FOOD QUALITY AND INTERNATIONAL TRADE

 

Morton Satin

Chief, Agro-Industries and Post-Harvest Management Service

How oftern have we heard the terms 'world class, 'nec plus ultra,' or 'top of the line,'all contrived to signify a high degree of quality associated with some product or service? Yet, the word 'quality' itself is one of the most poorly understood terms in the consumer's vocabulary. For example, many consumers would not hesitate to believe that the quality of food in a three-star gourmet restaurant in Paris far exceeds that of an international fast food chain with hundreds of outlets around the world, but does it? Of course, it depends on how the term quality is defined.

In the most generic sense, quality refers to the combination of characteristics that are critical in establishing a product’s consumer acceptability. In the food industry, this is usually an integrated measure of purity, flavor, texture, color, appearance and workmanship. In a highly-competitive market, another criteria of quality can be ‘value’ or a consumer’s perception of the worth of the product based upon the funds available for it. The dilemma is that, without making reference to a particular standard, the general term quality is very subjective and means very little. Once a particular standard is set, however, a critical additional component of quality becomes a product’s consistent adherence to that standard.

Increased Trade Opportunities

A greatly increased potential for expanded trade in agricultural products resulted from the Uruguay Round of the General Agreement on Tariffs and Trade (GATT). The most important outcome of the Agreement was that it established a new set of rules regarding international agricultural policy development. No longer would Governments be free to manipulate their agricultural policies to serve purely parochial domestic purposes. Agriculture, the important sector which had traditionally evaded GATT measures, finally fell into the fold of rational trade discipline. All countries had to undertake specific commitments in areas of tariffs, export subsidies and distorting domestic subsidies.

What were the key issues and how did the GATT Agreement improve on the previous situation? Perhaps the most significant element regarded the matter of international market access. With minor exceptions, all participants ceased the introduction of any new non-tariff barriers and converted existing non-tariff barriers into tariffs. These new tariffs had to be significantly reduced (by 36%) over the six year implementation period. This was a very significant step because it eliminated new barriers and made existing barriers transparent. This promised to change the nature of future world trade in agricultural products. Something that is visible can be dealt with.

The agreements on maximum acceptable export subsidies was also of great significance. This has traditionally been one of the greatest impediments to agricultural development in developing countries. How were farmers to be able to compete with highly subsidized imports? These subsidies were not be totally removed, but were to be substantially reduced - to a level low enough to allow efficient domestic production to compete effectively. Although the Uruguay Round tried to level the playing field, it was not an agreement on free trade. However, it did move in that direction and should improve the short- to medium-term possibilities for greater involvement of developing countries in world agricultural trade.

The Agreement on Sanitary and Phytosanitary Measures dealt with the vexing problem of using questionable health and safety concerns as disguised trade barriers. Countries could still set their own safety standards, but they would have to be based upon ‘sound scientific evidence’. The use of accepted international standards would be encouraged wherever possible and the adoption of scientifically accepted quarantine treatment technologies, such as irradiation, would provide a much greater potential for the many exotic fruits and vegetables produced in tropical regions.

As far as agro-industries are concerned, what are some of the possible consequences of the Uruguay Round for developing countries? There is little doubt that those industries traditionally based upon highly-subsidized raw materials will have to consider future options. As an example, the wheat industry was probably one of the most conservative and confident industries around. They had every reason to be confident because of the considerable subsidies in place. Removal of wheat subsidies, however, opens the door to partial replacement in baking with alternative local flours such as cassava, or sweet potato. There is no question that breads can be made with composite flours, for example 20 percent replacement of wheat with local flours of similar or equivalent market acceptability. The question is whether local raw material can be produced in sufficient volumes at an attractive price and quality.

There is tremendous potential for the profitable commercial use of indigenous raw ingredients, however, research and product development are necessary to exploit these materials, because so little attention has been paid to them in the past. The technology for commercial production of high quality flours is currently available and opportunities are awaiting future investment. The model for quality and reliability has already been set by the international agro-industries. That is who the competition is. If local raw materials cannot be produced at an equivalent level of quality or reliability then, regardless of the GATT agreement, they will never survive in the competitive world of value-added processing. There is only so much a level playing field can offer - the rest is up to the players.

Successfully operating in a competitive international environment requires the assumption of a number of key conditions such as:

This is the manner in which an organization is set up and managed. It can decisively impact upon the ability for any organization to compete internationally. Equally important is the organization's corporate philosophy which must exist throughout all levels of its staff thinking.

The organization must be in touch with the markets in order to create innovations ahead of its competition. A comprehensive understanding of client needs is essential to this task.

The organization must be focused upon its core business and be aware of its unique strengths - its comparative advantage. These particular strengths should not include natural endowment factors, since these may be assumed by other competitors.

The ability to effectively compete requires an attitude of constant self-evaluation in terms of market demand. There must be an intimate understanding of the products’ life cycles. Without this knowledge, the organization will not be prepared with new replacement products in time to satisfy new market demands. In essence, the strategy is to be pro-active rather than reactive - to be ahead of the game. The professional staff must acknowledge that staying ahead requires the organization to be kinetic. Past success can be enjoyed, but cannot be dwelt upon. That is the vitality of a competitive environment.

Quality Standards in International Trade

What sort of quality standards are normal in the food industry and why should we have them? The first type are legal standards- those which are commonly established by national governments and generally relate to safety. These standards are often mandatory and represent minimum standards of quality. The major purpose of these is to ensure that products are not adulterated or do not carry dangerous contamination. These might involve undesirable microorganisms, insects, pesticides or potentially toxic additives. They may even consider processing conditions to ensure that foods are not contaminated or unduly damaged. Few of us would argue the importance of standards genuinely related to food product safety. Problems arise when there is disagreement on what is actually required to ensure safety.

Another important area of standardization relates to the information presented to the consumer. In this case it is not the product itself, but rather its description that must conform to a particular standard. Much effort has been devoted to harmonizing labeling information and very large market segments do have common requirements. There may be some disputes arising out of a culturally-based philosophy regarding the role of food in the diet. Some societies traditionally confer great health benefits to certain foods while others may not. This may lead to health claims that are allowed in one country and not another.

Industry standards are sometimes established by an organized industry association in order to establish a reliable identity for a particular product. Normally such standards become effective because the majority of producers agree to them. They are seldom related to safety, but more to a characteristic quality which the industry feels is useful to establish credibility for the market. Products such as wheat gluten, corn starch, peanut butter all conform to a set minimum standard established by the industry. These standards are commonly referred to as commodity standards or standards of identity.

There are even standards which are established to make buying decisions easier for the consumer. Extra lean, lean and medium ground beef standards allow the consumer to make decisions based on particular requirements of taste, health and available income. The same goes for the various choice grades of products. These standards are not based on health or safety issues, but rather than on perceptions of overall appearance and taste.

How Is Quality Measured?

The measurement and evaluation of quality can be a complicated affair. Most organizations employ professional technicians to carry out his task, but this has not always been the case. In the past, many companies assumed that the quality of their raw materials could be guaranteed simply by paying the highest prices. However, this did not prove to be very reliable and almost all firms now use various analytical methods for quality determinations.

The methods used to measure quality can be subjective, as in taste tests or they can be objective, such as physical, chemical or microscopic analysis. Subjective methods are based on the opinions of the examiners and because they require the use of our various senses, they are often called sensory analysis. Much time and money is invested in training of personnel to accurately describe their responses to product quality. Recently also various computerized sensory evaluation systems are designed to ensure that sensory responses are accurately reported and statistically interpreted.

The physical, chemical and microscopic analytical methods are considered to be objective because they are designed to exclude any subjective opinions of the examiner. These methods are usually standard scientific tests which should be able to be reproduced with the same result by any trained technician. Physical measurements include product attributes such as size, weight, color, texture, headspace, and even impurities such as filth and insects. Sometimes these analyses are carried out with the help of instrumentation and at other times with little more than a pair of good eyes and a paper and pencil.

Chemical methods are usually more complex and often require instrumentation that can be rather sophisticated. Precise tests for moisture, protein, carbohydrates (total and specific), ash and fibre have become standard practice in the food industry along with a myriad of others pertaining to specific components of ingredients or products. Microscopic methods are used to determine the presence of mold, insect fragments or foreign materials as well as for any spoilage or disease microorganisms the product may harbor.

Why Have a Quality Control Program?

The main reason for having quality control is to ensure that products are made to the standards demanded by management. The fundamental purpose of a quality control program is to acquire dependable information on all the attributes of a product which affect its quality. Quality control ensures that raw materials meet set standards, processing methods perform as designed, finished products meet company standards, and consumer confidence in the company remains high.

 The basic functions of a Quality Control program are:

       a) Raw materials, ingredients and packaging supplies

       b) Processing parameters

       c) Finished products

 The assurance of quality depends to a large extent on how the program is organized and how committed corporate management is. Top management must want and actively support quality control. The quality control function should be directly responsible to top management if conflicts of interest are to be avoided.

Globalization Risks Associated with Poor Quality

While most who are concerned with world trade have viewed the GATT agreement as a great boon to exports, certain consequences of the increased movement of goods and services across may have to be more carefully considered. Specifically, the potential increase in risks associated with poorly controlled products is an matter of growing concern. This issue is of greatest concern in the area of foodborne infectious diseases, particularly those which are newly emerging.

Emerging Foodborne Infectious Diseases

The greatest achievement in recent medical history has been the dramatic reduction in mortality from infectious diseases. However, despite all the major developments in medical science during the past century, infectious diseases continue to be the primary cause of death worldwide. To add to this crushing public health burden, several new or emerging infectious diseases have begun to appear which harbor the threat of significantly-increased mortality.

Beside others the globalization of our food supply equally contributes to the of emerging disease proliferation. Globalization removes national control of laws, policies and markets, in order to bring together all people for the collective good or the common wealth. Free trade and the removal of restrictions on the movement of goods and people is symptomatic of globalization.

Moving together with free trade’ goods and services, infectious diseases also recognize no national boundaries and clearly conform to the typical globalization pattern. Every form of microorganism can cross international borders with impunity. They journey with finished food products, raw agricultural commodities, hidden insects, visiting tourists and economic immigrants. In fact, when one considers that organisms travel with the tiniest particles of dust carried in the wind and are easily swept along international waterways, it is apparent that even the most rigorous quarantine procedures cannot prevent the movement of pathogens between countries.

The free movement of goods and people is inevitably accompanied by invisible infectious organisms. The popular demand for foreign imported products has increased our exposure to both people and goods from around the world. All these products cross international borders with relative ease and so do the microorganisms they may harbor.

Along with the microorganisms come their particular set of virulence and antibiotic resistance characteristics, often with devastating results. Ordinarily, pathogenic organisms come to some type of ecological balance with other forms of life in their native environment. After years of continuous exposure, people and animals will develop a form of limited immunity or adjust their behavioral practices (food, local medicine, etc.) to cope with indigenous pathogens. However, when these organisms are transferred to a new environment, they will often demonstrate much greater virulence simply because natural immunity or appropriate social or medical management practices have not been established. Even though we may feel that the process of globalization may be very beneficial for international economic development, from the standpoint of public health it can be very costly.

Quality as a Prime Criteria in Accessing New, Competitive Markets

Product quality is a prime criteria in gaining access to competitive markets. Most marketers will agree that, aside from everything else, commercial markets require a stable supply and a consistent quality. Most industries do not like to be pioneers and it is extremely difficult to interest markets in new products unless these criteria can be assured with some confidence. The production of high-value finished products are to a large extent contingent upon dependable raw materials. Models for quality and reliability for most value-added commodities have already been established by the international agro-industry markets. Any products which cannot reach equivalent levels of quality, functionality or reliability will not survive in the competitive global markets. There is only so much that a more equitable trade environment can offer. The rest depends upon product quality and performance.

Hazard Analysis Critical Control Point Systems HACCP)

In order to improve food safety and to reduce the levels of rejected products, during the early 1970s the food industry began considering the same sort of zero-defects concepts as was employed in the aerospace industry. The application of this approach to the food industry eventually resulted in a system of control (particularly microbiological) called Hazard Analysis Critical Control Point or HACCP (pronounced hassep). This system emphasized the fully-integrated analysis of the entire production process for each product, including ingredients, the individual process steps and even the potential for consumer abuse. The goal was to determine when and where things could possibly go wrong with the microbiological safety of the finished product. The basic thrust of the HACCP concept was that it shifted the emphasis of control from the testing of end-products (when it was too late to do anything about it) to preventative control of all critical operations of the process. From the very early stages of development, certain government inspection services showed a great interest in this concept.

The HACCP system not only pays off in dividends of product safety but it also results in far fewer rejects. Fewer rejects means reduced losses and food manufacturers are always ready to look at any system that will result in savings. In fact, HACCP will become a mandatory part of many food inspection schemes once governments agree to institute such plans. Then, the government’s critical function will be to check the company HACCP records to confirm that all the correct procedures have been carried out.

Many people, particularly those from industry, feel that the use of the HACCP system will significantly reduce the need for traditional government inspection. However, the ability of the HACCP system to deal with emerging pathogens has still to be determined. In fact, a major weak link in the whole system of HACCP, as it is presently constituted, is related to the presence of microorganisms in foods. Everyone readily acknowledges that all natural raw materials such as poultry, meat, fish, fruit and vegetables carry pathogenic microorganisms. Since the first critical control point is the receiving door of the plant, how can contaminated raw materials be allowed in? Yet, they are.

Once contaminated raw materials have been allowed to come into a plant, an incredible amount of remedial work has to be carried out in order to ensure that these microorganisms are killed during processing and that cross-contamination does not take place. Since many products so exposed to cross-contamination do not have a definitive killing-step for microorganisms in their processing, the end result can be contaminated products. Although it is a significant improvement in overall process control, HACCP is definitely not a panacea for the problems of microbial contamination in foods.

Conclusions

In summary, the dynamics of world trade are rapidly changing and all countries must gear up to keep pace with it and particularly to take advantage of it. The global changes taking place present very wide possibilities, but only for those who are aggressive enough to pursue them. Quality is a critical factor in accessing competitive new markets and all efforts must be made to ensure that products meet and exceed established standards.

References

 i Bauman, H.E., "The HACCP Concept and Microbiological Hazard Categories," Food Technology, 28 (9), 30-34, (1974).

ii Kauffman, L.F., "How FDA uses HACCP," Food Technology, 28 (9) 51, 84, (1974).

iii Purdum, T.S., "Meat Inspections Facing Overhaul, First in 90 years: Scientific Testing Will Replace 'Sniff and Poke' Inspections," New York Times, 145 (50481), July 7, 1 (1996).

(iv) Annonymous, "Emerging Pathogens Seen Needing Military-Style Thinking," Food Chemical News, 38(32), 7, (1996).

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