GAP: Why care ? GAP standards and programmes : incentives, constraints, opportunities

1. GAP: Why care ?GAP standards and programmes : incentives, constraints, opportunities Anne-Sophie Poisot, FAO Agriculture Department Wageningen Training “Transition to sustainable agriculture” 23 May 2005 - 4June 2005

2. 1. What is going on? Welcome to the GAP jungle ! • Growing number and wide variety of standards, codes & guidelines codifying GAPs. CONFUSING ! • Distinguish GAPs (i.e. the farming practices) and GAP standards (i.e. standards codifying the farming practices)

3. Objective : clarify • Scope & purpose of GAP standards • Benefits & costs for farmers in developing countries • How can GAP support economic, environmental and social sustainability and food safety & quality

4. GAP What is Good Agricultural Practices (GAP) ? For FAO, GAP are practices that have to be followed to address environmental, economic and social sustainability for on-farm and post-production processes and result in safe and quality food and non-food agricultural products (FAO, 2003) • However: Different types of GAP standards • With different objectives and definitions of what are GAPs

5. Prerequisite Programmes are the basis for implementing Quality and Safety Assurance programmes such as HACCP or Certification programmes GAP GHP GMP

6. Definitions- Types of GAP Standards (1) • 1. Standards – generic term (ISO) • PRODUCT standards = on product attributes: taste, appearance, safety, convenience, etc. • PROCESS standards = how products are made : organic method, protecting environment and workers, etc • 2. Regulations: Government standards - mandatory • 3. International agreements: e.g. Codex Alimentarius, International Plant Protection Convention, Code of conduct on the use of pesticides, etc.

7. Definitions – Types of GAP Standards (2) • 4. Standards for standards • e-g IFOAM Basic Standards • 5. Growth of B-to-B Certification programmes • with third-party or in-house assurance • e.g. EUREPGAP- products are certified but not labelled • 6. Labelling: an information on certification to the consumer

8. 2. Why ? Driving Forces Scientific knowledge, food ‘scandals’, increased consumer awareness, increased trade, political & commercial risk aversion • Official Standards – Tightening of regulations for long-standing concerns; new standards for unknown/unregulated hazards – Total ‘farm to fork’ perspective; more process standards – Intensification of enforcement efforts – Precaution in face of scientific uncertainty • Private Standards – Consolidate sourcing—’preferred suppliers’ – Harmonization yet competition between private standards – Shift responsibility on the producer

9. USA Canada Australia New Zealand Japan Brazil Malaysia Thailand etc. Fairtrade Labelling Organization IFOAM (Organic standards) ISEAL code of practice for social and environmental standards Social Accountability International (SA8000) Sustainable Agric Network (coffee) IDF Guide to Good Dairy Farming Practice 3. Who defines GAP standards? Governments NGOs-Civil society

10. EUREPGAP SAI (Sustainable Agriculture Initiative) GFSI (Global Food Safety Initiative) EISA (Common Codex Integrated Farming) SQF (Safe Quality Food) COLEACP (Europe-Africa-Caribbean-Pacific Liaison Committee) British Retail Consortium (BRC) ...i.e.: everyone Private sector

11. The million dollar question is… How to make agricultural systems in developing countries more sustainable, in a world where food supply chains are ever more globalized ?

12. 4. Features of GAP programmes • Food Safety • Economic • Environment not enough! • Social not enough!

13. Recommended Good Practices Associated Hazards Practices to prevent Food Safety hazards and ensure food Quality, enhance profitability, while reducing impact of those practices on the environmentand worker’s health and working conditions Primary production Environment GAP Agricultural inputs Growing Practices Harvest and Transportation Facilities associated to the crop Equipment, tools, utensils

14. Environment • Associated hazards: • Faecal and chemical contamination of water and soils by manure & polluted surface waters; organic waste; agricultural chemicals; hazardous wastes, contamination of downstream sites by silt or chemical laden runoff, spray drift; adjacent farming and industrial activities, etc. • Environmental Protected Areas should not be used for agricultural proposes! ¿What should be done? • site history (adjoining sites too) • evaluate access of animals to site & to water sources • - plan for land use (identify crops, places for deposit of organic & chemical materials) • Contaminants at excessive levels? sites should not be used • till correction/control measures taken

15. 5. Benefits ? …Understanding farmer’s incentives to adopt GAP…

16. Economic Incentives to Adopt Incentive Strength GAP system • Price premium PSC • Market access  PSC (IG) • Access to inputs (P)  PSC, IG • Product differentiation (P)  PSC • Stabilize yield  PSC, IG, G, IA • Reduce storage losses  PSC, IG, G, IA • Increase farm asset value  PSC, IG, G • Protect against marketexternalities  PSC, IG • Reduce search & monitoringcosts (if certification) (P)  PSC, IG (G, IA)

17. Economic Disincentives to Adopt Disincentive Strength GAP system • Increased variable costse.g. labour  PSC, IG, G, IA • Increased fixed costse.g. equipment  PSC, IG, G, IA • Reduce output/increaseaverage costs  PSC, IG, G, IA • Asset specific investmentsi.e. tied to a buyer  PSC • Increase monitoring costs (P) (if no certification)  PSC, IG (G, IA) (P=processor/retailer)

18. Regulatory/Legal Incentives Incentive Strength GAP system • Owning property rightsto scare resources G • Subsidies  G • Reduce liability/showdue diligence (F)  (P) PSC, IG Institutional Disincentive • Lack of infrastructure fortesting, quality monitoring..  PSC, IG, G, IA F=farmer, P=processor/retailer

19. Human Capital Incentives/Disincentives Incentive Strength GAP system • Expand skill set  PSC, IG, G, IA Disincentive • Literacy (record-keeping)  PSC, IG, G, IA • Opportunity cost of time(record-keeping)  PSC, IG, G, IA

20. 6. Constraints • Cost of compliance, investments, paperwork, certification fees • e.g. cooperative tomatoes suppliers to McDonald’s in Guatemala: from 330 to 6 in two years … • Lack of local certification body or certified testing lab • Farmers may comply but not get premium • No guarantee from buyer • First-mover advantage may disappear overtime

21. • Standards as Barrier – Non-transparent protective device – High/unattainable technical and administrative levels – High costs of compliance erode comparative advantage – Marginalize small countries, traders and farmers – Contraction of Trade • Standards as Catalyst – Harmonized procedures and rules build confidence – Spur investment, modernization and public/private collaboration – Stimulate improved practices and stronger technical support – Foster new forms of competitive advantage – Maintain/expand trade opportunities 7. Alternative scenarios (World Bank, 2004)

22. Strategic Options for Developing Countries and for Farmers Hirschman’s (1969) Paradigm of Exit, Voice, and Loyalty as Strategic Options • Exit—shift export markets, shift to domestic market, shift products, get out of business, • Voice—WTO complaints/cross-notifications, CODEX participation, bilateral negotiations, negotiate with buyers regarding time-frame • Loyalty: pursuing changes which ensure compliance with product/process standards • Some combinations of these options are normally employed at the industry level

23. 8. FAO assistance on GAP ? • International policy level : facilitate negotiations of fair standards • National policy level: help govt understand implications, define policies, build capacity • From start of chain: help farmer groups link to markets • From end of chain: when private company wants to improve its GAP standards

24. GAP Good Agricultural Practices

25. Remember ! what to strive for: • Coverage of sustainability issues = INTEGRATION • Who pays? = REPARTITION • Opportunities, but risks for small farmers. Effects on trade + and - = analyze REPERCUSSIONS • Ultimately, a matter of policy choice for govts = SELECTION • Support win-win situations for consumers, food markets and farmers = NEGOTIATION

26. in the end... • Need multidisciplinary approach & teams • to date: consumer focus + economics/managerial focus • think of farmers too ! and engage food technologists and agronomists • FAO :Burkina Faso, Thailand, Latin America region, Asia Region, Namibia, Tunisia, Zambia.... FFV, milk, meat, feed, cotton, cereal, medicinal herbs...

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