Animal health is a concern not only in terms of animal productivity and export margins, but some animal diseases also pose a threat to human health. Industrial and intensive forms of animal production may be a breeding ground for emerging zoonotic diseases (Nippah, BSE, Avian Flu), with unknown consequences. Microbial pathogens may find their way onto produce and animal carcasses by way of feces from nearby animals, soil, irrigation water contaminated with raw or improperly treated sewage, green or inadequately composted manure, air (dust), human handling, or contaminated machinery, potentially resulting in food safety problems for consumers.
All scales of livestock production have a potential to impact on animal and human health by virtue of harboring these pathogens. Small-scale (family) farms often witness close human-to-animal contact and frequent movement of both humans and animals between farms. In many situations, animals are kept in and around human dwellings, especially pigs and poultry, thus creating a high risk for direct transfer of pathogens from animals to humans. The risk to both animal and man might be worsened by the fact that both local veterinary and local human health services are often minimal. Animals may not be routinely treated for pathogens such as internal parasites that can affect humans, or vaccinated against common zoonoses (e.g. Brucellosis or Leptospirosis).
At the same time, it is well known that food safety standards are high in developed countries, and that imports to the OECD from developing countries often run afoul of food safety regulations or testing. Partly, this is because the delivery of fresh perishable products to distant markets requires process controls throughout the production system, and mechanisms to certify to importing countries that these controls are effective. Often slaughter systems in developing countries are not equivalent to those of the developed countries they would like to trade with. Thus a two-tiered slaughter system emerges; one for the domestic market, the other for the export market.
It has been suggested that the cost of compliance of entering the developed countries markets exceed those justified on human and animal health grounds. Some of the countries/processors trying to enter developed countries markets are finding that they need to adapt their slaughtering process to meet many different countries' food safety standards. It is important to recognize than many of the same concerns are held by consumers in the high-end of markets of developing countries, especially in the major cities. Gomez and Torres (2000) pointed out that global trends in food safety are also affecting food industries in the south who have to compete with foreign produced products in domestic markets. Food safety is not just a matter of medical suitability for human consumption; in the marketplace it is a demanded attribute that has as much to do with the safety certification the product possesses as it does with its actual safety. Smallholder-produced products that are not certified as having been produced and handled through safe processes cannot compete in these markets, even if they are perfectly safe. Food safety certification has a cost to deliver and requires a price premium to elicit supply for the marketplace. It may not be scale-neutral to produce.
Branding, packaging, and refrigerated handling resolve many of the safety issues in developed countries. Trust and reputation are even more important in developing countries, where animal food products are less standardized, procedures are less predictable, and institutions for assuring quality are even more necessary. As people in major cities in developing countries-the drivers of the Livestock Revolution-increase their demand for food-safety attributes, vertically-coordinated responses are appearing in the livestock sector in developing countries to establish quality control, trust, and reputation. A key issue is whether smallholders can continue to compete in this area; without institutional support it appears unlikely. If not, will they be relegated to a shrinking, low-return "wet" market?
Within the CODEX regulations, trade can be blocked on equivalency grounds. Specifically, an importing country can block trade if they do not deem an exporting country's processing system to be equivalent to their own system. The equivalency process involves the importing country evaluating the laws, regulations, and other documentation of the potential exporting country. In this evaluation, five risk areas are evaluated: sanitation controls, animal disease controls (that might affect human health), slaughter and processing controls, residue controls, and enforcement controls prior to allowing a country to export to them. The types of hazards a country typically evaluate in another country are in terms of their control for natural toxins (aflatoxins, etc.), zoonotic diseases (bacterial, parasitic), other microbial contaminants, chemical contaminants (pesticides and drug residues), and food additives and decomposition of the product. Exporting countries are also required to submit to importing countries each year a list of those plants they certify as being eligible to export to the importing country. Not all countries will have plants on the list as being eligible even though they have gone through the equivalency process. This decision lies with the individual country.
3.6.2 Incomplete Markets for Food Safety
Food safety issues arise because of incomplete markets for food safety. These problems may be exacerbated by the failure of market forces to properly signal consumer demand to producers, since full social costs of these problems are not reflected in market incentives to producers to get rid of them. Imperfect information arises when workers and consumers are only partially aware of the hazards associated with the consumption of a specific good. They are therefore unable to trade-off risks in an informed way. Consumers buying the product are unaware of the potential costs associated with improved food safety. Thus the amount they pay for the product does not consider the cost of "safe" food. For instance, if purchasers could see pathogens on food, then those planning on cooking the products thoroughly might choose less expensive products exhibiting low levels, whereas those desiring lightly-cooked products pay a premium price for near-zero levels.
Historically public intervention to promote food safety issues has been justified by market failures. Though many countries have regulatory agencies in place to remedy the failure of the free market to allocate resources efficiently in the areas of food safety often these institutions have found it difficult to enforce and monitor due to lack of funds and individuals. Increasingly private solutions to food safety problems are emerging as the private sector recognizes the limits of the public sector to meet the demand to changing market conditions (Hirshorn, Unnevehr and Narrod, 1999)
3.6.3 Approaches to Improve Food Safety in the Study Countries
With the exception of Brazil, there appears to be less concern in the study countries over the issue of microbial pathogens as compared to the developed countries, but more on the misuse of pesticides, antibiotics, and growth hormones. This may reflect the differences in preparation and consumption of products; many consumers in the developed world eat products in a semi-raw state oppose to many developed countries where the products tend to be cooked thoroughly. In Thailand (see Poapongsakorn et.al., 2003) there is much concern over the use of banned beta-agonists to produce lean and red pork meat and the over-use of antibiotics. Thailand is currently in the process of trying to improve the monitoring and enforcement of these banned drugs as well as, improve food safety in the slaughtering process and, to lesser extent the practice of using dead animals in some processed food products. However, until recently, enforcement by the authorities has been lacking or sporadic and the approach to food safety voluntary.
Under threat of not accessing the export markets and possibly losing the urban market in some countries, the private sector has monitored the use of animal medicines in their own production units or via contract farming-where the integrators provide all feeds and medicines to the subcontractors and to some degree using a trace-back method to the producer, to ensure a safe "farm to table" standard. This is happening in Thailand and Brazil and to a lesser degree in the Philippines.
Brazil instituted a compulsory identification process for cattle in 2002 to monitor traceability from farm to table. Initially the System of Identification and Certification of Meat Origins (SISBOV) in Brazil was developed to meet the European Union's requirements for meat imports. The application of this regulation has now been extended to the entire national territory and includes bovine raising farms, slaughterhouses and certifiers for all production. However, there is a phase in period. Sarto et. al. (2002) have simulated the impact of the new Brazilian law on different size producers and found that there would be economies of scale in the ability of different size producers to adopt the law. Specifically, the costs would vary from R$ 9.75 per head, for a flock of 50 animals to R$ 2.18 per head for a flock of 2000 heads and the additional cost will represent 1.3 percent of the income from the animal (see Camargo Barros et.al., 2003).
The country reports in Thailand, Brazil, and the Philippines allude to the consequences of the "voluntary approach of food safety control" being driven by market forces leading to a situation where all three countries are developing a multiple tiered market system. In Thailand, a modern broiler slaughterhouse designated for the export sector was introduced about two decades ago; however, much of the broiler meat sold in the domestic market today also comes from these slaughter facilities. Thailand still has a two-tiered market consisting of high quality products designated mainly for export and the domestic market that have products with a wide range of qualities. There are still a substantial number of illegal and uncertified slaughterhouses with butchers operating on bare ground with high risk of contamination from microorganisms, dirt, etc. Brazil has a similar situation with only those establishments in which there is federal inspection can the meat go for export. Every Brazilian beef slaughterhouse has to be inspected and the product has to be distributed with a sanitary certificate signed by Ministry of Agriculture. Industries have to implement a Hazard Analysis and Critical Control Point System (HACCP), a set of rules initially proposed in the USA in order to guarantee products preserve human health to export to that country to many countries.
In India and Thailand (see Mehta et.al., 2003 and Poapongsakorn et.al., 2003) there is also the practice of using dead animals to produce some processed foods, a practice that has been used in many developing countries for a long time. While dead animals are not supposed to be used for human consumption some small food processors still use them to make cheap food products that usually end up in low-income markets.
The improvement of food safety for milk and poultry products in India over the past two decades has been phenomenal. Nevertheless, national standards for food safety in India are still significantly lower than international/developed country standards, and even lower than the standards of the other three study countries. This may be due to poor infrastructure, lack of resources and inadequate information. Indian standards typically allow much higher levels of contaminants in products than are allowed by CODEX. For instance in terms of lead, CODEX allows maximum levels of 0.05 ppm in butter, and 0.02 ppm in milk, whereas the Indian standard is 2.5 ppm for milk (see Sharma et.al., 2003). Part of the problem with high food safety requirements is that much of the poultry in India are still sold in the live market thus slaughtering of animals in a slaughterhouse is minimal. Also much of the smallholder milk production in India is hand milked, with few or no cooling facilities.
The National Dairy Development Board has started a Clean Milk Production Program and more than 12,000 village dairy cooperative societies in 16 states have been brought under it. Currently 63 milk-processing plants/dairies in the cooperative sector have obtained International Standards Organization (ISO)/HACCP certification with assistance from NDDB. Private sector dairy plants have taken similar steps to ensure the quality of raw material; for example, Nestle has provided bulk coolers to farmer societies and launched awareness programs in the area. However, current levels of infrastructure and financial resources are too low to achieve the desired standards.
In sum, there is a rising demand for food safety for animal products consumed in the study countries. Experience differs across the countries, but the demand for food safety is probably linked to urbanization and income levels. Smallholders need not only to meet these standards to stay involved with the fast growing segment of the market, but will need to be able to have their products credibly recognized as safe. This typically will require integration into high value chains that have large-producer like process-based food safety systems in place. Food safety will be a powerful motivator of contract farming for both small farmers and their customers.
 Food safety regulations
are becoming a prerequisite to access to international markets and for a number
of countries this cost is prohibitive.|
 For instance, protectionism policies established in Latin America under the import substitution model after World War II facilitated the development of large food processing.
 For years swine producers in Thailand have been using a Salbutamo, a beta agonist to produce leaner pig meat to meet the consumers preference for lean and reddish pork meat. It is also an anti-asthma drug (known as Albuterol in the US.). Although the use of Salbutamol in swine has been banned for many years, it is only until recently that the governments has been crack-down on the illicit use of this by the majority of swine producers.
 The concern over the misuse or overuse of antibiotics in Thailand is similar to the concern in the EC and the US in that it could promote antibiotic resistance to some bacteria, which would shorten the usable life of the medicines in humans.