Leafy Green Marketing Agreement Reviews Its Audits And Actions: New Report Released

It may seem like the tail that wags the dog, but sometimes the key evidence showing high standards being upheld is that some won’t make the cut. The California Leafy Green Products Handler Marketing Agreement has reported two decertification actions:

The following handlers are signatories to the California Leafy Green Products Handler Marketing Agreement who are currently decertified or who will not be certified:

• Farside Farms, Coalinga — decertified February 18, 2008 — March 3, 2008
• Fresh N’ Healthy, Hollister — decertified February 18, 2008 — March 3, 2008

It has also reported four members pending certification, including two who are ineligible for certification until April 1, 2008:

The following handlers are signatories to the California Leafy Green Products Handler Marketing Agreement for whom certification is pending:

• Access Organics
• Ben Abatti Farms, LLC, El Centro — Ineligible for certification until 4/1/2008
• San Diego Specialty Produce, Chula Vista
• Abbate Farms, Merced — Ineligible for certification until 4/1/2008

The willingness to decertify or not grant certification is essential to the overall credibility of the program. Another mark of credibility is the willingness to submit oneself to regularly reviewing the status of the program and of releasing those reports.

We’ve had the opportunity to review the LGMA Status Report covering July — December 2007. It is hard to overstate what a superb job the staff and board members have done in compiling and releasing this report. They have set a new standard of competency and transparency for the food industry.

Here is the way the board announced the release of this first status report:

CALIFORNIA LEAFY GREEN MARKETING
AGREEMENT RELEASES FIRST REPORT
ON PROGRAM AUDITS AND ACTIONS

Only seven months since government inspectors began conducting mandatory food safety audits for members of the California Leafy Greens Handler Marketing Agreement (LGMA), the organization today issued its first Status Report. The report details all audit findings from July through December 2007 as well as other actions undertaken since this unique and unprecedented food safety program was established.

“This report underscores the huge strides made by California’s leafy greens industry in the last year,” said LGMA CEO Scott Horsfall. “The most important news, of course, is that there were no reported food borne illnesses associated with California leafy greens in 2007.”

The LGMA was formed in the spring of 2007 in response to a food borne illness outbreak in September 2006. Operating with oversight from the California Department of Food and Agriculture, the LGMA is a mechanism for verifying through mandatory government audits that farmers follow accepted food safety practices for lettuce, spinach and other leafy greens.

“The California Leafy Greens Marketing Agreement is an appropriate response to reduce food safety outbreaks associated with leafy greens,” said Dr. Trevor Suslow, extension specialist with the University of California, Davis who was part of a scientific panel which has reviewed the LGMA Status Report. “The LGMA clearly has the right elements in place with a structure which includes a government auditing program, a body to act on infractions and a system of consequences which have financial implications for those found to be out of compliance.”

The Status Report released by the LGMA provides summary information from these mandatory audits and as well as other food safety activities which have taken place since the LGMA’s creation. Among the report’s highlights:

• 368 audits of leafy greens farms by trained and certified government inspectors were conducted from July 23, 2007 to December 31, 2007.
• The audit includes five specific areas of inspection with several “checkpoints” that inspectors must review for compliance. There are a total of 184 checkpoints which government inspectors must verify during an audit. The audits determined that the overall compliance with the LGMA food safety practices is really quite high with LGMA member companies being in compliance with 99.3 percent of the checkpoints audited.
• Those audits resulted in 457 citations for non-conformities. None involved shipping unsafe product. Many of these citations involved incorrect or incomplete record-keeping or minor infractions that could be fixed on site in the presence of government inspectors.
• Members of the LGMA have significantly enhanced internal food safety systems involved in the production of leafy greens and food safety expenditures by LGMA member companies have increased by 201 percent since September 2006.

Included in the report is also an explanation of the LGMA structure and procedures, details about the mandatory government audit program, the audit results and a survey of food safety practices initiated by LGMA members in the past year. An analysis by the panel of food safety scientists who reviewed the LGMA Status Report is also provided.

The LGMA is at the forefront in developing and implementing a comprehensive and effective food safety program, which can be a model for the entire produce industry,” said Tim York, president of Markon Cooperative and co-lead of the Buyer-Led Initiative on Food Safety. “As a buyer of leafy greens, I applaud this organization for moving so quickly to shore-up confidence for both the produce buying trade and consumers.”

“The goal of LGMA members is to protect public health and ensure our consumers enjoy a safe and healthy product,” said Joe Pezzini, chairman of the LGMA Board of Directors. “With the creation of the LGMA we can say that, now more than ever, the California leafy greens industry is producing a safe, delicious and nutritious product that consumers can buy with confidence.”

Scott Horsfall, Chief Executive Officer of the California Leafy Greens Products Handler Marketing Agreement, highlights many of the achievements of the marketing Agreement during its start-up phase:

Report from CEO Scott Horsfall

The LGMA is made up of companies (usually referred to as handlers) that ship and sell lettuce, spinach and other leafy greens products. These companies provide leafy greens products — both raw and processed — to the world’s grocery stores, restaurants and institutions. Working with hundreds of farmers, the 116 signatory member companies of the LGMA ship and sell over 99% of the California leafy greens products that ultimately reach consumers.

The LGMA, operating with oversight from the California Department of Food and Agriculture (CDFA), is a mechanism for verifying that farmers follow food safety practices for lettuce, spinach and other leafy greens. Farmers, shippers and processors have demonstrated their willingness to follow a set of food safety practices by voluntarily signing onto the LGMA. Once a company joins the LGMA, it becomes mandatory for that member company to sell and ship product only from farmers who comply with the LGMA accepted food safety practices.

This report covers the LGMA’s activities for the months of July through December 2007. During this period of time, the LGMA:

• Secured the participation and signature of 116 California companies
• Reviewed and accepted Good Agricultural Practices
• Reviewed and accepted mandatory audit protocols for government inspectors
• Conducted educational seminars for farmers, shippers and processors
• Launched the mandatory audit program of its members
• Released the Service Mark, which buyers use to identify which companies are members of the LGMA
• Reviewed 368 government compliance audits
• Conducted a survey of its members to determine their level of commitment to food safety practices

This report underscores the huge strides made by California’s leafy greens industry in the last year. By putting in place an unprecedented program based on mandatory government audits, the industry continues to make food safety a number one priority.

— Scott Horsfall
Chief Executive Officer
California Leafy Green Products Handler Marketing Agreement

Launching this type of effort, under the pressure of a fast approaching season start, is no small thing. Commendations are due to all involved.

Yet this report is exemplary in ways not fully emphasized in the press release. Long after the specifics of how many people were audited and how many passed and failed have been forgotten, the report will be held up as an example for these reasons:

1) The report publicly details the focus of the audits:

Audit Information

LGMA audits are designed to determine whether or not a member company is in compliance with the food safety practices accepted by the LGMA board. The industry’s goal is to protect public health by minimizing potential sources of contamination into the fields and farms producing leafy greens. Member companies are audited on a regular and random basis at least four times per year.

The California Department of Food and Agriculture (CDFA) employs certified inspectors to conduct LGMA audits. These inspectors operate with oversight from CDFA, but are certified and trained by the United States Department of Agriculture (USDA) under the auspices of the National Good Agricultural Practices Program standards. The National Good Agricultural Practices Program was jointly developed by the USDA and the Federal Food and Drug Administration (FDA).

LGMA inspectors also receive special training regarding the LGMA food safety practices. Members of the LGMA have agreed to tax themselves to collectively pay for the expense of these mandatory government audits.

Each audit is done using a comprehensive, detailed audit checklist, a 23-page inspection document that ties closely to the food safety practices accepted by the LGMA board. The audit covers five main areas:

General Requirements — Member companies are required to have a complete food safety compliance plan, an up-to-date list of growers, and a written traceback program.

Environmental Assessments — Pre-season and pre-harvest assessments are required to make sure conditions that can affect food safety, such as animal intrusions, flooding, proximity to animal feeding operations, etc. are not present, or have been properly mitigated.

Water Use — Extensive testing and record keeping for all sources of water used in the production of leafy greens is required by the program.

Soil Amendments — Extensive testing, certification and record keeping for soil amendments, including compost and fertilizers, are required by the program.

Worker Practices and Field Observations — Field audits verify that farmers are in compliance with the program’s requirements in the areas of worker practices and field sanitation.

2) The report publicly details the kind of questions auditors are asking:

Audit Information

The audit includes the five specific areas of inspection with several “checkpoints” that inspectors must review for compliance. The following is an example of actual questions found on the audit checklist:

Is a written Leafy Greens Compliance Plan, which specifically addresses the best practices of the LGMA, available for review?

Does it specifically address the following subjects consistent with the LGMA:

• Water
• Soil Amendments
• Environmental Factors
• Work Practices
• Field Sanitation

These questions verify six distinct audit checkpoints. Each individual audit verifies 184 total checkpoints for full compliance.

The implementation of the LGMA has created a system in which government inspectors verify compliance with accepted food safety practices. If an LGMA member company is found to be out of compliance in any of these areas, that company is issued a citation.

Each citation is recorded at one of four levels, ranging from a Minor Infraction to a Flagrant Violation. The LGMA Compliance Audit Process provides opportunities for member companies to take corrective action on citations that do not pose an immediate threat to food safety and public health.

Flagrant Violations, which could result in a potentially unsafe product reaching the marketplace, result in decertification from the program and discontinued use of the LGMA Service Mark.

The LGMA Service Mark is carried on sales documents, such as bills of lading and shipping manifests, so it is easily recognizable to buyers of leafy green products. Produce buyers help enforce the Service Mark when they only buy from LGMA member companies. For example, Canada and Mexico require that all leafy green products imported from the State of California are from certified member companies of the LGMA. All LGMA member companies in good standing are listed on the LGMA website.

3) The report publicly presents the actual audit results:

Audit Results

The LGMA launched its audit program on July 23, 2007. From that point until December 31, 2007, CDFA inspectors conducted 368 audits. All audit results were reviewed by the LGMA. Audit results showed that 58% of all farms inspected had either no citations or Minor Infractions that were corrected on site while inspectors were present. Forty-two percent of farms inspected required corrective action.

Another way of looking at the audit results is to examine compliance with all checkpoints reviewed by the government inspectors. The table below shows there were 67,712 total audit checkpoints examined during the 368 individual audits conducted in 2007. When looking at total checkpoints examined during these audits, LGMA members were in compliance with 99.32 percent. This means that, while 42 percent of operations audited were found to have citations requiring corrective action, over 99 percent of the total audit checkpoints were found in compliance with the LGMA food safety practices.

LGMA Audit Results

4) The report publicly details the actual audit citations:

Audit Citations

During the 368 audits conducted in 2007 by government inspectors, a total of 457 citations were issued. Most of these were Minor Infractions or Minor Deviations with corrective action taken either immediately or within a few days of the citation being issued.

Below is a table which outlines the 457 citations issued during the July through December inspection period. The table also details the penalties for citations and the corrective actions taken under the LGMA system.

LGMA Audit Citations July — December 2007

Specifics on Major Deviations

Of the 39 Major Deviations assessed in 2007, 31 were due to incorrect or incomplete record keeping. For example, the company was missing records of water testing or the written food safety compliance plan was incomplete.

Of the remaining eight Major Deviations, three resulted from the presence of animals near irrigation sources. The other Major Deviations were as follows: one case of inadequate testing of water used to reduce dust on roadways adjacent to the field; one case of toilet facilities located too far away from work crews; one case of inadequate worker training programs, one case of materials not being properly covered in the field overnight; and, one instance of harvest equipment leaking oil. All companies corrected the problem and are now in compliance with the LGMA.

Specifics on Flagrant Violations

There were three compliance actions taken in the 2007 audit period. One Flagrant Violation was assessed when a company, after repeated minor citations, refused to submit to the required mandatory government audit. The company was decertified from the LGMA for a two-week period and was not eligible for recertification until a successful compliance audit was completed. The company has completed all required corrective actions to become recertified. The second action was taken when one operator failed to correct a series of citations.

This company had never qualified for LGMA certification due to its inability to pass a government audit. The company was declared ineligible for LGMA certification until April 2008. The third case involved a company that failed to take corrective actions to meet all record keeping requirements. After repeated failure to provide the required paperwork, the company was decertified for a two-week period and will not be recertified until the corrective action is completed.

When decertified, a company cannot use the LGMA Service Mark. Buyers of leafy greens products for grocery stores and restaurants help enforce the mark by only buying from LGMA member companies. In addition, decertification results in the loss of markets in both Canada and Mexico which require that all imported product come from LGMA certified member companies. Decertified company names and actions are posted on the LGMA website so they can easily be identified by produce buyers.

5) The LGMA conducted a survey of its membership. In a model of transparency …

A) It was done by a third party

B) LGMA revealed who did the survey, and

C) LGMA posted the complete survey report on its web site, and you can read it here.

LGMA included an overview of findings in its status report:

Member Survey Results

In November 2007, the LGMA conducted a survey of its members to quantify the improvements industry has made in food safety since September 2006.

The survey was conducted and analyzed by Dr. Dennis H. Tootelian of Tootelian & Associates, a Sacramento-based marketing and management consulting firm. Dr. Tootelian is a Professor of Marketing and Director of the Center for Small Business in the College of Business Administration at California State University, Sacramento who has studied and written extensively about all facets of business management and practices.

Below are some highlights of Dr. Tootelian’s findings:

Overview of Key Findings

According to Dr. Tootelian, it is apparent that many changes have occurred in LGMA member companies when comparing pre-September 2006 to the current period. Findings showed LGMA member companies already had a substantial investment in food safety prior to September 2006. On average, LGMA members had at least one staff member dedicated to food safety and a total average dollar investment in food safety related activities of $210,000. On average, companies were conducting approximately 10 water tests per month.

Subsequent to September 2006, LGMA members greatly enhanced their activities. According to study findings, on average LGMA members who responded to the survey more than doubled the number of staff members dedicated to food safety. The average annual financial investment in overall food safety increased from $210,000 to over $604,000 and the number of water tests conducted increased five-fold from 10.68 to 52.23 times per month.

Industry Improvements in Food Safety*

*Based on projections from survey responses

Methodology

A 13-question survey was developed and mailed to all 118 LGMA signatory members in November 2007. A total of 49 responses were received, a 41.5% response rate which is considered high for mail surveys.

The survey results were analyzed by Dr. Tootelian. Projections for the entire industry were made using a weighted average based on product volume represented by the survey respondents.

Overall Spending on Food Safety Efforts. The survey of industry members documents the already significant investment in food safety in the leafy greens industry. On average, prior to September 2006, survey respondents were each spending an average of $210,000 annually on food safety programs and activities, with total investment projected at $24 million for all companies.

Since the 2006 outbreak, however, these industry members have tripled spending. Based on survey findings, industry members are spending on average $604,000 annually on food safety activities. The projected annual investment for all LGMA members is $71 million — up 201% percent from the amount being spent prior to September 2006.

Increased Staffing. Staffing specifically dedicated to food safety has also increased significantly. Prior to September 2006, those industry members who responded to the survey employed an average of just over one employee per company with specific responsibility for food safety. Since then, that number has risen to 2.26 persons per company.

Water Testing. Mandatory standards of the LGMA require members to test all sources of water used in the production of leafy greens for safety.

Accordingly, while more than three in four LGMA members indicated they conducted monthly water tests before September 2006, all report doing so now. Prior to September 2006, the approximate average number of water tests was 10.68 per month, compared to 52.23 per month now. Therefore, it appears that the number of water tests conducted by LGMA members may have increased about five-fold since September 2006, at a projected monthly cost of $3,657 per member company.

Impact on Acreage. Many of the requirements of the LGMA program can have an impact on growing and cultural practices — and in some cases, result in the reduction of available acreage to grow leafy greens. For example, the industry food safety practices impose specific buffer zones between leafy greens fields and neighboring operations that could present a risk (such as cattle feeding operations). Other program elements require farmers to conduct pre-harvest assessments and, should signs of animal intrusion be found, to take actions which could include not harvesting the affected fields.

Survey results indicate two in three of the survey respondents had lost at least one acre of production. About half of the respondents said they had lost up to 50 acres since September 2006. However, the vast majority — nine in ten — said the acreage lost amounted to 5 percent or less of their total acreage indicating there is an impact, but it may not be considered excessive.

Conclusions

It is important to note that significant improvements in food safety systems for individual leafy greens industry members are the result of LGMA mandatory standards. The survey findings are a clear sign of the commitment California leafy greens members have and are continuing to make to protect public health. As more information is learned through experience and research, we can expect leafy greens industry members to respond with changes in their practices and the LGMA will continue to monitor these changes and any impacts.

6) The LGMA’s conclusions are stated succinctly:

Status Report Conclusion

It is our hope that this report clearly illustrates the great strides which have been made in the area of food safety since implementation of the LGMA in March 2007. The LGMA Board of Directors has worked diligently in the last several months to implement this important food safety program and move it forward. With over 99% of the volume of California leafy greens now subject to mandatory audits, the completion of 368 audits by trained and certified government inspectors, the issuance of over 400 citations with corrective actions taken and verified and the completion of the first-ever food safety survey by the leafy greens industry, the Board looks forward to continually reviewing, refining and improving its food safety programs in order to advance the public health goals of LGMA member companies.

Through the creation of the LGMA, now more than ever, farmers, shippers and processors can state with assurance that the California leafy greens industry is producing a safe, delicious and nutritious product that consumers can buy with confidence.

7) Most striking and commendable of all, the LGMA arranged for a review from scientists of the report. It made public the names of who did the review, their assessment of the program and suggestions for improvements:

Third Party Review and Analysis

The purpose of the LGMA status report is to communicate actions and accomplishments of this program as well as demonstrate transparency by providing details of audit citations and overall results. As part of this effort, LGMA sought advice and counsel from a panel of scientists with expertise in food safety and food science. Also included on the panel is the public member of the LGMA Board of Directors whose role is to ensure consumer interests are represented through the program.

Assessment of Program

In addition to reviewing the report for content and clarity, the scientific panel was asked to provide their view of what the LGMA has accomplished to date and to offer some insight into how the program could be improved in the future.

In general, the panel agreed the accomplishments of the LGMA are significant and that the program is clearly moving in the right direction. The following are some of their specific comments:

• The LGMA program is an appropriate response to reduce outbreaks.
• The right elements are in place with: a government auditing program; a body to act on citations; and consequences for non-compliance.
• The actions of the LGMA have resulted in establishing a baseline for future food safety programs.
• It is appropriate that LGMA recognizes the human toll of food borne illness outbreaks and understands this is the reason for taking action to improve industry food safety practices.
• A key component of the program is the follow-up audits for those who are found out of compliance for any citation, even minor ones.
• LGMA’s survey of industry practices should be applauded and will be important in measuring the impact of these food safety practices on small farms and/or the environment.

Areas for Improvement

In looking to future improvements or actions which may strengthen the LGMA program, the panel agreed that long-term success of the program will ultimately be judged by reduction of food borne illnesses associated with leafy greens. However, it was noted that setting some short-term measurable goals would be an appropriate indication of the program’s success.

Some of the panel members noted that, in terms of compliance with total audit checkpoints, there was still room for improvement and encouraged LGMA members to strive for an even higher level of compliance. Panel members also suggested the LGMA look for better ways to communicate with buyers and consumers about leafy greens food safety practices and what they mean. The panel encouraged the LGMA to continue to expand membership with a goal of representing 100 percent of the volume of leafy greens produced in the state.

One panel member stated that food safety is a continuum and emphasized the importance of a system that is truly “farm-to-fork” where all parties involved can take steps to ensure food safety. It was acknowledged that food safety does start on the farm. And, finally, while it was acknowledged the LGMA does not determine standards or conduct research, the panel stressed the need for continuous improvement and leadership in the practical integration of science into every day business operations. Toward that end, the panel urged the LGMA to encourage and support future food safety research whenever possible.

The LGMA and its member companies thank this panel for their valuable time and assistance in painstakingly reviewing the report and providing their input on how best to communicate the information in a thorough, yet concise format. We appreciate the panel’s positive comments, as well as their input regarding future improvements. The LGMA recognizes and values the tremendous expertise of these panel members and welcomes their involvement in the industry’s efforts to continually improve its food safety programs.

That the report is filled with interesting information is without doubt:

• A tripling of industry expenditure on food safety.
• More than doubling staff dedicated to food safety
• An almost 400% increase in water testing each month
• Only 0.7% of all violations — 3 violations numerically — were believed to be the kinds of violations that could result in delivering unsafe product into commerce.
• Perhaps 5% of acreage lost to food safety restrictions.

Yet what really makes this an example for use throughout the world is its thoroughness and transparency. It is the kind of report only issued by an organization composed of individuals who are earnestly engaged in trying to do the right thing.

This report should be circulated to every corner of the globe because, from the garlic growers of China to the berry growers of Guatemala, it really sets a standard for the kind of behavior that will really make a difference.

Everyone involved should be very proud of what they have wrought, and I list below the staff and board members as a mark of commendation. The industry owes these people a great deal.

There is, however, one tiny problem that we need to know the answer to, because it threatens all the good work of all these good people:

Who is buying the product of the firms that are not certified?

There was a battle to get buyers to agree to restrict their supply chains to LGMA product. With over 99% of the supply certified, though, there is no issue of paying over market to get certified product. The certified product is the market.

Some of the non-certified California product may be sold at farmer’s markets, local restaurants and other local venues. This poses some question about whether consumers shouldn’t be informed about the safety status of this product.

But the commercial industry is not off the hook. Some of the names not certified sell through commercial channels. Which retailers, which wholesalers, which foodservice distributors, which restaurant chains, are not demanding certified product?

Right now the industry is focused, but in order to sustain this kind of effort at compliance rates near 100%, anyone who is not certified or who loses certification needs to be severely punished by the marketplace.

We need to be hearing stories of vendors crying with unsold inventory because they lost their certification — and their product is unsaleable or saleable only at the deepest of deep discounts to unsavory players.

That is tomorrow’s challenge. But for today, the industry deserves to celebrate. On behalf of the industry our gratitude to those who have made this report possible:

BOARD AND STAFF

Advisory Board Member

Mitch Ardantz — BoniPak

Jan Berk — San Miguel Produce

Larry Cox — Sunridge Farms, Inc.

John D’Arrigo — D’Arrigo Bros. of California

Dave Eldredge — NewStar Fresh Foods

Alec Leach — Taylor Farms

Barbara Matthews — Public Member

Tom Nunes — The Nunes Company

Joe Pezzini, Chair — Ocean Mist Farms

Eric Schwartz, Vice Chair — Dole Fresh Vegetables, Inc.

Jamie Strachan, Treasurer — Growers Express LLC

Ryan Talley — Talley Farms

Jack Vessey — Vessey and Company

Eric Wexler — Tanimura and Antle

Advisory Board Alternates

Phil Adrian — Coastline / Sunridge Farms

Mike Antle — Tanimura and Antle

Bardin Bengard — Bengard Ranch, Inc.

Joe Canciamilla — Public Alternate Member

Steve Church — Church Bros. Produce

Andrew Cumming — Metz Fresh

John Jackson — Beachside Produce

Lorri Koster — Mann Packing

Ron Ratto — Ratto Bros., Inc.

Tom Russell — Pacific International Marketing

Charles Sweat — Natural Selection Foods

Victor Tognazzini — Gold Coast Packing, Inc.

Staff

Scott Horsfall — Chief Executive Officer

Jonathan Field — Compliance Officer

April Ward — Communications Coordinator

You can read the press release here, the status report here and the member research report here.