1. Canadian On-Farm Food Safety Delivery Option Identification and Evaluation on behalf of the Canadian Federation of Agriculture’s OFFS Delivery Options Committee Final Report Discussion November 29-30, 2006

2. AGENDA Consulting Objectives Work Plan Costs of Delivery Options for Delivery Next Steps

3. CONSULTING OBJECTIVES To contribute to the determination of the most effective options that will support efficient delivery of producer-led on-farm food safety initiatives - to help remain competitive in production Èto determine the current and projected cost of delivery of OFFS programs at the national and provincial level; and,  to identify and profile the options for delivery of OFFS programs.

4. WORK PLAN Phase 1: Project Plan Development Phase 1: Project Plan Development Phase 2: Cost of Delivery Tool Development Phase 2: Cost of Delivery Tool Development Phase 4: Development of Delivery Options Phase 4: Development of Delivery Options Phase 3: Collection and Analysis of Data Phase 3: Collection and Analysis of Data March 20th, 2006 April 15 th, 2006June 15 th, 2006October 1st, 2006September 1 st, 2006 Estimated timing April 15 th, 2006

5. COSTS OF DELIVERY È Sources of the data: o 21 participants â 7 national â 14 provincial / regional â commodity sectors: dairy, chicken, egg, pork, horticulture, sheep, turkey, bison, herb and spice, vegetables o few costing reports, more estimates of actuals, some projected estimates required o ultimately, good co-operation and participation; significant efforts to get the data È Indicative cost data versus detailed costing study È 68,700 total producers represented; 12,500 trained; 10,175 certified; 9,418 validated / registered

6. È Includes costs incurred by the delivery agent È Key business processes: q Direction and Control q Planning, Directing, Reporting, Monitoring q Operations q Producer training, awareness and support q Auditor training and auditing, program level q Certification, validation of producers, appeals, dispute resolution q Recognition: of program, of producers q Supporting Administration q Information management, Finance, Legal, Administration, Communications COSTS OF DELIVERY

7. È Does not include: q costs associated with program development, sustainability, or QMS q additional costs incurred by grower q additional costs incurred by distribution network COSTS OF DELIVERY

8. È Total costs collected: o $5.8 million â $0.8 million Directing and Monitoring activities14% â $4.0 million Operations activities 69% â $1.0 million Administration Support activities17% ($1.4 million of Program Development activities excluded) È Total costs per producer: o $468 per producer, using a weighted average calculation COSTS OF DELIVERY

9. È Weighted average:  the cost per producer for an organization with small numbers of producers is not given equal weighting to the cost per producer for an organization with large numbers of producers  is appropriate to use when significant variation exists in the data, and the goal is to determine average costs per unit COSTS OF DELIVERY

13. ÈMake-up of the costs opersonnel 62% omaterials and supplies 11% otravel24% ofacilities 3% È 92% actual and 8% projected ÈDifferences - by region, within a commodity group:  variation in activities exists  completeness of the data  economies

14. COSTS OF DELIVERY ÈRange in costs:  per producer $0 to $400: 5 national (co-ordinating role); 5 provincial/regional $401 to $1,000: 2 national (co-ordinating role); 3 provincial/regional $1,001 to $3,600: 6 provincial / regional  per function: Directing and Monitoring: $60 to $70 Administrative Support: $70 to $80 Operations-Training and Support/Awareness Building: $30 to $50 Operations-Training and Support/Skill Development: $50 to $400 Operations-Certification: $40 to $50 Operations-Validation of Production Unit: $200 to $500 Operations-Registration: $200 to $1,300 Operations-Official Recognition: $5 to $120

15. COSTS OF DELIVERY È Cost drivers: ovariations in delivery activities oflexibility - market driven and voluntary oeconomies of scale, number of producers oeconomies of scope, integration with other programming oconsiderable fixed costs (versus variable); capacity planning owhether producer produces multiple commodities ouptake by producers otechnology - scheduling, producer database oon-farm audit activities costly ocustomer requirements oneed for compliance-level audit

16. OPTIONS FOR DELIVERY ÈKey differentiating attributes: qsingle or multiple commodity qnational or provincial or regional qcustomer recognized or not qofficially (CFIA) recognized or not qcertification versus accreditation qmulti-commodity audits (contracted through NPOs) versus pooled audits (contracted through a qualified 3 rd party) qin-house versus third-party

17. OPTIONS FOR DELIVERY ÈPotential Delivery Models: oSingle Commodity (National delivery) oSingle Commodity (Provincial or Regional delivery) oOfficially Recognized Single Commodity (Provincial or Regional) oOfficially Recognized and Accredited Single Commodity (Provincial or Regional delivery) oMulti-Commodity (Provincial or Regional delivery) oOfficially Recognized Multi-Commodity (Provincial or Regional) oOfficially Recognized Multi-Commodity Pooled Audit oOfficially Recognized and Accredited Multi-Commodity (Provincial or Regional delivery) oOfficially Recognized National Certification Body (Provincial or Regional delivery) oCustomer Recognized Programs (Provincial/Outsource)

18. OPTIONS FOR DELIVERY ÈPotential Delivery Models: oSingle Commodity (National delivery) oSingle Commodity (Provincial or Regional delivery) oOfficially Recognized Single Commodity (Provincial or Regional) oOfficially Recognized and Accredited Single Commodity (Provincial or Regional delivery) oMulti-Commodity (Provincial or Regional delivery) oOfficially Recognized Multi-Commodity (Provincial or Regional) oOfficially Recognized Multi-Commodity Pooled Audit oOfficially Recognized and Accredited Multi-Commodity (Provincial or Regional delivery) oOfficially Recognized National Certification Body (Provincial or Regional delivery) oCustomer Recognized Programs (Provincial/Outsource)

19. OPTIONS FOR DELIVERY ÈHow evaluate? oTechnical issues oBusiness issues

20. OPTIONS FOR DELIVERY ÈPossible Evaluation Criteria, technical issues qwhether certification to the specified performance standard is possible qregional / provincial differences and requirements qcommodity differences and requirements qcontributing to remaining competitive; acceptance by food industry / customers; issues of commercial acceptance, i.e. branding qapplicability to other related initiatives, i.e traceability, environment, stewardship, animal welfare – ability to deliver greater than food safety

21. OPTIONS FOR DELIVERY ÈPossible Evaluation Criteria, business issues qcost qindependence, objectivity qexpertise available qaffordability; ability to pay; availability of resources qapplication / use of technology qoverlap / economies with other initiatives / management systems qwhether effective linkages / communications in place âwith producers âwith other commodity organizations qstaged implementation: complexity and scale qfeasibility: capacity / availability / practicality qtimeliness: availability / proximity / location qpublic good versus commercial benefit (not-for-profit vs profit)

22. OPTIONS FOR DELIVERY ÈThe future? qno one model for all qnational or regional co-ordination where possible qnational training design and materials qprovincial or regional delivery of training, certification, maintenance or follow-up partial audits qevolution of verification requirements qultimately, objective, independent full audit service qinvestment in information management technology qcost-effective resource planning qlimited multi-commodity co-operation

23. OPTIONS FOR DELIVERY

24. NEXT STEPS ÈFollow-up telephone meetings with participants  feedback on, and clarification of, individual report  discussions on potential delivery models and possible evaluation criteria  ideas / direction on possible subsequent phase of project ÈPossible Phase 2: further evaluation of options for delivery