Survey finds standards, testing, IP, and
certification critical for non-GMO production
By Jason Konefal and Lawrence Busch
Co-mingling with genetically modified varieties can occur at multiple points between the seed and the final product. Thus, the success of non-GM corn and soy production is dependent on every actor in the supply chain ensuring the characteristics of the product. To accomplish this, various governance mechanisms are being used. These include: private standards, testing, third-party certification, and identity preservation. A recent survey by the Institute for Food and Agricultural Standards at Michigan State University examined the effectiveness and costs and benefits of each of these mechanisms. Findings on each are reported below.
Private Standards
Nearly all of non-GM production is regulated. When producing or handling
non-GM seeds, crops, and/or goods, 95% of respondents reported that they
had to comply with standards. Sixty-four percent identified these as government
standards, with the most common being United States (organic), European
Union, or Japanese standards. However, private standards tended to be
more common, with 81% of respondents reporting that they had to comply
with such standards. Buyers set private standards 30% of the time; while
22% of respondents reported that they set their own standards.
Testing
Testing for genetically modified organisms (GMOs) has become almost ubiquitous
in non-GM supply chains. Seventy-seven percent of respondents reported
that their products were tested. Testing is done by a variety of actors.
Most common is the sending of samples to testing laboratories, many of
which specialize in non-GM testing. Third-party certifiers also tend to
conduct tests for GMOs as part of non-GM certification. Many respondents
also noted that they tested their own products, while 19% of respondents
reported that buyers test their products before purchase.
The most common form of testing identified by respondents was the rapid strip test, with 56% of respondents reporting that their products were tested using this method. In contrast, 43% of respondents reported that their products were tested using a Polymerase Chain Reaction (PCR) test. Lastly, 30% of respondents reported product tests using Enzyme-Linked Immunosorbent Assays (ELISA). Many respondents reported that their products underwent multiple tests using different testing methods.
Identity Preservation
The idea of identity preservation (IP) has become a focal point of non-GM
corn and soybean supply chains. IP programs are a management tool that
helps to identify areas of possible contamination and design a set of
practices that preserves the identity and quality of a given product.
Seventy percent of respondents reported that they had an IP program. Having
an IP program was generally viewed as beneficial, as it increased customer
trust and confidence, customer assurance, improved market access, produced
higher prices and premiums, and increased sales. Responses were more mixed,
but still positive, as to whether the benefits outweighed the costs of
having an IP program. Causes of additional costs included documentation
requirements, auditing, testing, and certification costs, increased management,
increased storage capacity needs, and equipment cleaning. Generally, respondents
tended to believe that buyers checked to see if they had an IP program;
18% of respondents were required by buyers to establish an IP program.
An outside body accredited 40% of respondents’ IP programs.
Third-Party Certification
Third-party certification (TPC) is a standards enforcement mechanism, where
independent certifying bodies conduct audits to ensure compliance with
a given set of standards. Fifty-eight percent of respondents reported
that their business was third-party certified. Reasons for becoming third-party
certified included: organic requirements, credibility/integrity, verification,
and customer demand. Fifty-eight percent of respondents said that TPC
was required in some export markets, with Japan and the European Union
being the most commonly noted, while a majority of respondents thought
that having TPC made it easier to access export markets.
To receive TPC, 36% of respondents reported that they had to change their practices. Changes included more documentation, equipment cleaning, testing, and segregation practices. Generally, respondents thought that TPC had increased their workload and costs. Respondents tended to view the cost of TPC as too high, and a slight majority of respondents felt that the costs were not fairly distributed in the supply chain. However, the majority of respondents felt that the returns justified the costs of TPC.
Respondents were very confident in their third-party certifiers’ findings, and believed that the TPC process was generally transparent. Respondents also thought that having TPC was quite useful, as TPC assured buyers, improved management responsibilities, enhanced credibility, improved market access, and limited liability. However, respondents were mixed on whether TPC had improved their profitability, with 33% believing that it did, and 21% believing that it did not. For those who reported that TPC improved profitability, TPC was understood as enabling market premiums, improving market access (particularly foreign markets), improving efficiency, and enhancing reputation and credibility. Fifty-eight percent of respondents commented that TPC enabled them to be more confident when dealing with buyers, while 45% of respondents thought that TPC reduced their risks in the marketplace.
Third-Party Certification vs. Government Regulation
Respondents very strongly opposed government regulation and enforcement
of non-GM food and agriculture. In contrast, 60% of respondents believed
that TPC was the best mechanism for ensuring the segregation of non-GM
goods. A large number of responses were rooted in a negative perspective
of government, while some respondents saw TPC as more efficient. Third-party
certifiers were viewed as better at adapting to changes, able to specialize
more, and nearly as competent as government regulators.
The Future of Corn and Soy
Our findings indicate that “end users” tend to be the drivers
of non-GM production. Through the use of private standards, testing, TPC,
and identity preservation programs, downstream actors are able to control
and monitor upstream actors and practices. Thus, what is occurring in the
non-GM sector is the development of an auditing and testing network that
parallels the movement of goods through the supply chain. In other words,
the production of non-GM products is accompanied by a set of tests and
audits that verify production practices and product attributes, and passes
this information down the chain. Testing and auditing are likely to become
a permanent part of non-GM supply chains.
Our findings also indicate that the non-GM corn and soy sector will likely become both more differentiated and standardized in the future. First, while buyers often want corn and soy products to meet very specific standards, they also want them to be as homogenous as possible. Thus, bulk (i.e., commodity) markets for non-GM soy and corn are likely to develop in the future. Second, given the increasing differentiation of food, demand for highly specialized niche corn and soy products is likely to further proliferate. Therefore, congruent with developments in agriculture more generally, there will be both commodity and specialized markets for non-GM corn and soy in the future, both of which will be subject to downstream control, auditing, and testing.
This work was supported by the National Science Foundation under Grant No. 0426245. Any opinions, findings, and conclusions or recommendations expressed in this material are those of the authors and do not necessarily reflect the views of the National Science Foundation. For more detailed results please visit the website for the Institute for Food and Agricultural Standards at http://ifas.msu.edu or email ifas@msu.edu.
Lawrence Busch is director, Institute for Food and Agricultural Standards,
Michigan State University. Jason Konefal is a research assistant and Ph.D.
candidate at MSU.
© Copyright The Organic & Non-GMO Report 2006. (October 2006).