Category Archives: Quality Assurance schemes

WHERE TO NEXT FOR OUR MUCH-VAUNTED QUALITY ASSURANCE?

This post first appeared online at http://www.thatsfarming.com on the 14th August 2017

I have been around long enough to remember the passing of the UK’s Food Safety Act in 1990, it was when I first came across the Defence of Due Diligence. The timing coincided with the rise of the supermarkets and their dominance of the food supply chains and it was easy to recognize that being diligent was going to be a serious activity for those who supplied the nation’s food.

Those who supply food anywhere in our ‘modern’ world must now be able to demonstrate that they have taken all reasonable precautions to ensure the safety of their food and that they have systems in place to demonstrate their diligence. A consequence is that food retailers need to verify their suppliers and processors their sources of raw materials, thus giving rise to quality assurance schemes throughout food and farming. With concerns about resource use and climate change, they now increasingly encompass ‘sustainability’.

These quality assurance schemes must not, however, be confused with premium quality. They are akin to factory-based quality control systems; they ensure the quality of the product, be it aimed at the budget, standard or premium markets. Probably all car manufactures operate QA systems to ensure that their product meets their own determined quality level. With farm assurance, it is about assuring how the product has been produced, be it of a budget, standard or premium quality.

Quality assurance schemes have become a part of Irish farming. It is difficult to sell animals for meat that do not come from quality-assured farms and milk processors are now demanding that their milk supplies are quality assured. For all but those farmers who process their own milk or have niche markets for their meat animals, de facto, being quality-assured is now obligatory. Such nationwide schemes are powerful market-access tools for Ireland’s food sector but they are just that, market-access tools. It is a misnomer to believe that they will deliver a premium farm-gate price.

The achievement of the QA schemes is that they provide near industry-wide farm-assurance for Irish produce. The question is, do they deliver a wholesale rise in farm-gate price across the industry? Do they enhance the value of Irish produce overseas? Scrutinizing the position of Irish beef in the UK market should provide an answer. My own observations are that they only allow retailers to sell farm-assured, due-diligence-box-ticking products in their standard and budget ranges. The QA schemes do not appear to be providing access to the top shelves.

In the beef sector, the breed schemes do provide another differentiator beyond the standard farm assurance QA schemes. But just how effective are they at delivering a significant farm-gate price premium? Angus is now a global brand, probably more so than Hereford, and it is being developed large-scale in places as far afield as Russia and New Zealand. There is, however, an Achille’s heel with the breed schemes, they have no volume control because of their sire-only requirement. In other words, conformation notwithstanding, any old cow and a straw can, in theory, produce another beef-scheme animal. With no limitation on supply, simple economics means ‘success’ will increase supply and erode any existing farm-gate premium down to a break-even price.

The QA schemes may, however, yet prove invaluable, albeit by accident rather than design, with Brexit looming. One does not expect UK supermarkets and food-service providers to change their position in terms of requiring farm-assured products and Ireland will remain well positioned with that regard, not least because of locality. It is, however, not a laurel we can sit upon for long.

The QA schemes are a success, albeit a limited one. Ireland can deliver farm-assured produce to the corporate players in the supply chain, be they retailers, in food service, or processors. On an industry-wide basis Ireland has been a first-mover, but first-mover advantage only remains for the duration it takes others to follow, and they will. Beyond that, what makes Irish produce unique? Yes, there is a value in ‘Irish’ but that only has real value when accompanied by other characteristics.

Simply, we need to be developing new, more in-depth, quality-assurance schemes that are firmly linked to farming practices that the consumer recognizes as imparting quality, be it eating or otherwise. Their development needs to be farmer driven and farmer owned. The products produced and labelled under these schemes then need to be delivered to the market by supply-chains that the farmer can influence to the degree that they deliver a fair return to the farmer-producer. Only then will quality-assurance deliver the market-derived returns that small-scale, Irish farmers need.

Meanwhile, quality assurance as we know it provides a defence of due-diligence for Ireland’s high-throughput-focused processors; but something more is needed to enhance the economic future of the Irish farming family. Quality assurance does provide a foundation stone for enhancing farm-gate prices, but only that. It comes with a cost and it is a cost that many farmers do not easily recognize the benefit of. Much more needs to be done but one sees little sign of it happening, not least because those who should be striving for more do not seem to realize that they have only just begun the process. Quality-assurance schemes can revolutionize the future of Irish farming but there needs to be changes beyond the farm-gate for that to happen. So, when do we start?

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A Centre of Excellence for Quality-Indicated Products

Ireland desires to be a ‘food island’ but for a country with such aspirations it has woefully few European Union- registered designated-origin products. It may appear to be an anomaly but it is a well-founded one as the Irish agri-food industry apparently believes that premium products are created within a factory environment from farm-produced raw materials. An approach that simply restricts the premiumization of the product. Its products can be clever but they will never be recognized alongside the premium products of, say, France and Italy.

The rationale behind the establishment of The Centre of Excellence for Quality-Indicated Products [CEQUIP] is that for Ireland to make the transition to a premium-products food producer, it must first create the products that can achieve high market status. Traceability, in terms of origin and production methods, is absolutely critical. It must, however, go far beyond auditing farms; it must change both production and processing practices.

The products CEQUIP will work with will have their roots in the soil. In France, the highest quality products come from their ‘terroir’ and it is a characteristic that will be required of any food product from anywhere which aspires to being recognized as premium. Good food products may originate from within the factory environment and be manufactured using ‘ingredients’ but premium products will have origins traceable back to the land.

On a similar note, we live in times where ‘innovation’ is the buzz word in the food industry. It is being thrust upon the farming industry as incomes decline and further adoption of ‘technology’ is advocated as the solution. We, however, question whether the technologies of the last half a century have really delivered enhanced incomes to farm households and rural communities. In this light, whilst appreciating that innovation and technology has a role in farming and food production, innovation must be about creating products that are firmly linked to farming practices and produced within the local community. It may be considered ‘retro’ thinking but so be it.

This initiative comes at a time when farm incomes lurch from one crisis to another. It also comes at a time when the farming to food industry is being asked to minimize its impact upon the climate and our natural resources. Amongst the latter are the animals we rear and manage. Thankfully soil health and fertility is rising the agenda fast but we still overlook the welfare of our very food producers and the communities in which they live. We must produce food in fashion that rewards farmers for their time and effort and the use of the assets they own.

The objective of CEQUIP is to address the issues surrounding today’s food production. It may appear to focus on premium products for wealthy people but that is rationalized by saying that Ireland is characterized by small-scale, family-farming-based food producers working in a high-cost economy.  That said, the focus of CEQUIP is to encourage the production of high-quality, nutritious foods that are produced in a way that has a minimal impact upon the Planet and its finite resources. By some, we may be criticised for promoting farming practices that are seen as contradictory to this aim but we believe that those behind CEQUIP are at the forefront of a new agricultural revolution that will deliver both food security and climate-change mitigation.

For several years, we have researched the various designated-origin schemes used around Europe and further afield. Whilst we are aware of the official EU schemes, we do not feel that it is necessary to seek such recognition in the first instance. We consider that it is better to design and implement our own schemes first and only when they are well established to apply, if appropriate, for official recognition. This will allow greater flexibility at the design stage and allow the development of Irish solutions for Irish farming and food situations. It is also not just about developing Protected Geographic Indicators, it is about developing more in-depth schemes that go well beyond locality to include specific farming husbandry practices and food processing techniques. For these we will be investigating the way these are done in countries like France, Italy, Austria, Spain, the UK and the USA. Our plan is to now start by developing a multi-tiered, quality and origin scheme for suckler-reared Irish beef.

IS ANYONE VISITING CHELTENHAM OR AINTREE THIS YEAR?

With so much discussion going on in the Irish farming industry about Brexit and free-trade agreements at present, I thought it was time to ask the Irish farmer to have a look at their primary market, the UK, and the presence of Irish products on its supermarket shelves.

With the annual pilgrimage to the Cheltenham Festival nearly upon us and Aintree soon after, it is a good time to make a suggestion and, hopefully, gain some feedback.

A quick Google reveals that Cheltenham offers the full gamut of UK supermarkets; Asda, Sainsbury and Tesco [where you will find Irish beef] and Lidl, Aldi and Morrisons where you probably won’t. It also has a Waitrose and that is where I suggest one goes if one aspires to being a producer of premium foods. As food retail chains go, few are better than Waitrose.

As one cannot expect a racegoer to spend hours trawling the aisles of supermarkets, I would suggest to focus is on the meat and dairy shelves; that is after all what Irish farming is about; at least when we are talking exports. And please do not just investigate the chilled-produce shelves but also the delicatessen and butchery counters. It is the latter that often, conveniently, use national flags to highlight the country of origin. Just how numerous are the green, white and orange flags of Ireland? The counters are also staffed so do ask for Irish. Elsewhere one may have to read the small print.

So, what to look for? Kerrygold butter is a good starting point as it is likely to be the most obvious. How does it look upon the shelves? Is it asking you to put it in your basket or trolley? How does it compare with the competition in terms of presentation, packaging, its storyline and its price? Does it have unique selling points? And then move on to look for other Irish produce.

Ireland has two near-national quality assurance schemes, both of which are well known to Irish farmers and Irish farmers. Given that Ireland exports a few multiples of its domestic market size to the UK, just how visible and strong is Irish QA scheme presence on the UK supermarket shelves? Do they highlight that the premium status of Irish produce? Do they and other point-of-sale presence of Irish produce say, “buy me, I am Irish and I am special”? One would hope so.

This is only a suggestion knowing that a few Irish folk will be crossing the water soon. But I will go further, if you find yourself in the USA, Germany, the Gulf States or even China and you have an interest in Irish farming and food, please take the time to walk the aisles of the food retailers, it is always a surprisingly enlightening experience.

‘LEGUME-FED’, ‘HERBAGE-FED’ OR JUST ‘GRASS-FED’?

Much is spoken and written about ‘grass-fed’ in Ireland? But how is/will the label be used?

Will ‘grass-fed’ be a characteristic of well-defined, linked-to-farming, designated-origin products or will it be a generic term used to promote all Irish meat and dairy? One expects the latter. And if so, will it meet consumer expectations when others use the term in a more defined way?

Crucially, will an all-encompassing ‘grass-fed’ label raise consumer perceptions to an extent that translates into a positive impact on farm-gate prices and farm incomes? Or will generic ‘grass-fed’ fall foul of strict definition rules or be replaced with labels like ‘pasture-fed’?

I recently visited a dairy farm eastern England. It had thirty-something Guernseys and added value to all its milk. Everything was sold directly to the consumer. It also used lucerne [alfalfa] as its primary forage. It is suited to drier tillage regions and it is a legume. Is it a sign of what we may see across Europe’s tillage regions?

If I was advising a tillage farmer I would be talking about reintegrating livestock back into the farming system. The reasons include improving soil health, raising organic matter levels, carbon sequestration, blackgrass control, fixing nitrogen and income diversity. It will become an increasingly compelling story and one that will change the supply side of milk and meat.

Although it is not a catchy label, I can see ‘legume-fed’, being a part of a broader ‘sustainable’ product story. As a development from ‘grass-fed’ and ‘legume-fed’, how about ‘herbage-fed’? The term ‘herbage’ encompasses many forages types and suggests biodiversity [trendy for the consumer]. ‘Herbage-fed’ then needs to be part of a holistic, designated-origin story that wraps itself around a multi-characteristic consumer-facing product.

Does ‘herbage-fed’ influence the eating experience associated with the product? Does the flavour relates to what the animal eats? From my experiences eating lamb from the biodiverse pastures in Transylvania, I would say that it does. For something closer to home, try Achill Mountain Lamb [www.AchillLamb.ie]. Or just ask a chef. Will they say that there is a link between pasture and flavour? Why else are so many French products tied to the ‘terroir’? Charolais beef, for example, reared under its home designated-origin scheme must be finished on specified, biodiverse pastures.

Irish Beef’s UK website makes the bold statement; “the flavour shows where the best grass grows”. But just how biodiverse is the typical Irish meadow, especially when reseeded with ryegrass and raised up on artificial nitrogen? There is a great variability in Ireland’s grasslands and can it weaken the genereic Irish beef story? Variability is the antithesis of what is required by the Bœuf de Charolles appellation d’origine contrôlée [AOC] scheme in France.

It is also interesting to read that Irish cattle “boast a world-renowned pedigree”. That said, cross-breeding of the beef animal itself is the norm. By contrast, the French AOC schemes are usually breed specific; not least because that restricts supply and scarcity maintains price [a point that the ICSA has now grasped]. Sire-only breed schemes fail on this point. It is difficult not to conclude that the promotion of Irish beef is about talking-up the generic [‘grass-fed’ included] as opposed to beef products linked to specific breeds, locations and farming practices.

By and large, Ireland’s farmers operate in a business-to-business [B2B] environment. They supply processors and factories and do not sell direct B2C [business to consumer]. The B2B mindset pervades the farming and primary [the largely farmer-owned part] processing industry. It is about raw materials [aka commodities] and ingredients for others to process, to add value and to brand. In such an environment significantly improving farm incomes by adding value to premiumize the farm-gate price is near impossible. The value-added attributed to the final consumer-facing product tends to go elsewhere.

A quality assurance scheme has been rolled out over the last few years. In terms of farming participation, it is successful. In terms of consumer awareness in Ireland, it is successful. But does it return a premium price to the farmer?

For exports, is the QA scheme about B2B relations? Does it allow ingredient users and fast-food chains to tick the sustainability box? Does it allow major retailers to put on their label “produced on quality-assured farms”? Is it about ‘quality’ or ‘farm assurance’?

Does the QA scheme elevate the product onto a higher retail shelf? Does it even do so in Ireland? Or is the QA scheme logo found on products across the quality ranges from budget to premium? Are they all quality assured? If so, can there be a QA price premium? Or are we confusing ‘quality-assurance’ [as in QA systems] with ‘quality’ [as in eating quality]?

Should one have similar expectations for Origin Green? Is it a B2B or a B2C scheme? Is it aimed at raising the level of all Irish produce? Is the aim to help the farmer by enhancing export volumes? And will that translate into consumer-derived, farm-gate-price premiumization?

Ireland is successful at developing B2B QA schemes and it may be leading the World in doing so. But does the Irish family farm actually need to be the foundation stone for B2C, designated-origin, linked-to-farming-practices, eating-experience-enhancing products that can achieve market premiums that translate through to premiumized, farm-gate prices?

To come full circle, in Ireland, is the ‘grass-fed’ term about raising the profile of generic produce? As with the QA schemes is ‘grass-fed’ to be all inclusive? Is it again about ‘premiumizing’ commodities? Is it be about enhancing B2B relationships rather than creating the B2C relationships [and premium products] that the farmer needs?

To put it simply, to create a sustainable future for itself, Irish farming needs to move on from the B2B-only environment into a B2C environment. It is, however, the biggest challenge faced by Irish farming since the Emergency; not least because it has yet to begin the process. It has not even arrived at the racecourse let alone began to run the race.

The value of so-called ‘quality’ assurance

At some point in the last 25 years or so, quality assurance systems became all the rage. Some private-sector schemes like organic and Conservation Grade (in the UK) have been around for even longer although their focus is on giving the customer reassurance about the ecological impact of production. When it comes to quality food assurance schemes the original was the appellation d’origine controlee (AOC) system from France. As to generic ‘quality assurance’ schemes, they probably have their roots in the food crises of the mid-1980s and BSE and the enactment of food safety legislation [as for example the Food Safety Act of 1990 in the UK] that required retailers to show that they had shown due diligence in monitoring their supply chains. The rush to create and implement further Quality Assurance schemes appears to still be gaining momentum after the recent horsemeat scandals.

One immediate point to make with respect to Quality Assurance schemes is to question the use of a term that appears to be borrowed from the industrial factory environment [where product quality audits are made at various points within an assembly procedure]. To what degree do the quality assurance schemes used in the agri-food sector actually assure quality? Is the answer, ‘not at all’? Marks and Spencer in the UK uses the term ‘Farm Assurance’ and that is a more realistic title. Another that would better describe what these schemes are all about is ‘Supply-Chain Assurance’ as that is essentially what they are. They are about providing entities within the supply-chain assurance that those upstream have operated to a specific set of rules.

Given their prevalence nowadays [it is becoming a necessity to be quality assured] it is becoming confusing for the final retail consumer to know what is what. And when all the product offerings are quality assured, just how much difference do they make to the consumer purchase decision or the price they are willing to pay? Demanding of suppliers that they are quality assured is becoming a necessity for those in the retail chains, but is it really about giving the final consumer assurance about the quality of what they are buying or is it more about those in the supply-chain ensuring that they have done their due diligence? ‘Quality’ Assurance schemes have added costs to the supply-chain but to what degree has the final retail consumer or the farmer at the other end of the supply-chain really benefited from them?

Ireland has put significant resources into the creation of a number of quality assurance schemes. Their creators also seem to place significant faith in their ability to advance the cause of Irish products within the market place. Is this faith well placed or has the prevalence of other such schemes amongst competing suppliers already begun to negate any such advantage? That is likely to be the case in Ireland’s main beef market where local-to-the-market producers have also been adopting a variety of similar schemes. They also have the advantage of being local producers in a world where being local may actually outweigh being foreign and quality assured. In addition, UK producers have been far faster at acquiring protected origin status for their products (i.e. ‘Welsh’, ‘Scotch’ and ‘West Country’ Lamb and Beef all have EU Protected Geographical Indication status) than their Irish counterparts. These are in addition to being within various independent and retailer-driven quality [or farm] assurance schemes.

Is there in fact a harsh reality concerning the quality assurance schemes. Are they in fact schemes that guarantee that farmers are following the rules although they are just using good husbandry and animal welfare practices? Are they actually doing anything that they would not normally be doing? Are they doing anything that could be considered to be enhancing the quality of the product in terms of tangible consumer characteristics like, with beef, improved flavour or texture? If the answer is no, do the schemes provide any mechanism of improving the returns to the farmer in exchange for the time and effort and costs associated with being quality assured? The answer is probably no. The reality is that quality assurance has become a baseline market entry ‘ticket’ [as the Irish beef farmer is now finding out] that is a must have for a farmer but which thereon provides little tangible reward.