April, 1998

Fruits of Thought

Should QTV Be The Standard?

Everyone seems to be opposed to big government. Yet, inexorably, the government seems to grow. Why is this? The answer is that, inherent in the way our society is structured, there are incentives to turn certain functions over to government. There are many “country club communities” that own their own streets, but most communities have streets owned and maintained by localities. In no small part this is because private homeowners pay dues that are not tax deductible to an association that maintains streets. Yet the same amount of money, paid in the form of taxes to a municipality is fully tax deductible.

Liability plays a big role in shunting activities toward government. Over three years ago, I wrote a column urging the International Fresh-Cut Produce Association to set up a verification program for fresh-cut processors. It was obvious that there were a lot of substandard fresh-cut processors out there. It also was clear that when a food safety problem arose, the whole industry would be smeared by any one sub-par operation.

My thought was for IFPA to set up a sister organization to be a kind of Underwriter’s Laboratory for fresh-cut processors. The organization would ensure that proper HACCP plans were developed and implemented and would grant use of an insignia signifying that the processor had been inspected and certified. Retailers and foodservice operators would then be encouraged to purchase only from approved operators.

The IFPA looked at this idea and saw merit in it, yet the association was concerned about the potential for liability. The solution was to reach out to the Agricultural Marketing Service (AMS), a unit of United States Department of Agriculture and see if it would set up some sort of inspection program for processors. As a unit of the federal government, AMS has substantial immunity to liability for actions taken in its official capacity.

Today that program is called Qualified Through Verification (QTV), and its purpose is much as I thought it out three years ago. Yet, the involvement of a government agency has changed significantly the dynamics of the program.

A private group can offer a shield or insignia, and it is one of many. Some companies market with the Good Housekeeping Seal of Approval and others do not. It can be a positive connotation for those who have it without having a negative connotation for those who do not. After all, nobody is required to work with Good Housekeeping. Equally, AMS has long had involvement in produce marketing but on quality, not safety, issues. AMS has offered grade standard shields and so forth, but there was never an implication that someone else’s product was unsafe.

Traditionally, governmental safety regulations have been an all-or-nothing situation. An airline either has Federal Aviation Authority approval to fly or it does not. Automobiles pass the impact regulation or they do not. Now, to some extent, this is an illusion. Some airlines are safer than others; some cars are safer than others; but that always has been left to individual competitors to promote, not to the government to certify.

The QTV program is unique in that it is a voluntary program. The question is how voluntary is it and for how long will it remain voluntary?

AMS claims that the QTV program is unique and implies nothing about the companies that do not participate. In fact, it is correct in a substantive sense. Since participation is voluntary, a company that does not participate in QTV may be just as safe as or safer than a company that does participate. Yet this substantive truth is almost certain to be lost in the marketing juggernaut bound to trumpet from companies participating in the program.

Imagine going to the airport and airline 1 has a sign, “Verified by the U.S. Government for Safety” and airline 2 has a sign, “The U.S. Government makes no claims about the safety of this airline.” How long will it be before all airlines feel they must have the first sign?

There are lots of practical problems with this. For one, the AMS cannot certify all those who want the shield in an expeditious manner. This could give an unfair competitive advantage to one company over another. There also is a question of AMS’s competency in this area. Most of AMS’s work has been, as in the area of grade standards, with work that has specific and objective standards – an apple of a certain type must be of a defined size. Yet the QTV program is different in kind.

Most of what the program envisions is to audit a firm’s establishment and maintenance of a good HACCP plan. But developing HACCP plans is as much an art as a science. Already, top safety officials with some of the biggest fresh-cut processors have disagreed dramatically with AMS officials as to what their HACCP plan should include.

Beyond these prudential concerns, though, is a more dramatic set of broader concerns. It seems inevitable that this voluntary plan will become mandatory. All it will take is one serious safety incident involving a non-verified plant. Surely some senator will be on television right away asking why, where safety is involved, we would allow any unverified producer to ship product. A law transferring it away from AMS and making it mandatory would very likely follow soon thereafter.

Salvation for the program might be possible if AMS dropped the shield aspect. If AMS, in other words, was functioning as a consulting company, helping processors set up good HACCP plans, then these processors could mention such a fact to sophisticated trade buyers but couldn’t promote to consumers any U.S. Government involvement. This would limit any damage caused by the program, as trade buyers recognize that HACCP plans can be effectively developed by many organizations.

Of course, this still leaves open the question of why we need the U.S. Government in the HACCP consulting business. Want an answer? Open the daily paper, there is an item that relatives of those who died in the crash of Commerce Secretary Ron Brown’s plane are now suing the map maker for contributing to the crash. They may win and, inevitably, this means that one day the government will do all map sales because nobody can afford to sell a map for a few bucks and pay millions due to liability issues. IFPA was almost surely correct to fear the outcome of liability issues. Isn’t it time we did something to change the rules of the game?  pb