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Market forces -- Good Agricultural Practices

Food processors and retailers recognize that they can reduce the risk of unsafe food through careful oversight of their activities and by taking steps to assure the products they acquire have been produced and handled so to minimize the risk of food safety concerns. Accordingly, agricultural producers are being required by their buyers to provide documentation about their production practices as part of the sales transactions. Producers who are unable to provide these assurances to their buyers may find that they will have less opportunity to sell their ag products. These pages introduces some of the market forces shaping practices of the ag production sector.

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As stated on other pages, the U.S. food industry is divided into several sectors based on U.S. law:

  • the food processing sector that is extensively regulated by either the FDA or USDA FSIS
  • the retail/food service sector that is extensively regulated by state law
  • consumers who are primarily provided education and information so they can make informed decisions,
  • the production sector which has not been extensively regulated, especially from the perspective of food safety, and
  • the agricultural input sector that is increasingly being regulated.

This page focuses on the ag production sector (e.g., farms, ranches, feedlots, vineyards, etc) and how market forces and government regulations are re-shaping the expectations for agricultural producers.  The trend appears to be clear -- producers will be expected to consider how their production practices impact the safety of the final food product.

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Good Agricultural Practices

Good agricultural practices (GAP) appears to be the emerging global norms for agricultural producers.  GAP standards are being enforced by government regulations, but also by market forces, such as food processors.  GAP is broader than just the safety of the final food product; GAP also imposes expectations on agricultural producers in terms of their environmental impact, labor practices, and possibly "carbon footprint".

GAP is "just arriving" in the United States.  It has a longer history in many other regions or nations, especially Europe, Japan, and other countries.  From the perspective of U.S. government, GAP is being implemented by the USDA AMS for fresh fruits and vegetables; see USDA AMS Fresh Produce Audit Verification Program at http://www.ams.usda.gov/AMSv1.0/ams.fetchTemplateData.do?template=TemplateN&page=GAPGHPAuditVerificationProgram.  This step is in response to incidents in the past decade in which unsafe food was identified as raw vegetables and then traced back to the farmers' fields.

  • The Food Safety Modernization Act mandates the farmers producing for the raw/fresh market (fruits, vegetables, nuts and other such foods) adopt practices to reduce the risk of unsafe products. 
    • See 21 CFR Part 112
    • See FDA Fact Sheet on the Final Rule for Produce Safety at http://www.fda.gov/Food/GuidanceRegulation/FSMA/ucm334114.htm; this page provides links to a variety of related FDA web pages
    • "[FDA] in coordination with [USDA] ... shall ... establish science-based minimum standards for the safe production and harvesting of ... fruits and vegetables ... that are raw agricultural commodities for which ... such standards minimize the risk of serious adverse health consequences or death. [The standards] shall -- (B) include, with respect to growing, harvesting, sorting, packing, and storage operations, science-based minimum standards related to soil amendments, hygiene, packaging, temperature controls, animals in the growing area, and water; (C) consider hazards that occur naturally, may be unintentionally introduced, or may be intentionally introduced..."
    • Standards specified in the proposed regulation:
      • Subpart C -- Personnel Qualifications and Training
      • Subpart D -- Health and Hygiene
      • Subpart E -- Agricultural Water
      • Subpart F -- Biological Soil Amendments of Animal Origin and Human Waste
      • Subpart I -- Domesticated and Wild Animals
      • Subpart K -- Growing, Harvesting, Packing, and Holding Activities
      • Subpart L -- Equipment, Tools, Buildings, and Sanitation
      • Subpart M -- Sprouts
      • Subpart O -- Records

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GAP has characteristics of HACCP, such as, "producers:  do your production practices impose a risk that the product will be unsafe?  Are you taking steps to reduce the risk of unsafe food as a result of production and handling practices?  Are you documenting your practices, your assessments and your strategies to reduce the risk of unsafe food?"  Within the emerging mandate of GAP for producing and handling raw/fresh commodities, producers are required to assess their activities, and adopt and document practices that reduce the risk of unsafe food.  USDA AMS audit checklist for fresh fruit and vegetable growers is available at http://www.ams.usda.gov/AMSv1.0/getfile?dDocName=STELPRDC5091326 .

  • Note that the voluntary standards were promoted by USDA AMS but the "Produce Safety" regulation will be administered by the FDA.  We can only expect that USDA AMS will revise its approach to GAP for fruits and vegetables once the FDA Produce Safety regulation is finalized within several years.

GAP is not solely being imposed by government.  Increasingly, the firms that buy from producers (that is, the processors) are expecting producers to apply the concept of GAP and to document that they are practice GAP.  Restated, market forces are imposing GAP on producers:  "if you cannot provide documents that you are following GAP principles, we will not buy from you."  Market forces urging GAP are more prevalent outside the United States, but they are becoming more common in the United States.

  • Walmart Sets Standards For food Suppliers

Food Safety Requirements

copied from http://corporate.walmart.com/suppliers/minimum-requirements, April 7, 2014

All companies that provide edible products must meet our food safety requirements to become a supplier. Please see the guides below for complete requirements for your product type.

Food Safety Requirements for Processors
Food Safety Requirements for Produce Suppliers 
Food Safety Requirements for Pet Food Suppliers

students:  please take a few moments to review these linked materials

Global Food Sourcing – Supply Chain Security
New Food Factories - Suppliers must request an onsite audit of a food factory through Retail Link prior to the receipt of a Purchase Order. The cost for an onsite audit ranges from $975 to $1,250 USD depending on the location of the facility.

Pack Houses
For new pack houses: suppliers are required to have the primary pack house complete a “Pre-Assessment Checklist for Pack Houses” prior to receipt of a Purchase Order. The supplier must also immediately request an onsite audit of the pack house through Retail Link. The cost for an onsite audit ranges from $975 to $1,250 USD depending on the location of the facility.

Note: Walmart will accept the official security audit results of any pack house or food factory that has been audited on behalf of another retailer by any Walmart authorized third party audit firm, and has received a passing score of 71 or above. If the facility failed the audit, it will not be accepted and the facility must undergo a Walmart security audit.

  • McDonalds Meet our Suppliers

"From the beginning, McDonald’s has built a system of quality, service and cleanliness (QSC) into every aspect of our business - from our suppliers to our restaurants. We take food safety and quality very seriously at McDonald’s. Which is why our quality and safety requirements - which meet or exceed USDA standards - are among the strictest in the restaurant industry.

"Get the story behind the food. Take a look at our long-term relationships with some of the most trusted and experienced food suppliers in the industry."

See http://www.mcdonalds.com/us/en/food/food_quality/see_what_we_are_made_of/meet_our_suppliers.html

Processors will not purchase the agricultural commodity unless there is documentation verifying production practices.

  • Global examples
  • U.S. examples
    • "Effective July 1 [2007], the U.S. Department of Agriculture is mandating that all commodities, including potatoes, intended for distribution through federal procurement programs be GAP certified. This means that both fresh market shippers and processors who want to sell potatoes to the federal government for distribution through USDA-sponsored programs must grow them under GAP standards.
    • "After July 1, like it or not, all growers are going to have to be GAP certified or run the risk of being unable to deliver product to market, Charvet warns. This includes product sold to fresh packers and shippers, processors, chippers and dehydrators – anybody doing business with the federal government.
    • "Under the GAP program, at the growers’ expense, a qualified inspector must come to the farm annually and verify all GAP records and signature sheets before the product can be transported to market. Besides documentation of good farm practices, worker training is an important part of the GAP requirements."  Taken from http://www.columbiapublications.com/potatocountry/july07.htm
    • See USDA AMS Commodity Purchases
    • Good Agricultural Practices and Good Handling Practices Audit Verification Program -- User’s Guide at http://www.ams.usda.gov/AMSv1.0/getfile?dDocName=stelprdc5097151

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    The Broader GAP Concept

    "Good Agricultural Practices are "practices that address environmental, economic and social sustainability for on-farm processes, and result in safe and quality food and non-food agricultural products" (FAO COAG 2003 GAP paper).

    "These four 'pillars' of GAP (economic viability, environmental sustainability, social acceptability and food safety and quality) are included in most private and public sector standards, but the scope which they actually cover varies widely.

    "The concept of Good Agricultural Practices may serve as a reference tool for deciding, at each step in the production process, on practices and/or outcomes that are environmentally sustainable and socially acceptable. The implementation of GAP should therefore contribute to Sustainable Agriculture and Rural Development (SARD)."

    Taken from http://www.fao.org/prods/gap/

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    Related topics

    National Organic Program (United States)

    Food businesses recognize that 1) consumers have different food preferences, 2) some consumers are willing to pay a higher price for food that aligns with their preferences, and 3) a business may be able to capture a specific or niche market opportunity if its products meet those particular consumer preferences.  Food produced with "organic practices" is one such niche market opportunities, but how do firms providing organic food prevent protect against other firms from falsely stating that their product is organic?  In the United States, USDA was charged with establishing an organic food program (see http://www.ams.usda.gov/AMSv1.0/NOPNationalOrganicProgramHome).  The National Organic Program (NOP) includes standards for organic production practices and a structure for certifying that the producers are meeting the standards for organic production practices.

    In order to be able to market one's agricultural products and foods as organic, the producer's production practices must be certified as following standards of organic production.  The federal statute permits private entities to certify that a producer's practices meet the standards of organic production.  These certifying agents, however, need to be accredited by USDA AMS.  Restated, USDA AMS has regulations defining organic production.  USDA AMS also has regulations for businesses to be accredited as a certifying agent.  Once accredited, these entities can then certify the practices of producers (for a fee).  Accordingly, USDA AMS does not take on the task of directly certifying production practices.  Instead, the agency has set standards for organic production and also has set standards to accredit private businesses that want to certify producers. See USDA AMS NOP http://www.ams.usda.gov/AMSv1.0/nop.

      • "The OFPA and the National Organic Program (NOP) regulations require that agricultural products labeled as organic originate from farms or handling operations certified by a State or private entity that has been accredited by USDA."
      • Government (USDA AMS) takes a role in certification, verification, labeling, etc.
      • See 7 CFR part 205 for regulations of the USDA National Organic Program at http://www.gpo.gov/fdsys/pkg/CFR-2011-title7-vol3/xml/CFR-2011-title7-vol3-part205.xml
        • Subpart C addresses production and handling requirements standards
        • Subpart G includes a list of allowed and prohibited substances
        • Subpart D addresses labeling
        • Subpart E describes a process by which certifying agents certify organic production
        • Subpart F establishes a process whereby USDA accredits certifying agents
      • The regulations indicate standards in order to be accredited as a certifying agent.
      • The regulations specify practices that organic producers must follow in producing, handling and labeling organic product.  The regulations include allowable and prohibited substances.
      • The regulations direct USDA AMS in enforcing/administering the NOP.
      • The regulations define different levels of "organic" product: "100% Organic", "Organic", "Made with Organic ???" or "Contains Organic Ingredients".

    NOP certifying agents can be individuals who meet the USDA standards to be accredited as certifying agents.  As certifying agents, they charge a fee to inspect and certify that producers' practices meet the standards.  The fee is paid by the producers who want to be certified as organic.

    NOP does not focus on the safety of the agricultural commodities or the final food product.  NOP only addresses production practices.  It is up to the consumers to decide whether organic production practices produce products that align with the individual consumers' food preferences.

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    Beef Quality Assurance (BQA)

    The beef industry also has implemented a voluntary program for livestock producers to enhance the quality of their livestock and the final food products.  This program is based on education and documentation.  The manual explicitly discusses HACCP as a concept to underpin the BQA program.

    "State BQA programs are voluntary, locally led, and administered through organizations such as state beef councils, Land Grant Universities and state cattle associations.   BQA is not a “government” program. BQA links all beef producers with livestock production specialists, veterinarians, nutritionists, marketers and food purveyors interested in maintaining and improving the quality of cattle and the beef they produce.

    "While state BQA programs chart their own direction, program assistance and national leadership is provided by the National Cattlemen’s Beef Association.  The Joint Producer Education Committee continually updates a set of recommended national BQA guidelines from which states can base their BQA programs.

    "BQA principles are based on good management practices (GMP) that are standard operating procedures (SOP) designed to meet the United States food production system's needs.

    "BQA programming focuses on educating and training cattle producers, farm advisors, and veterinarians on the issues in cattle food safety and quality.  It also provides tools for verifying and documenting animal husbandry practices."

    Taken from earlier web page.

    See http://www.bqa.org/

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    BQA also considers dairy operations, use of antimicrobials in cattle, as well as livestock handling and transportation; see  http://www.bqa.org/programs.

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    Summary

    Historically, agricultural producers were not regulated for the purpose of assuring that their agricultural commodities result in a safe food product.  This is changing.  The notion that food safety needs to be addressed from "farm to fork" is leading to refined agricultural production practices.  Much of the emphasis is being driven by market forces, that is, food processors who are imposing expectations on agricultural producers.

    The assumption is that production practices impact the quality and safety of the agricultural commodity and that the agricultural commodity can impact the quality and safety of the final food product.  To reduce the risk that the agricultural commodity diminishes the safety or quality of the food product, the food industry is expecting agricultural producers to adopt specific production practices, or to avoid production practices that increase the risk of low quality or unsafe food.  Agricultural producers are not only expected to adopt such practices, but are also expected to document that they are following the desired practices.  A combination of private sector and government is emerging to oversee the activities of producers.  Processors' refusal to buy agricultural commodities that do not meet the expected standards often is adequate incentive for producers.

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    Email David.Saxowsky@ndsu.edu

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