Q: What is your connection to these issues?
A: We’re a small agriculture technology group doing business over 20 years, mainly strategy projects from flowers to forestry and anything in between.
Before that I was working out of Hawaii on large sugar and coffee plantations, and have been involved in farming up in Washington growing tea, so I’m coming from this a little as a grower and as a research and business consultant. My partner, Steve Savage, has a Ph.D. in plant pathology, and our third partner, Greg Faust, has a very strong and broad agricultural business background.
As our Cirrus name suggests, these clouds convey the first warning signs that things are changing, rain is coming, which could be good or bad depending if needed; the concept is a distillation of what we do. If a company sees a change coming, such as a competitor acquisition in the market place, a new regulation or a consumer trend, like the whole dialog about sustainability, what does that mean, is it good or bad? Groups like ours help companies understand what’s happening and dig at the core.
Q: Do you work with companies in the fresh produce industry specifically?
A: We respect the proprietary nature of our client relationships, but we’ve done a lot in produce, we go to PMA most years, and we certainly interact with industry executives frequently in coming up with solutions for the produce industry if the topics have a fit. I’ve done work in marketing and research development related to vegetable seed breeding, in particular. Our clients run the range from giant to very small, and some universities.
Our interest in sustainability, although it connects with client-related activities, is really something we’re doing as individuals. Steve and I have watched this debate going on and realize the consequences of these decisions being made on sustainability matter.
When we saw the Stewardship Index for Specialty Crops forming, and since we have known Jeff Dlott, president and CEO at SureHarvest and had a lot of dialogue with him, we said let’s get involved. We’ve worked on aspects of these issues many, many years now and thought we could add information. We have our biases — everyone does — but we’re doing our best to be constructive in reaching a positive outcome, although some people view us as major critics or obstructionists trying to halt the initiative.
Q: Why? What are your key concerns?
A: If Wal-Mart or a consumer has a choice between buying a sustainable product versus a non-sustainable one, it’s hard not to reward the company offering the sustainable product, and you might as well buy positive. Who can be against sustaining the ecosystem and people’s welfare? That’s how the sustainability issue got started; meeting our needs while making sure future generations can meet theirs. The key is how it’s done and this is where it gets interesting.
The problem is the negative externalities. You really want to factor those into any transaction. They all come home to roost. It’s just a matter of time. So why not find a way to factor all costs and benefits into the equation sooner rather than later.
Q: Isn’t a goal of the Stewardship Index to build a set of metrics that are measurable and verifiable as a means to better assess and track progress in different areas, such as water or energy reduction? Couldn’t that help as a tool in analyzing the costs and benefits in a broader sense?
A: There are two big approaches… science-based metrics measure real outcomes that matter, such as greenhouse gasses, better water use, biodiversity for a healthy ecosystem. One determines how you can measure it, and come out with practical implementations.
The other is prescriptive standards, which represent common assumptions. Did you follow our check list, yes or no, and that list may or may not have science-based or measurable outcomes. A perfect example would be organic, where people just presume it is better. Take Fair Trade, which has farm-size limits. There’s a line drawn in an effort to protect the rights of the workers.
If there is a very large plantation, an assumption is made that the owners are probably exploiting the workers, so a standard is developed that requires keeping farms a certain size. My experience is that the assumption is often not true or correct. In my experience, for example, the large farms are typically better managed; Starbucks knows this and does a better job of supporting farmers.
The Soil Association of the UK decided that to be certified organic, certified product couldn’t go on an airplane; it assumed that doing so must be energy-intensive and high in greenhouse gasses… It eventually backed down after mounting pressure from UK supermarkets, but the whole premise was not grounded in science.
Q: In that case, you would need to compare other variables in the lifecycle of the products, as well as social costs like the impact it would have on farmers in third world countries, etc…?
A: Prescriptive standards reflect commonly held perceptions rather than science. Tell customers what they want to hear. Is this accomplishing a more sustainable system? One strategy creates incentive to improve. The other says we’ve arrived based on a list of arbitrary requirements. We feel sustainability is such a complex issue; we don’t want to burden or punish agriculture unnecessarily.
Another theme, reminiscent of a conversation I had with Bruce Peterson when he was at Wal-Mart regarding food safety, is monumental. Would Wal-Mart get involved in certification representation on food safety, and do we need to go beyond government standards? If a company as big as Wal-Mart starts to convey messages in the store that government standards are not sufficient, there’s no way around eroding trust in our regulatory institutions; that FDA and USDA are not good enough, you need this extra thing.
We don’t want to go there. In the same way, if retailers easily succumb to pressure to implement an arbitrary list of sustainability requirements of their suppliers, it’s a runaway train, and we convey to the American consumer that we really do have something to be afraid of.
Q: Another perspective is that the industry should take proactive steps and control its destiny rather than wait until the government imposes less desirable regulations that may be politically motivated or not appropriate to the unique needs of produce companies. And some would ask, what’s wrong with trying to pinpoint problems and improve practices?
A: This is where I’m having trouble with the Stewardship Index; to put it bluntly it implicitly communicates that the EPA isn’t good enough. When we build a metrics system that communicates we can’t trust what we’re doing right now, or we have a big problem we need to solve, or we’re not sustainable… now we run the real risk of undermining consumer confidence in the food system itself. If we’re honest and look at the numbers, the American agricultural system has done a great job. I defy someone to come up with a measurable system that doesn’t show dramatic improvements historically in all areas; a trajectory path leading to more significant yields, waste reduction and input protection processes, soil protection, labor handling practices, etc. We live in these data, by any objective standard… not every farm, every time, but to the extent that statistics exist to support our efforts, we are good stewards from soybean to corn to tomatoes, and it is very easy to demonstrate this.
The first question to ask when creating a sustainability index is: Are we telling the whole story? The Keystone Field to Market Initiative was founded on multi-stakeholder solutions. They first asked, how are we doing, analyzing historical data on major crops going back 30 years to create metrics and outcomes that made sense. It’s important to understand how prescriptive standards compete with science-based metrics.
Q: Could you provide examples?
A: For instance, what is the greenhouse gas value we’d assign to compost manure? Nitrogen fertilizer is a key component of greenhouse gas, which has global warming potential, but what do you do with compost. Turns out when you make compost, in the process it has to be turned many times for organic standards, yet there is energy used in turning, methane is produced, it’s unavoidable, and when you look at methane it has global warming affects…
Q: So reality may be counter-intuitive?
A: There are many counterintuitive solutions. Preconceived ideas turn out to be a poor guide. Composting is a fine practice for many reasons, but not for greenhouse gases! We’re not for or against organic; it could be superior in production. We’ve tried to be respectful of different agricultural methods and preferences. Yet, this compost and nitrogen matters, organic may or may not be more sustainable. We’re very involved in doing these analyses in water use, greenhouse gasses, and pesticides.
Q: What issues have you assessed regarding pesticide use? We’ve covered the topic extensively, most recently highlighting erroneous and misleading claims arising from The Environmental Working Group’s infamous “Dirty Dozen”… .
A: Pesticide perceptions are a reflection of 1965, even though there has been so much progress in this area. The trend over time is that use rates are down, safety is up, specificity is better, and there is absolutely no incentive for a company to slide something by that will land you in law suits. The Environmental Working Group seems to be in a time warp of conditions 20 or 30 years ago.
My partner Steve Savage wrote a piece in defense of celery, “Two Radically Different Views of Celery,” after EWG ranked celery at the top of its annual Dirty Dozen list. When you start to plot the data, you conclude the opposite… It’s so easy to sell fear. Mark Twain said, “A lie can travel half way around world while the truth is putting on its shoes…”
Q: How do you insure misperceptions don’t tarnish the process?
A: If I were going to critique the Stewardship Index process, it would be that the governance of this is not transparent; it’s not balanced and doesn’t lead to trust; logarithms must be peer-reviewed and open, and we need healthy debate. One of the critical places where we find imbalance is in the representation of stakeholders. There are no fertilizer or chemical companies included, even though they could bring millennia of experience and expertise to the discussions.
The NRDC is a big environmental activist group. It championed the Alar lawsuits, and is currently suing several pesticide companies. NRDC sued Bayer CropScience, based on a non-food-safety technicality related to spirotetramat, or the brand Movento, a very safe compound by any measure for control of insects on a wide variety of agricultural crops. You would think NRDC would want to replace other older compounds; yet it sued EPA, and there was no logic to it. There are so many NRDC lawsuits against technology companies, particularly those in pesticides. NRDC got together with SureHarvest and Western Growers Association and is on the steering committee, doing most of the heavy work behind the Stewardship Index.
Q: Isn’t there opportunity for others who want to participate? On the Stewardship Index website, it welcomes stakeholders to help in developing metrics and invites those interested to sign up to be a part of the Metrics Review Committee…
A: The Stewardship Index site does a masterful job of giving the impression that hundreds of people are involved in the process. You can sign up for any one of these metrics, and once you’re in, you can navigate the site. But it is unclear how often people are posting things and if anyone answers questions. The appearance is so good at presenting an open process, but when trying to participate online, provide input and receive feedback, I find it’s a struggle to get involved, and most of the work seems to be done behind a curtain, and it is not apparent what is going to be done with this thing.
Q: How important is the outcome of the Stewardship Index to the produce industry? Is Wal-Mart going to incorporate those final metrics into its own sustainability initiative?
A: The reason why the Stewardship Index matters is that Wal-Mart desires to not reinvent wheel. What’s happening is Wal-Mart is waiting for the Stewardship Index to be completed and then will plug in to it. What these guys do is really important.
NRDC is really driving the bus and the growers are not involved in a meaningful way. This is far from the way it’s being sold. There is overlap of executives in different sustainability initiatives. For example, Jonathan Kaplan, Senior Policy Specialist in NRDC’s health and environmental program, also plays a role in Wal-Mart’s index and ANSI’s.
Q: Couldn’t Wal-Mart’s acceptance of industry metrics actually be preferable? Industry executives express frustration at the costs and inefficiencies of multiple standards and audits…
A: One concern I have relates to how PRiME, Pesticide Risk Mitigation Engine, a web-based tool for growers to assess pesticide risk, will eventually be used. It’s a great effort originally designed as an educational tool. It allows a grower to plug in details about his farm, put in specifications of pesticide use and see how it scores for avian and humans. There are 13 different sub categories under PRiME. The Stewardship Index wants to retrofit PRiME as an index, to boil into a number that gets plugged in to the metrics.
The Stewardship Index has 48 metrics and sub metrics, and is growing. Some of these risks score for earth worms and balance risk with impact on humans, and balance with greenhouse gasses, and other variables, so it is complex to turn into a score.
When you think of Wal-Mart and others that are joining the initiative, such as Safeway, Disney, Darden, Marks & Spencer, Wal-Mart’s ASDA, and Royal Ahold, if they adopt PRiME, it’s going international; if these metrics aren’t right we’re doing damage.
Wal-Mart is not well served adopting a system that won’t stand the test of time. If the foundation is not valid and true, it won’t stand forever. We just want to bring transparency to the process.
No one wants the process dominated by seed, fertilizer and chemical companies, but to not have them in the process is a grave mistake. The subcommittees, which are hand-picked, control agendas.
Here’s why it matters: the produce industry has an important role in educating American consumers. If we don’t go back to science, we’re communicating to consumers that you can’t trust EPA and USDA, and you need a Stewardship Index to protect you. We’re essentially feeding and stoking perceptions, which makes people less willing to support agricultural research and mistrust technological advancements.
Populations are exploding and we’re going to have to feed a lot of people.
This is not a Republican and Democratic issue. We have some real serious issues. There are a lot of complex challenges and costs of developing tools to control insects and diseases. The ranges of these problems are increasing, and they are not going to solve themselves. The costs are going up and the uncertainty of investment in research is too risky.
Along comes this Stewardship Index, and the PRiME tool turns into an index, which highlights the hazards and misleads because it is used out of context; it could turn into the Dirty Dozen on steroids.
A: It would incorporate information a buyer at a retail store couldn’t possibly understand. I don’t have the background to understand this thing because it is complex. It’s being adopted and hasn’t even been fully vetted. We’re messing with the toolbox on which the global food supply rests. We’re putting a system together that flames mistrust.
Q: Could PRiME still be used as an educational tool for growers?
A: Look at 48 metrics and all the data fields a guy has to put in; this involves significant costs just to enter the information, which is another problem, and we haven’t gotten into confidentiality, where there is already a major debate going on. I feel a grower’s data is its own, but once entered in the website, it could be discoverable in a lawsuit, or used in Dirty Dozen reports. Once we’ve created a site where growers’ data is out there, it could easily be misused.
Q: One contention is that the individual grower’s data would remain confidential, but by aggregating the information of many, knowledge could be gained on trends and a grower could weigh his or her own progress in different categories by those in similar scenarios…
A: They talk about aggregating the data. I can still run a report, however, that all peaches are bad and bring down the industry. If I showed bananas receive 50 to 60 fungicide applications, or Florida sweet corn gets more than California sweet corn, that’s real data that could be dangerous in the wrong hands. Confidentially concerns are well founded and could be a game-ender if people are not assured their data is protected. Even if Sure Harvest is fully committed to protect confidentiality, there could be data outside of its control…
One also needs pesticide information for water metrics, and then you need some of that data for calculating greenhouse metrics, even if it’s a minor part of the pie. Clearly the data needs to be exported or entered twice.
If I’m a major grower in Florida and my entire livelihood depends on it, even if the system manages to keep my name out, the information can be used for reports and trends. We give information to the NRDC, which has used such information to shame people.
Q: You mention financial burdens as well…?
A: Western Growers wants to influence the outcome and not have multiple standards. Estimated costs for compliance to the Leafy Green Marketing Order are high. Look at the complexity of the sustainability metrics; anyone serious about this would have to hire an individual just to translate the metrics. The cost of complying with these things is very significant.
Q: Don’t many of these measures lead to cost savings? For example, eliminating waste, reducing energy and water use, developing more efficient operations and streamlining transportation logistics also could make good business sense…
A: Agriculture has incentive to be efficient; it is selling commodities. Show me the cost savings, and why this is creating value downstream. Maybe it makes more sense as a value-added model rather than a compliance model. I think this will be a matter of growers forced to comply, but once implemented, does it accomplish anything? If a grower needs to change or increase use of pesticides to control disease in a bad year, it could negatively affect the buyer’s perception and add to the confusion in the marketplace. Real metrics need to be expertly interpreted.
Q: How could industry sustainability measures impact government requirements?
A: Government purchasing will start to integrate sustainability into the criterion. In a recent announcement, Wal-Mart’s sustainability strategy to reduce greenhouse gasses was cited as the kind of thing government wants to do.
How are we going to score on this metric? We better figure it out and not go forward until we do. If we’re selling crop protection products to stave off disease, even though EPA signed off on it, this tool says it’s not OK. We’ve created this parallel regulatory process, which could limit access to critical technologies we depend on.
Q: Say EPA signs off on two pesticides that would stave off a crop disease. Isn’t some of the process weighing the risks and benefits of using one method versus the alternative…?
A: There is an important distinction between hazard and risk. Electricity is hazardous; it can kill you. We say we need to limit your risk by protecting your exposure — insulating wires, calling electricians, and a judgment is made on acceptable risk. By limiting exposure you limit risk. Gasoline in a tank is hazardous but you manage the risk. Pesticides are no different. They are designed to control insects and weeds. For each type, toxicology tests are done, and restrictions and proper use are delineated on product labels; you keep rates down to micrograms per acre, spray so many weeks before harvest… practices on that EPA label control hazards by stipulation rates, timing crops, and states come in on top of it. Are the materials different, yes, and some are more hazardous then others, but if used properly, a company can say risks are very small and within the limits we use.
The premise here is that the EPA label is not good enough. We need to educate growers and insure they understand the implications. The PRiME tool is designed to educate the grower on inherent hazards and evaluate. It’s complicated.
PRiME scores the pesticides, with maybe a moderate risk for earth worms, high for birds, low for fish. How does that look compared to B fungicide? This one is good but nails the workers without protective gear. The premise of the education process is not bad.
What’s wrong is taking this PRiME tool and turning it into a metrics a buyer at Safeway can use. No one wants to read a score for everyone’s broccoli; this company is better on earth worms and worse on the avian population, but the competitor is better on this and worse on that…
It makes no sense to narrow it down to one number on an index within an index. First of all, it hasn’t been published; it hasn’t been reviewed, so to vote on this algorithm makes no sense. Retailers don’t want all buyers to be trained in toxicology.
The EPA and the industry have spent millions of dollars to come up with pesticide labels. If I’m a consumer and I walk into Safeway or Wal-Mart and see a good sustainability score on a product, will I think we’re safer and the world is better? I’m not against more sustainable products; I’m just against a process that is not transparent put in place by activists. Sunlight is the best disinfected.
Q: What actions do you propose?
A: My recommendations are don’t move ahead of the science. I’m not trying to torpedo the process, but this is a highly complex subject, and a lot of education needs to take place on all sides, growers, retailers, food service, manufacturers. This is complex and we don’t know what is going on yet. Even though we want a quick solution, we’re not there. People need to recognize the costs involved; asking the supply chain to do something like this is very hard, and the solution should be value-driven versus compliance-driven. Mandates won’t serve anyone well. At the very time Wal-Mart is asking people to factor in the long term, it’s focusing on short time buying strategies.
Confidentiality is another critical issue. There must be assurances. What is the business model with this data? With all this pesticide record-keeping, will data be sold back to the industry? There will be all kinds of reports that are money-makers. How is the data going to be used, aggregated or otherwise? Who will have access to it? Does the grower have the right to opt out of that? Does he have control over the use of his own records? Could they be sold without his knowledge?
Q: I suppose another concern is misinterpretation of the information…
A: Exactly. The almond industry, for example, has to spray to control aflatoxins, an extremely dangerous potent carcinogen. They have experts doing this. If a grower uses pesticides with high risk application, there needs to be perspective on why, but within the scoring, there is no allowance for the description that it is necessary to reduce this dangerous aflatoxin. Nowhere in the scoring is the benefit captured.
Certain fungicides may be used to manage disease resistance. You run the risk of growers selecting a pesticide based on what will win them a better score. If a grower wants to look better in PRiME, it may not rotate pesticides even though it would be the right decision.
In cost-benefit analysis, you look at the total picture, but in PRiME you only have the cost not the benefit. In growers’ hands, PRiME works because they already know the benefits of using a particular pesticide, but a buyer at Darden or Wal-Mart won’t understand that side.
Industry has really done a great job on all fronts, there’s not a big conspiracy to make food dangerous. The idea of bringing visibility as an education tool is fine, but turning it into metrics in the index and giving it to the buyer who doesn’t understand is creating confusion. A lot of contract applications are done by experts.
If these initiatives caused education across the U.S. to know about relative risks in ways we didn’t know before, great. Let’s make the next five years about education to see if the data justifies going further from a cost-benefit standpoint.
Q: Even when science-based metrics are considered, won’t sustainability options always have subjective elements? Sustainability is not going away. Shouldn’t the produce industry at least be aggressive in influencing its direction?
A: We’re rushing the process because of perceptions, and it’s getting away from us. I don’t want to appear as if I’m throwing rocks at the Stewardship Index; we’ve engaged heavily to make it better.
Government purchase of food will require metrics focused on greenhouse gases. It will look to Wal-Mart’s metrics, which will be tied to the Stewardship Index… it will all be interconnected. What’s really happening is a parallel regulatory system being established under the radar that will be exported.
We need real progress, not reinforced perceptions. We have this perception-driven strategy that doesn’t lead us to where we need to go from a global food security level.
In the book Starved for Science, Robert Paarlberg raises a moral question of the implications of anti-science building its way into the food industry and its impact on funding for the world’s poor. The Stewardship Index codifies some of these ideas and this matters…
It’s getting really goofy in a hurry; if metrics are science-based, fine, that’s great, but this is turning into a presumption-driven phenomenon.
Wal-Mart needs to be on the right side of the truth; we accomplish nothing by feeding retailers wrong information. The growers are a little intimidated by the fact that Wal-Mart, Safeway and more and more big retailers and foodservice operators are becoming involved, and they don’t want to upset them.
Western Growers Association is involved because it doesn’t want myriad metrics; it wants rationalized standards. In the end, it does no good if everything is standardized, if it’s not good science!
We work in agriculture technology projects across the board. I look at what can be done. At the end of the day, it’s legitimate to reward good decisions. If we’re going to do science-based, open and transparent metrics that focus on outcomes that matter, let the chips fall as they may, but let’s not get into value judgments. We’re all behind the science. It’s critical to factor in externalities that we have not captured in our internal decision-making. There are going to be winners and losers, but if the decisions are based on bad science, it is unconscionable to me. The way it stands now, when we start getting into the data of implementing this, I think it will collapse under its own weight.
We thought it would it would be helpful to get input from the man organizing the process. Mira reached out:
Q: We’re hearing from many people concerned that the governance of the Stewardship Index for Specialty Crops is not balanced to include all stakeholders and that the process for decision-making is biased and not fully transparent. Could you provide further explanation? What is the governance process for the Stewardship Index? Who is driving the process, who makes the decisions and how are those decisions made? Are advisory committees asking for input? Are there votes on different components, who votes, are the votes given equal weight, and if the vote is “no”, who will make the final decision, etc.?
A: We’ve tried to be very transparent and all material of governance is on the website. [Editor’s note: “To access, go to the site, register for private log in, click Coordinating Council Information, and then click Coordinating Council July 27, conference call meeting notes, and SISC Discussion Organizational Structure and Policies DRAFT].” If someone chooses to get access to information and remain anonymous, they are able.
There are 33 Coordinating Council members with relatively equal representation, including buyers, producers, and NGO/scientific folks there, and I fall into that category. Decisions on metrics and if they are ready for use are decided by the majority of those three stakeholder groups, but can be vetoed by the buying community, producers or NGO/scientific folks.
Q: How was the Coordinating Council formed?
A: Initially the founding parties were Tim York [President, Markon Cooperative], myself, Jonathan Kaplan, [Senior Policy Analyst, Natural Resources Defense Council (NRDC)] Hank Giclas [Senior VP, Strategic Planning, Science & Technology, Western Growers Association], Kathy Means [VP Government Relations & Public Affairs, Produce Marketing Association], who replaced founding member Karen Ross [former President of the California Association of Winegrape Growers and now USDA’s Agriculture Department Chief of Staff], Hal Hamilton, Co-Director, Sustainable Food Lab, a non-profit group.
For me, Tim York was instrumental, following his work on the Buyer-led Food Safety Initiative. Markon had developed its five-star food safety program and was an industry leader in food safety, part of the Markon brand. Tim came to the conclusion that food safety shouldn’t be a competitive advantage; it should be a given. It helps nobody if one company has a food safety problem, and he professed that food safety is not a journey, it’s a destination and we should all be there.
So Tim started to think of sustainability as the next option to differentiate. He contacted SureHarvest and we looked at what it would take to build Markon’s sustainability program. Tim funded a study, and we sponsored it as well to look at collecting data with suppliers for metrics, and determined it feasible to collect certain data. Tim started looking at the landscape… If he developed a sustainability program then competitors would follow, resulting in the food safety phenomenon of multiple programs and standards all over again. His philosophy was, let’s make sure we’re all competing on the same playing field.
The Food System Alliance’s California Round Table for Agriculture and the Environment brings together agriculture and environmental leadership in California. If you look at that group, the members are familiar folks we run into. Hank Giclas and Jonathan Kaplan are both very involved in that, and now Tim York is a member of that too. They have been discussing coming up with a program. Also parallel, Jonathan Kaplan is excited about work Unilever is doing on collecting and benchmarking performance.
Then we had discussions with the Grower Shipper Association of Central California stationed in Salinas; Jim Bogart, President; Steve Church, Chairman of the Board; Margaret D’Arrigo-Martin, Treasurer; and other executives there… The Grower Shipper Association, a local trade association, was doing seminars around food safety and also was involved with the Leafy Greens Marketing Agreement.
Tim York was saying we have to get ahead of this train. Buyers will develop their own system and compete… look what’s going on with Wal-Mart. It was clear something was happening.
Tim reached out to Hank, based on their experience with development of the Leafy Greens Marketing Agreement, which didn’t have a broad stakeholder group. We wanted to avoid that so felt it important to insure wide stakeholder representation. Hank knew Jonathan Kaplan, and I knew him as well; he’s prominent in non-profit sustainability issues in California. If you’re involved in sustainability, you will know Jonathan.
We have Tim and Hank, and we invited Jonathan to join us. It is California-focused there, so we decided to reach out to someone for a national presence. Hal Hamilton of the Sustainable Food Lab was also developing sustainability, so we looked to tap into his expertise. And lastly, we picked Karen Ross, who at the time was head of the California Winegrape Growers Association. I worked with her for years and she had taken sustainability down that path in wine. Hank and Jonathan knew Karen well, and winegrapes is a $2 billion-plus crop so important.
We discussed setting up a governance structure and operating body. Hank advocated we needed a coalition of the willing, not everybody under the tent. And who did we collectively know, who had interest, expertise and programs in place? We knew the Food Marketing Institute (FMI) was working on sustainability. United Fresh and PMA were working on it and we needed to tap into trade organizations because either they are going to do their own thing or we have the opportunity to harmonize programs.
We knew the Compass Group (a competitor of Tim’s) was working on sustainability, and Tim said it won’t work unless competitors are at the table. We reached out broadly… who were the top retailers we knew or had worked with, or were active? Wegmans, while small, was active.
It’s a fair assessment to say it was not, come one come all. We needed a broad representation from retailers, foodservice, and growers, and we reached out to contacts through FMI, United Fresh and PMA. Why Jim Knutson, one farmer over another, you may ask. We picked growers who are active and already demonstrated interest. It’s voluntary, and folks are dedicating their time and money to this effort.
We brought in buyer trade groups; Bon Appétit Company was part of the Compass Group, but also Sodexo; Markon, but also Sysco. We went out of our way to get varied representation. Steve Balling, Director of Agricultural and Analytical Services at Del Monte Foods, is extremely active in Wal-Mart sustainability meetings, but we also brought in Heinz and Unilever. We have to have something that can work. Wal-Mart, Sam’s and Wegmans are actively involved, but if Safeway or Tanimura & Antle came tomorrow, we’d accommodate them.
Q: John Vendeland, Partner at Cirrus Partners, wants to know why there are no chemical/pesticide companies on the Coordinating Council to provide their expertise…
A: That’s a legitimate question: Should there be chemical companies represented?
Pesticides are one piece. What about seed companies, insurance companies, I can start going down the list… do we create suppliers to suppliers. Those folks also have a role, but the primary drivers are the producers and buyers. The issue is how do you do this in a way that doesn’t predispose to potential conflict of interest?
Who defines the industry? Clearly the direct producers of products and the buyers, the world Tim York or PMA comes from. There are always allied and supportive companies.
Q: Don’t many companies like NRDC that are on the Coordinating Council also have conflicts of interest in their goals as well?
A: This is a legitimate issue that comes up. There’s been fairly good evidence at this point and time that environmental and other public interest groups have validity with the public. How many of those groups work with the Compass Group or Wal-Mart? I know these groups are actually engaged with these companies already. All these companies were working with British Petroleum, for example.
A couple of Harvard Business Reviews point out the value to business of getting broader public input through NGO’s. How many of those buyers have issues working with these folks? Wal-Mart already works with them; Sodexo already does. Whether Syngenta or John Deere, or Bank of America, annual conferences are sponsored by these groups. At PMA all those folks will be sponsors at some level. They do play a different role, providing services to producers and suppliers, versus NGO’s, which are bellwethers of the public.
How do you decide who’s on the Coordinating Council? Is it how involved they are in the industry? It may seem like a political decision, but if the issue is taken on face value, what percentage of the industry from farm to fork on pesticides. An insurance company or banker is important for their risk or loan portfolio. Yes, there are folks that have expertise, but that expertise should shift to the metrics review committees. The steering committee is rarely on the same page; SureHarvest is probably considered the big pain with NRDC.
Q: How do the metrics review committees operate?
A: Anyone can sign up to participate in those committees. The role of the metric groups is to deliberate and debate and provide recommendations to the Coordinating Council. The Council then determines whether the metric is ready to pilot.
[Editor’s note: Pilot information was coming forward in the spring, and there was notable controversy in the Pesticide Committee, according to Barbara Meister, Marketing and Communications Manager at SureHarvest. In April, SureHarvest sent out a survey to the list of 420 people who signed up to participate in 8 of the 11 metrics being pilot tested.
“A lot of those people are passively watching but not providing input,” she noted. People were asked to provide their opinions about the testing; whether it was practical, did they think it was useful, etc. [Editor’s note: members of the metrics committees can access respondent’s answers to the surveys through the site]. It was not the final decision but open to further deliberation, she said. Survey results were received from 100 people. “You can lead a horse to water but cannot make them drink. There must be self-determination to participate,” Meister emphasized, adding, “The majority are not active participants.”
At the same time, Meister acknowledged valid criticism from members regarding the website. “We are rolling out a new site based on feedback that came out of the surveys, making it more dynamic, and trying to keep it constantly updated and alive and fresh with current content.” Further, to make it more useful and easier to navigate, SureHarvest is offering a more interactive option, where interested parties can request to get newly posted comments directly sent to their emails. It’s the member’s choice to get those updates all the time or weekly, she explained.]
Q: Another issue that has been raised: If the industry develops its own standards, does it put into question the validity of EPA and government regulations? In the matter of pesticides, for example, the EPA has determined which products are safe to use under specific regulations, restrictions and labeling requirements. If we say we’re establishing our own standards, what is that going to do to consumer confidence in the food supply?
A: Let’s say the Stewardship Index was gone tomorrow. Based on consumer surveys, where will concern about pesticides be? In the top five, maybe the top one or two, so it’s a real issue. Clearly consumers have fears whether real or perceived. It almost doesn’t matter, because if you’re a buyer, this is nothing new. Did Wal-Mart decide independent of the Stewardship Index to have a pesticide council? Yes they did. What do almost all food companies track? Pesticides.
Will this undermine government regulations? Every buyer requires companies to supply data. From a strict liability point of view, most grower/shippers are required to do this.
The argument is that the government says it is safe, but not all pesticides are created equal, some are more toxic to fish than others, some more toxic to humans, some are more short-term problems than others; those are the metrics the EPA uses. The issue is that there are differences in these products and the question comes to how you develop the system. If possible, you prefer companies to use less risky materials.
Q: But there are so many factors to consider when choosing a pesticide…
A: That’s right… costs, efficacy, pre-harvest intervals… there are all kinds of criteria applicators use now. If you’re about to harvest, you need material you could get quickly. Certain pesticides can’t be used if you plant crop after that. This is more toxic to fish than that one and if you have a choice, not all pesticides are created equal. Some cost more, some you have to apply more, and some less. One will hope growers will make the best decisions based on their own business.
Q: Is the Stewardship Index moving from an index to a standard? Many believed the original premise of the Stewardship Index for Specialty Crops was to measure end results or output, rather than inputs. For example, you wouldn’t measure how much pesticide was used, but measure how much leached into soil, or the impact it would have; the amount of greenhouse gases given off, not the amount of petroleum used in the tractor… In other words, are the metrics becoming prescriptive standards instead of science-based metrics measuring outcomes that matter?
A: The purpose is to develop measurements, not dictate how a buyer will use them. Are guns the issue or are people the issue? It’s so important, the notion of governance of the index. We end up with a measurement stick. Can someone take it and beat someone with it. Sure. The question is who will call them on it?
We’re in this debate for super metrics in food safety. There are still companies requiring suppliers to do non-science based metrics. Look at the Leafy Greens Marketing Agreement. If you have a strip of land next to cattle, some guidelines say it must be 50 meters distance, others say 100 meters. That’s not science-based. Before we had industry-agreed metrics, we had companies doing their own things. Now we have metrics and we still have buyers and some producers not following those basic metrics. Whose job is it to harmonize this? That is the role of trade organizations and nonprofit and public interest groups. Long term, the bigger risk is not doing metrics, cutting off your nose to save your face. It is incumbent on trade organizations to say, this wasn’t the intention.
Sodexo and McDonald’s already came out with their metrics; the train has left the station. Wal-Mart is working on theirs. Sysco already records pesticide use on a pound-of-active-ingredient basis. There is a general consensus that measuring pounds of active ingredients is not a good way. Pounds of sulfur are used to control mildew in grapes, but has low toxicity…
Q: Will Wal-Mart take these metrics and arbitrarily say, “We want everyone to produce strawberries at a certain percentage of water use…” Is there a risk that supplier decisions could be less sustainable to get Wal-Mart business? Say a company needs to show it is burning less oil, so it puts solar panels in… even if it doesn’t make any sense, but it helps improve its score. Maybe implementing solar panels is unsustainable and could lead the company to become subpar profitable or reduce the amount of people it has working there, creating unemployment, etc. Are there metrics built in for these other variables?
A: Could the Stewardship Index be abused? It could be, but should that prevent something from going forward? It’s the equivalent of the Precautionary Principle. There is a notion in public health, when in doubt if you don’t have data on safety you should not approve a product. In Europe, the job is to protect public health by proving it is safe. We have a different regulatory system here, proving it’s not safe. When people say don’t do a Stewardship Index, they are standing behind the Precautionary Principle. For example, don’t develop nuclear weapons because they could be used. What bothers me is that people are not consistent on how they apply the Precautionary Principal; otherwise they’d have to say, don’t develop technology because it could be misused. It is hypocritical.
I’m a pragmatist. Do I think someone will abuse the Stewardship Index, yes. They’ll figure out some other way to abuse it, but that’s not the issue. What can we do to minimize that risk, but not to say don’t move forward.
With companies like McDonald’s and Frito Lay, these issues are happening already. The potato industry deals with these lists all the time. Conduct a risk/benefit analysis; is the world better off to invest and try to standardize? Will buyers use supplier score cards? That is going to happen whether we have a Stewardship Index or not.
Q: Could you discuss concerns about confidentiality of information in the Stewardship Index, and whether that information could be prone to abuse. For example, different production areas have different needs. In Florida, due to humidity and moisture, there is greater use of fungicides, while in desert areas none are needed. Yet in the desert, growers have to use scarce water to irrigate. In isolation, without understanding all the variables, a person could misinterpret or misuse the information, disparaging the industry.
How will the information be used? Are confidentiality protections being implemented? Even if an individual grower’s information is guarded, couldn’t aggregated trends be taken out of context in the wrong hands? For example, in the age of the Internet and 24-hour cable news cycles, could anti-pesticide activist groups spread information gathered from a trend report about a high percentage of pesticides used in peaches, for example, creating unwarranted fear and resulting in consumers staying away from the entire commodity? How can this be avoided?
A: We do have a confidentiality agreement in place now with pilots. No individual data will ever be released, the only company that can see the data is SureHarvest, and they have a disclosure agreement. At this stage, it all comes to us. In the pilot stage can this information be shared on an aggregate level? If there are 15 potato growers, and an identity could be breached, discretion is used. In this case it is a precautionary principle that we won’t disclose.
Discussion is underway for the long term of how this will work. Will there be a software system a grower answers and through their data the buyer can see where they’re at? That decision has not been made. The decision hasn’t even been made whether that’s the role of the Stewardship Index. There is value for growers to see the data. Do you facilitate sharing from buyers to growers? Primus has that with food safety right now.
With the Stewardship Index, there would be a fight to break down the walls of confidentiality, and it would have to be voted by majority of producers, buyers, and NGO’s. I don’t see how that could happen right now.
What could happen is companies could say we’ll help you figure out your strategic supply chain, sourcing costs, risks, etc. A company could hire one of these outside firms, or big companies like Sysco or Wal-Mart could assess water use in Salinas, the Midwest, and Yuma. Someone publishes that there is twice as much water in Yuma compared to only half as much in Ohio, because it is rain-fed. The buyer isn’t going to say, I’ll only source lettuce from Ohio. From a logistics and supply standpoint it wouldn’t happen.
Q: With so many different variables involved, is there really any meaningful way to weigh each of these things against each other? Suppose a company meets all the criteria on every environmental metric, and gets top scores on Wal-Mart’s list, but the cost is that it has to pay workers less, or it can’t make donations to charities. Could this lead to over-investment in the environment at the expense of other sustainable causes?
A: In the water scenario, what if Ohio had more energy. You can’t look at these individual metrics in isolation. Some say there is a global crisis because of corn going to bio-fuel. What we do know is a lot of rainforests are getting cut to plant palm oil, which is terrible for greenhouse gases and biodiversity. We have to look at single, perverse and unintended consequences. We have to figure out how to aggregate data from each.
Any data that gets released we’re going to have to decide what’s OK about it. It’s the job of the Stewardship Index to determine is it any or all data or do we provide guidance on what should be reported together.
Q: That sounds like a complex, if not impossible, undertaking. How do you gain consensus on something so elusive?
A: Some of the criticism of the Stewardship Index is coming from the pesticide industry. They do lab testing and then the crop gets destroyed. They don’t model in a way to get real data. The pilot program is so much better in collecting real data. The theoretical discussion has no real resolution. To demonstrate my point, I sometimes show a map highlighting U.S. intensity of crop value. California is dense, so is Florida and the Mississippi Delta. Then it shows how insecticide use correlates to those locations, as well as fertilizer, and disturbance. It also shows that unemployment correlates with agricultural density, and who would have thought that.
It’s no wonder if you just reported nitrogen use in the U.S., you wouldn’t see that location and context is important, but we have to have that discussion. Real data about real issues is always better than hypothetical discussions. From Wal-Mart to Sysco, the debate is happening in clothing, electronics, bio-fuels, and other industries about linking data or aggregating it. The real defense is trust in the process.
We’re looking to be able to say here are the metrics, and we’re close. Still, they’ll be influenced by the trials, the pilots themselves in the 2010 production year, which will shed more light on the process…
This only works in a consensus process, where the majority of these groups rule. Arguing that the Stewardship Index is a standard is a red herring. How do procurement folks do procurement; they assess cost, quality, service, time of delivery, number of rejects, all these things. I never see sustainability as being more than one of these items. Not only would the producer go out of business, but the buyer would go out of business.
These kinds of arguments are just red herrings. Wal-Mart has a score card now. If price is the same, level of service is the same, and quality is the same, then maybe sustainability will have this role.
There may be other companies that brand off sustainability, like Whole Foods or Wegmans. Sustainability can be a unique competitive advantage for a small guy. To think somehow this will lead to perverse unintended consequences, I don’t see how that happens.
Are the big bad buyers that bad? Can they really afford not to look at the costs of goods? I find some of these commodity-type arguments all the same.
The Compass Group decided no RBT growth hormones in dairy products. They would be so much better to have a consortium to make decisions. In the same way, consumers view pesticides in produce as bad. If we can get a process in place to vet that, I do question the motivation behind the opposition. Is it better not to have anything?
A decade ago, the auto industry used to pay people for managing how much paint they used. Paint was expensive but consumer defects were a big deal so the whole system was incentivized to use more paint, even though it wasn’t good for the environment. The model had to be changed to provide solutions. A car could be painted well using less paint that didn’t have any defects, which was better for the environment and more cost effective, and where suppliers were incentivized to provide solutions to reduce paint, and in doing so make money.
If a supplier needs high quality fresh produce with no insects, they need a solution. If the business model is based on the equivalent of the paint scenario with the auto industry, the supplier is just selling fertilizer. The business model has to be based on companies becoming solution providers. PepsiCo is doing this with Tropicana juice, working with companies to make lower carbon fertilizers. That’s a market economy. I do think the chemical manufacturers are caught between selling products and providing solutions.
PepsiCo is saying come in with this lower carbon fertilizer. Sustainability will never be reason number one in PepsiCo’s business decisions, but welcome to the modern world of competitive space. Sustainability is representing three legs of the stool, and, of course, a company needs to meet all the criteria.
We thank both John Vendeland and Jeff Dlott for taking the time to discuss this important initiative.
Although we initially were sympathetic to the idea of the Stewardship Index as we were seeking a standardized way to measure the elements of sustainability and certainly there is not the slightest question that Jeff believes he is doing good for the industry and good for the world, we are sensing problems down the road if the industry doesn’t act to clarify the scope and purpose of the Index.
The problems here are numerous and obvious:
1. The overriding issue is that the industry has gotten itself between a rock and a hard place. Jeff’s point that chemical companies and similar organizations can be resources rather than voting members of the Coordinating Council is reasonable enough — if applied to all special interest groups. However, rather than limiting the Coordinating Council to those actually touching the produce — buyers and sellers — to agree among themselves on what to measure and how, and then allowing those same buyers and sellers to get input and information from whoever they choose, be it chemical companies or advocates for economic development or the National Resources Defense Council, the organizers of the Stewardship Index decided to make self-proclaimed environmental and public interest groups an independent “stakeholder” group with veto power over any decision.
So, now, if the industry wants to come away from this effort with something that will avoid duplication, it has to appease this particular interest group or the initiative dies.
These are just special interest organizations with their own needs, including sometimes villianizing others to raise money or get publicity. The only objective reason for giving these groups such power rather than, say, the Club for Growth, is akin to a form of extortion. If the industry doesn’t come up with a response acceptable to these groups, they could threaten to go to 60 Minutes with an “Alar” type story or to issue a press release declaring some produce item to be on the “dirty dozen” — this makes the industry desperate to have their approval.
Negotiating out of a position of desperation, when you have given the party you are negotiating with veto power over your decision, is problematic indeed.
2. Quantification is, in fact, not a neutral activity. We don’t count things without an expectation that we either want to reward or discourage the thing we are counting. So although we have no doubt that Jeff is being frank when he says, “The purpose is to develop measurements, not dictate how a buyer will use them,” the fact is that the very act of measuring these things is sending a message that these things are significant and buyers ought to do something about them. Certainly the media will view them as significant.
3. The measurements that were originally thought to be the heart of The Stewardship Index for Specialty Crops are, in and of themselves, virtually useless. If you perfectly measure use of a particular fungicide and a particular pesticide and you thus note that Farmer A has reduced its use of the fungicide and Farmer B reduced its use of the pesticide, you really have no basis for favoring one farmer over the other. If you measure the hundreds of variables that exist, no buyer can meaningfully make heads or tails out of it.
Inevitably you will move toward one of two things: Particularistic standards selected for marketing reasons or personal values — so someone will decide to be the Organic Chain or the Fair Trade Chain or the Carbon Neutral Chain, etc. Alternatively someone will weigh and measure all these inputs and come up with a score. As a matter of marketing, some chain will declare it only sells products over 80, another only over 90 and a pointless battle over a meaningless composite will be the condition of produce marketing.
4. It is not necessary to demonize the Environmental Defense Fund to acknowledge that it has a particular interest that does not necessarily represent any consensus on the meaning of sustainability. Back when we were objecting to Scientific Certification Systems’ attempts to dictate an ANSI standard to the industry, we pointed out that the “rules” that had been set up preserved 25% of the seats on the governing board for environmental advocates. This was, of course, completely arbitrary. We asked why we couldn’t reserve 25% of the seats for advocates of economic development? EDF had its founding in the fight against DDT, but now many see in its efforts the cause of a resurgence in malaria around the world and of bed bugs right here at home. Sustainability and environmentalism are not synonyms.
5. When Jeff says that “One will hope growers will make the best decisions based on their own business,” the answer is, “Of course they will.” But that is not the point. The best thing for someone’s business will probably be to keep the Wal-Mart account. So if the key is that they need a specific score on carbon usage, then they will certainly spend money to get that score. But that might well be a waste of money, and money is a valuable resource as well. Although, of course, Wal-Mart may allow its buyers discretion; this is essentially an either-or situation: If the buyers enforce the standards, then we have to deal with the consequences including misallocation of resources to win Wal-Mart approval; if the buyers don’t enforce the standards, then the effort will do no good.
6. Jeff’s comments regarding the Precautionary Principle and the possibility that the Stewardship Index might be abused are a bit of a red herring. The issue is not might they be abused — of course, they might — and we need to consider the ramifications of possible abuse. It is predictable that the media will get its hands on some statistics and announce to the world that one should avoid some product from Florida because it will have a high fungicide score..
Of course the possibility of a bad outcome does not, in and of itself, mean we shouldn’t proceed. We need to weigh that possibility of a bad outcome against the positives. In other words we need to ask the question when the metrics are not abused, are they helping the world? It is just not clear how this Index will help at all. Sure, if you measure water usage, you get that statistic. But how does knowing that help one to decide if one should buy a melon from Kenya or Turkey? Water usage is a perfect example of how complex this is. Measuring water usage in two widely disparate farms utilizing different irrigation methods, etc. is hard enough but if farm A is in an area of severe water shortage, very close to a viaduct to bring water to thirsty urban areas, its situation is very different than a farm in a very rural place with plenty of water, no nearby viaducts to transfer the water elsewhere and right near the point where a rolling river is about to dump the fresh water into the ocean. There is nothing obvious about claiming that this second farm should invest millions in reducing water usage..
So if there is a severe downside — statistics that can easily be abused –and the upside is negligible or unclear, it is difficult to build a case for doing this.
7. On pesticides, the problem is that only the government has the authority to require companies to do safety testing before approval. If the folks behind The Stewardship Index think those tests are inadequate, they should speak up. They should write a letter to the EPA and their representatives explaining the flaws in the current system and what they want to be done. If they copy us on the letter, we will publish it. But if they don’t have opinions on this, what is the point?
One of the greatest assets of the US food system is the consumer confidence in the food supply. It makes a lot more sense to build on that confidence and work for more effective government standards than to superimpose a standard on top of the government system.
8. Although there are real efforts at transparency being made, especially lately, for the most part it is an unambitious form of transparency. Just look at Mira’s instructions on how to get information off the web site:
That is five (5) separate steps when you have someone telling you exactly what to do. If you were bumbling around the site to do it yourself it could take ten steps to get the information. That is not making a real transparent process. Plus, at least 99% of stakeholders will never access the web site. So true transparency and engagement requires outreach. There should be a constant stream of press releases and notices asking for input on specific measures. But there is mostly silence. The Pundit is on all these lists and the last press release we received on the Stewardship Index was October 6, 2009 announcing that USDA gave SureHarvest a grant. If someone really and truly wants lots of input, that is not the kind of communication program one runs.
9. Beyond transparency, though, the governance system does not allow people with different beliefs to effect change. There are loads of work groups and a Metrics Review Committee but the governance rules require that each of three groups on the Coordinating Council — Sellers, Buyers and self-proclaimed environmental and public interest groups — all vote in favor of anything before it can happen. . Those work groups can work all day and night and vote unanimously for anything they want — they still have no authority.
Sustainability is traditionally seen as a balance between the social, the economic and the environmental but no matter how many people one brought to the web site or to meetings, if those people want to emphasize the social aspect or economic aspect of sustainability over the environmental, the game has been fixed. Environmentalism as an ideology, has been given its own stakeholder category and it would literally be a waste of time for those who view sustainability differently to participate in the process.
10. Even if lots of chains temporarily bought into the metrics, in the long run sustainability, unlike food safety, is inherently about marketing. This is because it is about choices. Wal-Mart has emphasized a kind of faux sustainability because it has emphasized money-saving efforts that it would be appropriate to undertake whether one believes in sustainability or not.
Inevitably different chains will want to promote higher or different standards than their competitors. So it is not even clear that the Index will achieve its goal of avoiding multiple audits. If I am Safeway, with upscale LifeStyle stores, I don’t want the same standard as Wal-Mart. The Index doesn’t change that dynamic.
Jeff Dlott, the WGA folks and Tim York and the others involved all deserve praise for trying to make something work. But we are at a delicate moment. There are real risks involved in the use of the PRiME Tool and risks involved in reducing consumer faith in the safety of the food supply, and the role of Wal-Mart may be problematic as well. Wal-Mart may like the idea of utilizing these metrics, but there also is a danger that the metrics will be developed with an eye out for what Wal-Mart wants.
In a very real sense the Stewardship Index for Specialty Crops has a become a kind of negotiating forum for Wal-Mart and the environmental advocacy groups. In and of itself that could be fine, there is nothing wrong and a great deal right with a major retailer wanting to act through communal institutions. Indeed, as Wal-Mart has really only shown interest in sustainability that saves money, it may be able to strike a deal with the environmental groups who are focused on reducing resource use.
Yet, this is an odd communal institution. There are a lot of trade associations listed as involved on the Coordinating Council, including FMI, but on the retail side you have the giant Wal-Mart, the comparatively tiny Wegmans and…nobody else. No Kroger, no Safeway, no Costco, no Supervalu, no Publix, no H.E.B.. It makes one question how much this represents the retail community. On the grower side you have again, trade associations but no large producers. There is Del Cabo, the organic producer and marketer. There is Farm Fresh Direct which sells conventional product but also trumpets its position as the largest organic potato shipper in the country, and the sainted Maureen Torrey, who somehow often gets the burden of representing conventional farmers. Noticeably missing, other than United and PMA, no grower representation from Texas or Florida or overseas production groups. Once again, this raises the question of how broad and deep the support for this initiative really is.
The question is this: Is Wal-Mart really interested in a set of measurement procedures? It seems unlikely. It wants a buy-in from the environmental community on a set of standards so it can trumpet its procurement policies as having been blessed as “sustainable” by the environmental groups.
Up to now supporting the stewardship index has been like supporting Mom and Apple Pie — what was there to oppose.
Yet the goal of getting one’s sustainability program blessed by the environmental groups through this Index is incompatible with the idea of the Stewardship Index as a kind of neutral information provider.
Now the question is whether the focus will remain on metrics as opposed to creating standards?
We wish all involved good fortune in navigating what are certain to be most tricky shoals.