Agriculture and ISO 14000

Food Policy 26 (2001) 35–48 www.elsevier.com/locate/foodpol Agriculture and ISO 14000 Ellen Wall a, Alfons Weersink b c b,* , Clarence Swanton c ...
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Food Policy 26 (2001) 35–48 www.elsevier.com/locate/foodpol

Agriculture and ISO 14000 Ellen Wall a, Alfons Weersink b

c

b,*

, Clarence Swanton

c

a Farming Systems Research Group, University of Guelph, Guelph, Ontario, Canada N1G 2W1 Department of Agricultural Economics and Business, University of Guelph, Guelph, Ontario, Canada N1G 2W1 Plant Agriculture (Crop Science Division), University of Guelph, Guelph, Ontario, Canada N1G 2W1

Received 5 April 1999; received in revised form 25 May 1999; accepted 13 December 1999

Abstract Many agricultural firms are now considering the environmental consequences of their activities as a means to obtain a competitive advantage. The shift is highlighted by the significant interest in standardized private codes such as those found in ISO 14000. These standardized codes are characterized by signatory firms voluntarily agreeing to abide by a given set of environmental management principles with monitoring conducted by an outside party. Government policy makers are also interested in the ability of such codes to address environmental concerns related to agriculture. This paper examines the feasibility of ISO 14000 for agricultural producers and the policy issues surrounding its application. The costs to an individual firm largely depend upon the availability of an environmental management system and the extent of the changes required under the system. The potential rewards are related to lower costs from reduced input use or lower premiums and increased revenue from new customers or market premiums. Net benefits to ISO 14001 certification will be greater for producers marketing food products than for firms selling a bulk commodity far removed from final consumption. Policy concerns related to ISO 14000 include providing institutional support for promotion and training, tying environmental regulations to the code, and the lack of public accountability in the setting of standards.  2000 Elsevier Science Ltd. All rights reserved. Keywords: ISO 14000; Environmental management systems; Agriculture

* Corresponding author. Tel.: +1-519-824-4120; fax: +1-519-767-1510. E-mail addresses: [email protected] (E. Wall), [email protected] (A. Weersink), [email protected] (C. Swanton). 0306-9192/01/$ - see front matter  2000 Elsevier Science Ltd. All rights reserved. PII: S 0 3 0 6 - 9 1 9 2 ( 0 0 ) 0 0 0 2 5 - 7

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Introduction The agricultural sector has traditionally produced generic, homogeneous commodities primarily for feed use. However, as we enter the 21st century the sector is changing to one that manufactures products increasingly for food and industrial use. The process, termed the industrialization of agriculture, is due largely to information and production technological advances that permit an increasingly segmented consumer market to be linked with agricultural producers. The linkage allows producers to supply products with specific attributes as demanded by the particular end-use market as opposed to the traditional means of supplying a generic commodity sold on an open spot market. The attributes desired could be associated with any number of features including chemical composition, volume, timing, texture and/or characteristics of the production process. For example, the demand could be for crop products that do not contain genetically modified organisms (GMOs) or are pesticide free, or for livestock products that have been raised in a certain manner. For such demands to be met successfully, there must be a means of ensuring the products contain the specific attributes desired by the end-use markets. Although the product supplied by farmers can be readily tested for qualities such as protein or texture, characteristics of the production process cannot be easily verified ex post. A voluntary or regulatory code is necessary to provide such assurances. In response, partially to customer demands and public expectations, many firms outside of the agricultural sector are also considering the relationship between their production activities and their markets particularly the previously ignored environmental consequences of their activities (Esty and Chertow, 1997; Morelli, 1999). The shift is highlighted by the significant interest in standardized private codes such as those found in ISO 14000. These standardized codes are characterized by the voluntary agreement from signatory firms to abide with a given set of environmental management principles that are monitored by an outside party. Many business analysts believe that registration with codes verifying a firm’s adoption of environmentally responsible actions will become a necessary condition to be successful, particularly when trading internationally (Office of Consumer Affairs, 1998; Webb, 1998). However, because the ISO environmental initiative is so recent, little is known about its applicability and potential for such voluntary standardized codes, especially in the agri-food sector. There are also unanswered public policy questions whether business-led initiatives such as ISO 14000 can achieve environmental objectives efficiently. Appropriate environmental policy that will garner public support and lead to environmental improvements remains a challenge for all sectors but particularly for agriculture given the non-point or diffuse source nature of many of its emissions (Weersink et al., 1998). In general, policy designed for agriculture and policy for the environment had been treated as antithetical until events and concerns in the 1960s and ’70s led to their convergence into what can be broadly termed agri-environmental policy (Swanson and Clearfield, 1994). These agri-environmental policies have evolved toward micro-managed programs that have demonstrated environmental value (Potter, 1998) and include the trend toward market-based, business-led initiatives

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(Batie, 1997). Even if it is not profitable for an individual firm to become ISO 14000 certified, government involvement in promoting a business-led initiative such as ISO may be justified if the total benefits, including environmental improvements, are greater than the costs. The purpose of this article is to examine the feasibility and issues surrounding the use of ISO 14000 for agricultural producers. We begin with some background information on the development of ISO and the components of ISO 14000. The paper then discusses the steps necessary for a firm to become ISO 14000, including potential problems and solutions for agricultural operations. Costs and benefits of the certification process are then reviewed to determine whether producers would be able to obtain market premiums sufficient to offset compliance and auditing costs. The paper concludes with policy issues facing the agri-food sector confronted by voluntary standardized codes such as ISO 14000.

The basics of ISO 14000 Development of ISO Standardization is fundamental for smooth and effective exchanges between and among individuals and their related organizations. The establishment of standards has been promoted by standard associations present now in most industrialized countries and many of these associations contribute to international bodies focussed on standardization such as ISO (International Organization for Standardization). Established in 1946/47, ISO is a non-profit, voluntary, business or industrial association much like an engineering society which is how it began. ISO’s main purpose is to encourage and assist the international exchange and transfer of goods and services thereby enhancing technological, economic, and scientific activity throughout the world. Although ISO began with a primary focus on production features, by the 1980s it also started to encompass ‘softer’ issues such as the processes involved in management systems (Gleckman and Krut, 1997). To date, the most widely know of the ISO efforts is ISO 9000, a series of guidelines and standards for quality management that is designed to focus on meeting customer requirements. Response to ISO 9000 has been overwhelming in terms of the growing number of firms seeking registration with many businesses viewing ISO registration as a ‘ticket’ to do business in a global economic environment (Croy, 1995; Mehta and Wilcock, 1996). Like ISO 9000, ISO 14000 is directed at the management systems within organizations. Both can be applied to any kind of organization, institution or firm and are not sector specific. However, the key concern with ISO 9000 is on product or service quality whereas with ISO 14000 it is on the environmental impacts an organization has in the course of doing its business. ISO 14000 was conceived as an industry response to a host of potentially inconsistent environmental standards and to the perception that government and existing industry initiatives for environmental standards were too bureaucratic and burdensome (BEC, 1996). The Business Council for

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Sustainable Development and ISO explored the creation of international environment standards during preparations for the Uruguay Round of GATT negotiations and the 1992 United Nations conference on Environment and Development in Rio de Janeiro, Brazil (Hortensius and Barthel, 1997). While the consequences of quality management associated with ISO 9000 are viewed primarily within the business of competitive markets, the consequences of environmental performance associated with ISO 14000 have implications beyond that of an individual enterprise and thus create broader public policy concerns (Gleckman and Krut, 1997). Components of ISO 14000 ISO 14000 is a series of standards and guidelines that can be grouped into three broad categories; evaluating and auditing tools; management systems standards; and product-oriented support tools. Procedures for specifying environment management systems are outlined by ISO 14001 which is the first and cornerstone standard of ISO 14000. Formally published in the fall of 1996, it is the only specification standard in the 14000 series and as such is a prescriptive document against which an organization will be measured for registration. The elements of ISO 14001 including the design of an environmental policy and its implementation are discussed in further detail below in terms of how an agricultural firm might become ISO 14001 certified. Misconceptions about ISO 14000 Although ISO 14000 is heralded by some as the great solution to environmental problems world-wide and as an effective way to ensure environmentally responsible production, there are many misconceptions about just what it is and how it works. For instance, ISO is not the organization that issues a certificate acknowledging compliance with ISO standards. This service is provided by organizations independent of ISO; these organizations go through a certification process themselves to enable them to be certifiers. The quality and legitimacy of the audits is questioned by those who point out the inevitable variability there will be among different nations’ auditors (Davy, 1997). As well, state environmental legislation varies widely throughout the world yet forms the basis for objectives and targets connected to ISO 14001 environmental policies (Lamprecht, 1997). Thus, ISO 14001 certified organizations in areas where environmental regulations are strict could be perceived as being on par with ISO 14001 certified organizations in a region where there may be no environmental regulations in place. Given these possible inconsistencies, some claim that it is a false impression that ISO 14000 is a ‘standard’ and ‘international’ (BEC, 1996). Another important misunderstanding is that ISO 14000 is not a label that signifies a ‘green’ or ‘environmentally friendly’ product or service. ISO certification is attached to the organization (or a division within a firm) and means only that the organization has followed the prescribed steps for implementing an environmental management system. The objective is to give the customers/consumers some confi-

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dence that the organization with which they are dealing has considered the environmental impacts in its production of goods and services.

Implementing ISO 14001 in agriculture Detailed descriptions about the elements of ISO 14001 and what actions need to be undertaken for certification are readily available in generic terms (e.g. Kuhre, 1995; CSA, 1996). The following points out considerations related specifically to agricultural operations. Environmental policy statement Each facility must have an environmental policy statement ‘appropriate to itself’ that contains a commitment to comply with applicable laws and regulations, with ‘other requirements to which the organization subscribes’, and to ‘continual improvement and the prevention of pollution’ (CSA, 1996, pp. 18 and 22). The policy statement is used to design and implement the environmental management system and forms the basis for its monitoring and continual improvement. Elements to be included in the policy statement are a mission statement for the firm, its contractual obligations, and set of principles outlining its commitment to environmentally responsible behaviour. Based on a study of small and medium enterprises (SMEs) in Europe that were in the process of adopting ISO 14001 or EMAS environmental management systems, Hillary (1997) found there were significant problems in writing up environmental policies. Included in their complaints were difficulties in finding the right kind of language to use and a lack of knowledge about all the environmental aspects of the organization. As well, the SMEs were criticized for ignoring non-regulated environmental issues, focusing instead on just what they were required to meet by law. These points suggest that small and medium size farm operations will fare much better if there is institutional support for them when undertaking the development of their own environmental policies for ISO. Farm organizations and/or government could develop and make available to farmers a generic template with suggested phrasing for an environmental policy statement that could be tailored by individual firms to their specific situation. Objectives/planning Organizations must have a planning dimension so that environmental aspects and legal and voluntary obligations can be assessed, objectives and targets can be set, and a program (or programs) to achieve the targets and objectives can be developed. The identification of the environmental impacts arising from its activities and the subsequent development of an environmental management system (EMS) will be a major stumbling block for most individual agricultural producers or organizations wishing to become ISO 14001 certified. The informational and time requirements

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necessary to assemble such a system would be onerous for most farmers. However, public agencies in many jurisdictions have documented variations of an EMS (for example Ontario’s Environmental Farm Plan (EFP), and Farm*A*Syst in the United States) in an effort to increase producer awareness of the environmental consequences of their actions.1 As noted in later sections, several regions are pursuing the modification of their agricultural environmental management systems for use in ISO certification and providing extension/industry support for implementation. Implementation of EMS An organization’s EMS for ISO 14001 must indicate how its activities that can have a significant impact on the environment will be regularly monitored and measured. Records of monitoring and measurement are required to track performance, to prove that operating controls were effective, and to demonstrate conformance with objectives and targets. Monitoring and measurement results need to be compared to ensure compliance with legal requirements. Although ISO 14001 focuses on practices rather than on performance measures such as water quality, the EMS must ensure regional environmental regulations are met. Third party auditing and continuous improvement Audits of the Environmental Management System (EMS) are required on a periodic basis to provide assurance to the organization of its implementation, to determine if the EMS is operating as planned, to provide information for management review, and to determine the capability of the EMS in achieving the organizations environmental objectives and targets. ISO 14001 has established an extensive third party auditing process that is often cited as one of the drawbacks to adopting the EMS due to its expense. Suggestions about how to proceed with the auditing dimension for ISO 14001 in the agricultural industry include a proposal to have registration at the level of farm organizations rather than individual farm enterprises. For example, if several pork producers in a region wanted to pursue ISO 14001 registration to give them an advantage in foreign markets, they could request their representative producer organization seek ISO 14001 registration. To qualify, all farm operators wanting the certification would have to adopt an ISO 14001 environmental management system but only a random sample of them would be audited. If those audits were successful, then the producer group would become an ISO 14001 organization. Any producers with membership would be able to claim ISO 14001 registration. Farm and commodity organizations can play other roles in the auditing process if there is strong interest in the farming sector for adopting ISO 14001. For instance, 1

Details about the Environmental Farm Plan are available through the web site: http://res.agr.ca/lond/gp/efp/ or through contacting the Ontario Soil and Crop Improvement Association, 1 Stone Road W., Guelph, Ontario, Canada, N1G 4Y2. Information about Farm*A*Syst is found at the web site: http://www.wisc.edu/farmasyst or through contacting: Farm*A*Syst, B142 Steenbock Library, 550 Babcock Dr., Madison, Wisconsin, USA, 53706-1293.

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sponsoring the training of staff in ISO certification and providing their services at reduced or minimal costs. Likewise, providing comprehensive environmental consulting through appropriately trained staff could streamline ISO auditing. Information seminars directed specifically at ISO 14001 adoption would also be beneficial to those producers interested in pursuing individual certification. Potential problems that arise during reviews and audits can be dealt with in terms of the continuous improvement aspects of the EMS. ISO 14001 acknowledges and accepts that continual improvement will not occur in all areas of activity simultaneously, reinforcing the idea of gradual incremental change for the better (CSA, 1996). Current EMSs designed for the farm sector can be adapted to meet the requirement for continuous improvement. For example, Ontario’s Environmental Farm Plan designates categories ranging from poor through fair, good, and best with respect to the 23 environmental criteria selected. This provides a structure suitable for continual improvement. Each farm operator can use the goal of moving to the next classification through implementing the management practices suggested for that improvement as the guide for continually bettering the environmental practices in the farm operation.

Current interest in ISO 14000 within the agri-food sector North American attempts to interest farm operators in exploring the possibility of having ISO 14001 certified farms has met with limited success despite initial interest in the possibilities (Smoller, 1998a). In both Canada and the United States, pilot projects to certify farm operations are now underway but have been delayed due to procedural and political implications (Mullholland, 1999). However, interest is high in sectors other than agri-food. For example, government and academic circles have created the MSWG (Mutli-State Working Group on Environmental Management Systems) which is pursuing various issues related to ISO 14000 for the United States. Among their interests is the development of a national (and eventually international) database for compiling performance information related to ISO certification.2 Presently there are no farms involved in the database of approximately 300 firms. Nordic countries have adopted ISO 14001 in agriculture in various schemes. In Denmark, a project called, ‘Kvamilla’ initially incorporated ISO 9002 and environmental management standards based on BS 7750 (Knudsen, 1997). By 1998, ISO 14001 had replaced the British Standard and 40 operations, including those for potato, dairy, and swine production, had been certified (Danish Agricultural Advisory Centre, 1998; Knudsen, 1998). By 1999, this project had also met some setbacks not unlike those facing the North American trials but still continues (Ljing, 1998; Smoller, 1998b). The Swedish Farmers Association (LRF) is in the process of adopting their Environmental Farm Plan to the ISO 14001 certification requirements (Ljing, 1998). Some farms have been certified to ISO 14001 and 9002 but the initiat-

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The website for information about this database is: www.mswg.org

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ive appears to be led by more large scale interests. Finland is also involved in ISO 14001 and agriculture initiatives. The agricultural industry there has been able to link support from the European Union to the development of environmental management systems on farms and is proceeding with certifying them (Ljing, 1998). The first known farmer to become ISO 14001 certified is Mike Logan.3 who grows cotton in Western Australia where environmental management continues to be a key issue in the agriculture industry (Carruthers, 1997; Logan, 1998). Since Logan’s certification in 1997, the Department of Agriculture in New South Wales has aggressively promoted ISO 14001 certification for agricultural operations and now ensures that extension agents trained in ISO 14001 are available to assist interested producers.

Costs and benefits to ISO 14001 for agriculture Acceptance of ISO 14001 by agricultural producers will occur if the benefits from compliance are greater than the associated certification and marketing costs. Whether the net returns are positive is unknown but will undoubtedly vary significantly depending on factors such as the stringency of the environmental management system, the type of output produced, and consumer awareness. The following section examines the components of costs and benefits for ISO 14001 compliance. Costs Certification costs There are costs associated with each of the components of ISO 14001 described earlier. Developing an environmental policy statement, setting environmental objectives and defining an environmental management system can be done through private or public consultants. An individual firm could also complete these components of certification depending on the producer’s knowledge base. The necessity for completing these components by an individual firm would be negated if the firm moved into ISO 14001 as part of a group with others in an industry sector. The major cost with the initial development of an ISO plan is designing an environmental management system. This cost will increase with the comprehensiveness of the EMS but be lowered significantly with the existence of publicly available systems such as Ontario’s Environmental Farm Plan. The cost of acquiring information necessary to complete all steps of ISO 14001 certification will decrease as the acceptability of the program increases and its appeal broadens. The two major costs of certification are those associated with the change in practices required to meet the established EMS and the auditing costs to verify the EMS is being followed. The stringency of the ISO 14001 plan developed for the agricul3 Southern Star cotton is the name of the company Logan operates. The farm operation is part of an integrated system that includes spinning and textile production and retail elements. ISO 14001 certification on the farm site enables Southern star to have an environmental label on their cotton products sold to the public (Logan, 1998).

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tural firm determines the cost of its implementation. Little change implies little cost. The firm could decide to make rather mundane changes in the way pesticides are stored and handled as an example. The average cost to Ontario farmers of meeting relatively tough standards in this area is $1800 (CDN). In contrast, if the EMS outlines changes in the way manure is stored or crops are cultivated, compliance costs associated with manure tanks or no-till equipment would be at least ten times greater. The final step necessary for registering an organization to ISO 14001 is an audit to confirm the firm is following its EMS. Auditing costs for the non-farm sector are approximately $7500. The high cost incurred by Mike Logan ($12,000 (AUS) for certification plus $2800 (AUS) for annual audits) is partially explained through the consultants’ and auditors’ inexperience with farming systems. Auditing expenses will likely decrease with an increase in the number of auditors that would result from wider adoption of ISO 14000. The costs to an individual producer would be much lower if certification were pursued as part of group such as a producer organization. Auditing would occur only on a randomly selected group of farms thereby spreading the costs among all members of the group. Marketing costs Before a firm can reap any benefits from ISO 14001 registration, it will have to enhance customer awareness in the environmental implications of registration and develop trust in the claims made. A study by the Food Marketing Institute indicates consumers are largely unaware of the relationships between agricultural practices and environmental quality. The implication for a standardized code such as ISO 14001 based on process rather than actual environmental performance is that it may be difficult to create consumer awareness about the benefits from ISO 14001 produced goods. The costs of developing the knowledge among potential purchasers may thus be significant. Marketing costs, however, will likely be assumed by processors of the raw agricultural products who use ISO 14001 grown commodities as part of a life cycle assessment on the environmental friendliness of the final consumer product. Benefits Despite the concern that improving environmental quality through ISO 14000 will lead to more restrictions, more paper work, and increased costs, there may be a number of positive aspects associated with the adoption of ISO standards besides the obvious improvements to environmental conditions on the farm and the surrounding area. The four areas of potential benefits include enhanced competitive advantage found through innovation offsets, increased demand, alleviating the potential of more stringent government regulation, and a lowering of insurance and financial premiums associated with reduced liability risk. Competitive advantage Rather than forsaking profits by improving their environmental performance through ISO 14001, firms may be able to enhance their competitive position. Accord-

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ing to Porter (1991), green competitiveness and its ‘win–win’ opportunities for individual firms arise from innovations induced by environmental regulations. Porter and van der Linde (1995) describe several means of enhancing competitive advantage. First, costs can be reduced by lowering input use through a reduction in initial application rates or by re-capturing and re-using the excess. Cost savings will increase with the cost of the inputs and waste disposal. Second, many examples exist of companies developing new products from wastes (Porter and van der Linde, 1995). Finally, a policy instrument such as ISO 14001 can force a firm to evaluate its production process that may create value to its product and reduce input costs. An example provided by Porter and van der Linde (1995) within the agricultural sector are Dutch flower producers. Forced to reduce fertilizer and pesticide contamination of groundwater, these producers developed a closed loop system for growing flowers in water and rock wool which reduced input levels, lowered the risk of disease and narrowed the variation in growing conditions. Both environmental health and the competitive position of the firm improved. Reduced liability risks ISO 14001 may allow firms to reduce insurance and financing costs in addition to lowering productive input expenditures. With the rise in law suits over environmental infractions, registration to ISO 14001 is being presented as evidence supporting an argument of ‘due diligence’. Due diligence is demonstrated when proactive measures have been taken to avoid the commission of an offense and is often the only defense acceptable under environmental legislation. Organizations that are sued for damages stemming from environmental ‘accidents’ have been viewed more favourably by the courts if they have a recognized environmental management system in place. Related to liability issues are concerns the farm community has over potential difficulties regarding their eligibility for insurance plans and bank loans (Canadian Centre for Pollution Prevention, 1998). The net result is that the existence of a recognized environmental management system such as ISO 14001 will likely reduce premium costs for loans and insurance. Meeting market demands Regardless of the impact of ISO 14001 on a firm’s cost structure, many firms will not consider certification unless revenues are improved through premiums for their products or increased sales. There is potential for increases in demands from the domestic market for food products that come from farm operations that can guarantee sound environmental management. Recent surveys indicate that consumers are very concerned about environmental issues and are willing to pay more for goods that are certified as ‘environmentally friendly’(Globe and Mail, 1999). Food manufacturers may adopt ISO 14001 registration as one way to assure consumers that they are purchasing goods that have been produced under environmentally responsible conditions. Processors with ISO 14001 would therefore be obliged to establish similar ISO procedures with their farm suppliers thereby enhancing the demand for farms ISO certified (Davy, 1997). It is possible that new export markets for agricultural goods produced by farms

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with an ISO 14001 registration will also develop. For example, a group of Ontario apple producers are seeking ISO certification in an effort to sell their product in Europe. Companies that adopt the ISO 14000 series first are viewed as having a critical strategic advantage by being prepared when the demand arises (Birchard, 1997). Food processors and government agencies that import and distribute agricultural products could make ISO 14001 a stipulation to ‘do business’ as has already happened with ISO 9000 and HACCP. In these cases there is a need for an international as opposed to a national standard to overcome the uncertainty associated with the regional quality standards of foreign states. By adopting one global set of criteria, the importers and exporters (both of whom could have had input into developing the standards) have a degree of assurance about the environmental management systems employed for production. Anticipating and reducing government regulation In general, the more farm operations that adopt environmental management systems, the better the public relations agriculture will have with customers and consumers. One consequence from improved relations could be a lessening of pressure for government rules and regulations regarding farming practices. This possibility has been an important selling feature of ISO 14001 in the United States where the Environmental Protection Agency looks favourably on firms that have ISO 14001 registration (Smoller, 1998a). The need to be pro-active through activities such as ISO certification is increasing as government enforcement of environmental policy is now being directed more at problem firms within an industry rather than the whole sector (Esty and Gentry, 1997). In addition to potentially reducing the stringency of government regulations, firms adopting ISO 14001 may enhance their strategic position relative to other firms. Business that incorporates environmental policy within their strategy are best positioned to adapt to changing regulatory conditions (Morelli, 1999).

Conclusions Whether ISO 14001 is profitable for an individual agricultural producer depends on the relative costs and benefits. Certification costs will decrease with the availability of environmental policy statements and management systems that can be adapted easily by an individual farm. Annual auditing costs will likely represent the major compliance expense for producers but this item may be spread among other producers or purchasers depending upon the route chosen for ISO certification. The potential benefits from ISO 14001 are in the form of an enhanced competitive position from the lowering of input costs including reduced liability risks, increased market demand, and a reduction in regulatory pressures. These benefits will likely be less than the associated costs for traditional farms selling a homogeneous commodity on a spot market. However, new technology, both information and biotechnology, is allowing producers to engineer food products that meet consumer demands for various attributes including their concern for the environmental impacts of the production

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process. The sale of these products tends to be negotiated through contracts rather than auctions. The negotiated coordination may allow producers to obtain added value for goods produced under ISO 14001 or it may become a necessary condition demanded by purchasers in order for sale to occur. Because the ISO 14000 series is new and relatively untested much of our discussion has to be phrased in hypothetical terms, especially since agricultural examples are so scarce. Nevertheless, there are significant points that bear repeating, especially in terms of policy implications. The focus of ISO 14000 on environmental impacts implies that its feasibility is not only an issue for individual businesses but also for public policy makers. Even if it is not beneficial for firms to become certified, government involvement in promoting ISO 14001 can be justified if the total benefits, including environmental improvements, are greater than the costs. Adoption can be promoted through the provision of environmental management system templates or through training and education into the certification procedures. The monitoring requirements under ISO 14001 could also serve as a reporting device under existing or potential regulatory programs. Governments could also stimulate firms to consider the environmental implications of their actions by reducing the threat of more stringent environmental policy tools for those firms that are ISO 14001 certified. However, potential environmental impacts are uncertain as the focus of ISO 14001 is on environmental practices and not on performance measures. Another public policy concern with ISO 14000 is the power an industry has to institute international trade standards without involvement from the public or government institutions, thereby avoiding constraints from the democratic process and/or public accountability. In addition, some feel that ISO 14000 might have a potentially weakening effect on more regional and industry specific initiatives for sustainable development (BEC, 1996). The concerns are particularly relevant for developing nations who do not have a standards-setting body in place necessary for representation on ISO. These countries are automatically excluded from participating thereby losing the opportunity to contribute to initiatives that might be very important to their economic development (UNCTAD, 1996). As well, there is some apprehension that export markets for goods from developing countries could be lost if ISO 14001 becomes a requirement since many indigenous businesses in developing countries might not be able to afford ISO certifications or have reasonable access to auditors (UNCTAD, 1996). Several factors point to the likelihood that ISO 14000 will become increasingly important in business, policy, and trade. First, the example of ISO 9000 creating a domino effect through chains of integrated enterprises is put forth as a precursor of what will happen with ISO 14000 (Morelli, 1999). Second, the current trend of the state forfeiting its traditional regulatory role to the private sector and what is termed the ‘new infrastructure’ (Salter and Salter, 1997) creates an ISO-friendly environment. Third, trade relations are increasingly reliant on international, certifiable codes for quality assurance. ISO 14000 represents the environmental element in a tri-part assurance scheme for food products where HACCP for food safety and ISO 9000 for food quality constitute the other two. What remains for ISO 14000 to take hold is the added catalyst of public pressure for improved environmental responsibility

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worldwide in a manner similar to its effect in the mid to late 1980s. If and when this does occur, it is likely that major business interests and governments will turn to the ISO 14000 series as a ready-made solution for offering guarantees of responsible environmental management just as HACCP has been used to assuage fears of food safety. The agri-food industry therefore might be caught up in having to incorporate ISO 14000 before its value and/or implications are fully known.

Acknowledgements The authors acknowledge the financial support of GrowOntario and the Ontario Federation of Agriculture.

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