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Pundit’s Mailbag — Food Safety Is
Part Of Being Socially Responsible

Jim Prevor’s Perishable Pundit, March 4, 2008

We ran two pieces — Fresh Basil Recall Brings Additional Concerns About FDA’s Safety Procedures and Importer Of Recalled Basil Sheds More light On FDA Handling — regarding a food safety issue with basil in January. Now we have received a most thoughtful missive from an importer of Israeli and Dutch produce addressing the responsibility of importers in situations such as these and the importance of allowing growers to make a return and connecting these issues to questions of sustainability and social responsibility:

We have been following your writings and views concerning the recent basil recall from some Mexican growers and the import company Top Line, as well as your recent writings on sustainability and social responsibility. We have some concerns, and would like to share our thoughts and perhaps bring in a different perspective to the discussion.

We are an importer of organic and conventional fresh herbs, peppers, and tomatoes from Israel and Holland located in New York. We distribute our products all over North America. Israeli and Dutch imports have an excellent reputation not only of being “clean” and “safe”, but is also well known for the “clean” systems and food safety standards that are among the best in the world.

Food safety standards and systems of adherence in Europe and Israel are some of the strictest standards around, and have been used throughout the world to develop new uniform standards, and have been adopted by growers all over the world in the quest for standardized global food safety programs. In reference to a recent letter from Tim York in one of your Pundit articles, we agree that we need to have a model to emulate and evaluate if we are really going to create cleaner and safer food.

By no means are the Israelis and the Dutch exempt from product that is “unclean” or “tainted”, nor are they exempt from what we call “bad apples growers”. We do believe, however, that their standards and practices of food safety in the export arena allow for the process of food safety to actually work, so that incidents of recalls and contaminations can be handled quickly and effectively. That being said, we are back to the question that bothers us the most and a question you asked to Alberto Martinez of Top Line:

WHAT IS OUR RESPONSIBILITY AS THE IMPORTER??

We believe this is one of the most fundamental problems that currently exist in the produce world, and especially in the world of fresh herbs — specifically with basil. We find two very important factors in what we consider the responsibility of the importer: 1) The standards to which our growers adhere, and 2) The return we give back to the growers.

First of all, let’s speak about our responsibility as the importer to help shape the industry and its food safety standards. Make no mistake, we are the one segment of the industry (wholesalers, importers, and distributors) that have the most power to shape the industry. We drive the prices; we drive the quality; and ultimately, we drive the social responsibility around the products we offer for sale. We control the margins, and we control the supply.

Basil has been a major issue in the food safety world. Herbs in general have a very high risk for possible contamination, and this high risk has been neglected industry-wide. Maybe we should begin to look at what we have allowed the food safety practices to be, how we have shaped them, and where we can change them. If one has been down in Baja or Central Mexico, it is easy to spot the hundreds of farms growing basil in substandard conditions that are nothing close to what we (the distributors, importers, and wholesalers) are representing the standards to be.

Haphazard farms with dilapidated shacks for packing houses, zero refrigeration, zero sanitation for harvesters, etc. They are easy to spot, and in some cases you can even spot some very fancy labels being put on the bags. For those of us in the basil world, there are really no secrets; likewise for those growing in the Baja, for example, the culprits are well known. Both in Baja and on the streets of LA, you can find basil for sale for literally dirt cheap. Interestingly enough, one can even find basil on the streets of LA some parts of the year for less than a dollar!! What possible return could a grower get off of $0.95 after packaging, transport, customs, labor, etc.?

That being said, there are many companies growing in Mexico (even Baja) and other parts of the world with excellent standards and with motivation to evolve and constantly improve. A few important players in the basil world who have shown respect to food safety systems and adherence are companies like Jacobs Farm Del Cabo and Vida Fresh, which both grow in Baja and place a much greater emphasis on food safety and quality than many of the other Baja basil growers.

This is where certifications and testing come into play, and where we need better models and uniform standards to allow us to be educated enough to help drive the systems into place. It is about time we begin to simply do what we say. Importers, distributors, and wholesalers are all promising their customers clean, safe, standardized product — product that has been sourced from growers who are practicing “good agricultural practices”, growers that are Primus tested, growers that are certified organic, growers that have a HACCP certification, and growers that have long reputations of adhering to these practices.

Unfortunately some importers are simply not delivering on these promises, and consequently, they put us all at risk for food contamination and loss of consumer trust.

Which brings us to our second point — the return to the grower. How can we expect growers to invest in their farms, upgrade their facilities, implement training programs and uniform standards, and introduce frequent and private testing of their products when the return they are getting is so low or worse yet……open price? Open price is a very dangerous tool that importers, wholesalers, and distributors use in order to collect their due margins. However, they neglect the grower who is usually more desperately in need of any margin, especially in basil. In order to create change, we need to be willing to think about the possibilities of another model.

The average price of basil in LA has not changed in over 10 years, yet the price of everything else from fuel, labor, packaging, and freight has skyrocketed. How can we expect our growers to produce clean safe product with this kind of return? On average, Israeli basil sells for more than double that of Mexican basil. The growers are able to get a better return resulting in the customers getting clean safe product that they can trust. Additionally, if a contamination occurs, the recall system and the responsibility of the growers, exporters, and importers are not only standardized, but have been in place for decades and are constantly improving thanks to the pressure of the European markets and their dedication to food safety.

With the Israeli and Dutch imports, there are no open prices or even debate over price. The value of the dollar, the competitive demand from Europe, and the better margins within the European market have eliminated any possibility of cheap Israeli or Dutch goods. In the end, the growers (although not prospering like they used to) are able to invest something back into their farms. This is more than we can say about most of the basil growers in Mexico, Columbia, and Guatemala, where the majority of basil for the US market is grown.

It is true that in items like bell peppers, tomatoes, and other higher priced commodities, food safety programs are more likely monitored and adhered to. Thanks to the importers and distributors of these products who have had to show their customers proof and who have used these practices as a marketing tool.

We know that the American market is very different from that of the rest of the world, and as the dollar weakens and other markets become more difficult to maneuver, we have to ask the question of whether the lack of responsibility of the importer is really one of the main problems, and what can be done about it? We as importers, distributors and wholesalers have to go beyond relying solely on the FDA to ensure there are no short cuts taken in food safety, particularly when we ourselves have not done everything possible to ensure the product we are selling is safe. This surmounts to corporate responsibility.

There was a recent salmonella scare in Europe where it was thought that Israeli basil had been the culprit. Recalls were set in motion, and testing began in order to trace the contamination. At the end of a daily 3-month long follow-through of testing, no abnormalities were found. The tainted product was traced back to one grower of one exporter and no other traces of the contaminant were found.

Although it is common and standard to have frequent testing done on all exported basil from Israel, we along with all the other Israeli basil importers implemented an immediate TEST FIRST policy during this 3-month investigation whereby every shipment was pretested. By the time the basil landed on US soil, we had our test results and could provide them to our customers in advance regardless of whether the FDA took action of its own and did testing. These tests can be administered quickly if it is important, while still remaining cost effective. We remain proactive in food safety even after the scare, regular testing as always on all items and, in fact, the ministry of agriculture in Israel also overseas these practices as part of the exportation process from Israel.

In the end, we believe that although the FDA is/should be responsible for the governing of our country’s food safety, we as the people who are bringing these goods into our country and selling them for profit have a huge responsibility in seeing that our goods are clean. Furthermore we believe that there are enough resources for this outside the FDA that are cost effective and can enable us to do just that: deliver clean safe food to our American consumers.

We believe we have an obligation to do this. We have the same obligation to give the growers the kind of returns that can allow them to build/improve the kind of systems that will allow for clean safe food. Victims we are not, but possible gamblers with our consumer’s food safety??? Should we continue to allow importers to gamble with our food safety in the name of profits??

We agree with the Pundit that the next outbreak is just a matter of time unless we start to take food safety seriously. Thus our point is simply that regardless of whether the FDA takes quick action, as they should in order to standardize the systems in question, the importer has an enormous responsibility to shaping the reality of food safety in our country as well as consumer perception of food safety. Let’s take responsibility together and ask for more communication, more openness and more willingness to bring prices up where they have to be in order to pay for food safety.

— Nissa Pierson
Managing Member
Ger-nis International, LLC

A very hearty thanks to Nissa Pierson for thinking these issues through in such a comprehensive way.

We often find greater attention to food safety overseas. Partly this is because many markets produce almost exclusively for export, so they anticipate selling to a wide variety of customers with many different standards. We noted this when we were in South Africa, because the fruit could wind up in Japan, China, continental Europe, the United Kingdom or North America, so the highest standards were followed.

Also so much money in terms of transportation and duty was likely to be applied to this product that only the highest quality product would be shipped anyway.

In addition, many of these markets are dominated by only a few large chains, and their standards have enormous influence.

The growers of basil in Baja are in a completely different set of circumstances.

The vast majority of the product is going to the US, transportation is relatively cheap and the market is a diverse group of wholesalers, chains, foodservice distributors, etc., with various markets to pursue.

Certainly there is a moral responsibility not to defraud people, so we find especially disturbing Nissa Pierson’s claim that “…If one has been down in Baja or Central Mexico, it is easy to spot the hundreds of farms growing basil in substandard conditions that are nothing close to what we (the distributors, importers, and wholesalers) are representing the standards to be.”

Yet we suspect that not too many trade buyers who don’t want to be defrauded are being defrauded. After all, these buyers know that they are choosing to rely on an unverified assertion made by an importer. If the buyers really wanted to assure they were getting product grown and packed to a certain standard, they would insist upon either verifying it themselves or getting a trusted third-party auditor to verify the claim.

Although everyone has ethical responsibility for their actions — and so any importer who knows or should have known that something is “unsafe” and still markets it is unethical — that is a standard without much bite. After all, knowing something was not grown or packed to a specific standard is not the same thing as knowing something is not safe. In fact, as far as we know, even with a high risk item such as basil — well over 99% of the basil production causes no problems.

The issue we would have with Nissa Pierson’s letter is that in the American context, especially vis a vis Mexico, the power in the marketing relationship lies not with the importer, who in many cases is really just a commissioned sales agent for the basil farmer, but with the buying end of the industry. As we wrote in our piece:

We also see Alberto as a victim of his customers. How is it possible that over a year after the spinach outbreak of the fall of 2006, none of Alberto’s domestic customers were demanding any certifications? And on herbs — an item identified by the FDA as high risk.

Alberto basically functions as a marketing agent for the growers in Mexico. He needs to be able to go to those growers and tell them that there will be no market for their product if they don’t get certified….

At the various trade associations and seminars, people are always standing up and saying food safety is their Number One priority.

Yet the real life business experience of Alberto Martinez tells us another story — that lots and lots of industry buyers don’t insist on product meeting tough standards.

As long as that is the case, the next outbreak is just a matter of time.

And so it is. Nissa Pierson’s plea is plaintive, and there is no question that, in the end, growers, packers and processors have to be paid enough to maintain standards, sustain the earth and make a living — otherwise they will go out of business. But these standards can be enforced regardless of the mechanism of selling, such as the use of a commissioned sales agent.

In the American context, it is becoming clear that we have two options — one is to go for a regulatory or quasi regulatory approach, the California Leafy Greens Marketing Agreement being the premier example. In this approach, the whole industry or virtually the whole industry agree on a standard and a mechanism for enforcing it.

Alternatively individual buyers — say Darden — develop their own standards and mechanisms for enforcement, either by their own people or relying on third-party auditors.

In either case, the importer is then empowered by these buyers to make it clear to his growers that there is no market for anything but product certified to meet a standard.

That is the key. If the buyers constrain their supply chain to only growers, packers and processors who meet high standards, many producers won’t make the cut. This reduced supply of qualified product will bring higher prices.

Many thanks to Nissa Pierson and Ger-nis International for helping us think through such an important issue.

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