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After 16 Years Of Compliance, Florida-Mexican Tomato ‘Suspension’ Agreement Gets Challenged By Florida Growers Claiming Dumping Is Occurring: Is This Just Rent-Seeking?

The issue of “dumping” in fresh produce has been brought to the fore by the decision of Florida’s tomato growers to request that the U.S. Department of Commerce tear up the “suspension” agreement that established minimum reference prices for Mexican tomatoes sold in the United States.

When the request was made back in June, Reuters reported on the matter this way:

Reggie Brown, executive vice president of the Florida Tomato Exchange, told Reuters U.S. producers want the pact voided so they can file a new anti-dumping complaint against Mexico.

The rare request comes in a dispute that dates back to 1996, when U.S. industry filed a petition accusing Mexican producers of selling in the United States at unfairly low prices.

Brown said the Commerce Department found that Mexican producers were dumping their tomatoes in the United States at nearly 188.5 percent below fair market value.

The department later agreed to suspend action on the petition and negotiate a "suspension" agreement with Mexican producers and exporters that established a minimum reference price for Mexican tomatoes in the United States.

In following years, two more suspension agreements were negotiated to replace the original pact, but the reference price barely changed, Brown said.

In the meantime, U.S. tomato imports from Mexico nearly tripled in value to about $1.8 billion last year.

"Over this entire period U.S. growers have been the victims of gamesmanship and evasive actions by Mexican growers," Jimmy Grainger, president of the Florida Tomato Exchange, said in a statement.

"It's time to end the charade and restore fair prices that reflect market reality," he said.

The U.S. industry feels the best way to do that is to ask to withdraw its original petition and thereby terminate the current suspension agreement, so it can file a new case, Brown said.

The debate has been predictably fierce with most of the arguments against Florida’s position being well expressed in an op-ed in The Wall Street Journal written by Jim Kolbe, a former member of the House of Representatives from Arizona. The piece was titled, The Sunshine State’s Rotten Tomato Fight with Mexico:

In June, a group of Florida tomato growers filed documents with the U.S. government requesting withdrawal from a 1996 antidumping agreement that governs the sale of fresh tomatoes from Mexico. If the Obama administration goes along and kills the 16-year-old agreement, the president may win a few votes in a key swing state. But it would come at the cost of far higher prices for American consumers, the loss of U.S. jobs, and possibly a trade war with Mexico.

Florida growers have been trying to cut off Mexican imports for decades using a variety of actions designed to disrupt trade. The Florida Tomato Exchange, the special-interest group requesting withdrawal from the current agreement, filed several trade cases in the 1990s, including one in 1996 accusing Mexico of "dumping" their tomatoes in the U.S. at below market prices.

To avoid an all-out trade war and the unraveling of the North American Free Trade Agreement, the U.S. government and the Mexican tomato industry entered into an agreement suspending the antidumping investigation. Working within the framework permitted by U.S. law and NAFTA, the Mexican growers agreed to sell tomatoes in the American market above a minimum price calculated by the U.S. Commerce Department. In response, the department dropped the pursuit of punitive tariffs that surely would have increased prices and decreased consumer choice.

That choice is an important one, especially in this economy. The tomato industry in Mexico was started by U.S. investors after World War II for the purpose of providing fresh vegetables to American consumers during the winter. Most Florida tomatoes, however, are a "gas-green" variety — picked green and brought to a ripe "tomato" color with ethylene gas. Preferred by fast-food restaurants only because they can be sliced easily, the tomatoes are hard and fairly tasteless. The Mexican varieties are picked after ripening. American consumers have embraced the flavor and quality of these "vine-ripened" tomatoes and the wide variety Mexico produces.

Tariffs on Mexico's vine-ripened tomatoes would lead to price spikes in the U.S. as well as the loss of thousands of American jobs in the $3 billion fresh-produce industry. Among states hardest hit would be my own home state of Arizona, where most Mexican tomatoes enter the U.S., generating tens of millions in annual income for importers, distributors, warehouses, transportation companies and the like.

For its part, the Mexican government is not likely to sit idly by while the U.S. permits a special-interest group to cripple a Mexican industry that employs 350,000 workers. Mexico is a major export market for many U.S. industries, including agricultural giants such as pork, beef, poultry, grains and vegetable producers. They could be the target for retaliation that might follow from Florida's protectionist efforts.

Scores of businesses from Arizona and other states have expressed their strong opposition to terminating the tomato agreement with Mexico. Arizona Sens. John McCain and Jon Kyl, together with Reps. Jeff Flake, Paul Gosar and Ron Barber, recently sent an open letter to Acting Secretary of Commerce Rebecca M. Blank noting how this would have a "chilling effect" on agricultural trade with Mexico. Our neighbor to the south is the second-most important destination for U.S. exports overall just behind Canada, and a major disruption in agricultural trade is something American businesses can ill-afford.

Outside of the protectionist interests of Florida tomato growers, there is no reason for any of this to happen. The current antidumping agreement has worked well for 16 years. It has been renewed twice and its reference price adjusted when necessary. No violations have ever been found or even alleged.

For 16 years the U.S.-Mexico tomato agreement has fostered the spirit of NAFTA through legal mechanisms that have struck a delicate balance between the interests of U.S. producers and the broader U.S. public interest. As an Arizonan who has witnessed the many benefits provided by NAFTA, I urge the Obama administration to avoid any protectionist measure against Mexico's tomato growers.

All the specific arguments aside, it is hard to get too passionate on either side of this argument because, for better or worse, it is essentially a political power struggle. The reference price in the current suspension agreement is just a political compromise. It is no more the “right price” than the price that might come about if the agreement is renegotiated.

The root of the problem is that the law in this area was not designed with reference to fresh produce and the whole concept of “dumping” is really incoherent when applied to fresh produce.

Dumping is traditionally defined as either selling product for export cheaper than it is sold in the home country or selling product below the cost of production.

Much of the fresh produce grown in Mexico, though, as in other major produce exporting countries, is typically grown for the purpose of export to the US or other markets. So there simply is no domestic market for the vast quantities of, say, Chilean grapes grown in Chile. The product is sold around the world and in each market the product has to sell at the price that market will bear. So to compare prices in the US to prices in Chile or Mexico or South Africa is simply meaningless.

Equally, because these are perishable products, the cost of production is irrelevant to the market price. It is a simple matter of supply and demand.

Indeed, much imported product arrives on a commission sale basis, emphatically establishing that the producers have to accept the market price. This is not product one can warehouse until the price rises over replacement cost.

Still the anti-dumping laws apply to fresh produce and thus give the Florida growers a hammer with which to threaten the Mexicans and, thus, attempt to get a better price.

Economists call this “rent-seeking” which is an attempt to “obtain economic rent by manipulating the social or political environment in which economic activity occur.”

The problem for society, of course, is that much time, effort and money goes into rent-seeking and thus detracts from resources being invested in productive economic activity.

Should we blame the Florida tomato growers for trying to get the best deal for themselves? Should we blame the Mexican producers and those who handle their product for trying to defend their interests?

Of course not, but in this presidential election year, we might start looking at situations such as this, which really represent a society that has lost focus on producing wealth. Instead of fighting to produce the best product at the best price, brilliant people are fighting to have the government set up the rules so they will win. This problem is hardly limited to tomatoes, and it impoverishes us all. 

As Certified Greenhouse Farmers Look To Develop Guidelines, Mexico’s Protected Agriculture Industry Continues To Build Marketshare

The issue of uniform definitions for marketing terms is not a new one. Indeed, we have addressed such issues in the sweet onion industry with pieces such as these:

Sweet Onion Fraud

Pundit’s Mailbag — With Proper Science And Marketing, Onions Could Be Sold As Mild, Medium Or Hot

Pundit’s Mailbag — Sweet Onion Specifications Need To Start With A Definition

Another Reason Retailers Need A System To Make Sure That Any Onion Labeled Sweet Actually Is Sweet:
They May Get Sued If They Don’t

Pundit’s Mailbag — Retail Specifications Needed For Sweet Onions

Now a trade association called Certified Greenhouse Farmers, which represents many greenhouse growers in North America, is calling for standard definitions for what it means when consumers are sold “greenhouse-grown” product.

We asked Pundit Investigator and Special Projects Editor Mira Slott to find out more: 

Ed Beckman
Certified Greenhouse Farmers

Q: Why are you trying to develop a single definition of greenhouses and an industry-wide certified greenhouse-grown standard? What is Certified Greenhouse Farmers trying to accomplish?

A: Our job is to protect growers of greenhouse produce. We are a relatively new organization. Although formed back in 2008, I joined the first of this year, and we are going through a restructuring. The organization has evolved in terms of who it is representing and its mission. We believe it is really important to protect the integrity of the greenhouse growing process. It is not just about the physical structure; it’s about the environment, the food safety procedures in place, and it goes back to the varieties grown.

[Editor’s note: you can read the full Certified Greenhouse Farmers standard requirements here.]

It’s all about differentiating our members from domestic and international competition. Some don’t grow to the same standards. We want a way to convey this information to government officials, retailers and foodservice operators, as well as consumers.

Q: Who are your members?

A: Right now our members are growing in 29 locations in Canada, the U.S. and Mexico. Key areas are British Columbia and Ontario, Canada, California, Texas, Nevada, as well as Pennsylvania and New York in the U.S., and some production down in Mexico as well.

Q: You mention production in Mexico. However, aren’t your members all US- and Canada-based companies?

A: Product today is marketed from four member companies: Village Farms, Windset Farms, Houweling's Tomatoes, and our newest organization, Nature Fresh Farms, one of the largest pepper growers in North America. That covers just under 1,000 acres in the organization right now.

Q: Do you have data on the size of the greenhouse market? How much of that market do your members represent?

A: If you look back into the field tomato industry 24 years ago, greenhouse-grown represented a couple percentage points in market share. Perishables Group/AC Nielsen data shows that more than 50 percent of tomatoes on retail shelves are labeled greenhouse grown, and this data doesn’t include the big box stores, Wal-Mart and Costco, which sell primarily greenhouse. Adding in those numbers would certainly impact results upward.

The greenhouse tomato category is one of the greatest success stories. It accounts for the lion’s share of greenhouse-grown product, thus drawing much of the attention, yet production of greenhouse-grown commodities continues to broaden, encompassing bell peppers, a variety of leafy greens, eggplants, and other specialty vegetables.

Q: Do you consider all those products labeled as greenhouse to actually be greenhouse-grown? If not, is the amount significant?

A: It includes some products that say greenhouse-grown, which are not, but we are unable to determine what percentage that would be. The tomato category changed dramatically, with the Number One product now being tomatoes on the vine. There has been tremendous growth in specialty tomatoes, which are mainly greenhouse. When you look at the greenhouse industry, it really hasn’t had a formal organization supporting its needs. We need to work with elected officials with a unified voice and an ability to speak on behalf of our members.

What is bringing everyone together is the need for an industry-wide, enforceable definition of greenhouse. Those that have met certification requirements would be able to use a seal to differentiate their product.

Q: How would this definition and the standard and related certification requirements be determined? Is it possible to create a universal definition? Would these requirements be more stringent than what is currently employed? Are there other greenhouse certifications out in the market now?

A: The definition we’ve adopted is very similar to one proposed across Canada; a somewhat expanded definition. I was involved when California developed a standard greenhouse-grown regulation, which was put in place in 2004. The action came from concern that product not grown in a greenhouse was being marketed as such. This standard has been analyzed. I don’t think it goes far enough. 

Q: Why?

A: We are looking for a harmonized definition, not just saying, ‘This is what we stand for.’ There is a process that takes place in the growing, which must be audited independently. To become a member of our organization, one must meet our standard. Scientific Certification Systems (SCS) is actually doing all of the auditing to insure all our audit and certification requirements are met. This can take several months to complete.

Q: What exactly are the requirements? How do they differ from the California regulation, for example?

A: You have to look at the process. It starts where the food safety audit stops. Look at facilities, water usage, the nutritional management strategies, the strength of integrated pest management systems, the surrounding environment and how to handle waste. It goes beyond just that of facility, but looking at the production process the company is employing within the greenhouse. It’s a rigorous test and audit.

Membership is focused on advanced technologies and food safety applications. There are far more restrictions on pesticide use in the greenhouse environment. That is a standard.

Just like any Global Food Safety Initiative [GFSI] audit, if problems arise, the company needs to submit corrective actions and follow-through.

Q: Is food safety a main component of the industry-wide, standardized greenhouse certification you seek? Aren’t there already food safety regulations in place that greenhouse growers must follow?

A: One of the reasons I feel strongly about the need to define greenhouse goes back to the tomato metrics from United Fresh that became the guidance document for FDA. It makes the distinction between field and greenhouse production. There are different protocols that are going to be deployed. For example, there is no soil, so there will be differences in critical control points. 

This is really about reflecting production processes within the greenhouse environment, focusing on food safety beyond GAP, the use of water and the fact it is recycled, targeting techniques that differ from those in the field, for instance.

Q: If the tomato metrics guidance document distinguishes between field and greenhouse production, are you suggesting that isn’t sufficient?

A: Instead of focusing on field and applying it to greenhouse with exceptions and accommodations, we’re focusing on specific greenhouse practices first.

Q: Are you involved in shaping and/or reshaping the tomato metrics guidance document?

A: Back in January, the tomato metrics meeting indicated that all of us are part of an effort to develop standards for the tomato industry. There is a standard for greenhouse, but it is kind of cut and paste. It is important to do critical control point analysis for the greenhouse process.

It has to focus on quality, food safety and environmental performance. If you are going to make claims, you have to have a standard transparent definition, from how product is developed and documented, and it has to be done by a recognized third party. SCS has a high reputation.

A certification has to be a living document. We are looking at what can be fully captured and what needs to be captured. It can’t be status quo. It has to evolve with technological advances.

A company professes to have great standards for greenhouse tomatoes and greenhouse cucumbers. How can you have a great standard that is not defined? We would hope, if you look at a standardization program, that those exceptional processes could be validated. Even the varietal selection of greenhouse products is unique for a controlled high tech greenhouse environment. You can see this differentiation back to the breeding site.

Q: Could you clarify the food safety element in the greenhouse standard? Aren’t there already food safety regulations in place? How would this standard change those requirements? If a company were GAP-certified, for example, would your greenhouse standard have more stringent food safety requirements than that?

A: We start with the Global Food Safety Initiative [GFSI] benchmark audit. GFSI is something out there already and becoming more common place in fresh produce in the past couple of years. We’ve been working with United Fresh for several years, first for a food safety protocol on tomatoes, field-house and greenhouse. Then that effort on tomatoes served as the model for development of a harmonized standard that was picked up by GlobalGAP, which is one of the GFSI benchmark audits.

We’re seeing the evolution of what was the first GAP audit undergoing scrutiny, expanded beyond tomatoes to being applicable to all fresh produce, and then adopted to the GFSI model. Dr. David Gombas, Senior Vice President for Food Safety and Technology at United Fresh in Washington D.C., has been shepherding this through the past few years. I don’t want to take that thunder.

And again, one of our initiatives being championed now goes back to that standard that was adopted, one for field and one for greenhouse. The problem is that when that standard was developed for field, greenhouse wasn’t fully represented and it turned into a cut and paste.

What we hope for when we upgrade standards and identify critical control points, the end result will be a standard much more in-tune with actual greenhouse practices and process.

Food safety from our perspective is a prerequisite before we start looking at production processes. The standard is all the criteria that go into the definition. It’s very comprehensive.

Q: Beyond food safety issues, why is it necessary to standardize a process? Aren’t there many variables involved in greenhouse growing that could require different methods? And if so, couldn’t the desirability of different processes be subjective?

A: There is product that is out in the system marketed as greenhouse, although some is not. As consumers reach for what they think is greenhouse, they should know that product is authentic.

Q: Is most of the greenhouse-grown product in the U.S. and Canada meeting the requirements you are trying to standardize?

A: It is one of continuous improvement. What you find now is that about 80 percent of greenhouse product grown in British Columbia meets those standards, and in the U.S., an estimated 40 percent meets those standards.

Q: How do you arrive at those numbers?

A: We currently represent 80 percent of greenhouse product in British Columbia, and 40 percent in the U.S. through our members. If you cast out a net on who could meet those standards, those numbers would be significantly higher. We’re obviously in discussions with producers in Canada and Mexico. If you look at Canada, that 80 percent number could pretty much be applied across Canada.

In the U.S., a lot of people could not meet the standard without some modifications, but the definition is different than certification. The certification is the process to validate that you are meeting the definition. As far as the definition, I’d say the vast majority of growers in the U.S. of commercial scale could meet that definition; say automatic climate control, drip irrigation, no use of fumigants and herbicides.

That said, there are producers in the U.S. and Canada and Mexico that can’t meet the definition.

Q: Isn’t there a debate on the criteria for what constitutes greenhouse grown?

A: In going through a lot of research we’ve done, we identify a loose definition of greenhouse-grown, some producing in soil in all three countries, using mesh or cloth, double poly or glass, so we do see these variants.

A lot of these methods are seen in the eastern U.S., various parts of Canada and Mexico. Those descriptions would not fit the definition of greenhouse grown. There’s a difference even in the varieties grown.

I traveled recently to Vancouver to look at the greenhouse industry. Even though we talk a lot about tomatoes, we’re also developing greenhouse vegetables, peppers, cucumbers, eggplants, etc.

We want to make sure we have a certain degree of harmonization, working with Canadian groups and the U.S. government. California is the only regulatory greenhouse standard and that was done back in 2004. We take a look at how we are currently growing. There are examples that need to be communicated out from food safety to the environment. We’re not dealing with animals and not growing in dirt. We’re growing in coco fiber, not herbicides, etc.

Q: What are the differences between greenhouse grown and protected agriculture?

A: Protected agriculture takes incremental steps away from field growing in ways to extend the harvest season or minimize virus. Greenhouse is a process with defined parameters based on things like balancing CO2 in the environment, water recycling, automatic climate control, integrated pest management… It’s not just about where you grow but it’s a process. That’s really how you differentiate between protected agriculture, which is a continuum. You have to explore where a company stands.

The greenhouse growers are committing to a production process based on controlled environment and the highest levels of sustainability and food safety. When you look at sustainability, there are clear differences in land use, water use and recycling. It’s the commitment the greenhouse grower has to the process compared to that of protected agriculture. What protected agriculture is focusing on involves taking steps away from field-vegetable production, but just what is necessary to do, how to provide the most sufficient methods… it’s not the same commitment.

Q: Is it necessarily the case that greenhouse growing is the most sustainable? Isn’t it important when assessing sustainability to examine all three legs — the environmental, social, and financial aspects? For instance, could greenhouse-grown product require more energy use than field grown? From an economic standpoint, could it require significant investments to meet and maintain your greenhouse standards?

A: The economic side is always important to consider. When you take a look at energy and water use, you have to assess yields for comparisons. If you look at yields, greenhouse produces at least twice as much as protected agriculture operations. When you look at resources used, and compare field and greenhouse production of a box of tomatoes or box of peppers, you find with the efficiencies of greenhouse, use of resources is much less.

What our member Houweling's Tomatoes is doing in California provides a good example. In addition to the solar farm it uses, the company is putting in a co-generation plant, which is recycling the CO2 from the greenhouse and sending the electricity into the grid that it is not using. This is an initiative very much focused on energy conservation, a critical component of greenhouse farming.

Q: Are operations like this common? Is it realistic to expect widespread implementation of the greenhouse standards you propose, taking into account economics and environmental conditions that impact growing decisions in different regions and countries?

A: There are growers that are producing to our standard now in Mexico, Canada and the U.S. We are a North American trade association, but absolutely, companies outside North America can apply the standard we have in place. There is a high tech agri park in Mexico, where growers meet the definition.

Q: Are these growers connected to your member companies?

A: Yes. We have growers in Mexico that are currently producing for our members.

It’s not an issue of the U.S. and Canada versus Mexico. We’re a trade organization opened to anyone who believes in our definition and sustainability and standard program. We’re really drilling down on the sustainability that you find in greenhouse production.

I’m not sure people really understand the use of biologicals and recycling water. The end result is minimal energy use in production of crop. We want to illustrate the need to differentiate product outside of greenhouse that is marketed as greenhouse but is not.

Q: Do retailers and foodservice buyers care about the distinction? Does this matter to consumers?

A: We are hearing that it is beginning to matter with retailers. Demand for greenhouse product is at an all time high. People are wanting to know the production process and about the farmer. People are raising the questions. Who is my farmer? Where is this product coming from? It’s simply an extension of the interest for more knowledge on the origin of produce. A lot of education is needed. In the Perishables Group/AC Nielsen study, consumers are paying a premium additional 40 cents a pound for greenhouse grown.

Q: So greenhouse-grown product garners a much higher price point at retail just on its label?

A: The state of California from time to time actually enforces its labeling law on greenhouse tomatoes. There can be thousands of boxes coming into California that are labeled greenhouse that are not. Officials are able to stop them because of the state regulation.

We all live in a heightened environment regarding food safety than we have in the past, making us much more concerned about the source.

Q: Is greenhouse-grown product assumed to be safer? Is there any evidence to suggest that is valid? Has there ever been a food safety incident regarding a product that was mislabeled as greenhouse grown, for example?

A: In California some number of years ago, there was a food safety incident and a product in question had been falsely labeled as greenhouse when it wasn’t, but authorities weren’t quite certain it was the source of the problem.

I’m still living through the Salmonella St. Paul crisis. It was all about getting on the cleared list. There was a lot of misinformation taking place, and a lot had to do with greenhouse tomatoes. Through unified standards, there can be improved confidence at government and retail levels.

Q: Could you explain further?

A: Right now, we’ve opened up discussions with some state regulators, USDA and our counter parts in Canada regarding a standardized definition, not just for tomatoes but the greenhouse category in general. Let’s get a dialogue going here.

Right now, there is not a single standard. Under the Florida federal marketing order, there is a definition of product grown indoors. Then there is the California definition. Then there is the United Fresh tomato metrics guidance document for the FDA. The Canada Food Horticulture Council proposed a definition similar to ours to Canada Food Inspection.

Wouldn’t it serve the industry, trade and consumers best to have a harmonized definition?

That’s what we’re trying to foster. In the meantime, we have a validated certification program that provides that. There is insurance through a rigorous system of food safety, auditing, and certification.

Q: Where do you stand in your goals? Do you have a timeline going forward? How are you communicating these goals to relevant parties?

A: Right now we’re very much focused on establishing dialogue. Our website just went up a few months ago. We were surprised by the level of consumer interest, people asking a lot of questions about product origin, food safety and the growing process. Consumers want to know how product is grown.

Individual members are expanding their educational efforts as well. It helps when the members all keep focused on the same message. We want a single message going out to consumers.

Q: You say that greenhouse-labeled product gleans a premium at retail. Is this greenhouse certification standard somewhat of a marketing effort to differentiate from protected agriculture product in Mexico, which could be sold at lower price points?

A: It goes beyond price points. I’ve seen greenhouse product selling for less than field-grown side by side on retail shelves. We are international because our members are producing in Mexico, the U.S. and Canada. Right now, in terms of meeting the standard we set forth, the problem is more out of Mexico.

There has been a tremendous growth in protected agriculture, but some of the growers won’t use the term. We believe consumers want and deserve accurate information so that they can make educated purchasing decisions. If you choose a greenhouse-labeled product, you should know what you are buying. From our perspective, the standard we’ve adopted that is supported by many in the U.S. and Canada could be adopted by companies in Mexico. We put in provisions to certify outside of North America. This standard greenhouse certification can be put in place in any country.

Q: Have you built a wider consensus on a single greenhouse definition as a foundation? How are you flushing that out? Are you anticipating a regulatory outcome at the federal level that pivots off the state definition in California?

A: The definition in California is limited but has been a subject of a lot of discussion. We’ve been reaching out to a number of companies in the U.S. and Canada and those with growers in Mexico. There are a couple of pathways you can take. We’re very much focused on defining what our growers adhere to, growing in a controlled environment, with dedicated integration in pest management.

There’s rationale in what we say. There will be regulatory changes. We have great standards for greenhouse tomatoes and cucumbers, but no definition. Shouldn’t we look at taking a regulatory path so someone purchasing greenhouse product can be assured of what they are buying?

If you called for an inspection of greenhouse tomatoes, how would you know what to base it on? It has to go hand in hand.

We want to have the industry adopt a definition they believe in and can embrace, and then some type of regulatory enforcement. Right now, if my tomatoes began life as a transplant in a greenhouse, because of that I can say they are greenhouse, and there are no repercussions.

If you have product grown in a shade house, maybe tomatoes, cucumbers, or peppers, it’s grown with exposure on the ends, grown in soil and marketed as greenhouse, which is pretty far away from hydroponically grown. It is not a controlled environment from a food safety perspective, and not conducive to integrated pest management. Most likely, if it’s coming from a shade house, it’s marketed as greenhouse.

Q: When all is said and done, do you think most consumers make purchase decisions based on a value-equation of quality, taste and price?

A: As consumers learn more about greenhouse food safety and sustainability elements, demand will likely increase. Some buy with their eyes, some buy with there preferences. If the consumer decides in the end to go to the 40-cent cheaper product, that’s fine. We just want to make sure consumers are getting what they paid for. Most research shows consumers are asking questions. One of the top questions is whether the product is genetically modified. Who would think consumers would be asking that?

Q: Do you think there is a downside to positioning greenhouse product as safer?

A: As for food safety, the number of critical control points are significantly less than found in the field, so if we’re eliminating some of those critical control points, then indeed there is the possibility of fewer risks in production of the crop. That said, it is important not to use food safety as a competitive advantage. Whenever there is a food safety problem, the whole industry is negatively affected. The spinach crisis and Salmonella St. Paul outbreak are quintessential examples.

There is a perception that product produced in controlled environments presents fewer risks, but in the produce industry we don’t want to be in a predicament where people are saying my produce is safer than yours. During a food safety incident, we all suffer.

In the future, we will focus more on critical control points and preemptive measures, how do you approach those risks? This is something we all have to look at whether field or greenhouse. As we go forward with meaningful food safety policy, how many critical control points do we face? We don’t have animal intrusion, we don’t have soil and because of how we produce, our protocol will look different.

When starting to work on food safety policy, we’ve never gone down this path looking at these different standards. In time, as we discuss more, I think you’ll find industry coming together. What we’re trying to do is provide insurance to consumers and keep consumers in mind.

Q: How do you respond to the point that for many growers, it wouldn’t make sense to adopt this greenhouse standard, and in fact it could lead to costly unnecessary investments crippling the company at a time when we have a global food crisis?

A: I just got back from British Columbia, where I was visiting smaller acreage growers, who were looking to balance the purchasing of power sources and other initial investments to meet the greenhouse requirements and certification standards. One challenge with sustainability is whether to include that economic component. It has to be included or it won’t be sustainable.

When you look at growers’ decision to make the investment, not just for tomatoes, but for onions or other crops, they are making fairly significant investments. Looking at the future, they can take more control. They can alleviate the uncertainty of what the economics will be when dependent on others for resources.

The economics of farming have always been a challenge, but in terms of sustainability, growers have to look at how economically sustainable they can be long term.

The yield is far higher with greenhouse. Where is the greatest actual efficiency? By far it is coming from the high tech greenhouse segment. In addition to the fact the yield is higher, product waste is also minimized, and the actual amount of product that meets market conditions is higher.

A lot of customers want perfect produce. What my growers are telling me is that maybe two percent of greenhouse product doesn’t go into the marketplace. That is a very high level of efficiency. Being able to produce higher yields and less waste in our perspective is a positive move toward feeding the population.

Mira reached out to Jeff Dlott…

Dr. Jeff Dlott
CEO, Chairman of the Board
Soquel, California

Q: How did your collaboration with Certified Greenhouse Farmers come about?

A: Our company had been working with Ed Beckman in his previous job [as president of the California Tomato Farmersrs] on a sustainability self assessment tool. It was part of a California specialty crop block grant. Money was authorized in the last Farm Bill to invest more research dollars into the specialty crop industry. Each state gets a certain amount, and California gets the most because it is the largest specialty crop producer.

Ed Beckman asked if we could continue that work with other commodity groups. He wanted more than a self-assessment tool, for us to take sustainability metrics to the next level, to create the next generation from self-assessment to certified standards. This fit with the interests of Certified Greenhouse Farmers to develop such a system.

Q: You say this will be the first comprehensive performance-based system in agriculture. Could you elaborate on what this means?

A: There are a couple of different certification types. Some are process ones, where you adhere to certain processes. With ISO standards, you’ve committed to follow certain procedures and get certified to that. It may not address energy efficiency but look at actual performance.

Also there are performance-based standards, and compliance with those standards grants you certification. Like certified organic, there are certain materials you can’t use. You have to use approved materials and follow certain practices.

It goes back to the Stewardship Index for Specialty Crops, looking at water, energy use, nutrient efficiencies, and setting about to do a performance index. Now we’re looking to adapt that.

Q: In earlier discussions, you’ve said the premise of the Stewardship Index for Specialty Crops was to build a tool to measure performance, not to create standards. Yet debate has ensued, not only on having fair, representative input and a balanced approach for development of those metrics, but also on how measuring those metrics will be prioritized and used in the buyer world. How is the current mission for greenhouse metrics different? Will some of these same issues arise?

A: The Stewardship Index is looking to develop common metrics, not setting certification standards. It’s not its function or purpose or mission. If looking at nutrient use efficiencies or energy efficacy, whether it’s citrus, apples or lettuce, we have a common set of metrics. It’s not certifying folks on whether they’re using a certain amount of energy. That was one of the common concerns or misconceptions that the Stewardship Index was going to do that.

The greenhouse farmers are uniquely positioned. They already have high tech systems as part of their production process. Because they have a lot of control in a greenhouse environment, they already track energy and water use. It is common practice, where it may not be common practice across the whole industry or sector. They want to differentiate themselves by developing a comprehensive set of these metrics.

The key for performance metrics is how to accurately measure and reflect resources in a scientific way for productivity. It really gets down to establishing how many resources are used.

Q: How do you decide what is optimal?

A: What do we know in baseline information, the literature, from the scientific community? In terms of drawing that line, it will take time to do. We have to understand the buyer community, NGO’s [Non-Government Organizations] like the Nature Conservatory and the Environmental Farmland Trust. Clearly in looking at environmental metrics, we are reaching out to environmental organizations working on these sustainability initiatives; The Sustainability Consortium, the Stewardship Index for Specialty Crops, etc.

Q: Hasn’t that strategy met with controversy in the past? What challenges do you face in finding consensus? Isn’t there subjectivity in weighing all the variables?

A: It really does need to be a stakeholder process as well as meeting industry and buyer objectives, whether looking at performance, practice or process. When people came out with organic standards, why those in particular? Stakeholders got together to decide what made sense. The standards must have integrity, be credible and meet market demands.

SureHarvest worked with other groups in the past to find that sweet spot. If it is set too high, no one can meet it, and if it is set too low, it doesn’t mean anything. In the case of the greenhouse farmers, there can be a standard. The question is where do you set it? The issues are the same in other instances, whether mandatory or voluntary.

If you’re saying, best management practices, where do you draw the line? It’s the same process. What is the right place? It starts with credibility and integrity, but you must consider what is wanted and needed in the marketplace.

Q: Ed Beckman says that developing a greenhouse standard is a means “to optimize value to society and use of resources to produce the best of the best in terms of quality, food safety and environmental performance.” Could you discuss the role of metrics in this light? Isn’t quality subjective, for example?

A: The scope of our work is defined in terms of developing environmental standards. Ed has a broader vision for the definition of greenhouse that encompasses the environmental aspects. For us, that definition is the foundation. What we’ve been focused on, given that definition, is what makes the most sense in developing those environmental performance metrics and making sure they have broad support. We have not gotten involved in quality and food safety aspects.

Q: How do you respond to concerns that complying with a single greenhouse standard could put unnecessary financial burdens on protected agriculture producers in Mexico? What if some of these growers already maximize their resource use and efficiencies based on their unique growing conditions and economics to produce quality product?

A: One of the key parts of developing this program with greenhouse farmers is that we’ll know the information. We’ll be able to build a set of metrics that is based on real data.

This goes back to any standards development. Will you differentiate your product? Why do it? Will it be meaningful in the marketplace?

We’re going to put together a set of standards. In our case, we’re building a set of performance metrics. If another group wants to differentiate its product, it can decide to do its own set of standards.

As we develop performance metrics, we really look at environmental concerns. What we really care about and the big discussion is about increasing food supply with less impact on the environment. Across the globe, we look to increase food productivity to meet demand. We don’t have enough water, which is a whole other discussion.

Q: Is it necessarily the case that greenhouse growing is the most sustainable? Isn’t it important when assessing sustainability to examine environmental, social and financial impacts, and to carry that throughout the supply chain?

A: It’s a statement about producing more with less. How do you know? You have to set up performance standards; how much energy does it take to produce a pound of tomatoes? The process has to be scaleable for small, medium, and large producers. There will be certain folks that need more energy in northern climates than southern climates but the goal is how much energy, how much water. That’s what makes a difference. We need a common measuring stick.

If you try to develop best management practices, that’s a means towards an end. Farmers are innovators. It’s the core business model, trying to use the least amount of resources to meet product demands. Why not create standards to be the most efficient? What’s realistic and doable from the environmental and economic side? We’ll create real data, which will evolve; on average, this is how much energy or water to produce a pound of tomatoes or cucumbers.

It’s a big step to create standards. The statement by Certified Greenhouse Farmers to move forward on standards is bold and innovative. It also comes with risks because it involves discussions with multiple stakeholders. At the end of the day, are we heading in the right direction, producing more products with fewer resources?

In certain cases, you use much less land, and may be weighing that against using more energy. For example, in the case of energy, we talk about alternative energy sources, maybe solar or wind. That’s a discussion we’re getting into. In cases where you require more energy, perhaps you need to consider alternative energy sources.

It gets down to the stakeholder group, ‘we believe this is the right way to go.’ This has to be a multi stakeholder process.

Q: Your strategy is to collaborate with third-party stakeholders to understand their sustainability priorities and validate process areas the certification standard will cover. Could you expound on who these third-party stakeholders are, and how you will be doing this?

A: What we’re looking at is a common set of environmental metrics. NGO’s are very active in this space; the Sustainability Consortium, the Field to Market Program, the Stewardship Index group… We’re reaching out to talk to the leadership of those groups. Finding out who is interested, gauging that interest and ensuring broad credibility.

Q: Do you see this metrics as a process toward a regulatory outcome?

There is a standard that’s being developed here. But it will be dependent on the stakeholder process. There will be questions on scale, what’s appropriate for smaller, medium, and larger farmers. How do we build in a continuous improvement approach, a point reaching the best of the best and where there is room to improve? How does that get quantified in a standard? Here’s a transparent set of standards that society and buyers can look at and know growers have met.

Q: Do you have a timeline?

A: We’re literally launching this now. We’re looking at the next four to six months, or even sooner than that, pulling together stakeholders, understanding the environmental community and the buyer community.

There will be a standard development process once we really understand the needs in the marketplace and environmental community and do our due diligence on how these metrics really could be applied. We talk about this being the first phase. We’re reaching out to people. I think this is cutting edge in getting down to the nuts and bolts of looking at real performance outcomes.

Mira reached out to Eric Viramontes…

Eric Viramontes
Mexican Association of Protected Horticulture

Q: Certified Greenhouse Farmers is working on an industry-wide, standard greenhouse definition and certification to differentiate from product that claims to be greenhouse-grown but is not, as well as from product grown within the protected agriculture umbrella. What is your take on this?

A: The way protected agriculture should be viewed, and what we’re trying to gain, is efficiencies, providing for whether to create the right elements for growing agricultural product. This involves protecting and managing elements, sometimes protecting from rain, sunlight, and temperatures, both highs and lows. The goal is to create the right conditions for growing vegetables. When making decisions of what technology to employ, you have to consider data.

It’s never the right comment to say this is the right technology for you. These are decisions each grower makes with their expertise based on the region he’s growing in. It does not make sense to have one standard. It’s the other way around. It’s like we want to make a standard definition for clothes — declaring the right definition is wearing a suit. What happens if you live at the beach or in the mountains? You need different types of clothes to be comfortable, the right conditions for you. It is analogous for protected agriculture.

The more elements you have to protect, the more money you have to invest. If you think about the most advanced technology in the world, you think the Netherlands. There you have high tech greenhouses because conditions are very inadequate for growing vegetables. If there’s a place God didn’t intend to grow vegetables, it’s the Netherlands. There, you never see the sun right on top of your head; it’s always on an angle. You have to invent artificial light, heating systems, providing CO2, and all the elements nature is not providing. They have a high end market that will pay for that investment. They are spending a lot of energy to produce tomatoes.

Q: How does this differ from Mexico in the context of defining greenhouse grown?

A: Let me talk a little about my country. Anyone going on vacation in Mexico can understand my point of view. We are blessed with sun. The Number One element to produce vegetables is sun and the second heat and the third element is water, probably the most important is water. Right now when we’re trying to make a definition from technology, we’re not really being fair.

I’m going to make a definition based on my conditions, whether I live in Colorado, Arizona, or the Netherlands. In California, they have a greenhouse standard. Does that make them the best? I can be very subjective about this topic. We have rainforest, deserts, mountains, and all kinds of technologies.

The way we see technology is in controlling the elements. If you’re using active heating and cooling systems, automatic ventilation systems, they’re dynamic, they move. When you’re using passive technologies, a shade screen, a window, they’re not dynamic.

People want to defend active technologies. They’re more expensive — fuel, electricity, all the resources — but that doesn’t justify that the tomato has to be better. I challenge anyone to prove a steel structure hydroponic system produces better quality than passive technology. I think certifying greenhouses won’t work. You would have to include South Africa, North Africa, Spain, and Israel.

Q: Do you see any common ground with what Certified Greenhouse Growers is trying to accomplish?

A: Where we can meet eye to eye is on food safety. I would challenge any part of the world to say their growers’ food safety is better than ours in Mexico. I don’t care if the process is high tech, low tech, active or passive. You’d be surprised how far we’ve come in Mexico.

Q: Are you saying that a standard greenhouse definition and certification would in some way raise questions about Mexican product food safety?

A: We have to think about the American public. Americans have been very cautious when it comes to Mexican product, always looking at Mexico when there are food safety concerns. Our food safety standards are state of the art. You will find standards at produce operations like being in a hospital with white gloves. We’re really up there. The story that a greenhouse has to be 100 percent enclosed so you can control those elements to make them safe implies that protected agriculture is unsafe.

I want to get back to Canada and the U.S. and that hemisphere of the world. People want to defend their technology, the double-layered plastic structures, etc., but their carbon footprint needs to be researched.

I would challenge people to look at Israel, South Africa and North Africa, where there are better conditions to grow vegetables. The whole game is efficiencies, high quality, good product, food safety standards, and delivering product in a competitive way. Making a standard on greenhouse grown in the northern part of the world will backfire on the consumer, who will have to pay high end prices.

Q: Will consumers pay a premium for a product with a certified greenhouse label?

A: The consumer is going to pick the quality tomato at the best value. If the consumer sees this tomato is $1.40 and certified-greenhouse, and the one on the right is just as good quality at $1, the consumer will buy the less expensive one. The consumers recognize quality and price, not the technology. The grower has to make the decision how to invest. At the end of the day, he has to be competitive.

We need a universally accepted standard. First on quality, there are different grades and we have to make sure we comply with those standards. Whether it’s a high tech or low tech greenhouse, we need good quality standards. We really have to have the same idea of what is good quality.

We believe in delivering what the customer needs. The way our industry and organization sees it, the growing process is protected agriculture. Within protected agriculture, you have different levels and descriptions of technology: shade house, hybrid, greenhouse, different designs, etc. It’s very complex. Some will be round, some will be square, some higher walls, some lower walls.

That’s the grower’s decision. If I want to certify the process of how a car is made, I need to know I’m driving a safe, good car. Greenhouse is inside the category of protected agriculture. Greenhouse has several different definitions — glass, double plastic layers, etc.

Q: What do you think about the California greenhouse regulatory definition?

A: To me, it’s even a joke. It essentially amounts to one paragraph. In California, to be greenhouse, it must be 100 percent enclosed; it can be steel, plastic or glass, and uses a hydroponic system. Here’s how the California definition would apply to a car: It has to be a Mercedes. If it’s a Prius, it wouldn’t count. Why should somebody tell me how to define what constitutes greenhouse?

Q: If the Certified Greenhouse Farmers wants to create a greenhouse standard with a stringent set of criteria to differentiate from product not grown to that criteria, is there any real downside in that?

A: We have a big problem. What’s the consumption of vegetables? In Europe and Asia, it’s approximately 350 pounds of vegetables per person. In the U.S., Canada, and Mexico, it’s closer to 140 pounds. That’s where our focus needs to be. We need to get people to eat more vegetables, tomatoes, eggplants, peppers, and create a culture like the Europeans and Japanese. If we’re able to raise another 100 pounds per capita, the technologies have to be more efficient and produce more.

Protected agriculture is a wonderful thing, allowing us to be more efficient, more sustainable, delivering a better quality safer product, using less water, and being more responsible in terms of the people we’re hiring, invest in training and provide housing. We want good conditions. It’s a great story.

Q: You make an important point that sustainability encompasses many aspects, environmental, economic and social responsibility…

A: The Mexican greenhouse industry created some 9,000 more jobs for the U.S. through our industry. We need more companies supplying to us. We need seeds, fertilizers, pallets, cartons. We want high standards and we want to bring in companies to assist us. We need distributors, truckers, suppliers… How many companies from the U.S. are supplying traceability-related product, plastics, structures…The amount of truck drivers working for this industry is enormous. It’s a great, great story. Mexican Protected Agriculture has generated 250,000 direct jobs and 350,000 indirect jobs. 

Unfortunately, the focus on Mexico has been on very ugly issues, such as immigration. That is 350,000 people not immigrating to the U.S. They’re staying in Mexico, these good decent people. They won’t be participating in drugs and violence that is getting so much attention in the U.S.

Many of these people are fifth and sixth generation growers, great people working in greenhouses that have evolved.

Q: Could you expound on the evolution?

A: In the last 10 years, Mexico has developed its own technologies, exported to North Africa and South Africa, South America and Central America. We’ve been learning the process. In the last 20 years, we’re probably ranked Number Four in the world in protected agriculture, the Number One country is China, Number Two is Turkey and Number Three is Spain.

Q: What would you like to convey to Certified Greenhouse Farmers? Moving forward, do you see a path for working together on common goals?

A: Let’s work on a quality standard that promotes all our requirements. In terms of technology, I’d stay away from it. I think we need a standard in terms of food safety and quality.

As far as standards for greenhouses, each country has them. We have construction codes that greenhouse growers have to follow, and we regulate the safety of our workers, but this is something the consumer doesn’t have to know. I think the difficulty of trying to create a single standard is just trouble. We need to talk about our environment, taking care of our workers… There are a lot of areas we can work on together. I’m not going to work on standards that deceive consumers.

Q: How would consumers be deceived?

A: High-tech active processes are no better. This concept of a single definition for greenhouse-grown and a certification seal to differentiate product at retail is a marketing gimmick. You’re misleading the consumer. I don’t agree in creating a standard to get consumers to pay more. We go to the supermarket, see the quality, worry about the price, and buy what we consider the best value, whether it be tomatoes, bell peppers, or eggplant.

Q: Is there any merit in providing more information to consumers about the product they are purchasing so that they can make knowledgeable decisions?

A: I work for the protected agriculture industry. I have a lot of members with greenhouses. It never crosses my mind when at the supermarket to look for shade house or greenhouse vegetables. What is important is to make sure product is safe, good quality, and what the consumer wants.

Q: Are you finding any pushback from retailers questioning whether product is greenhouse grown? Is there increased demand for greenhouse labeled product?

A: Through Mexico’s protected agriculture industry, we’re meeting requirements in terms of safety, quality and being competitive. Retailers care about quality. In survey after survey, retailers’ main concerns are insuring a year-round program of safe, quality product.

Q: Do you think there is a need for more consumer education on these issues?

A: I may be wrong in saying this, but maybe we should start explaining to consumers what protected agriculture is all about. Some consumers view protected agriculture as artificial. We have to talk about how we’re enhancing nature.

It’s not artificial. It’s cleaner. We’re not using pesticides. We’re managing pests in a different way and not bombarding fields with chemicals. With protected agriculture, we’re using 75 percent to 80 percent less water to grow vegetables, not just opening and flooding fields. Within our greenhouses, we’re using less land to grow vegetables, being more efficient per square meter, and a lot of our members are reforesting and planting trees.

Q: What you describe is a spectrum in the protected agriculture arena, a range of different methods and processes being implemented, rather than one particular standard…

A: Right now this is just the beginning. A lot of growers are being more environmentally responsible; our job is to support them through this evolutionary process.

Q: In what ways?

A: We have a program within our membership, our 2012 Bullet Proof program. It focuses on five labels: Number One is food safety, an international benchmark food safety system. Companies have to be on board with the Global Food Safety Initiative (GFSI); Number Two, you have to be in line with all requirements for destination and origin, and align with FDA; Number Three, you have to be on board with the PTI traceability initiative; Number Four is about responsibility, right now incorporating socially responsible programs and environmental requirements, with standards to measure and show results. And Number Five, to be proactive on a monthly basis, beyond the requirement for an annual third-party audit and certification. We’re pushing our members to self audit once a month, compare results with their third-party audit and report to us.

Q: As the protected agriculture industry evolves, what are the key points you want our readers to know?

A: Mexico has changed dramatically, making huge investments in food safety and technology. It is the only way to stay competitive. In Mexico, my grandparents were growers and their fathers were growers, and more likely, the next generation will be growers. Being efficient and being competitive is critical to our livelihoods. Cost structure is all important.

In Mexico, protected agriculture spans 20,000 hectares, around 37,000 acres. We have been converting open fields into protected agriculture. It’s not new areas of production, it’s converted. Between 30 percent to 35 percent of production is in the domestic market. We have 120 million mouths to feed. Around 60 percent goes to export markets, U.S. and Canada mostly, and 95 percent of our exporters are in our memberships.

This industry is about perceptions. Let’s do a standard, but focus on food safety and quality. Technology is being used in every single category of protected agriculture to enhance nature. These days, growers are educated businessmen making decisions on how to deliver the best product.

Our organization’s five requirements are internal, not a marketing tool. It’s about keeping a standard as a state-of-the-art industry and organization. We’re not marketing a label. Our main value is that to be a member of our organization, you uphold these requirements, so the industry knows what they are getting.

While nobody can be opposed to honest marketing and presenting consumers with clear options, the real question is: Do consumers care if their produce is grown in an actual greenhouse? Put another way: Does consumer preference for greenhouse-grown produce simply reflect a number of qualities that congeal around greenhouses but that may or may not be available in product grown under other growing systems?

It is a free country, so if some group wants to trademark a logo, set criteria for its use and then promote that logo to consumers – well, more power to them.

The industry as a whole, though, may want to be cautious about any legal standard, and retailers may want to be cautious about endorsing any standard at all. After all, declaring a standard is not really a neutral act. So efforts to promote “greenhouse-grown” are inevitably claims that field-grown produce is, in some way, inferior.

It is clear why greenhouse growers would like this, but it is not clear why the produce industry writ large would want to endorse the comment.

Consumers may well value more flavorful produce, more resource-efficient growing techniques, fewer pesticides, less risk of food safety problems – but it seems unlikely that one growing technique will always and in all places optimize all these things.

More likely, different growing techniques will produce the optimal mix of traits at different times and in different places. Perhaps the industry ought to focus on producing useful tools that might help consumers to judge all produce, however grown, on the basis of flavor, the sustainability of the growing methods, the relative risk of food safety problems, etc. This seems the kind of program the whole industry could get behind.

Without Clear Proof, Industry Suffers From Mango Recall And Is Left To Defend Itself

We’ve heard from Dave Westendorf before:

Pundit’s Mailbag — Produce Pricing Strategies… Does Stater Bros. Do It Better Than Safeway?

Now he weighs on a subject he is, unfortunately, very close to:

Some Thoughts on the Daniella Mango Recall

I'm very close to Daniella mango recall situation as I sold the mangos to North American Produce of Vancouver, BC, that are the subject of the Canadian recall. I think most people will find it interesting that at this time, not one single mango has been detected with any salmonella contamination.

The Canadian Food Inspection Service (CFIA) determined that a common factor linking the salmonella-infected people was that they had consumed mangos. When that was decided, CFIA traced the source(s) to the retail level and determined that Daniella label was the most common brand of mangos in those stores. It was traced to North American Produce, which was the only company that had imported that label into western Canada during the time period the infections occurred. North American immediately voluntarily recalled all the fruit still in distribution.

The situation is similar in California, where 67% of the 70+ infected people had eaten mangos. The California Health investigators have followed Canada's lead in naming Daniella label mangos as a likely source, not the definitive, proven source.

This situation is not like the North Carolina or Indiana cantaloupe incidents where contamination was proven with positive links to the suspect facilities. A very good company, Splendid Products, the US distributor for the Daniella grower, has been critically damaged through no fault of its own. Upon finding out their product was the subject of the Canadian recall, Splendid immediately ceased sales and voluntarily began recalling all Daniella mangos.

If Daniella mangos were the source, the blame goes to the grower, not Splendid, which was only acting as sales agent. Sadly, Splendid will take the hit because of its position in the supply chain. Every warehouse facility that Daniella mangos passed through in the distribution channel is third-party certified. Every company involved acted responsibly in operating clean, independently certified facilities and both North American Produce and Splendid Products can be commended in placing food safety and consumer health over every other business motive by initiating voluntary recalls.

Statistically, some 125 incidents of infection out of perhaps two million Daniella mangos consumed during the recall time period is insignificant, obviously except for the people sickened. Fortunately everyone who was infected is recovering at this time. It is a very sad situation, both for the affected consumers and Splendid Products.

I think our health officials do a good job, but sometimes innocent people get hurt. That's currently the case with Splendid Products and in a macro sense, with all the members of the fresh produce industry who place food safety foremost in importance in operating their businesses.

What is happening to Splendid could happen to any one of us. The public needs to know that food safety is viewed by the produce industry as the single most important factor in conducting business, and any incident like this one which is not yet explained is very painful. We want to sell clean food, and our worst nightmare would be finding ourselves in a situation that could put us out of business, yet one that we had no control over, and where the true source of contamination may never be proven.

—Dave Westendorf
Bay Area Produce
San Clemente, California

We appreciate Dave’s note, partly because it is heart-felt and thoughtful and partly because it gives us an opportunity to review many attitudes commonly shared in the produce industry — attitudes that although “true” may still require reexamination. Let us look at four specific points Dave makes:

1)   “If Daniella mangos were the source, the blame goes to the grower, not Splendid, who was only acting as sales agent.”

Where “blame” or, more precisely, “liability” rests in the supply chain is actually a public policy choice. Perhaps in some metaphysical sense, one could claim that blame always belongs with the producer for foodborne illness that has its roots at the farm — although a caveat here is that just as we don’t know for certain the Daniella Mango was at fault, we also don’t know where in the supply chain any contamination occurred if, in fact, it did occur.

In the US, we have a liability scheme that holds the producer of food primarily responsible. Others in the supply chain can be held responsible but typically only secondarily, if, say, the grower/shipper is insolvent and can’t pay its bills. The practical consequence of a liability regime such as this is that the primary focus of food safety policies at retail is to make sure that one’s vendors have sufficient liability insurance.

A retailer can demand audits, inspect fields, etc. It typically has zero impact on the retailer’s liability because, typically, the retailer is not liable at all. This contrasts with other jurisdictions, such as the United Kingdom, where liability is shared and the retailer is expected to exercise due diligence.

The big advantage of the American system is that it facilitates commerce. If any organization or any person can buy and resell any legal product, the barrier to entry in business is low. It facilitates a kind of entrepreneurial economy that produces wealth and innovation. One could argue that, long term, such wealth and innovation is more important to food safety than anything else.

In the short term, however, the argument for laying liability with the producer is less certain. The obvious call is to say that the producer has the most control over food safety, so laying liability here makes sense. A more sophisticated assessment, however, might say that buyers, with the power to prioritize demands and the power to determine what they are willing to pay for, and what they are not willing to pay for, may establish the parameters under which producers operate.

For example in our initial piece on the Jensen Farms cantaloupe situation, titled, THE CANTALOUPE CRISIS — The Truth That Dare Not Speak Its Name: The Priority Can Be Safe or The Priority Can Be Local, But It Cannot Be Both, we raised the question of whether retailers weren’t prioritizing “local” above food safety, a possibility that seems to be reinforced by more recent food safety issues among locally grown cantaloupes.

In a piece we ran way back in the Spinach crisis, which we titled Tale of Two Buyers,we pointed out that buyers were not, in fact, paid to buy safer food. This situation has not changed

Now we doubt that focusing liability on sales agents would make much sense. After all, they work under the same strictures that producers do, but we have written about the issue of shifting liability in the supply chain in a piece for The New Atlantis titled, How to Improve Food Safety.

Food safety experts generally agree that the top foodservice chains do a better job on food safety than the top retailers. Of course, under the law, restaurants are the “producer” of the food they sell to customers, so they have primary liability. That may explain a lot.

2)  “Every warehouse facility that Daniella mangos passed through in the distribution channel is third-party certified.”

As we wrote in our piece analyzing the reaction to the news that the Jensen Farms facility was, in fact, audited — a piece we titled When It Comes To Audits…Retailers Get What They Specify — this type of talk tends to obscure as much as it reveals.

Audited by whom? Audited for what? Audited to which standard? Obtaining what score? What was in the comments?

And why the focus on “warehouse facilities”?

In fact, most of these audits are not designed as failsafe mechanisms; they are more designed as tools for continuous improvement.

On the one hand, this story is a story of another challenge for traceability. It is not enough to know what supply chain the product traveled through; one also needs to know a lot about each step. In other words, the reason this letter didn’t claim that every facility the product touched was GFSI-certified is that such a claim is difficult to verify — even for someone integral to the supply chain. For an outsider to have confidence to this level is almost impossible.

On the other hand, this idea that a third-party audit is some kind of badge that participants in the supply chain can use to prove themselves exceptional is belied by the fact that third-party audits are so common. In other words, one of the things that the Jensen Farms situation brought front-and-center was that being audited does not mean one is world-class, following best practices, etc. — it often just means that one is in conformity with industry standards, which may, or may not, be optimal food safety practices.

3)  “Statistically, some 125 incidents of infection out of perhaps two million Daniella mangos consumed during the recall time period is insignificant, obviously except for the people sickened.”

One useful bit of research for the Center For Produce Safety to pursue would be to support research trying to better define the true scope of outbreaks. There are all kinds of numbers out there, and we need to better understand the relationship between the published number of verified cases of illness with the total number of people impacted by the pathogen. We also need to distinguish qualitatively between people who get identified and those who do not .

We know that of the many people who come into contact with a pathogen, only a smaller subset becomes ill and, of those who fall ill, only a subset are seriously ill. Understanding the scope and effect of foodborne illness could help make better public policy.

On the other hand, the numbers may not really matter at all. It is one thing to sell a product that, if improperly used, can cause injury. Every car can do that. Consumers have the right to assume that a product — when used as intended — is safe. The produce industry is complicit in raising consumer expectations for safety because the trade is hesitant to raise doubts about safety and so tries to avoid warning labels etc., that would change what “used as intended” means.

We put expiration dates on some products, but don’t want to say: DO NOT CONSUME AFTER THIS DATE — PRODUCT MAY CAUSE ILLNESS OR DEATH. Even admonitions to wash, though supported by the industry through separate programs such as Fight BAC, are rarely included on labels or stickers for fear of alienating consumers.

Indeed, the government approaches the whole issue from the perspective of statistical food-safety benefit rather than individual responsibility. So, for example, the government does not endorse a recommendation that a consumer wash pre-washed salad mixes. This is not necessarily because it wouldn’t, if done properly, enhance safety. It is because, given the reality that many consumers will not properly sanitize their kitchen before starting, there is more likelihood that consumers will cross contaminate the lettuce with salmonella from the raw chicken they just washed than they will eliminate a food safety problem on the salad.

The big issue may not actually be a food safety one, but, once again, a public policy and legal liability one. Public policy may pay lip service to zero tolerance for food safety problems, but, in reality, the priority for making inexpensive and healthy food available for the population is such that public policy efforts are not likely to support the enormously expensive measures that would be required to eliminate food safety concerns entirely — if that is even possible.

So there will always be food safety outbreaks… the question thus becomes how damages should be calculated. It is one thing to hold companies responsible for actual damages caused by their actions — loss of wages, medical care, etc. When one starts to go beyond that — punitive damages, etc. — in cases where there is no negligence or mens rea, the “social contract” with farmers — whereby food is produced in accordance with reasonable industry standards and consumers understand that an unfortunate side effect of our societal desire for inexpensive food is that there will be occasional food safety outbreaks — breaks down.

4)  “The public needs to know that food safety is viewed by the produce industry as the single most important factor in conducting business.”

Anyone involved in the produce industry knows that there is a much higher level of consciousness regarding food safety than existed 15 years ago. Among the larger producers, this is a sea change. It is a consequence of a series of food safety battles that the industry has weathered. We have covered many topics on this matter, ranging from…

Botulism And Carrot Juice Summary

Buyer-led Food Safety Initiative Recap

Cantaloupe Listeria Outbreak

FDA Import Alert: Honduran Cantaloupe

Food Safety Roundup

Foodservice Discussion On Food Safety Round-up

NRA Food Safety Round-up

Pistachio Recall

Salmonella Saintpaul

Spinach Crisis

Sprouts Round Up

But food safety is always just one of many values that are constantly being weighed and measured against each other. It is interesting to follow the aftermath of the Jensen Farms outbreak and note how little has come of it despite its serious nature and 33 fatalities.

On a legal and regulatory basis, the government-issued report clearly states that a failure to pre-cool cantaloupes is likely to contribute to food safety problems. Yet no law has been passed or regulation released forbidding the sale of non-pre-cooled cantaloupes. In other words, the government is saying that from a public policy perspective, the interest in food safety is outweighed by the need to protect small scale, local and geographically diverse deals.

And we know of no retailer who has, subsequent to the outbreak, issued a ban on receiving non-pre-cooled cantaloupes. This means that providing local or being price-competitive is, in fact, more important than food safety.

This is all far afield from mangos, but despite the fact that food safety is always front-and-center as an issue and no one in the industry wants to get customers sick, there are many issues and concerns — safety just one of them —and it is in some ways not being forthright with the public to fail to point out these competing interests.

One final question yet to be fully addressed is that the industry has to be cautious about denigrating epidemiology. Although finding a “smoking gun” in the form of a pathogen on the produce and in the packing plant that matches what was consumed by consumers is desirable, as it removes all doubt, epidemiologist are able to make connections much as detectives could solve crimes long before we had DNA evidence. More effective than simply dismissing epidemiology would be having access to better epidemiologists that are capable of seeing the flaws in the government’s epidemiological case — when such flaws exist. 

Although a few large companies have top epidemiologists on retainer, most famously, Chiquita/Fresh Express who retains Dr. Michael T. Osterholm, who we interviewed during the salmonella St. Paul crisis for a piece titled Dr. Michael Osterholm, Esteemed Authority On Public Health, Speaks Frankly About The FDA, The CDC And The Incompetent Management of the Salmonella Saintpaul Tomato Outbreak Investigation, most produce companies do not. As a result, they haven’t the foggiest idea if the government’s epidemiological case is strong or weak.  

One of the most valuable things our trade associations could do for their members would be to get a prominent and respected epidemiologist on retainer and make him available to produce firms having a need. Effective analysis of the government’s epidemiological case would be more influential than simply pointing out a lack of physical evidence.

We thank Dave for this letter. It is a cri de couer, and we too feel the pain and anger that good people have their businesses and lives destroyed when they have done nothing wrong — just sort of randomly being victims themselves to a pathogen.

Now Accepting Nominations For Joe Nucci Award For Product Innovation

It is now seven years, yet it is so real to this author that it feels like yesterday that Joe Nucci, the then President and CEO at Mann Packing and prospective Chairman of the Board of PMA, died while on vacation with his family and the Pundit’s family at The Animal Kingdom Lodge at the Walt Disney World Resort. We memorialized Joe at his funeral and with a piece titled Saying Goodbye To Joe Nucci.

This year, at The New York Produce Show and Conference, presented by the Eastern Produce Council and PRODUCE BUSINESS magazine, we will continue a tradition we started last year of honoring Joe and his creative spirit by presenting The Joe Nucci Award for Product Innovation in Service of Expanding Consumption of Fresh Fruits & Vegetables.

Last year, the prize was accepted by Matt Curry, President of Curry & Company, for the innovation demonstrated in producing and marketing his company’s Vidalia Sweet Carrots, which perfectly tied into both the high flavor and local trends.

The prize was presented in the presence of Joe’s three sisters — Lorri Koster, DeeDee Reyna and Gina Nucci (pictured left to right) — and it was a way of creating a living monument to Joe, in which the creativity of the industry shall stand forever, as a constantly changing mural, saluting the ideas that Joe held dear and that he expressed by promoting so many innovations, including broccoli cole slaw.

Now we are soliciting nominations for this year’s award. Does your company have a product that represents the best in innovation that will lead to increased produce consumption? Do you know of a vendor or a customer that is on the forefront of such innovation?

If so, please submit a nomination right here.

If you would like to be at the General Session where the Joe Nucci Award for Product Innovation is being presented, please consider registering for The New York Produce Show and Conference here.

Hotel information is here.

Travel discounts can be obtained here.

Increasing Produce Consumption One “Hot Banana S’More” At A Time

An obvious hole in the produce industry’s public communications is that nobody has taken up the banner of promoting fresh produce based on anything other than its health-related qualities.

We have never understood the point of transforming such wonderfully diverse and delicious products into medicine, and we would further say that the evidence is slim indeed that this kind of marketing by the produce trade boosts consumption.

Let us suggest an alternative that is far more likely to succeed. The Pundit family spent Labor Day weekend with family up north. Among other things, this meant time around the fire pit roasting marshmallows and eating s’mores. Yet the real winner around the fire pit was a produce item.

In the accompanying photo, you see Jr. Pundit Primo, aka William, enjoying a “Hot Banana S’More” —  you take a banana, slice it lengthwise with the peel still on, stuff the banana with marshmallows, chocolate, crumbled Graham crackers and other delicacies, wrap it in aluminum foil, throw it on the flame and let it all congeal to a yummy goo. Take it out of the fire and, well, you look at William’s face and you see the enthusiasm with which the results are received.

In choosing to not promote things such as this because – horrors – the recipe includes marshmallows or chocolate, the industry is fighting for market share with one hand tied behind our collective back. 

Pundit’s Mailbag —
When Confronted With A United/PMA Merger Question,
What Would Jesus Do?

Among the many letters in response to our articles on the United/PMA Merger, we received this one that brought in a reference to a well known Christian bible verse:

Just when I thought your opus was complete, you outdid yourself again. Thank you for inspiring me on this matter. I've been mentally beat down after this failed merger as I felt industry asked us/me to perform a duty while I served on United's board & I did not deliver - yet.

Cheers (John16:33) & Shalom !!

—Fred Williamson
Andrew and Williamson Fresh Produce
President and CEO
San Diego, California

The bible verse that Fred mentions is as such:

33 These things I have spoken unto you, that in me ye might have peace. In the world, ye shall have tribulation: but be of good cheer; I have overcome the world.

John 16:33
King James Version (KJV)

The gist of meaning is clear: That as difficult as our state might be in this world — whatever our trouble and tribulations — we ought to still take heart. We can know peace not because life is easy but because our difficulties are temporary. The hardness of life prepares us all for eternal glory which is guaranteed.

The Greek version of this verse contains the word thlipsis as the word for “tribulation.” That word is about trouble and affliction. It comes from a root meaning “to crush, to press, to break.”

Interestingly, though, the Hebrew text uses a different word with a slightly more complicated meaning; it uses the word tsarah. Tsarah refers to both a threatening enemy or rival, and a time of extreme affliction or stress.

Of course, Jesus may have spoken Hebrew at times, so sometimes looking at the Hebrew text can add meaning. The verse can be read as enjoining us to a battle that it is certain we will win. We don’t know the timing, but the result is inevitable. We ought to organize our lives within the context of this inevitable victory.

We have written so much about the issue of a merger between United and PMA and have always known there are valid arguments to be made for many possible outcomes.

The ending of the most recent talks has been unsatisfactory and will result in substantial degradation in the esteem in which both national associations are held. Industry leadership failed at the key obligation to either complete a merger or explain why it is undesirable to do so.

Although we have explained that the focus on the CEOs as a cause of collapse of the talks is overstated — that these men became proxies for disagreements over the nature of the association — still, the fact that it all collapsed around this leaves a scent of self-dealing that can’t help the associations grow in esteem.

Private companies haven’t come out so well either. Many called us filled with anger and vituperation in the days following the collapse of the talks, vowing to push the matter. But, in the end, it appears few care enough or are brave enough to press the matter in any real way.

The verse that Fred sends us is Jesus talking to his disciples and advising them that because of his actions, his willingness to go to the cross, the temporal concerns of the world will be transcended. In sending this verse, Fred holds out the hopeful thought that the tribulations of the trade are difficult but also temporary and the result inevitable. Of course, that raises a question of leadership.

The verse doesn’t preach that good outcomes are preordained; it explains that because of Jesus and his actions, the result has been determined. So the logical question in analogizing to the United/PMA merger talks is this: Who is to be our Jesus?

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