AG 9000: Quality Management System for Grain ProductionChad Laux12/13/04

OverviewBackgroundAttitudes about BiotechCustomer/consumer importanceSatisfy needs through differentiationCustomer focused systems – QMSISO 9000Implementation issuesAG 9000Standards process

BackgroundIncreased usage of biotechnology in agriculture

Grower benefits including pesticide reduction, increased profit

As a result, current use of GM modified food products widespread

95% of Argentinean soybeans GM modified (Millis, 2001)

Customer AttitudesConcerns about use biotechnology in US and abroad range from little concern to outright opposition

Poll of US citizens of GM food safety:

(Hoban, 2001)

Are Genetically Modified Foods Safe?

0.290.25

0.46

Safe Unsafe Not Sure

Result: strong consumer resistance to GM in many countries

Customer Focused MarketsThere are more open, transparent, market-oriented economic systems today than ever before.

Customer choice on food preferences or traits results get back to producer

• South Korea buys a majority of soybeans from Brazil rather than US due to non-GM soybeans Brazil supplies (Harl, 2002)

Consumer/customer dominates the debate (Harl, 2002)

Market Conditions TodayIncreased customer demand for product information

Result: Global markets moving from homogenous foodstuffs to differentiated foodstuffs• Food products increasingly defined by

product differentiation rather than as commodities categorized by grades (Reardon, 2002)

Product DifferentiationProducts defined by product attributes, traits, verification by testing, or process defined by auditable or certified production system (Clause, 2003)Separation of product w/ testing doesn’t address how Agriculture does business (blend and send)

Prescriptive ApproachApproach that relies on organizational change, and customer focus to adapt to the changing marketplace.

Customer Focused Systems-QMSA quality management system (QMS) is a system that defines operations to achieve consistency and creditability with customers (Weigers, 2001)Also, it refers to what the organization does to manage its processes, or activities in order that the products or services that it produces meet the objectives it has set itself (ISO, 2004)

ISO 9000 series (International Standards Organization standard on quality management)

ISO 9000ISO 9000 is a generic standard - means that the standard can be applied to any organization, large or small, whatever its product in any sector of activityISO is an auditable system – organization may be certified to a market standard by outside agency (Weigers, 2001)ISO 9000 predominant QMS today – adopted by 149 countries/economies (ISO, 2004)

Growth of ISO 9000Almost 350,000 companies registered to ISO 9000 series (ISO, 2003)Top 10 countries for registrations:

China (approx. 27%)ItalyUKJapanSpainUSA (approx. 9%)GermanyAustraliaFranceSouth Korea

ISO 9000 CharacteristicsLeadership demonstrates commitment to customer requirements.Policy and measurable quality objectives are set and renewed.Processes are identified, analyzed, and managed.Customer satisfaction is measured.Data are collected, analyzed, and used.System effectiveness is continually improved.(Bloomfield, 2004)

ISO Process ApproachCompany must identify and manage numerous linked activities.An activity uses resources, is managed in order to enable the transformation of inputs into outputs.

ISO 9000 and AgricultureISO compels process control, traceability of product information, and continuous improvement practices in Agriculture. (Clause, 2002)Operational discipline resulting in improved efficiencies such as a 2:1 payback ratio. (Hurburgh and Lawrence, 2002)

Rigor and profit-based model is attractive to Agriculture dominated by low-margin products

Implementation IssuesLimited adoption of ISO in Agriculture thus far

ISO not explicitly written to Agriculture• ISO a general quality management system

document• ISO is applicable to all industries and sectors

Fiscal impacts of ISO not explicit• Focused on operations, not on accounting• Picture of fiscal impact of ISO mixed

Create an ISO Guidance standard for Agriculture

AG 9000: ISO 9000:2000: Quality Management System for Grain Production Draft Document

Scope: This standard will encompass all quality aspects of grain production from planning to the delivery of the product.AG 9000 guideline for ISO 9001:2000 and ISO 9004 will clarify implementation issues for farmers.

Ag Core ProcessesPlanningLand Allocation Procure InputsField PreparationPlantingField ActivitiesPre-HarvestHarvestGrain ManagementStorageDistribution and Delivery

Timeline and Standards ProcessWritten 1st draft document for adoption by ISO.

Initial response from international community very positive. (EU)

Will become New Work Item under ISO/TC 34/Working Group

Handles Food Products

TC 34 Structure

W G 7G M O

W G 8F o o d S a fe ty

S y s te m s

W G 9T r a c e a b ilit y

S in g le S ta n d a r d sA lle r g e n ic it y

F o o d I r r a d ia t io n

S C 2 S C 3 S C 4 S C 5

S C 6 S C 7 S C 8 S C 9

S C 1 0 S C 1 1 S C 1 2 S C 1 4

S C 1 5 S C 1 6

T C 3 4F o o d P r o d u c t s

(AOCS, 2004)

Timeline1

6

5

4

3

2

PROPOSAL

PREPARATORY

COMMITTEE

ENQUIRY

APPROVAL

PUBLICATION

Working DraftWD

Committee DraftCD

Draft International StandardDIS

Final Draft International StandardFDIS

Publication-International StandardIS

New Work ItemNWIP

(AOCS, 2004)

Key Aspects of ISO ParticipationTimely – prompt response to enquiries within the accepted timelineConsensus – all points of view are accepted in forming the TAG position, majority support for the positionTransparent – activities of the committee are open and may be inspected by all interested partiesTraceable – all items must be accompanied by a voting record

(AOCS, 2004)

Considerations from ISO/TC 34/WG 8 Food Safety Systems

What would the ideal standard look like?How can different national standards be integrated together?How can we ensure consistency between different interests?How far is the current draft from ideal?

- guidance document or auditable standardCompromise: Guidance document with annex containing auditing plan

(AOCS, 2004)

Questions?