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Perishable Pundit
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American Food & Ag Exporter

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Food Safety And ‘Locally Grown’

Jim Prevor’s Perishable Pundit, June 22, 2007

True story: A national shipper has a meeting with a major retailer. He is told to produce his third-party audit certification and provide evidence of his water testing and other food safety measures that he has previously been told he is obligated to comply with. The importance of food safety as the paramount value of the retail chain is emphasized.

The meeting also covers shipping schedules. He is given a list of warehouses with weeks indicated when this national shipper will not be supplying product to those warehouses. Why? It is explained to the shipper that during these weeks on the shipper’s product lines, the indicated warehouses will be doing a “locally grown” program and the retailer will be buying from local suppliers.

Our shipper is a big boy and accepts the loss of business gracefully. He does ask one question though: “What do you require as far as food safety goes of these local suppliers?”

The category manager on the other side of the table looks at the shipper with steely eyes and says: “Never raise that subject again if you want to get another PO from my office.”

As we roll into summer, we have locally grown programs blossoming all across the country, which means that food safety standards, so carefully developed after the spinach crisis, are, for the most part, being tossed aside without a second thought.

And we are hearing about it at the Pundit. The details are different but the storyline is always the same: national or regional grower/shippers get preached to by retailers about the importance of food safety, the grower/shippers spend substantial amounts of money to conform to the best standards… then they lose the business to completely unaudited, uncertified, untested local growers.

It is sometimes worse than this. Sometimes retailers don’t even know which farmer grew the product, because the retailers simply buy off the Amish or Mennonite Auctions, which are spreading widely and growing fast.

What is behind retailers’ sudden abandonment of their own food safety standards? Some of it is a determination to have “locally grown” when there are no suppliers available that meet food safety standards. Yet there also can be a substantial price differential between this locally grown product and what buyers would have to pay to purchase crops from a reputable, third-party-certified shipper.

It is sometimes the case that one can purchase a bushel of some crops for $1.50 at the auction, and it would cost many times that price from someone audited. We know of no retailer donating that price differential to a fund at its state’s ag college to help local farmers practice better food safety.

So although retailers may sell locally grown to meet consumer demand and may do it to be politically correct with local politicians and interest groups, they are also doing it to boost profit margins.

One of the things we learned from the Buyer-led Food Safety Initiative is that buyers are loathe to constrain their supply chains. The California Marketing Agreement came together not under the withering pressure of major retailers but as a processor and shipper initiative.

But the highly diffused nature and fractured production base for locally grown produce means that if we are to achieve comparable standards with locally grown product, it is buyers, and only buyers, that can make it happen — unless and until the government steps in, of course. Though that is probably years away — if ever.

We ran a piece entitled, Getting ‘Locally Grown’ Up To Standard, which highlighted a whole bunch of things that Primus makes available on its website at no cost that growers can do to improve food safety. At very least, every retailer should require any supplier not third-party audited to do the things mentioned in that article:

If retailers direct their suppliers (growers) to the Primus web site, they can:

  1. Develop their own operational Standard Operating Procedures (SOPs) at no charge (formats in Word allowing customization or in PDF as a training exercise). They can return at any time and alter the manuals. http://www.primuslabs.com/dd/index.html
  2. perform self audits on themselves at no charge (the results will be e-mailed to their attention with a benchmark for what we see throughout the industry) http://www.primuslabs.com/fs/self.html
  3. Can access the audit SOPs as well as the guidelines to audits (excellent training for growers and handlers).
  4. Contact someone to work with his suppliers from our Affiliate list. There are Affiliates in Ohio, Michigan, etc. Primus is not involved in this so he can negotiate a price or the suppliers can negotiate a price directly with the Affiliate directly http://www.primuslabs.com/tpa/auditors.asp

    This is all provided without Primus generating any revenue.

This would be a substantial step forward. Among other things, though, it would mean that those retailers buying, or allowing their suppliers to buy, at auction would have to ban the practice because they would need to see evidence that these four things were happening before they would buy.

Though this would be a big improvement, it is still a stop-gap. Logically, if a standard is necessary to impose on Dole, for example, it is equally necessary to impose on the smallest grower.

The real problem is that if food safety really is the Number One priority, then produce buyers and merchandisers can’t have the flexibility to waive food safety requirements to achieve some other goal — including buying locally.

The solution is to have a Quality Assurance department that is totally detached from any concerns other than food safety. Before any produce company can sell to a chain, it needs to get approved as a supplier by QA, based on conformance to food safety requirements.

So in planning what to promote and procure, buyers and merchandisers will have to build those plans within the universe of approved suppliers. This will not be pleasant. Chain retailers won’t like it because they will not be price-competitive with local stores that can buy from anonymous sources at public auction.

Small growers won’t like it as the cost and complexity of compliance means that many will be compelled to close down, sell out, consolidate and form co-ops to keep their customers.

Yet there really is no option. The complaint to us may have come in the form of vendors complaining of unfair treatment and they have more than a point, but, beyond our trade issues, how will retail produce executives feel if some locally grown product causes a death and the retail executive knows that the death came about because he waived the chain’s food safety policy?

Every chain needs mandatory food safety standards, universally enforced. The consumer is counting on the retailer to sell only safe food.

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