August 2000 23962 No.26 Agriculture ; *Technology Notes Rural Development Department (RDV) 3 The World Bank Food Safety and Developing Counties The safety of the food supply has taken on a new urgency in the global marketplace For developing countries, investment in food safety institutions and their capacity can play an important role in improving living standards through advances in domestic public health, agricultural production, and export markets. Investment is needed to establish regulatory systems and technology, build institutions, and train staff in food safety as well as in international negotiations. Approaches should facil tate the activity of the private sector and consider regional cooperation to combine resources. This Note provides background and basic principles about how World Bank lending for food safety can help client countries build the effectiveness and credibility of their food safety systems. - Food Safety at Home and forTrade Food safety is attracting increased - _ attention, not only because of its implications for domestic public health, but also in meeting the continuing . challenge of international market access and competitiveness (Box 1). On the domestic side, food-related diseases are a major source of human and economic losses. Diarrheal diseases affect 1.5 billion children under age five ----- (1 billion = 1,000 million). As a result, Setting and maintaining adequate and appropriate sanitary standords is essential for both domestic ond 3 million of them die annually, and export markets,A dairy worker prepared milk for processing in this Bank-sponsored project in Brazil, 70 percent of these deaths are caused by illnesses from contaminated food problems are becoming more complex and growth, and the additional impetus (WHO, 1999). Traditional food practices difficult to isolate or control. and new of exports is required. More markets are changing, especially with increased pathogens or antibiotic resistance to are opening up as world consumers urbanization and travel. Increased existing pathogens continue to emerge. increasingly enjoy imported foods for affluence leads to the consumption of Moreover, food safety is important to year-round freshness and variety. more animal and other perishable promote exports. WVith such global distribution, consumers products and wider distribution of foods Domestic demand for food is often not and regulators are demanding strict safety to more distant markets. Food safety enough to spur robust rural economic standards to guarantee that no health RDV TechJ2ology .Notes hazards are transmitted across borders. production and processing sectors are Growth in Agricultural Trade Food safety has emerged as one of penalized, and their exports face and Food Safety the most prominent souirces of coinfliet discrimination in international markets. International trade in food has increased in international agricultural trade. Small Despite some progress in increasing 0 ~~~~~~~by some 400 percent since 1989, and an and developing countries face constant the volume and variety of agricultural increasingvarietyofproductshasevoled. challenges to assure continued inter- exports and imports, developing countries, national market access, and are faced particularly in Africa, have not shared occurred among growtivelv has with (i) stricter quality and safety proportionally in expanded agricultural perishablemproductaincludinggfreshuo perishable products including fresh or standards, both official and private; (ii) trade. The rejection rate for their products minimally processed fruits, vegetables, increased requirements for traceability based on standards is disproportionately meats, and fish. This product perishability of products and ingredients, and the high. According to data from the U.S. Food combinedwiththedemandforyear-round associated product liability; and (iii) and Drug Administration, the highest availabilitv and the involvement of many market trends where quality and safety are number of detentions and rejections for food new players in the international food trade increasingly central to competitiveness. safety concerns is for products from arena, has raised the stakes and challenges Poor countries lack the human and developing countries. The most frequent of food safety. infrastructure capacity to face these violations are contamination bv insects, International agreements have also challenges, and as a result the food follo-wed by microbial contamination and broughtfoodsafe tothefore. Te Uruguav excessive levels of pesticide residues. Round concluded in 1994 brought Finally these countries hnve not played agriculture into the international trade BoX I. a significant role in the WVorld Trade liberalization talks. This included thle BOXt if . Organization (WITO) negotiations or in the Agreement on the Application of Sanitarv What is food safety? discussions with international food safetv Andeemyton Me asure ox Samtarv Food safety hazards include organizations about international trade brought the beginnings of order anid foodborne microbial 1.a l and standards. discipline to food safetyb standards. that occur naturally in the environment and that may contaminate food from improper handling (e.g., salmonella, E. coli, listeria), animal diseases, parasites, Box 2. SPSAgreement of 194 mycotoxins, antibiotic orpesticide The WTO Air. . n i-nt on the Application of Sanitary and Phytosanitary residues, and adulterants (dirt, Measures (SPS Agreement) covers !,otl food xafLt ty regulations and agricultural glass, or heavy metals). Food safety standards for animal and plant health. It recognizes that member govermments also encompasses agricultural have the sovereign right to protect their citizens, but that measures should protection from insect pests and be applied only to the extent necessary ail'l s Il .Ihl t. aiIltlar]y or unjustifiably diseases of crops or livestock. discriminate ,.iin t other WTO countries where identical or similar conditions The commercialization of prevail. '. ii u11il. products is also In order to harmonize sanitary and phytosanitary measures as widely as raising questions for regulators I.l .].-. WTO members are( na.,)1_i.raL, rd to bts, tl-iir iiie.tsur.s on intermational who must be concerned with standards, guidelines, and recommendations where they exist. The reference consumer sentiment. institutions for such standards are the Codex Ahhm.entarius, the International The modem approach to food Plant Protection Convention lIP Pl., and the Office International des safety is to rely on prevention at Epizooties (OIE). every stage of the food chain from However, members may maintain or introduce measures that result in farm to table. This new doctrine higher standards if there is sound, demonstrable scientific justification or is the foundation of the an appropriate risk assessment. Members are to accept the sanitary Hazard Analysis and Critical and phytosanitary measures of others as equivalent if the e.ip)rtlIIg country Control Point (HACCP) system, demonstrates to the lmpiming country that its measures also achieve the the state-of-the-art approach to 1"'rthi country's appropriate level of health protection. The agreement food safety that has already been includes provisions for control, inspection, and approval procedures. adopted in the EU, USA, Austraha, One of the most forward tiii itng of the provisions is the concept of New Zealand, and Canada, and is Ic l 1- ii iliII 11Ii .t 1t - 1 ir disease-free zones within national borders, Finally, being evaluated for adoption in a member conmtryCs regime must he published and thus transparent, and all many other countries. changes must be notified in writing to the WTO. page 2 August 2000 Whether food safety standards are used by countries to protect their own Box 3. Possible project components for food safety producers against foreign competition or whether they legitimately protect Export focused countries from unwelcome insect pests, Establishing disease-free zones diseases, or contaminants, such standards Des I l-,Iping, laboratory capacity for residue te-still; microbial counts, etc. often prevent trade. Cli,dlin iii*njtrrliit "from farn to the table') regulation and training The Agreement would reduce SPS Strenligth,%miv-i capacity forfood inspection and certification barriers to trade and expose countries IIA(.( I> training when they use these measures for Systems forproduct traceability protection because it requires member [Market information about import standards in export markets countries to demonstrate the scientific Ti.liilc- in appropriate use of pesticides and veterinary pharmaceuticals basis of their standards. Developing countries were given a Domestic market focused longer deadline to the vear 2000, but Basit investments in water and sanitation compliance with the Agreement is proving TT zi( li e training for street food vendors costly and difficult. I T i- II practices for wholesale marketplaces llOndiflulO.i of disease-free seed and :vt dling' TheWorld Banks Role in Legal framework for seed inspection and certification International Food Safety PlIat and animal quarantine infrastructure Food safety is a relatively new area for Eradication of Npe. 1ifc plant pests (e.g., MAt' locusts) NVorld Bank involvement. To date, there V Xi.,ti' 11i [ii IIvrdl!- against livestock diseases are 66 Bank projects with any food safety component in the ESSD core database, mainly in the form of agricultural projects with animal and plant health componcnts. In designing food safety investment quarantine bureaus with domestic private for export markets, where the value of programs for World Bank financing, there companies of all sizes, as well as those additional exports through improved are some critical issues that must first foreign companies investing in food and market access can be compared to the cost be discussed. agriculture, has proven to be sustainable. of investments to meet the standards for Private and public sector roles and This participation of the private sector that market. For domestic food safety partnerships. In principle, protection of in government improves government investments, cost-of-illness estimates have food safety belongs in the public domain, responsiveness and accountability. been used, but they are more difficult to but there are externalities (control of Level of investment. 'Modern' food assess (Unnevehr and Hirschhorn, 2000). diseases by one farmer reduces the disease safety measures are costly, and the returns risk for the rest) and moral hazards in terms of increased exports and Future Food Safety (hygienic qualities are not easily improved domestic health are unsure. detectable). On the other hand, introduction Markets (export or domestic), prevailing On the basis of these priority considerations, of qualitygrades for food products, especially food preparation practices, and consumer investment priorities can be identified. if linked to brand name development, demand and needs should therefore Clearly, needs and capacity vary greatly provides benefits that can be captured by define the level of investment, not the with the level of development of each the individual processor, and is therefore misplaced desire for 'modern' European country. Types of projects (Box 3) to a private good. Infant industry arguments or North American style regulations. support the public sector can include: might, in some instances, be necessary for Moreover, the cost of participating in Capital investments may include the public sector to have a role in the the many regulation-setting events of laboratories and quarantine stations introduction of grades and standards. international bodies is high. Detailed need appropriate to the level of development However, in both food safety and and risk assessments should therefore pre- and proposed export markets. In the low- quality, experience from export promotion cede any investment, regulatory reform, or est income countries, water and sanitation, projects indicates that where the capacity participation in international agreements. basic health care, and child nutrition are exists, the best practice is to rely oII private Domestic vs. export. Risk assessments likely to have lhiglhest priority. certification and private investments under and economic analyses are a pre-condition Institution and capacity building the supervision of the state. The cooperation for decisions in this area. Cost-benefit may establish hygienic standards or of public health officials and agricultural analysis in food safety is straightforward inspection and quarantine procedures at page 3 RDV Technology Notes a level appropriate to the market and there is a requiremenit for institutions to approaches should be promoted for small economic development of the country. involve stakeholders in the system. countries to cooperate in international Unnecessarily stringent standards may Public/private cooperation should result in negotiations, as well as in laboratory unduly favor large producers and crowd the formation of interest groups by the capacity, writing rules, certification small farmers out of the best markets. As various stakeholders, possibly on a systems, setting up pest-free zones, port many stakeholders as possible should regional, national, or local basis. Such inspection facilities, etc. This regional benefit - farmers, food processors and associations will engender improved approach would save money and time and vendors, agribusinesses, transporters, responsiveness by regulators to implement enhance their negotiating clout when export companies, regulatory agencies, systems that will facilitate production and international standards are set by the OIE, livestock and food products companies, trade. The regulators should ensure equity IPPC, and Codex. Most of all, -while not public health authorities, and consumers. without compromising impartiality. mandatory under the SPS Agreement, Sustainability is akeyissue -how much Human capacity building can harmonizing standards across countries of of the continuing costs of food safety provide public support services for private a region would facilitate both imports and interventions will be borne by the producers of agricultural or processed exports. government in the case of domestic health products through market information, In designing and implementing new and by private sector companies or their training government officials and private projects, the Bank can draw upon other associations for products developed for the entrepreneurs in trade issues, and institutions for expertise in food safety, export market. Food safety requires an overall in particular by increasing their including FAO and WHO, as well as system of guarantees from farm to table. participation, negotiating skills, and capacity on bilateral assistance from the major More than just laboratories, a legal in official international rulemaking and industrial country importers, and on framework is required for regulation, and negotiations. In this context, regional private sector companies and organizations. Further Information References Australia Food Safety Campaign - http://wxvxvsafefood.net.au/index.cfnI Henson, S., and Loader, R. 1999. Barriers Canadian Food Inspection Agency - http://wwvw.agr.ca/inspece.html to agricultural exports from developing Codex Alimentarius - countries: the role of sanitary and http:/vw.fao.org/WAICE NT/FAOINFO/ECONOMIC/ESN/codex/default.htm phytosanitary requirements. Centre for Food & Agricultural Organization (FAO) - http://v,wwdfao.org Food Economics Research (CeFER). France: AFSSA (Agence fran,aise de s6curit6 sanitaire des aliments) - http://www.afssa.fr/ Dept. of Agricultural and Food International Organization of Epizootics (animal health) (OIE)- Economies. Reading, UK: The University http://www.oie.int/A_html.htm. of Reading. International Plant Protection Convention (IPPC)- Roberts, D. 1998. Preliminary assessment http://wwwv.fao.org/ag/agp/agpp/PQ/Default.htm of the effects of the XATO Agreement International Standards Organization - http://vvww.iso.ch/ on sanitary and phytosanitarv tradle National Food Processors Association (USA) - http://www.nfpa-food.org regulations. Journal of International United Kingdom: The Royal Institute of Public Health & Hygiene Economic Law 377-405. http://www.riphh.org.uk/index.html Unnevehr, L., and Hirschhom, N. 2000. USDA Animal Plant Health Inspection Service (APHIS) -http://weNww.aphis.usda.gov/ Food safety issues in the developing U.S. Food & Drug Administration (FDA)- http://wwNv.fda.gov/ world. World Bank Technical Paper World Bank Animal Resource Thematic Group - No. 469. http://essd.worldbank.org/rdv/rdvweb.nsf/animal/ WHO (World Health Organization). 1999. World Health Organization -http://www.who.org Basic food safety for health workers. World Trade Organization - http://www.wto.org/wto/goods/agric.htm Geneva. 1!rt-i1lu,ro r TEchnology Note., prn'dc r:p-to-dac anti livlah.n oj sdlectcd topius tog W'orhd Bank Pro4tisOnnals. Czvn di Hant cotdinnta the Srits rht. Note was prt:parv ep by Suisar ici hilck Tizedr rutt input fretri Aftclhi Slnieor, Stea-tm f/tce. and Cees d Haan. Th'obtirn copt s .f Ihu. t,rot/w' MIVtes, or to nqtc nuiii" sinul I Iw s, rres. ple-a. call (2012i 4r.3-0464 The ms z<.t rt e.nt M.'t.es irn this .se*'W3 inrclufe' L rbatt lliitts7t *ad Rtndil Soil Atot:ig nic.ar Projecci-R/Iared rainting Integrted NWstrierit ?lanagcrnLnt &jmrinu of Peticzde Regulta.ioTs 1Aondoring. Lanti Qrudliq Cuompettive RFsearob Grant Progrnms int esting in Paltoratd tn Sn stanable AquuLv/r1 .Autonomy for AgHridcudl. cuResearch Organf ofon-s Edit. d Iii, Setit Becktmniau. BhssiTPss ,rerd Tecalinical Co.irniink:ato.ns. PdftdnsrrlI PA. Laqout by InTry Cod/elae) Cnidcelgo Drvign. Puttibtutgh. PA. page 4