The standards imposed internationally and nationally are driven by the need to manage risk in the food chain. The demand for changes in standards is created by drivers within a country's economy, while the institutional structure influences the way in which standards are defined and imposed.
Consumers with high purchasing power
Consumers are the primary drivers of standards. Those who are very poor are concerned mostly with access to food. As their livelihoods improve, they become concerned with safety and then with other less tangible quality elements. Consumers with high purchasing power demand, as a right, food which is safe, sustainable and ethical, free of toxic substances, residues, additives and contaminants. They have influence, hence their preferences become reflected in standards set and imposed by the public and private sectors. In any national livestock food chain, the demand for health and safety standards is influenced by an interaction between the demands of the export market and competition within the national market.
FIGURE 1
Consumer needs and expectations
Export
Consumers in affluent countries have a major impact on standards setting. Their preferences are expressed through their governments, international supermarket chains and multinational food processors. Long, vertically integrated market chains originate in developing countries to supply consumers in affluent countries.
Consumers may have a disproportionate role in standards setting compared to producers. A culture of litigation encourages retailers in developed countries to pursue a ‘zero-risk’ policy, to demand very high international standards and expect government to enforce them. International retailers demand safety standards that are at least as strict as those set by international agreements and in some cases (e.g. organic food) may be higher, while other technical standards (consistency of appearance and flavour, volume, animal welfare) may also be very high.
Developed countries also have a disproportionately high role in both OIE and Codex. Little account is taken of the needs and circumstances of developing countries in e.g. setting MRLs. For instance, developed countries and affluent consumers consume on average much higher quantities of meat but lower quantities of maize than the poor in Africa, and MRL levels reflect developed country consumption. No alternatives are considered based on dietary patterns.
International standards should ideally be set at levels necessary for safety, but no higher, or they become unnecessarily exclusionary. One example is the need for very expensive laboratories to test MRL levels which are becoming increasingly stringent but may not be a realistic reflection of the safety needs of the consumer.
Competition on the national market from export quality or local goods
Standards imposed by export can affect those in domestic markets. Examples include Thailand, where chickens for export are produced by approved farms and slaughtered by approved abattoirs. However, some parts are not exported and enter the domestic market, where they are consumed by a variety of people including the poor. This has created an expectation of standards among urban consumers. In South Africa, competition from imported foreign cheese, which is more expensive than the local product but has a longer shelf life and is preferred by consumers who can afford it, has led to a raising of standards by some local processors. Income influences the market for standards - as people become richer, they demand higher standards.
In countries where supermarkets have made inroads into the domestic market, they introduce a variety of standards, both safety (e.g. quality testing of milk, use of packaging) and technical (e.g. labelling, type of cut). Livestock products have been less affected than vegetables, but the share of milk passing through supermarkets is increasing rapidly, e.g. in China.
Producer groups may attempt to use SPS measures to prevent ‘dumping’, although under WTO this cannot be done purely as a trade barrier, but only where local standards justify it.
Tourism and media impact
Tourism creates a direct relationship between the consumers of one country and the producers and processors of another. It may create a demand for certain products and safety standards, perhaps resulting in a specialized market niche, or eventually influencing the preferences of consumers from the host country. It may also create a hazard if tourists travel in livestock producing areas and then return home.
Consumer preference is affected by the information at their disposal. Hence, there is concern among middle class consumers in Africa about genetically modified organisms, which have received considerable media exposure, but rather less about zoonoses which have an immediate and major impact on human health.
International standards setting, which sets the framework for negotiating power in the international arena, requires an understanding of the negotiating process and the ability to participate. There is a lack of representation of developing countries in SPS meetings and also in Codex and this may be leading to an unnecessary trend towards raising of international standards (which should be those necessary for safe food consumption rather than zero tolerance).
In addition to standards setting, negotiations are needed for international trade. Where a country has a strong producer organization (e.g. the dairy industry in South Africa, the pig industry in Chile) it may be able to negotiate commercial agreements, but still needs the government to participate in international fora.
The private sector is having an important impact. For example, prior to Poland’s accession to the European Union (EU) foreign investors in Poland set standards above national legislation. National legislation has now been upgraded to comply with EU regulations. The high standards are set particularly by companies that are aiming to export, or international retail chains like McDonalds with a global image and sales to maintain. Is the private sector keeping pace with the dynamic of the livestock sector, or is it driving the dynamic? It seems that the perception held by retailers, of the needs of consumers, when coupled with competition, creates the dynamic.
Public sector involvement often seems to lag behind the private sector, or even be driven by the private sector. For example, in Thailand, the private sector forced the government to ban the import of certain chemicals.
Whilst the international standard setting process is relatively slow, the rate of change in scientific knowledge, the development of new technologies, consumer demands and risk analysis progresses at an ever-increasing rate.
Countries may face the following problems that prevent them from fully participating in the international standards setting process:
The very poor tend to operate in informal markets. Changing standards make it increasingly difficult for them to move into formal markets. Those participating in formal markets individually and on a small scale may be squeezed out if regulations change or are enforced more strictly. For example, the Brazilian dairy sector has developed rapidly, and changes in the structure of food chains have resulted in considerably fewer producers supplying major markets.The speed of change may be as important as its direction for players in the food chain, particularly small producers and processors, because of the investment required in physical capital and human resources. For example, in Latin America, China and Poland, supermarket penetration has been very swift and has placed demands on those wishing to participate in associated value chains.
Factors that are already influencing developments in standards, and will be a potential problem to the developing countries include, (but are not restricted to), the following:
