For environmental and social standards, process standards are more important than product standards as it is the process of production or operations that have associated environmental and/or social impacts. Requirements of organic production standards, for example, include the prohibited use of conventional pesticides, artificial fertilizers, ionizing radiation and food additives, or antibiotics and growth hormones for animals (Fuchs et al., 2009). Some studies argue that the organic sector is moving away from its original ‘bottom up’ alternative food movement positioning (Buck et al., 1997), with strong corporate actors attempting to dilute standards (Jaffee & Howard, 2010).

International standards such as GlobalGAP pay some attention to environmental and social issues, but compliance with environmental and social requirements in the GlobalGAP has been ‘voluntary’ or ‘recommended’, so in practice non- compliance does not constitute a threat to the supplier (Fuchs et al., 2009). According to Van der Grip et al. (2005), GlobalGAP’s emphasis on various sustainability issues within the initiative has gradually decreased since its establishment and has turned into a programme primarily focused on food safety.

6. Social benefits and challenges of food standards Standards cover multifaceted social sustainability issues such as workers’ rights, migration and rural livelihoods, gender issues and food security (Fuchs et al., 2009). Social requirements such as worker welfare, gender non-discrimination and rules against sexual harassment, are included in mainstream standards (e.g. Ethical Trading Initiative) and in companies’ codes of conduct (e.g. Chiquita Code of Conduct). However, it has been argued that their scope is limited as they apply only to regular employment force, rather than adequately covering “flexible” seasonal work or “informal” work (Fuchs et al., 2009).

Small farmers face high costs of implementing new private standards, especially documentation and certification costs (Hatanaka et al., 2005). While some workers may benefit from new management practices that give increased responsibility to an elite group of workers, an increasing share of the population may be disadvantaged (Van der Grip et al., 2005). Although some social benefits are observed from private standards, Fuchs et al. (2009) argue that opportunities tend to exist only for a small subset of suppliers, receiving capacity building support from NGOs, development or multilateral agencies.

PAGE 7 7. Food standards and food security Few studies have explicitly examined the links between food security and certification and standards. Schleifer and Sun (2020) explore the impact of sustainability certification on food security in developing countries, identifying three main causal mechanisms to guide their analysis – economic, land use and land rights, and gender effects – that link certification to local food security. Schleifer and Sun found that existing research points to a positive (but weak and very context- dependent) relationship between certification, farmers’ income, and food security. If certification increases farmers’ productivity, it can make more food available for consumption; and if environmental conditions are improved on farm, food may be available in the longer term. However, Schleifer and Sun (2020) emphasise that certification standards do not necessarily lead to higher yields or better conditions, and may have negative outcomes in some contexts (DeFries, 2017). Certification may impact individuals’ or households’ access to food by changing their income or land rights and therefore access to food. Sustainability certification may also affect food security by changing food quality and safety. Unfavourable weather conditions, political instability, or economic factors such as unemployment and rising food prices, can all be a source of food instability. Sustainability certification can bring uncertainty to producers' income if price premiums are not ensured, but sustainability standards may increase climate resilience of agricultural production, and therefore improve food stability in the longer term (Schleifer & Sun, 2020).

8. References

Brunsson, N. & Jacobsson, B. (2000). The contemporary expansion of standardization, in: N. Brunsson and B. Jacobsson (eds.) A World of Standards (Oxford: Oxford University Press), pp. 1–17. Buck, D., Getz, C., & Guthman, J. (1997). From farm to table: The organic vegetable commodity chain of Northern California. Sociologia ruralis, 37(1), 3-20. Busch, L., & Bain, C. (2004). New! Improved? The transformation of the global agrifood system. Rural sociology, 69(3), 321-346. European Commission (2021a). Organics at a glance. Available from: https://ec.europa.eu/info/food-farming-fisheries/farming/organic- farming/organics-glance_en [Accessed 21 April 2021]

PAGE 8 European Commission (2021b). Organic production and products. Available from: https://ec.europa.eu/info/food-farming-fisheries/farming/organic- farming/organic-production-and-products_en [Accessed 21 April 2021] Fairtrade UK (2021). What is fairtrade? Available from: https://www.fairtrade.org.uk/what-is-fairtrade/ [Accessed 12 April 2021] DeFries, R. S., Fanzo, J., Mondal, P., Remans, R., & Wood, S. A. (2017). Is voluntary certification of tropical agricultural commodities achieving sustainability goals for small-scale producers? A review of the evidence. Environmental Research Letters, 12(3), 033001. Fuchs, D., Kalfagianni, A. and Arentsen, M., 2009. Retail power, private standards, and sustainability in the global food system. In: J. Clapp & D. Fuchs (eds.) Corporate power in global agrifood governance, MIT Press Scholarship Online pp.29-59. Martinez, M. G., & Poole, N. (2004). The development of private fresh produce safety standards: implications for developing Mediterranean exporting countries. Food Policy, 29(3), 229-255. Hatanaka, M. (2010). Certification, partnership, and morality in an organic shrimp network: rethinking transnational alternative agrifood networks. World Development, 38(5), 706-716. Hatanaka, M., Bain, C. and Busch, L. (2005). Third-party certification in the global agri-food system. Food Policy, 30(3), pp. 354–369. Henson, S., & Humphrey, J. (2010). Understanding the complexities of private standards in global agri-food chains as they impact developing countries. The journal of development studies, 46(9), 1628-1646. Herzfeld, T., Drescher, L. S., & Grebitus, C. (2011). Cross-national adoption of private food quality standards. Food Policy, 36(3), 401-411. Jaffee, S. and Henson, S.J. (2004). Standards and agri-food exports from developing countries: rebalancing the debate. World Bank. Policy Research Working Paper 3348, The World Bank, Washington DC. Jaffee, D., & Howard, P. H. (2010). Corporate cooptation of organic and fair trade standards. Agriculture and human values, 27(4), 387-399. Maertens, M. and Swinnen, J.F.M. (2009) Trade, standards and poverty: evidence from Senegal. World Development, 37 (1), pp. 161–178.

PAGE 9 Martinez, M. G., & Poole, N. (2004). The development of private fresh produce safety standards: implications for developing Mediterranean exporting countries. Food Policy, 29(3), 229-255. Meneley, A. (2014). Discourses of distinction in contemporary Palestinian extra- virgin olive oil production. Food and Foodways, 22(1-2), 48-64. Monteiro, D. M. S., & Caswell, J. A. (2009). Traceability adoption at the farm level: An empirical analysis of the Portuguese pear industry. Food policy, 34(1), 94-101. Ponte, S. (2004). Standards and Sustainability in the Coffee Sector: A Global Value Chain Approach (Geneva: IISD). Ponte, S. (2008). Greener than thou: The political economy of fish ecolabeling and its local manifestations in South Africa. World Development, 36(1), 159-175. Pugliese, P., Zanasi, C., Atallah, O., & Cosimo, R. (2013). Investigating the interaction between organic and local foods in the Mediterranean: The Lebanese organic consumer’s perspective. Food Policy, 39, 1-12. Schleifer, P., & Sun, Y. (2020). Reviewing the impact of sustainability certification on food security in developing countries. Global Food Security, 24, 100337. Spognardi, S., Vistocco, D., Cappelli, L., & Papetti, P. (2021). Impact of organic and “protected designation of origin” labels in the perception of olive oil sensory quality. British Food Journal. Van Der Grijp, N. M., Marsden, T., & Cavalcanti, J. S. B. (2005). European retailers as agents of change towards sustainability: The case of fruit production in Brazil. Environmental Sciences, 2(4), 445-460.

9. Links

Fairtrade International (product-oriented multistakeholder group aimed at promoting the lives of farmers and workers through trade. Fairtrade's work is guided by a global strategy) https://www.fairtrade.net/

Fair Trade Organisation UK https://www.fairtrade.org.uk/

GlobalGAP https://www.globalgap.org/

ISEAL Alliance (global membership organisation for credible sustainability standards) https://www.isealalliance.org/

PAGE 10 IFOAM -Organics International https://www.ifoam.bio/

United Nations Forum on Sustainability Standards https://unfss.org/

Zaytoun, Community Interest Company founded to support Palestinian farmers https://zaytoun.uk/about/

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