Food Policy 30 (2005) 354369

www.elsevier.com/locate/foodpol

Third-party certiWcation in the global

agrifood system
Maki Hatanaka , Carmen Bain, Lawrence Busch
Department of Sociology, Michigan State University, 422 Berkey Hall, East Lansing, MI 48823, USA

Abstract
Recently, third-party certiWcation (TPC) has emerged as a signiWcant regulatory mechanism
in the global agrifood system. It reXects a broader shift from public to private governance. Traditionally, government agencies were responsible for monitoring food safety and quality standards. However, the globalization of the agrifood system, the consolidation of the food retail
industry, and the rise in private retailer standards have precipitated a shift in responsibility for
this task to third-party certiWers. This development is reconWguring social, political, and economic relations throughout the contemporary agrifood system. In discussing the rise of TPC,
this paper focuses on the role and implications for three key stakeholder groups: supermarket
chains, producers, and non-governmental organizations. We conclude that TPC reXects the
growing power of supermarkets to regulate the global agrifood system. At the same time, TPC
also oVers opportunities to create alternative practices that are more socially and environmentally sustainable.
2005 Elsevier Ltd. All rights reserved.
Keywords: Food safety; Standards; CertiWcation

Corresponding author. Tel.: +1 517 355 6640.

E-mail addresses: hatanaka@msu.edu (M. Hatanaka), lbusch@msu.edu (L. Busch).

0306-9192/$ - see front matter 2005 Elsevier Ltd. All rights reserved.
doi:10.1016/j.foodpol.2005.05.006

M. Hatanaka et al. / Food Policy 30 (2005) 354369

355

Introduction
With the development of new regulatory and veriWcation mechanisms for the
safety and quality of food and agricultural products in recent years, governance in
the global agrifood system is being transformed. Traditionally, it was predominately
government agencies that were responsible for monitoring food safety standards and
food quality attributes. However, the globalization of the agrifood system, the consolidation of the food retail industry, and the rise in private retailer standards have
precipitated a shift in responsibility for this task to third-party certiWers (see Zuckerman, 1996; Tanner, 2000; Barrientos et al., 2001; Bredahl et al., 2001; Golan et al.,
2001; Barrett et al., 2002; Deaton et al., forthcoming; Henson and Northen, 1998;
Calvin et al., 2001). Consequently, third-party certiWcation (TPC) is emerging as a
prominent and inXuential regulatory mechanism in both the public and private
spheres of the contemporary agrifood system, as food retailers demand that their
suppliers provide TPC (Bredahl et al., 2001; Tanner, 2000), and government agencies
also move to implement it (Greene and Kremen, 2003; Martinez and Baados, 2004).
Third-party certiWers are private or public organizations responsible for accessing,
evaluating, and certifying safety and quality claims based on a particular set of standards and compliance methods (Deaton, 2004). CertiWcation provides assurances
about a product to stakeholders by providing information about the commodity and
its production processes. What distinguishes TPC is its claimed independence from
other participants involved in food or agricultural production, such as retailers or
suppliers (Zuckerman, 1996; Tanner, 2000). Third-party certiWers also appeal to technoscientiWc values such as independence, objectivity, and transparency in an attempt
to increase trust and legitimacy among their customers and to limit liability.
In contrast to much of the literature on TPC (see Tanner, 2000; Golan et al., 2001;
Sanogo and Masters, 2002; Fagan, 2003), we argue that TPC is not merely an objective or impartial technical tool or institution desirable for the eYcient organization
and regulation of markets and trade. Rather, we argue that TPC reorganizes, transforms and disciplines people and things (Busch, 2000) throughout the supply chain,
with diVerential social and economic implications for various participants.
To accomplish this, our paper will illuminate some of the key factors driving the
adoption of TPC, as well as some of the implications that TPC might have on various actors throughout the agrifood system. We begin by situating the rise of TPC
in the broader framework of the shift from public to private governance. Next, we
attempt to brieXy characterize TPC and explain how it operates. The rest of the
paper then critically examines conventional explanations that TPC in an independent, objective and impartial institution. We do this by examining the role of three
groups of stakeholders that have inXuenced and/or are aVected by the adoption of
TPC. This includes, Wrst, those participants primarily responsible for the distribution of food, namely transnational supermarket chains; second, those participants
primarily responsible for the production of food, namely suppliers; and Wnally,
actors who have played an important role in inXuencing both the adoption and
content of TPC, namely non-governmental organizations (NGOs) and consumer
activists.

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From public to private governance

Standards are measures by which products, processes, and producers are judged.
Prior to the formation of the World Trade Organization (WTO) in 1995, agrifood
standards were largely the province of various government departments within
nation states. Uniform public standards were viewed as necessary for reducing transaction costs and improving market eYciency by providing a common language for
market participants involved in the food and agricultural marketing system (Hill,
1990; Clayton and Preston, 2003). At the same time, governments were primarily
responsible for inspecting food, determining its safety, and providing assurances to
the public about the safety of the food supply.
However, the globalization of the agrifood system has made it increasingly diYcult for nation-states to regulate food safety and quality practices. With globalization, it is not uncommon for supply chains to cross multiple national boundaries.
Consequently, an increasing quantity of food on supermarket shelves is produced in
countries other than where it is purchased, and is purchased from suppliers operating
under a diverse range of food safety and quality regulations (Bonanno et al., 1994;
McMichael, 1994; Coyle et al., 2001). Moreover, the rapid pace of product diVerentiation, and the concurrent expansion of quality attributes, has placed considerable
strain on government regulatory bodies. The eVect is that government regulations are
increasingly unable to keep pace with new developments and changing production
practices (Sporleder and Goldsmith, 2001; Reardon and Berdegue, 2002). Both retailers and governments recognize that within this context regulations need to be transnational in scope and applicability if they are to be eVective (Marsden et al., 2000).
Thus, as the global economy shifts towards a free market, greater roles for both
international governmental bodies and the private sector arise in standards setting
and enforcement (Busch and Bain, 2004). For example, the WTO has become the de
facto enforcer of standards through the legal matters it has adjudicated. Supermarket
chains (and to a lesser extent food processors) have also become standards setting
organizations, often setting standards that are more stringent and more comprehensive than those of international standards bodies (Dolan and Humphrey, 2000; Levidow and Bijman, 2002; Reardon and Berdegue, 2002). Rather than neutral market
lubricants, supermarkets increasingly view agrifood standards as strategic business
tools. In other words, businesses use private standards today strategically, whether it
is to gain access to new markets, to coordinate their operations, to provide quality
and safety assurance to their consumers, to complement their brands, or to deWne
niche products and markets (Farina and Reardon, 2000; Giovannucci and Reardon,
2000; Reardon et al., 2001; Konefal et al., 2005).
Private standards increasingly encompass a variety of quality attributes that public standards do not (Farina and Reardon, 2000; Reardon and Berdegue, 2002; Sporleder and Goldsmith, 2001). Various actors in the agrifood system, including
retailers, consumers, and social activists, seek products that are diVerentiated not
only by that products physical characteristics but also by its production practices
(Deaton et al., forthcoming). Private standards, labels, and certiWcation systems are
crucial for providing information to stakeholders, allowing them to diVerentiate

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357

agrifood products by the attributes that concern them, such as animal welfare, environmental sustainability, and worker welfare (Deaton et al., forthcoming). However,
private standards are ineVective without an enforcement mechanism. TPC is emerging as a key institution for enforcing private (and public) standards that is both independent from producers (who, by virtue of the qualities demanded, are no longer
believed by consumers) and from governments (which have neither the Xexibility nor
the responsiveness now desired by all actors in the supply chain). Under these conditions, many retailers have begun to take advantage of the Xexibility and responsiveness to rapid change that private standards and TPC permit (Callon et al., 2002).

Third-party certiWcation
The rapid proliferation of third-party certiWers globally and the breadth of standards that certiWcation covers have produced a very complex set of institutional
mechanisms that are diYcult to categorize. For example, third-party certiWers verify
supplier compliance of systems, processes, and products for both private and public
standards that concern food safety (e.g., Codex standards), food quality (private
retailer or processor standards), Good Agricultural Practices, Good Manufacturing
Practices, and/or Good Management Practices (e.g., ISO 9000 standards), labor practices (e.g., SA 8000, ETI Baseline, and Fairtrade standards), environmental standards
(e.g., ISO 14000 standards, Rainforest Alliance ECO-OK standards), and/or nongenetically modiWed materials (Busch and Bain, 2004).
Furthermore, TPC oftentimes involves an accreditation mechanism1 by international or national institutions that may be either private, or a hybrid of both public
and private. For example, private accreditation institutions include the International
Federation of Organic Agricultural Movements (IFOAM), the Euro-Retailer Produce Working Group Good Agricultural Practices (EUREPGAP), and the International Accreditation Forum (IAF). Quasi-public institutions include, for example,
American National Standards Institute and the Registrar Accreditation Board
(ANSI-RAB) in the US, the UK Accreditation Service (UKAS), Standards Council
of Canada (SCC), and the Japan Accreditation Board (JAB).
Typically, the process of obtaining TPC operates in the following way. First, a
supplier applies to a particular third-party certiWer for certiWcation. Second, the
third-party certiWer conducts a pre-assessment and documentation review of a suppliers facilities and production operations. Third, the third-party certiWer conducts
Weld audits. Fourth, when conformity is veriWed, the third-party certiWer issues a certiWcation and allows the supplier to label its products as certiWed. In general, suppliers are responsible for meeting the costs of the audit.2
1
Accreditation is the process by which an authoritative organization gives formal recognition that a
particular third-party certiWer is competent to carry out speciWc tasks.
2
One exception is the TPC operated by Fairtrade Labeling Organizations International (FLO). To maximize returns to small producers in developing countries, FLO has established a mechanism whereby consumers bear the cost of the audit (Fairtrade Labelling Organizations International, 2004).

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M. Hatanaka et al. / Food Policy 30 (2005) 354369

One of the primary reasons given for the proliferation of TPC is its perceived
character as independent and objective. These qualities are viewed as necessary
for the eVective regulation of food safety and quality throughout the global commodity chain (see Tanner, 2000; Golan et al., 2001; Sanogo and Masters, 2002;
Fagan, 2003). Tanner (2000) argues that TPC diVers from conventional product
safety and quality assurance schemes in that certiWers are independent. Put
diVerently, it is the independence of third-party certiWers from other actors in
agrifood commodity chains, namely buyers and sellers, which distinguishes TPC
from Wrst (audited by suppliers) or second-party certiWcation (audited by retailers paid technicians) (Tanner, 2000). Fagan (2003) argues that such independence gives TPC greater legitimacy since third-party certiWers are thought to
have no stake in the outcome of the transaction. Thus, TPC is viewed as more
reliable and credible than Wrst or second-party certiWcation (Golan et al., 2001)
and is thus an eVective mechanism for ensuring food safety and quality (see
Sanogo and Masters, 2002).
However, in the following section, we argue that TPC is a more complex phenomenon. While third-party certiWers may be independent actors, the rise of TPC, and
therefore its objectives, are strongly inXuenced by the marketing strategies and economic concerns of the major global supermarket chains.

Retailers and third-party certiWcation

The opening of global markets via the WTO and its predecessors has permitted
the formation of global oligopolies in food retailing. Globally, three giant chains
dominate: Wal-Mart, Carrefour, and Royal Ahold, and retail concentration is occurring in most industrialized countries. For example, in 2000, the top Wve supermarket
chains in the US accounted for over 40% of retail food sales, while in 1993 they
accounted for only 20%. During this same period, the market share of the top Wve
chains in France increased from 48 to 61% and in Italy from 11% to 25% (Busch and
Bain, 2004).
As food retailing becomes more oligopolistic, retailers prefer to minimize
price competition and to compete as much as possible on the basis of other qualities, such as providing variety, convenience, quality, consistency, food safety,
and year-round supply (Valceschini and Nicolas, 1995; Busch and Bain, 2004).
The capacity to compete eVectively on quality depends on the establishment of
new institutions such as direct contracts with suppliers, centralized procurement
centers, branding, and private standards and certiWcation systems to facilitate
the process.
Economic concentration, private standards, and in-house branding have exposed
retailers to greater risks if a problem should arise. For example, centralized procurement centers distribute produce from a few major suppliers to retailers nationally,
thus helping to ensure consistent standards while reducing transaction costs. However, should a food safety problem occur, the incident would no longer be conWned

M. Hatanaka et al. / Food Policy 30 (2005) 354369

359

locally, increasing the potential for loss of reputation and Wnancial liability.3 Concerns about the potential loss of reputation and the need to minimize liability should
a food borne illness occur, have in part motivated the development of TPC
(Henson and Northen, 1998; Levidow and Bijman, 2002). Retailers recognize that
private standards are insuYcient without certiWcation and labeling schemes that
ensure their enforcement. They are also cognizant of and even embrace the fact that,
as the interface between consumers and producers, consumers view them as responsible for the safety of the products they sell, especially retailer-branded products
(USDA/FAS, 2001).
Thus, TPC is a regulatory mechanism that provides retailers with (1) the Xexibility
to diVerentiate agrifood products by the attributes that concern them, (2) ensures the
consistent implementation of standards regardless of the products origin, while at
the same time, (3) minimizing transaction costs and Wnancial liability. Consequently,
a growing number of supermarket chains are implementing TPC (Tanner, 2000; Barrientos et al., 2001; Bredahl et al., 2001). An interesting example is EUREPGAP,
which was developed by a consortium of leading supermarket chains, including
Royal Ahold, Marks & Spencer, Tesco, Safeway, and Sainsburys. Suppliers who
want to sell fresh produce to the European stores of these chains must be third-party
certiWed against the standards established by EUREP. Since EUREPGAP was introduced in October 2001, more than 13,000 suppliers in 32 countries have been
EUREPGAP-certiWed, with many more currently in the process of certiWcation
(EUREPGAP, 2004).
Similarly, in the US, the worlds largest natural and organic food supermarket
chain, Whole Foods, recently decided to become the Wrst grocer to have its retail
operations designated as CertiWed Organic by a third-party certiWer, Quality
Assurance International (QAI) (Blank, 2003). Furthermore, a number of restaurant
chains have also begun to insist on TPC for their suppliers. For example, Subway
now requires that their tomato, lettuce, and green pepper growers are audited by PrimusLabs (Primuslabs, 2004).
As food retailing becomes more concentrated, large supermarket chains are better
able to exert market power over upstream actors within the commodity chain and
require that suppliers implement TPC. For example, in February, 1999, Safeway sent
a letter to its suppliers informing them that if they wished to continue doing business
with Safeway they were required to begin the process of becoming certiWed by one of
their approved certiWers.4 Interviews with producers of fresh fruits and vegetables,
from our ongoing research on TPC in Ghana, conWrm this. These growers explain
that many of their produce buyers in the UK and EU, including wholesalers, have
warned them that EUREPGAP certiWcation will be a requirement by 2005. While
EUREPGAP is certainly not required by all buyers nor all European countries (for
example, Germany does not require it), exporters argue that its inXuence is becoming
3
Similar concerns have been raised in the meat industry where food safety outbreaks are increasingly
likely to be national concerns due to the concentration of the industry (see Schlosser, 2002).
4
See a copy of letter sent by Safeway to its suppliers at http://intranet.primuslabs.com/igap/letters/safeway.htm.

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M. Hatanaka et al. / Food Policy 30 (2005) 354369

so pervasive that it is quickly becoming the standard if you wish to export to the
UK or Europe. Thus, while supermarket chains often claim that they ask their suppliers to voluntarily adopt TPC, the use of TPC is actually becoming de facto mandatory, at least from the perspective of suppliers (Bredahl et al., 2001). In many
instances, supermarkets designate particular third-party certiWers that their suppliers
must use. This occurs in part, because they prefer to use established organizations
that are recognized by others in the industry (Barrett et al., 2002) to help protect their
own reputation.
TPC has a number of important advantages for retailers that other safety and
quality assurance mechanisms (such as Wrst- or second-party certiWcation) do not.
First, retailer responsibility for policing the safety and quality of their products is
minimized since the monitoring of standards is largely transferred to third-party certiWers (see Bain and Busch, 2004). Second, liability shifts from retailers to third-party
certiWers. For example, Tanner (2000) argues that TPC strengthens a due diligence
defense.5 If a product failure occurs, retailers can claim that they had taken all reasonable precautions and exercised due diligence by adopting TPC.
Third, the use of TPC enables retailers to shift the costs of monitoring food safety
and quality to suppliers. This allows supermarket chains to allocate Wnancial
resources previously allocated for audit costs to other areas, such as investments in
R&D (Henson and Northen, 1998). Fourth, retailers can use TPC as a marketing
tool. They can communicate to consumers their standards via labels and certiWcation
which enables them to capture rents from quality and safety and product diVerentiation (Farina and Reardon, 2000:1171-2), or alternatively it reduces rents for those
who do not diVerentiate. Finally, TPC reduces transaction costs through assuring
higher levels of food safety and quality (Henson and Northen, 1998). By minimizing
the risk of product failure and thus reducing waste, TPC can increase eYciency in
supply chains, which lowers costs for retailers (Tanner, 2000).

Suppliers and third-party certiWcation

The adoption of TPC in the global agrifood system has important implications for
suppliers. Producers that are third-party certiWed may stand to gain economic opportunities in the marketplace over those producers who are not certiWed. For example,
TPC allows suppliers to demonstrate to other stakeholders within the commodity
chain their commitment to more rigorous standards for their products. This may
facilitate access to new, and potentially, more proWtable markets. This is particularly
the case for suppliers in developing countries. In many of these countries, insuY5
In the UK, the 1990 Food Safety Act introduced a new defense of due diligence against all food safety
oVenses. Under this defense, suppliers must demonstrate that they have taken all reasonable precautions
and exercised due diligence to ensure that the food they handle conforms to legal food safety standards.
The implication is that food retailers are now ultimately responsible for the safety of food products from
the procurement of raw materials to the sale of the Wnished product to consumers (Henson and Northen,
1998).

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361

ciently stringent or unenforced public standards for health and safety have meant
that products often do not meet the standards necessary for participating in the more
lucrative markets of developed economies (Barrett et al., 2002). Furthermore, TPC
assists producers who want to access segmented and niche markets such as those for
organics, or non-GMO, where certiWcation ensures their legitimacy. However, as
growing numbers of major retailers request certiWcation, TPC may become less about
gaining a competitive edge and more about simply remaining in the marketplace.
Initial evidence suggests that the eVects of TPC, and therefore the opportunities
open to producers, diVerentially vary by their size. Opportunities will be available for
those suppliers, generally larger producers, who can aVord to institute the necessary
organizational changes and technological upgrades. These suppliers may be more
willing to adopt TPC voluntarily as a marketing tool and as a way to gain access to
new markets. A Dutch tomato grower who is EUREPGAP-certiWed highlights some
of the beneWts he sees in TPC:
Retailers are not paying more for certiWed produce [P]articipation in EurepGAP will not lead to better prices, but its importance is that it will ensure
access to world markets and create a sound basis for expansion EUREPGAP, 2003).
Of particular concern are the challenges that TPC poses for small- and mediumsized producers, who may not be able to beneWt from the economies of scale often
necessary for adopting TPC. A study of the Michigan blueberry industry found that
growers who ran their own processing facilities had to make considerable investments, in some cases reaching upwards of $100,000, to meet the requirements of TPC
(Bain and Busch, 2004). These investments included upgrading the plant facilities
(e.g., installing impermeable washable surfaces), purchasing new equipment and technology (e.g., metal detectors, optical sorters), and employing extra labor to conduct
the ongoing day-to-day tasks of documentation (Bain and Busch, 2004). In addition,
it is the suppliers who are required to pay for the costs of TPC services, including
documentation and Weld audits. Carl Tarabbio Jr., of Tarabbio Farms illustrates
some of the frustration felt by growers:
[Retailers] are asking us to pay as much as $600 a day for private labs to come
and inspect our farms. They want the packing house to be enclosed so birds
cant Xy in and possibly contaminate the containers or produce. They want our
crates and boxes stored in concrete padded room. They want us to disinfect
each basket after picking. They want us to disinfect the truck after each delivery. There is no way we can comply with an additional 100 plus demands and
remain in business (Miller, 2001).
The investments necessary to implement TPC may result in some suppliers being
squeezed out of business or forced into alternative, less proWtable markets. Processing operations may need to consolidate as a result of this process. One option is the
formation of cooperatives. For example, in the Michigan blueberry industry some
growers met the challenge of TPC and increasingly rigid private standards by coming
together and establishing two processing cooperatives (Bain and Busch, 2004).

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M. Hatanaka et al. / Food Policy 30 (2005) 354369

The challenges of implementing TPC may be especially diYcult to overcome for

small- and medium-sized suppliers in developing countries. First, since TPC is largely
a phenomenon developed in industrialized countries, growers in developing countries
are likely to have limited access to information pertaining to the standards required
by retailers in industrialized countries (Barrett et al., 2002). For example, in Ghana
there is a general lack of public and private institutions and resources for agrifood
standards and TPC. Therefore, growers who wish to export depend almost entirely
on NGOs to provide the necessary information and education regarding international standards and certiWcation requirements, and to facilitate the training and certiWcation process necessary to meet them.
Second, supermarkets chains tend to require the use of third-party certiWers from
industrialized countries. Such certiWers are often viewed as more competent than certiWers from developing countries (Barrett et al., 2002). Moreover, in many developing
countries there are no indigenous certiWers (Martinez and Baados, 2004). In Ghana
there is only one individual who is qualiWed (but not accredited) to certify to
EUREPGAP standards. Therefore, most growers seeking TPC are required to bring
in certiWers from the UK or Europe. Thus, in addition to the normal costs required
for certiWcation, suppliers in developing countries are often also faced with having to
pay for the travel and living expenses of certiWers from industrialized nations (Barrett
et al., 2002).
Certainly the challenges facing producers in developing countries in implementing
TPC are onerous. However, it would be wrong to conclude that growers believe that
the beneWts of TPC accrue only to retailers. Rather, grower participants in our Ghanaian study explained how TPC had assisted them in producing fruits and vegetables
that now meet international standards for quality and safety, an accomplishment
that resulted in considerable prestige and personal pride. These growers identiWed
several fundamental beneWts of certiWcation. First, EUREPGAP requires the implementation of Good Agricultural Practices (GAP). Growers are now receiving training from NGOs in GAP practices, including Integrated Pest Management (IPM).
Training in IPM farming practices and techniques has facilitated their ability to
improve both the quality and safety of their product in a cost-eVective manner. For
example, training in how to select higher quality and disease resistant strains of plant
breeding material has assisted farmers in growing robust plants that require fewer
applications of expensive chemical sprays, which helps minimize chemical residues
on the produce.
Second, farmers must implement traceability systems. Farms are divided into individual plots and documentation must be kept that records all activity in that plot, for
example, what was planted and when, and the quantity and type of each chemical
used, and by whom. Traceability systems help ensure that any food safety or quality
problem can be traced back to its origin. One grower explained how this system
allowed him to trace and manage a fungicide problem that had aVected his fruit quality and threatened the loss of an entire export shipment. Since he was able to identify
the plot where the problem originated, isolate and quarantine the fruit from this plot,
and then demonstrate this documented process to his buyers, the shipment was not
rejected.

M. Hatanaka et al. / Food Policy 30 (2005) 354369

363

Finally, growers, NGOs, and government oYcials explained how TPC would help
farmers minimize post-harvest losses, a considerable problem in Ghana. Participants
explained that quality concerns (e.g., that the fruit arrived in poor or damaged
condition) is the primary mechanism used by some buyers to reduce the price oVered
or, in some cases, to refuse any payment for the product. Participants agreed that in
some cases the product standard was poor or had diminished during transportation.
However, they argued that some buyers were using claims of poor quality to reduce
the price knowing that growers were in no position to verify or challenge the buyers
allegations. This problem was prevalent enough that NGOs have stepped in on
behalf of growers and organized to verify the quality of the produce at its point of
destination.
TPC is perceived as an important mechanism for overcoming the problem of postharvest losses. First, as outlined above, in the absence of public agrifood standards,
implementing TPC assists farmers to improve product standards. Widely accepted
standards are necessary for improving trust in the quality and safety of Ghanaian
products in the international market. Second, certiWcation provides documentation
that a grower is meeting particular quality and safety standards. Growers believe that
having certiWcation will make it more diYcult for buyers to create Wctitious claims
about poor quality.
While retailers are the primary proponents of TPC, a number of NGOs both
advocate the use of TPC and are working with small growers and other agrifood suppliers from developing countries to implement this system. This shift has occurred as
NGOs, together with other consumer activists, have moved to assist small producers
in developing countries participate in global trade, while working to improve small
farmer proWts. At the same time, these organizations view TPC as an important
mechanism to improve social and environmental conditions throughout the commodity chain. We now turn to examine this process in more detail.

Non-governmental organizations, consumer activists and third-party certiWcation

Widely publicized incidents of food-borne illnesses, coupled with controversies
concerning genetically modiWed foods, have heightened consumer anxiety over food
safety and quality (Goodman and Dupuis, 2002). This has resulted in a loss of consumer conWdence in the ability of governments to regulate food and ensure its safety
(Jensen and Sande, 2002). It has led some consumers to reject the production methods, techniques and products of mass consumption (Lawrence and Frank, 1994;
McKenna et al., 1999). At the same time, in Europe, and increasingly in the US, globalization has led to growing concerns by consumers and social activists regarding
ethical trade and sustainable agricultural practices (Bredahl et al., 2001). For example, concerns have been raised about the impacts of agriculture on the environment
(Harris and Bailey, 2002; Murray and Raynolds, 2000), labor conditions (BlowWeld,
1999; Renard, 2003), and animal welfare (Mitchell, 2001; Bennett, 1997).
Observing this increased awareness with respect to food, some commentators
argue that a new kind of social movement is emerging. In contrast to traditional

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M. Hatanaka et al. / Food Policy 30 (2005) 354369

social movements, which were largely concentrated on production, the new politics
of food increasingly focuses on matters of consumption (Marsden et al., 2000; Goodman and Dupuis, 2002). In other words, consumption can now also be viewed as a
political practice, as a new way to save the world (McLaughlin, 2004: D1). In
response to this broader awareness of food by consumers, but also in an eVort to foster it, a number of social movements are now trying both to educate consumers about
social and environmental issues related to food production and to draw attention to
the role of retailers and their procurement practices in this process.
Consequently, some NGOs and consumer activists advocate the adoption of TPC
as a tool that can help promote worker rights and environmental protection in an era
of global free trade (GereY et al., 2001). Many view TPC as essential to ensuring that
company standards are objective, transparent and accessible to interested parties
(Joseph, 2002; Ruggie, 2003). These groups use TPC in two ways: (1) as a tool to create alternative production and consumption systems; (2) as a way to try to incorporate ethical practices into existing production and trade systems. In each case, these
activists have as their objective to improve labor conditions and/or to institute more
environmentally sound agricultural practices.
As a way to promote alternative production and consumption systems that are
more socially just and environmentally sustainable, a number of NGOs have developed their own TPC institutions and labeling programs to distinguish alternative
agricultural products from products produced using conventional practices (Murray and Raynolds, 2000, also see Constance and Bonanno, 2000; BlowWeld, 1999).
Examples of such NGOs include the International Federation of Organic Agriculture Movements (IFOAM), the Rainforest Alliance (RA), the Marine Stewardship
Council (MSC), and the Fairtrade Labelling Organizations International (FLO). The
market for these products remains small. However, sales have steadily climbed as
supermarkets, processors, and fast-food chains recognize that there is a market niche
among the growing numbers of consumers willing to spend more money on products
that make them feel like they are acting in a socially responsible fashion (McLaughlin, 2004). In the past year alone in the US, sales of FairTrade CertiWed products have
grown 46% (McLaughlin, 2004). Products, such as FairTrade CoVee, are now available in the nations three largest grocery chains, Kroger, Safeway, and Albertsons,
numerous smaller chains, such as Trader Joes and Whole Foods, as well as Dunkin
Donuts and Starbucks.
At the same time, other NGOs and consumer activists are seeking to reform existing production practices and trade systems. The development of private standards
and labels by supermarkets and their emphasis on quality has unexpectedly made
them vulnerable to campaigns for corporate social responsibility. While there is no
universal agreement on what corporate social responsibility is, or how it should be
measured, the general idea is that corporate behavior should reXect the triple bottom line of economic, social, and environmental performance (Webb, 2002).
Increasingly, social activists are demanding from retailers what economists deWne as
credence goods, that is, goods that have attributes not (easily) discernible to the consumer. These goods could include standards and certiWcation programs for child and
forced labor, environmental hazards, genetic engineering, health and welfare issues

M. Hatanaka et al. / Food Policy 30 (2005) 354369

365

related to agricultural laborers, animal welfare, or food safety. These social movements are often involved in publicly shaming and stigmatizing corporations for their
undesirable behavior (Winston, 2002). Their goal is to take advantage of the power
and vulnerability of highly visible corporate brand names at the retail end of the supply chain (GereY et al., 2001). Retailers have proven to be sensitive to such criticism
(Santoro, 2003); given the Werce competition in the sector any negative publicity has
the potential to damage sales, and thereby negatively aVect their economic bottom
line.
In response, a number of supermarket chains are working with NGOs to develop
standards and certiWcation systems for their social and environmental practices.
Examples include Social Accountability 8000 and the Ethical Trading Initiative
(ETI). Both seek to improve employment conditions for Southern producers exporting to European markets (Barrientos et al., 2001). Seven of the UKs largest supermarkets, including ASDA, the Co-Op, Sainsbury, Marks & Spencer, Safeway,
SomerWeld, and Tesco, recently agreed to incorporate ETI standards into their company codes of conduct (Ethical Trading Initiative, 2004).

Conclusion
In sum, TPC is emerging as an inXuential institutional mechanism for monitoring
and enforcing standards for food quality and safety throughout the contemporary
agrifood system. From our discussion above, we conclude that TPC has the potential
to signiWcantly reshape social, political, and economic relations as it expands the
capacity of some actors, while limiting the capacity of others, to participate in the
global agrifood trade. In particular, major supermarket chains appear certain to beneWt. TPC facilitates their ability to police their own product standards throughout the
supply chain, while reducing their direct responsibility for the monitoring process,
and minimizing their liability should a problem occur. At the same time, retailers can
reduce their transaction costs since they have the power to shift the burden of the systems costs to other stakeholders and to producers in particular.
However, those producers who have the technical and Wnancial capacity to implement TPC should also beneWt. In an increasingly competitive market for agrifood
products, TPC can assist these suppliers to remain in the marketplace or even to
expand their market share by allowing them to demonstrate to their customers that
they have met the necessary standards. At the same time, TPC can help some producers enter niche markets for non-conventional products, such as GMO-free or organic
products. Such certiWcation systems can help build trust between actors in the commodity chain by providing independent assurance that the end-product meets the
appropriate process and product standards.
Consumers may also expect to beneWt from TPC systems. Growing numbers of
consumers now expect to purchase fresh fruits and vegetables, including exotics,
year-round, as well as products with particular quality and safety credence attributes.
Since many standards for these products now fall outside the purview of government,
TPC can help to ensure the safety and quality of these goods.

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M. Hatanaka et al. / Food Policy 30 (2005) 354369

As with most things, TPC poses the greatest challenge to small- and medium-sized
suppliers, especially those from developing countries. Without Wnancial, technical, or
educational assistance, the high costs associated with TPC will simply be beyond the
capacity of many suppliers. Consequently, these producers will be excluded from participating in the more lucrative global markets and, as TPC becomes more pervasive,
non-certiWed growers may be pushed into less proWtable internal markets as well. We
believe that government policy and international development assistance programs
have an important role to play in enhancing the capacity of small holders to succeed
in meeting the challenges of TPC.
With the globalization of trade, and growing moves towards private retailer standards and TPC, the ability of governments to set and regulate agrifood standards is
increasingly constrained. At the same time, many stakeholders are concerned at the
power of the global retail giants. As a Rabobank (2002:3) report said, the formation
of EUREPGAP is a message to both suppliers and government authorities that
retailers are now becoming directors of the food chain and are an increasing force to
be reckoned with. However, as we have demonstrated, TPC may also provide some,
albeit limited, opportunities for greater democratic governance of the agrifood system. With the advocacy and participation of NGOs and consumer activists, TPC
may oVer the potential for alternative agrifood practices and systems that are more
ethical and sustainable. As with most businesses, retailers often view their primary
task as wealth creation. However, the actions of social movements may help ensure
that retailers function in ways that are not only concerned with maximizing their economic performance, but also their social and environmental performance, wherever
they operate on the globe.
Acknowledgments
This paper is partly based upon work supported by the National Science Foundation under Grant No. SBR 0094618. Any opinions, Wndings, and conclusions or recommendations expressed in this material are those of the authors and do not
necessarily reXect the views of the National Science Foundation. We are grateful to
the external reviewer for useful comments.

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