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. 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. 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. 4 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. 5 are the basis for implementing Quality and Safety Assurance programmes such as HACCP or Certification programmes

6. 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. 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. 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. 9 3. Who defines GAP standards? Governments NGOs-Civil society 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

10. 10 Private sector 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

11. 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. 12 4. Features of GAP programmes Food Safety Economic Environmentnot enough! Socialnot enough!

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

14. 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. 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? ¿ 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. 15 5. Benefits ? …Understanding farmer’s incentives to adopt GAP…

16. 16 IncentiveStrengthGAP 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 market externalities PSC, IG Reduce search & monitoring costs (if certification) (P) PSC, IG (G, IA) Economic Incentives to Adopt

17. 17 DisincentiveStrengthGAP system Increased variable costs e.g. labour   PSC, IG, G, IA Increased fixed costs e.g. equipment   PSC, IG, G, IA Reduce output/increase average costs   PSC, IG, G, IA Asset specific investments i.e. tied to a buyer  PSC Increase monitoring costs (P) (if no certification)  PSC, IG (G, IA) (P=processor/retailer) Economic Disincentives to Adopt

18. 18 Incentive Strength GAP system Owning property rights to scare resources G Subsidies G Reduce liability/show due diligence (F) (P)PSC, IG Institutional Disincentive Lack of infrastructure for testing, quality monitoring..  PSC, IG, G, IA F=farmer, P=processor/retailer Regulatory/Legal Incentives

19. 19 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 Human Capital Incentives/Disincentives

20. 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. 21 7. Alternative scenarios (World Bank, 2004) 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

22. 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. 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

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25. 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. 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...

27. 27 More at...