Food Law News - EU - 2007

Commission Press Release (IP/07/142), 6 February 2007

CERTIFICATION - Food Quality Schemes under the Microscope

The future of quality certification schemes, their functioning in the internal market as well as their benefits and potential were examined and discussed by stakeholders and experts at the Conference "Food Quality Certification – Adding Value to Farm Produce" in Brussels , 5-6 February 2007. The conference brought together stakeholders and representatives of all interested parties. It follows a 2-year "Food Quality Schemes" pilot project undertaken by the Commission's research arm, the JRC.

"Quality production is a key issue for the Commission, to ensure the future of European agriculture and to promote rural development," said Mariann Fischer Boel, Commissioner for Agriculture and Rural Development. "Quality logos are a good tool to promote quality but they only make sense when it is totally clear what they stand for. Each consumer must have the possibility to know what they mean."

The EU standards for food placed on the market are among the toughest in the world: whether EU produced or imported, all food meets high standards of safety and hygiene. In addition, EU farmers and producers also adhere to detailed rules concerning animal welfare, environmental protection, and labour and employment standards. Compliance with these rules is costly for farmers, who often don't receive a higher price for their products than their international counterparts. Mariann Fischer Boel said that “an EU labelling scheme or logo might be a way to pass the message about EU standards more effectively”. However, she added “I have lots of questions and I know many stakeholders are sceptical”. Further study is needed to examine exactly how an EU label would work.

Certification schemes can assist farmers to communicate better with consumers about food. The best certification schemes can give farmers access to key markets; help consumers make informed purchasing decisions; and keep more of the value-added in rural areas.

However, there are a number of concerns about the ways in which some schemes have developed. Farmers speak of duplicative controls, and high costs for scheme participants. The Commission would encourage scheme owners to use benchmarking, promote recognition and reduce duplicative audits and controls Farmers and first-stage processors should participate in the development and operation – if not the ownership – of certification schemes.

Potential barriers to free movement in the single market must be addressed as well as difficulties for exporters from developing countries. Authorities in the Member States and the Commission must ensure respect of single market rules and prevent abuse of dominant positions or cartel behaviour.

Farmers and stakeholders in developing countries should play a role in the development of schemes affecting imports. Technical assistance should be provided under development aid programmes.

Finally it was agreed that further research was needed into the economics of food quality schemes, in particular impacts on farm incomes and on rural development.

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Given below are the opening and closing presentations from Mariann Fischer Boel

SPEECH/07/64Mariann Fischer Boel
Member of the European Commission responsible for Agriculture and Rural Development
Quality is the (present and) future for European agriculture
Conference on Food Quality Certification – Adding Value to Farm Produce
Brussels , 5 February 2007

Ladies and gentlemen,

Let me welcome you very warmly to this conference on Food Quality Certification, organised by the European Commission's Directorate-General for Agriculture and Rural Development.

I'm very pleased to see so many people here. I hope you have been looking forward to this conference as much as I have. Certainly, a lot of work has gone into it and I'm sure that we have some thought-provoking discussions ahead of us.

I'm very glad to be joined this morning by Commissioner Kyprianou, Minister Seehofer, and MEP Jan Mulder – who has done some very thorough and valuable work to promote the high quality of European agriculture.

Perhaps I could start the substance of my comments to you with a question: "What do you expect to get out of this conference?"

There are many possible answers to this. But I suspect that there's one answer to which most people would assent, even if they would not actually say it aloud as their first reply. That answer would be: "A good lunch".

If you can't get a good lunch at a conference on food quality near the heart of Brussels , I don't know where you can get one.

I don't say this to put pressure on our caterers for today: I'm sure they have done an excellent job. I say it to make a point: for many of us, being particular about our food is central to our quality of life.

Over the next few hours in Brussels alone, thousands of business lunches will take place. The business people who sit down together will expect to enjoy their meal, not simply pass the time. Later, there will be evenings out in restaurants and experiments in the kitchen at home (some of them successful).

So even in one city, in just 24 hours, there will be considerable demand for food that tastes particularly good.

We should take encouragement from this fact. Because all too often, when we look at the processes which are transforming our world, we assume that they are bad news for our farmers and food producers.

We look at globalisation. And we see that the world is contracting in an astonishing way. Supply chains and mass communication become more sophisticated all the time, raising our exposure to competition and to choice.

Then we look at the world's low-cost agricultural exporters. We see a country like Brazil , whose agri-food sector works with low costs and draws on enormous resources of land. And we feel nervous.

But globalisation cuts more than one way. In a world of multilateral trade disciplines, openings for others often mean openings for us as well.

China gives us a good example. Stories about Shanghai bankers drinking two bottles a day of top-of-the-range Bordeaux perhaps reflect the exception rather than the rule. Nevertheless, in a country with a large population and growing wealth, the potential growth in the market for high-value food and drink is enormous.

Globalisation does not mean the end for our agri-food sector. It is a powerful force which we can harness – with the right strategy.

We have some very innovative, competitive producers of commodities in the European Union. They are world-beaters and will continue to succeed on world markets. Biofuels and bioenergy may well bring fresh opportunities in bulk production in the years ahead, as we address the problems of climate change and energy insecurity.

But alongside commodity production, many of our producers will compete best in the high-added-value, high-quality markets.

We can do this.

We can do this because we have a food tradition that is the envy of the world. In fact I should say "food traditions". For centuries, in the various landscapes and climates which make up the wonderful diversity of Europe , producers have been choosing ingredients, refining techniques, building reputations. People all over the world want what we produce, and will pay well for it.

The balance of our farm exports already tilts firmly towards items with a high added value – meats, for example – rather than basic commodities. From 1999 to 2004, such items made up more than two-thirds of the agricultural exports of the European Union of 15 Member States.

Of course, not all of these exports were covered by specific quality schemes and labels. But the products concerned are generally products to which it is possible to add particular "qualities", and certify them. So we have a solid foundation on which to build.

At this point, we should remind ourselves that the word "quality" includes a wide range of meanings in this context. Among these, I might include the following:

This is not an exhaustive list. We could define "quality" attributes more generally as characteristics about the food or its production method that the farmer wants to get across to the consumer, and that consumers want to know about.

In various ways, the Common Agricultural Policy (CAP) has been giving growing support to our agri-food sector in its efforts to compete on quality of different kinds.

The CAP reforms of 2003 and subsequent years are enormous steps in the right direction. Under these reforms, we are essentially cutting the link between direct agricultural payments and production. This leaves farmers free to follow market signals from consumers, instead of sitting up at night worrying over possible subsidy combinations.

Quality is also firmly embedded in rural development policy – the "second pillar" of the CAP.

Since 2003, there has been a specific chapter on food quality in our Rural Development Regulation. This offers financial incentives for farmers to get involved in European or national schemes which improve product quality and production processes, or which certify product quality for consumers.

There is also money to help the food chain co-operate in developing new products, processes and technologies.

And it goes without saying that our rural policy offers a range of ways of making farming more environmentally friendly – thus producing goods with the sound ecological credentials that many consumers value.

Therefore, policy is making a strong contribution to our efforts to compete through high-quality production. But of course, production is only one side of the coin. The other is communication and marketing. We cannot afford to neglect this side.

There is little to be gained from growing the best apples in the world if no one knows how good they are. Likewise, making pork from pigs reared on high-welfare or free-range farms, may be a loss-making activity if the consumer does not know what standards have been respected, and therefore will not pay a higher price.

This is where certification comes into the equation.

As you know, we run a number of certification and labelling schemes at the European level.

But there are also hundreds of schemes which have been introduced over the last few years by local and regional authorities, retailers and the agri-food sector.

These cover a large portion of the market for food and drink products, by assuring and highlighting particular qualities. Many of them have successfully passed clear messages to the consumer and brought producers a better return for their efforts.

The time is ripe to take a closer look at many aspects of these schemes – to understand more clearly how they work, and to check whether anything can be done to help them work better.

We have picked out four areas to be put under the microscope today.

Our first workshop will examine the economics of food quality schemes in greater detail. How much will consumers pay for certified food? Where in the food chain do the schemes add value, and how much? To what extent do farmers and others in the retail chain benefit? And what impact do these schemes have on wider rural development, in terms of tourism, infrastructure and employment?

Our second workshop will be about the rules under which certification schemes operate in the European Union. What types of schemes are there? What is the level of understanding of rules governing labelling, competition and the single market? Can certification schemes help EU farmers communicate better their high production standards?

The third workshop will address the international context. How do our schemes fit in? What impact do they have on imports from third countries? How can we help developing-country suppliers get involved?

The fourth workshop will examine the practical details. What are the difficulties and opportunities of operating schemes? What makes a certification scheme successful? Which schemes work the best in terms of certification and control, benchmarking and mutual recognition?

The Commission is in a good position to organise a conference which examines all these questions, and more. But let me emphasise that I am not waiting eagerly to step in with new rules.

I want to help people to use their energy and creativity. Over-regulation is the kiss of death to such things.

If there are problems - if the single market is threatened, if certification schemes are leading to waste and added cost without benefit, and if regulation is the only way to address these issues - of course I will be open to this.

On one point I can be crystal-clear. Although we must sustain our success in achieving quality, marketing that quality must not take a back-seat. We must produce what people want, and be seen to produce what people want. Only then can our quality policy deliver what is needed.

You can rely on me to take a very close interest in this challenge of marketing European quality.

Ladies and gentlemen, thank you once again for coming, and I very much look forward to hearing what you have to say.

I hope you enjoy the conference. And I should add: I hope you enjoy your lunch....

Thank you.

Mariann Fischer Boel Member of the European Commission responsible for Agriculture and Rural Development
Closing remarks at Conference on Food Quality Certification Conference on Food Quality Certification – Adding Value to Farm Produce Brussels
6 February 2007

Ladies and gentlemen,

We seem to have covered a lot of ground since yesterday morning, and I'm very glad to have this opportunity to make some final comments.

First of all, let me thank you, Chairman, and the Chairs and Rapporteurs of the Working Groups for your excellent work in preparing the workshop reports and drafting our conference conclusions yesterday evening. This sort of work does not become any easier after dinner, but the group kept admirable clarity in its thinking and its drafting.

As Nikiforos Sivenas has just set out the conclusions, I don't intend to list them point by point. Instead, I should like to make a few observations.

This conference gives us a clear reminder that the baseline food production standards to which we work in the European Union market are very high indeed. There are the product standards of safety and hygiene – which are met by all food on the internal market, whether produced within the Union or outside it.

Then there are the extra production standards which European farmers and producers have to respect: related mainly to animal welfare, environmental protection, labour and employment.

We can be proud of these standards. At a time when the public is still nervous about food scares, we should remind consumers that the overwhelming majority of our farmers and food producers respect these very high standards seven days a week, 365 days a year. But, the fact remains, ladies and gentlemen, that these standards carry costs — in terms of cash and competitiveness. I realise that some producers can turn this to their advantage, and raise their game, find a market niche, and raise their prices. But that is not an option for all.

The benefits of the EU's high standards, needs to be put across more effectively to retail buyers and consumers. Some existing certification schemes seek to do this at national or regional level. An EU labelling scheme or logo might be a way to pass the message about EU standards more effectively and ensure that the internal market is not compromised. However, I have lots of questions and I know many stakeholders are sceptical. So I will insist on finding out more about how a possible label would work, what standards it would apply, whether “basic” or “superior”, and how it would fit in with existing schemes.

The fact that more and more producers and retailers are using certification schemes must prove something. And I'm glad that we are beginning to see the results of detailed work which reveals where, when and how the schemes add value and how much benefit farmers see. This work needs to be continued.

We should not be surprised that the various schemes available have not all worked without problems. But we need to be serious about solving these problems.

This means starting out with the right aims in each case.

Schemes should aim to pass clear, accurate message to retailers and to consumers. They should aim to enable producers and retailers to obtain higher returns for qualities which consumers genuinely want.

Certification schemes should be transparent. Lack of openness is not only unfair to the consumer, but also may erode trust in the schemes in the long term.

Also, schemes must not be designed to keep suppliers out of the market nor to discourage cross-border business within the interal market.

Of course, even if we have the right aims, we may sometimes achieve them imperfectly. And even when individual schemes work well, we see that there can be burdensome administrative duplication between them.

We have to be honest about these issues, learn from experience, continue consultations, co-operate where necessary, and solve the problems.

I feel confident that the industry can do this.

There are already encouraging signs of greater co-operation and we have heard of examples of benchmarking and mutual recognition between schemes that facilitate trade between Member States. I see a strong will to make things work better.

Is there a role for the Commission and the other bodies of the European Union? I think there is. But I still have a strong impression that we need to use a light touch – not take a hammer to crack a nut.

I suspect that simple steps at a central level could bring significant gains. For example, we could oblige certification scheme owners to place the specifications of their schemes on the internet, making them accessible to the media and the public.

Another logical step could be to develop a guide or framework setting out what a good certification scheme should comprise. This could cover best practice in operating schemes in the internal market, use of fair labelling, as well as the specific standards to be attained. I can see benchmarking against this kind of guide or framework as a way of greatly increasing the effectiveness of certification schemes.

And it's clear that ongoing research into impact on farm incomes of certification will be important; the Commission may be able to help here.

I am open to hearing about any ways in which I can assist, whether through guidance and co-ordination at arm's length, or through more detailed legislation if necessary.

I have made no secret of the importance that I attach to "quality" of various kinds in our agri-food sector. I say again: it is essential to the future prosperity of this sector.

I said yesterday that communication about product quality was the second side of a coin. In fact, it's more like a link in a chain: if that link is weak, so is the whole chain. Our producers will not get the returns that they deserve if buyers don't know what they are offering.

I have listened closely to what you have said at this conference about communicating quality. The industry wants to raise its game. If you will do your part, I will do mine.

Ladies and gentlemen, thank you once again for coming, and let's get to work.


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