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Stewardship Index Still Has High Hurdles To Overcome

Jim Prevor’s Perishable Pundit, October 1, 2010

Our Sustainability Special Edition featured a piece titled The Battle Over The Stewardship Index: Will Wal-Mart Wind Up Taking Over.

The piece featured something of a debate between John Vendeland, an ag consultant who has engaged with the Stewardship Index, and Jeff Dlott, a consultant guiding the process by which the Stewardship Index is coming to fruition.

Now we received a letter in response to the piece:

Thank you for the extensive coverage on sustainability this week. Perhaps it’s a topic that some have perceived as not critical in this economic climate, but it remains an issue on which many of us, both inside and outside the industry, remain focused.

One only needs to reflect back on the food safety process to see why the Stewardship Index for Specialty Crops (SISC) remains relevant and necessary. Today, the most common complaint amongst growers/suppliers is not the cost of food safety, but the multiplicity of audits, dueling standards, and added costs. Over this past year United Fresh has held multiple meetings on “GAP harmonization”, and has made some progress in that area. This effort may have proven unnecessary had two things been in place: sound science to support a common standard, and an effort by the grower-based organizations to bring all stakeholders — buyers, sellers, growers, regulators, NGO’s — together to develop common food safety practices in advance of the proliferation that now overwhelms the industry.

SISC was founded on three simple principles:

1) A focus on performance metrics and not prescriptive practices. Where possible, we correlate performance metrics with practice options so that growers and supply chain partners can continuously innovate in ways that achieve profitability, environmental stewardship, and social responsibility outcomes.

2) An aim to reduce compliance costs for supply chain participants by developing a broadly accepted set of metrics on how sustainability is to be measured. Simply stated — develop the yardstick.

3) An open and transparent process that includes the engagement of all interested participants.

While we know the execution of these simple principles is very challenging and critics assert we fall short in some areas, they continue to be our driving principles. Today, SISC has over 100 growers in 13 states pilot testing 8 performance metrics on 18 different crops to determine if they are practical, meaningful to their customers, and useful for identifying opportunities for internal cost-efficiencies. SISC remains the industry’s best hope for a multi-stakeholder, pre-competitive, marketplace solution for measuring and improving specialty crop sustainability.

Jeff Dlott, SureHarvest

Hank Giclas, Western Growers Association

Hal Hamilton, Sustainable Food Lab

Jonathan Kaplan, Natural Resources Defense Council

Kathy Means, Produce Marketing Association

Tim York, Markon Cooperative

We appreciate the effort that went into this letter but must confess it leaves us in a quandary…and the nature of the quandary speaks to some of the points about mission drift that were raised in the article.

When it comes to substance, the letter avoids addressing any of the real critiques leveled against the process. The letter points out:

1) That growers hate the trouble and expense of multiple audits — which was never contested.

2) That United is trying to harmonize food safety audit standards — which was never contested.

3) That if there had been sound science and grower-based efforts to bring everyone to a common standard, the multiplicity of audits would have never have come about and so United’s harmonization efforts would not have been necessary. This is possible, although uncertain. After all, even in food safety, there is no absolutely correct standard for how frequently one should place traps or how broad buffer zones ought to be.. These are judgment calls, not scientific findings. Besides, even if you have agreement on one standard, you still have a question as to which auditors you want to trust. We only have one accounting standard, yet many a firm wants its own accountants to look over the books before they buy a company.

More importantly, the relevance of all this to sustainability is decidedly uncertain. Sustainability is very much a way for retailers to express their own values. So it is not obvious at all that science has much to do with it or that growers could have somehow persuaded retailers to put the values they want to express by the door. If one retailer wants to emphasize that farm workers are paid well and another wants to emphasize that everything is organic, it is not self-evident how lots of science and lots of stakeholder meetings will make a difference.

4) The letter then pronounces that the Index was founded on a focus on performance metrics, not prescriptive practices. This was also never contested. The question is whether there has been “mission drift.” The whole business of correlation sounds like a little mission drift right there. Developing measuring systems for how to determine how much carbon a farm puts into the atmosphere is one thing. Blessing particular ways of reducing that carbon output comes perilously close to prescriptive standards.

5) We then are told that the goal is to “develop a broadly accepted set of metrics on how sustainability is to be measured.” Yet this is itself very close to a standard. It is one thing to say we will develop a set of metrics that will provide a standard for measuring outcomes — say carbon output or water usage or residue of pesticide X left in the soil — so that one farm can be compared to another farm’s.

This by itself is exceptionally hard to do in a meaningful way. In the article, we compared two farms, one in a rural area right on a river, with the river about to dump its water into the ocean, and another farm where the water could be easily diverted to thirsty cities. A seemingly fair measurement system could easily have the ocean front farm overinvest in water-saving technology to keep its water usage down to meet a seemingly objective measurement or to prove it is “conserving” a lot of water.

Yet this answer — “develop a broadly accepted set of metrics on how sustainability is to be measured” — seems like not just a drift but a leap from the way the Index was originally sold to the industry.

The web site of the Stewardship Index explains why it was not called the sustainability index in the first place this way:

Why is the project using “stewardship” instead of “sustainable” to describe the proposed tool?

We recognize that many stakeholders are sensitive about how the term “sustainable” is used in commerce. Use of the term “stewardship” is compatible with our decision not to try to identify a “sustainable” level of performance.

So the Stewardship Index has gone from a decision “not to try to identify a ‘sustainable’ level of performance” to a decision to “develop a broadly accepted set of metrics on how sustainability is measured.” That is a big change. That moves the Stewardship Index smack dab into the substantive debate over differing values that can be expressed through sustainability efforts.

Such a substantive change merits PMA and United looking carefully at whether they should participate in this effort at all. After all, the decision to make the Natural Resources Defense Council and similar groups members of the steering committee is not really objectionable if this is a scientific matter — if NRDC is sending in scientists to judge whether the technique proposed to measure carbon output is state-of-the art, for example. These are technical issues.

But if the goal is for the leadership of NRDC to see whether the value judgments being made by the produce industry meet its own values agenda — it is simply completely unacceptable to give these groups veto power over the outcome. Who voted them in? On what basis was it decided that these particular NGOs should hold these seats? As we asked in the article, why not The Club for Growth instead? Surely not because these are the groups who will threaten the industry with unfair attacks if we don’t. Is that the level we are now at?

Sure the industry would be wise to seek input from all kinds of groups, including the NRDC, but getting input and giving a veto in the governance is not the same thing. If this effort is to continue — that should really be changed. The only voting should be people who buy and sell produce. Everyone else should be in an advisory capacity.

In any case it is quite clear now that there has been a substantial change in mission since the founding and this change has not been well articulated to the trade.

6) The letter goes on to explain that the Index is founded on the principle of an “open and transparent process that includes the engagement of all interested participants”. We have no doubt at all that this is how the Index was founded. We also have no doubt that in their hearts of hearts, the founders really believe in transparency. Yet, as we mentioned in the article there is actually very little outreach. It is in fact interesting that the Steering Committee took it upon itself to respond. The whole Coordinating Councils were meeting in Denver this past week, the Steering Committee could have waited to see whether any members had a different reaction to the critique contained in our article. In fact, they could have asked the broader industry for feedback. But instead, the control group seized control, seemingly wanting to shut down internal discussion rather than being open to it.

7) Finally the letter asserts that whatever its failures, “SISC remains the industry’s best hope for a multi-stakeholder, pre-competitive, marketplace solution for measuring and improving specialty crop sustainability.”

This strikes us as probably true. Of course, the “best hope” doesn’t mean it will work, and it is not 100% clear that just because it has multi-stakeholders that the outcome is desirable.

The heavy involvement of the Western Growers Association and the complete lack of involvement of the Florida Fruit and Vegetable Association are tipping us off to the dangers of this proposal for the broader industry. Regional production techniques are difficult to measure in a meaningful way against totally different production techniques used in totally different environments.

The FFVA knows about sustainability. They called in the Pundit to give a workshop on the subject at their annual meeting. If they are not participating, we would guess it is because they see trouble down the road. People comparing incomparable situations, the media judging things in a way not reflective of the totality of the circumstances.

But while they are not a stakeholder, the NRDC is. This is the root of the problem. The definition of stakeholder was determined in such a way that the NRDC and its ilk get a veto but the Florida produce producers do not. This is a value judgment, not a necessary part of the process.

We have to tip our hat to the signatories on this letter. They are working hard and trying to do good things for the industry. But goals and intentions sometimes can’t transcend the difficulty of the situation. The danger is that so much time, money and personal and institutional prestige get invested in these matters that just saying we tried and it didn’t work no longer seems to be an option.

So much time, money and personal and institutional prestige get invested that solely producing metrics seems not inspiring enough.

We wish the founders of this effort well because we know they want to help.

The triple bottom line, on this initiative, however, is this:

1) That many industry stakeholders will not participate in a process in which the likes of the NRDC and the Environmental Defense Fund are given a veto over industry actions. This is either a “giving in” to a kind of extortion or it is the decision to elevate a particular ideology over others — neither is acceptable.

2) The stakeholder definitions are arbitrary. You could just as well say “Florida Agriculture” or “Chilean Agriculture” are each a stakeholder group. It would be bad for the industry if regional discord is sowed because a global chain such as Wal-Mart adopts nationally and/or internationally metrics that were really California-based and thus create inappropriate comparisons.

3) There has clearly been a mission shift. What started out as so metric-based they didn’t want to use the word sustainability has now become an initiative to literally define sustainability for us all or, in the words of the letter, to “develop a broadly accepted set of metrics on how sustainability is measured.” But nobody elected them to do that, and the ideologies of the veto-wielding environmental groups absolutely guarantee that the end result will not comport with any industry or societal consensus on the meaning of sustainability.

We wish everyone well and hope it all works out, but those are three very high hurdles to leap over.

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