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The Seal of Quality - - A New, Market-Oriented Agricultural Development Tool

The Seal of Quality - - A New, Market-Oriented Agricultural Development Tool. Association for International Agriculture and Rural Development Washington, D.C. June 7-8, 2004 By Kristin Penn International Development Division Land O’Lakes, Inc. Topics. Brief Introduction to Land O’Lakes

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The Seal of Quality - - A New, Market-Oriented Agricultural Development Tool

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  1. The Seal of Quality - - A New, Market-Oriented Agricultural Development Tool Association for International Agricultureand Rural Development Washington, D.C. June 7-8, 2004 By Kristin Penn International Development Division Land O’Lakes, Inc.

  2. Topics • Brief Introduction to Land O’Lakes • The Seal of Quality Concept • SOQ Case Study – Macedonia • Program Implementation • Lessons Learned

  3. Land O’Lakes - Since 1921 • Integrated and diversified national cooperative with more than 300,000 farmer-members • A national leader in: • Deli cheese • Butter • Eggs • Feed • Seed • Plant food • Crop protection products

  4. Land O’LakesInternational Development • Works within agricultural and food systems in developing countries • Implement a customized approach to address country-specific impediments to economic growth. For example: • Uganda - value adding and consumer marketing • Montenegro - access to services • Colombia - market-driven alternative

  5. The Seal of Quality Concept

  6. Growth Impediments Scenario

  7. A Solution – Seal of Quality • Targeted technical assistance aimed at marketing chain impediments • Expedites producer’s competitive potential and access to local and export markets • Provides a link between lowest-and high-potential producers, processors, retailers and consumers for positive impacts throughout the market chain

  8. The SOQ Concept • Relentless consumer-based focus on product quality • Seal award to firms who comply with and adhere to strict quality standards • Strict and transparent scientific and systematic compliance measures, tested independently • Seal and award process are “owned” and controlled by producers and processors

  9. Key SOQ Concept Variables • Existing market constraints • Consumer sophistication and understanding • Target country market conditions • Availability of unutilized production • Processing capacity for market growth • Production process quality control • Availability of commercial protections for effective process control

  10. SOQ Case Study - Macedonia

  11. The Situation • Low productivity • Fragmented marketing chain • Termination of Soviet production subsidies and traditional markets • Collapse of former state-run firms • New firms with limited products, substandard packaging, inconsistent quality, lack of standardization and branding

  12. The Needs • Transparent systems for production certification and compliance monitoring and enforcement • Technical assistance to enable overall efficiencies and profitability in manufacturing and marketing • Consumer awareness andconfidence in the Seal ofQuality to increasedemand

  13. Implementation • Formation of the National Association of Private Meat and Dairy Processors • Development of transparent procedures and voluntary quality standards for certification • Establishment of an independent food testing laboratory

  14. 8-Step Certification Process • Membership and product seal application • Adoption of standard production procedure • Processor’s plant inspection • Product testing at project laboratory • Product testing at State Veterinary Institute Laboratory • Sensory testing by independent certifying board • Test review and determination by certification board • Test procedure verification and seal award

  15. SOQ as Marketing Tool • Marketing campaign based on consumer survey • Introductory PR campaign and pilot program • National promotional campaign • seal introduction • awareness building • deepening understanding • changing consumer behavior • reminding consumers • reinforcing consumer habits and awareness

  16. The Results • The meat processing industry tripled; the dairy industry increased by 44 percent • Forty companies expanded their product lines by a total of 162 new products • Processors cumulatively invested over $20 million in their facilities • Processors and retailers form 223 new strategic partnerships • Client firms reduced production costs by 50 percent • SOQ certification was awarded to 37 firms for 205 products

  17. Lessons Learned • Ensure industry ownership of the program • Require greater cost-sharing from project on-set • Avoid threats to state labs • Provide producer assistance through SOQ processors • Deepen public understanding of the SOQ process • Strengthen reinforcement of SOQ usage • Use retail assistance to help ensure SOQ product quality • Application of SOQ concept to low-income producers

  18. Conclusions • Focus on sustainability of certification association • Expansion of program to other sectors • Assistance to meet EU ascension policies • Program expansion to Albania, Honduras and several East African countries.

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